Sitting of 6 February 1974

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

    River Pollution
    Mr. Hardyasked the Secretary of State for the Environment if he will urgently consider the need to reduce river pollution in Yorkshire, and take suitable action.
    Mr. Harperasked the Secretary of State for the Environment what advice he has given to the new water authorities regarding reductions in their efforts in cracking down on river polluters; and what is his present policy on the extent to which polluters must be required to pay for the consequences of their action.
    The Under-Secretary of State for the Environment (Mr. Hugh Rossi): At present the responsibility for dealing with river pollution rests with the river authorities and after 1st April will be transferred to the new water authorities. It will be for them to decide how best to deploy the resources available to them for carrying out their functions, but under Clause 39 of the Protection of the Environment Bill, now being considered in another place, they will be able to recover the costs of cleaning up pollution from the polluter.
    Mr. Hardy: Will the hon. Gentleman make clear that the Yorkshire Water Authority will not be allowed to take an outdated and over-relaxed attitude on river pollution? Will he also confirm that cuts in Government expenditure will not be such as to lead to the pollution of our rivers and streams being ignored? Will he make clear to the water authorities that the rivers and streams in industrial
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    areas will not be forgotten, that targets will not be abandoned and that these waters will be clean at the time anticipated by the people who live in the areas?
    Mr. Rossi: My answer is "Yes" to the last part of the hon. Gentleman's supplementary question. In the first part of his question he was referring to Press reports which have subsequently been denied by the Chairman of the Yorkshire Water Authority, who said subsequently that there will be no let-up in the drive against water pollution and that the number of pollution inspectors will be increased. On the question of public expenditure, my right hon. Friend the Minister for Local Government and Development has suggested to chairmen of water authorities that one area in which action could, if necessary, be postponed without harm to the economy is in improvements to dirty rivers not used for water supply. That is a temporary measure for economic reasons only.
    Mr. Harper: Who guards the guards? Is the Minister aware that the new water authorities are in charge of all water from the raindrop to the consumer and out to the sea, and also of land drainage, fisheries and sewerage? Does not this mean that the new water authorities are policemen and polluters at the same time? Is not the corollary of the situation that problems such as the foam problem which has existed in Castleford for the past 20 years will exist for another 20 years in view of the soft approach of the new water authority chairman?
    Mr. Rossi: The hon. Member takes too gloomy a view. The Government's intention is clearly set out in the Protection of the Environment Bill.

    Heavy Lorries
    Mr. Huntasked the Secretary of State for the Environment Whether, in the light of the growing volume of heavy lorry traffic, he is satisfied with the timetable laid down by the Heavy Commercial Vehicles (Controls and Regulations) Act for the zoning of areas in which such vehicles shall be prohibited or restricted.
    The Minister for Transport Industries (Mr. John Peyton): Yes, Sir.
    Mr. Hunt: Is my right hon. Friend aware that for residential areas which are enduring a constant nightmare in the form of nuisance caused by heavy lorries three years will seem a very long time to wait for some alleviation of the situation? In areas such as Greater London, where the problem is so acute, is it not possible for local authorities to be allowed or persuaded to make the necessary orders in advance of the date laid down in the Act?
    Mr. Peyton: There is nothing whatever to stop local authorities anticipating the date or using the wide powers which they already possess. I assure my hon. Friend that I do not underrate the nuisance to which he refers.
    Mr. Austick: Does not the Minister understand that many villages, towns and cities, such as Ripon, Otley and Ilkley, are being strangled by heavy traffic? Will he urge local authorities to use their existing powers? It seems to many of us that local authorities do not wish to use these powers. Therefore, will he urge them to use these powers—
    Mr. Speaker: Order. I remind the hon. Gentleman that this is Question Time.
    Mr. Peyton: I understand the problem, and if I did not I can assure the hon. Gentleman that I should be constantly reminded of it. I have urged local authorities to use their existing powers, which are considerable.
    Mr. Fry: Can my right hon. Friend assure the House that cuts in public expenditure on the road-building programme will not be disproportionate, as the success of the Act depends on alternative routes being available for heavy vehicles?
    Mr. Peyton: No one is keener than I am to see the road programme continue and to ensure as little interference as possible from any source.

    A5111, Allestree (Inquiry)
    3 Mr. Whiteheadasked the Secretary of State for the Environment if he will now publish the inspector's report from the public inquiry into the proposed A5111 Leeds-Exeter trunk road through Allestree, Derby.
    The Under-Secretary of State for the Environment (Mr. Keith Speed): My
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    right hon. and learned Friend will publish the report when he announces his decision on the proposals, which I hope will be this spring.
    Mr. Whitehead: As it is now 14 months since the inquiry and also well past the date when publication of the report was promised, are we to assume that the Government are still trying to take on board the new thinking about the destruction and distress caused by urban motorways of this kind or are there other considerations such as the announcement of an election, given the area concerned in Derby?
    Mr. Speed: The last part of the hon. Gentleman's supplementary question was uncalled for and untrue. He will know that the scheme is both complex and sensitive. I agree that there has been delay; it is a long and comprehensive report. In addition, the hon. Gentleman will know that last July the scheme was announced as one of the deferments.

    New Palace Yard
    Mr. Cormackasked the Secretary of State for the Environment if he will make a statement on the future of New Palace Yard.
    The Under-Secretary of State for the Environment (Mr. Reginald Eyre): I hope that the underground car park will come progressively into use from July and understand that the Services Committee is at present considering alternative solutions for the surface.
    Mr. Cormack: May I express the hope that the Services Committee's new solutions will take into account what was said in the debate that we had a few months ago? May I urge my hon. Friend to consider once again whether this vastly extravagant car park cannot be put to better use and its enormous capacity devoted to other more essential facilities of the House?
    Mr. Eyre: I must stress that my Department is only the servant of the House in that matter. In due course the Services Committee will make recommendations. I have no doubt that it will take into account the points that my hon. Friend has just mentioned—
    Mr. Russell Kerr: I doubt it.
    Mr. Eyre: —and subsequently, with the authority of the House, my Department will carry out its instructions.
    Mr. Wellbeloved: Will the hon. Gentleman bear in mind that the uninformed and obstructive view expressed by the hon. Member for Cannock (Mr. Cormack) has contributed to the inflationary costs which will result when New Palace Yard is resurfaced?
    Mr. Eyre: I am sure that the Services Committee will note what the hon. Gentleman has said.

    London
    Mr. Atkinsonasked the Secretary of State for the Environment if he will now make his promised statement concerning the Greater London Development Plan and, in particular, his conclusion as to the optimum size London should be in terms of population.
    The Secretary of State for the Environment (Mr. Geoffrey Rippon): I will make a statement as soon as possible.
    Mr. Atkinson: I am sure the Secretary of State remembers saying that on two previous occasions. When is "as soon as possible"? Is the right hon. and learned Gentleman aware also that there are different understandings between planning officers in the London boroughs and planning officers employed by the GLC and that there is a difference of as much as a million in population between the ideas held by those various officials? Has not the time arrived when the Department itself must come to a conclusion about the optimum size of London in order that we may have effective planning in terms of housing, roads and the other necessary environmental services?
    Mr. Rippon: By "as soon as possible" I mean before long. I am aware of the hon. Gentleman's interest in this matter and of the differences of opinion. When I made my initial statement I said that I agreed broadly with the Layfield Panel but that there should be an updating of the population forecasts and that the GLC should keep the matter under continuous review. There has been a change in control at County Hall, and the GLC has been a little slow in making its
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    various observations. I must give it time to sort itself out a little better. But I agree that I shall have to make a statement before long.
    Mr. Stanbrook: Is not the population of London decreasing? Should not we examine closely all applications for housing development in green belt areas surrounding London?
    Mr. Rippon: That is one of the factors to be borne in mind. As I said, the Government will have to consider this in the light of regional strategy. At the time when the Layfield Panel ended its inquiry, however, it expected a labour surplus in London because that was at a time when there was no growth and employment prospects were bad. The situation is now different. There is a shortage of skilled and semi-skilled labour. I made some reference to this in our debate yesterday. I think that we ought to concentrate more than we have in the past on providing housing and work in the cities, thus avoiding unnecessary commuting and the loss of skilled labour. That is the way to avoid excessive overspill schemes.

    High-Speed Trains
    Mr. Dempseyasked the Secretary of State for the Environment when high-speed trains will come into operation in the United Kingdom.
    Mr. Peyton: The high-speed diesel train is due to come into full commercial service in 1976.
    Mr. Dempsey: May we have an indication of when that train is likely to be introduced between Glasgow and London? In view of the fact that it has been widely reported that on some stretches of its route it will travel at 150 mph, may we be told whether the Minister is satisfied with the safety devices which are to be adopted?
    Mr. Peyton: There is always the possibility of widespread reports, some of which the hon. Gentleman may have seen, being inaccurate. The electrification of the West Coast main line to Scotland will be completed by May this year. Therefore, the operation of the high-speed diesel train on that route would be rather counter-productive.

    Furnished Tenancies
    Mr. Clinton Davisasked the Secretary of State for the Environment if he will make a statement concerning the Government's policy in connection with furnished tenancies consequent upon the recommendations made in the report of the North Islington Housing Rights Project, a copy of which has been furnished to him.
    The Minister for Housing and Construction (Mr. Paul Channon): I have studied this report with great care but still do not feel that it would be wise to change the Government's present policy in this field.
    Mr. Davis: Is the Minister aware of the increasing amount of arbitrary eviction taking place in Hackney and Islington? Does he not recognise as a result of the research which has been done in the report that an overwhelming case has been made for providing the same degree of security of tenure for furnished tenants as for unfurnished tenants? Why are the Government so rigid in their thinking?
    Mr. Channon: I take my present view not because I am rigid in my thinking but because I believe genuinely that the adoption of the policy that the hon. Gentleman wishes to see followed would in the long term lead to more homeless-ness than would the present policy.
    Mr. George Cunningham: When will the Minister recognise that the only result of not having security for furnished tenants is to reduce the amount of accommodation available for renting, because by this means tenants are got out and houses are sold for owner-occupation?
    Mr. Channon: I do not think the figures bear that out. The stock of furnished letting in London, according to my figures—these have to be estimates because no one can be exactly sure—is increasing at the current rate of 4 per cent. a year. They would certainly fall into a decline if full security of tenure were given to furnished tenants.
    Mr. Wiggin: Is my hon. Friend aware that the letting of furnished accommodation is not as profitable or as easy an occupation as some Opposition Members would have the House believe? My hon.
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    Friend's conclusions are quite right. Many hundreds of thousands of properties would be withdrawn from the letting market altogether if security of tenure were given.
    Mr. Channon: That remains my view, especially since the report to which the hon. Member for Hackney, Central (Mr. Clinton Davis) referred advocates full security for tenants of owner-occupiers as well as those of absentee landlords. The effect of that would surely be to lead to a decline in the number of unfurnished lettings available.
    Mr. Freeson: Does the hon. Gentleman realise that the figures which he quoted in reply to a previous supplementary question are very questionable and that the increase of furnished accommodation in the inner London area has been at the expense of unfurnished rented accommodation? Is he aware also that every bit of research and every report produced by local authorities and independent bodies in recent years following upon the Francis Committee's negative view support the introduction of security of tenure for furnished tenants, and that if he does not take action on this soon he will face disastrous consequences in inner London?
    Mr. Channon: Whenever a report is produced which the hon. Member for Willesden, East (Mr. Freeson) does not like, he calls it "negative". When he likes a report, he calls it "positive". It remains the fact that there has been a decline in unfurnished tenancies and an increase in furnished tenancies. Surely the implications of that are clear. Like those who have the responsibility for dealing with this matter, I believe that there is a real risk that if we tamper with the market we shall make the problems of housing in inner London much worse.

    Local Government Reorganisation
    Mr. Adleyasked the Secretary of State for the Environment what steps he is taking to ensure that adequate consultation is taking place between the present local authorities and the new district councils into which they will merge, and to maintain control over expenditure initiated by the existing authorities.
    The Minister for Local Government and Development (Mr. Graham Page): Recommendations on this subject were made in paragraphs 59 and 60 of my Department's Circular 121/72 and I believe that the present local authorities are fully aware of the need to consult the new authorities before committing expenditure which the new authorities must meet. Such expenditure will be subject to existing controls and the new authorities must be allowed to consider how they can meet it.
    Mr. Adley: I thank my right hon. Friend for that reply. I do not doubt that the local authorities are aware of their responsibilities, but does my right hon. Friend agree that there is evidence, some of which I have submitted to his Department, that many local authorities are not carrying out the spirit of the provisions of the relevant section of the Local Government Act? Is he aware that in my constituency a shopping centre at present in the Mangotsfield urban district in Gloucester County Council area will be transferred shortly to the area of the new Kingswood council in the Avon County Council and that despite the fact that the urban district council has twice turned down a proposal for the shopping precinct, suddenly, a few weeks before reorganisation, Gloucester County Council has given permission? This sort of thing is going on elsewhere. Can my right hon. Friend—
    Mr. Speaker: Order.
    Mr. Page: It is obviously important at this time of restraint in public expenditure that existing authorities should not enter into commitments which will make that restraint the more difficult for their successors. I will look into the detailed case to which my hon. Friend referred.
    Mr. Farr: Will my right hon. Friend tell us whether, when the new district councils come into operation on 1st April, there is any good reason why an existing local authority which applies for status as a parish council from that date should have its request turned down?
    Mr. Page: I cannot see how that matter comes into the Question on the Order Paper. The application for successor parish status exercise has been
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    completed and I cannot hold out any hope of reopening it.

    Waterways (Pollution)
    Mr. Spriggsasked the Secretary of State for the Environment, in order to assist the cleaning up of Great Britain's waterways, and in view of the need to keep a close watch on sewage outfalls into waterways and the beaches round Great Britain's coastline, if he will seek powers to strengthen the system of monitoring all waterways and to publish reports thereon.
    Mr. Rossi: Yes, Sir. I would refer the hon. Member to the Protection of the Environment Bill, at present being considered in another place, and to the published reports on the surveys of river pollution and of sewage discharges to coastal waters, copies of which are available in the Library.
    Mr. Spriggs: What is the Department doing about the untreated sewage which has been pumped out on to some of our North-West Coast beaches? Will the Minister consider making a monitoring device available so that the public may keep themselves informed and act accordingly?
    Mr. Rossi: My Department has initiated a harmonised monitoring scheme to ensure standardising the sampling of water and to establish long-term trends in changes of water quality. River authorities have begun work on these schemes. Under the Protection of the Environment Bill, which I have just mentioned, powers are being given to the authorities to take samples of all discharges into coastal and other tidal waters.
    Mr. Evelyn King: Does my hon. Friend accept that this question is meaningful only in the context of a prosperous countryside? In Dorset and other counties throughout England, the price of milk and other foodstuffs is so low that farmers are losing on every gallon they produce. Prosperity in the countryside alone can answer many of our problems.
    Mr. Rossi: I will refer that question to my right hon. Friend the Minister of Agriculture, Fisheries and Food.
    Dr. Marshall: Is the hon. Gentleman aware that within the borough of Goole

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    there are sewage outfalls into the rivers Ouse and Don close to residential parts of the town? Will he therefore assist and encourage the local authority to undertake a resewerage scheme for the town?
    Mr. Rossi: This is primarily a matter for the regional water authority. I will draw the hon. Gentleman's remarks to the attention of that authority.
    Mr. Sydney Chapman: In view of the critical importance of controlling and containing pollution, particularly in our estuarial and coastal waters, would it not be a good thing if one Department instead of several Departments had overall responsibility for this matter?
    Mr. Rossi: I thought that was the case.

    Decaying Areas
    Mr. Meacherasked the Secretary of State for the Environment if he will seek powers to assist local authorities in the rehabilitation of decaying local areas, in order to achieve effective competition with private property developers.
    Mr. Eyre: My right hon. and learned Friend is seeking in the Housing and Planning Bill, which received its Second Reading yesterday, to provide local authorities with new powers and inducements, in addition to those which they already possess, for improving areas of substandard housing.
    Mr. Meacher: Nevertheless, is the Minister aware that in the absence of specific property development aid local authorities are often forced to sell exceptionally valuable sites which later yield huge private profits which are not returned to the community? Is not the most glaring instance at this time the fate of 5,000 acres of London dockland? How will the hon. Gentleman ensure that in this and other large cities such inordinate profits are returned to the community?
    Mr. Eyre: The hon. Gentleman is developing an innuendo which is misleading. In the great majority of cases local authorities are able to make use of land for dealing with their basic housing needs.

    Inner Ring Roads
    Mr. Frank Allaunasked the Secretary of State for the Environment if he will halt the building of all inner ring roads on motorways inside towns which would involve the demolition of houses or the loss of housing land and on which work has not started.
    Mr. Peyton: No, Sir.
    Mr. Allaun: Does the Minister accept that homes must come before roads? Is not the place for ring roads outside rather than inside built-up areas? Will the Minister bow to the upsurge of anger in town after town against these multi-lane motorways which are destroying whole communities and ripping open the hearts of our cities?
    Mr. Peyton: I am far too great a coward not to run away before any great upsurge of anger, but I do not believe that there is one. The hon. Gentleman's question about homes coming before roads is a very glib but useful electioneering argument in the hands of some persons. The word may not have reached the hon. Gentleman yet, but the need for roads arises largely to meet the needs of people, and houses with no means of road access might be of limited use.
    Mr. J. H. Osborn: Is it not a fact that, if we are to implement the proposals in a recent White Paper for keeping cars out of city centres, inner ring roads are as important as middle and outer ring roads? Would it not be better if, in the city of Sheffield, for instance, the ring roads proposed 25 to 30 years ago were now constructed rather than still being under construction?
    Mr. Peyton: By drawing attention to the fact that it takes some time to make progress in this country my hon. Friend is performing a useful service. I agree with what he said.
    Mr. Jay: In view of the completely altered prospect for petrol prices and supplies, should not all new motorway schemes, whether urban or rural, be critically reviewed?
    Mr. Peyton: Yes. These projects are constantly under critical review. The need for these roads is always being reviewed. Nothing has happened so far to obviate

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    the need for good road communications. We have not yet reached that point.
    Mr. Robert C. Brown: While I broadly agree with my hon. Friend the Member for Salford, East (Mr. Frank Allaun) on the proposed schemes, may I ask whether the Minister accepts that, in the case of urban inner road motorways such as the East Central motorway in Newcastle, which is virtually completed, involving consequential road schemes such as the coast road and the North-West radial route where massive demolition of property has taken place, it would be a nonsense not to proceed?
    Mr. Peyton: I entirely accept the point made by the hon. Gentleman. I also accept that no one in his senses would wish to engage in policies which involve unnecessary destruction of valuable house properties.

    Metropolitan Green Belt
    Mr. Goodhewasked the Secretary of State for the Environment what arrangements he has made to discuss his policy on the metropolitan green belt with the Hertfordshire County Council.
    Mr. Rippon: None, Sir, but there are frequent discussions upon green belt policy and related matters between council members and Ministers in my Department and between council officials and officials of my Department.
    Mr. Goodhew: Is my right hon. and learned Friend aware that his recent decision to allow housing development on 138 acres at Jersey Farm, Sandridge, has caused anger and dismay in my constituency, particularly in the village of Sandridge, which will be adversely affected by it and by the new pattern of traffic that it will generate? Is he also aware that an application for a comprehensive development on the old Handley Page airfield at Radlett would enable a much better solution to our housing problems to be achieved? Will he, even at this late stage, reconsider the matter?
    Mr. Rippon: In taking my decision I followed the recommendation of the inspector in that case; other applications will be considered on their merits. It is worth bearing in mind that in Hertfordshire all the unallocated land is either
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    metropolitan green belt or interim protected land. This was interim protected land. We must recognise that these cases are considered on their merits.
    Mr. Allason: While agreeing with my right hon. and learned Friend on the need to take more than 2,000 acres of green belt land, selecting the worst, to help the housing problem, may I ask whether he agrees that it is unsatisfactory to take it in a piecemeal manner? Would it not be better to have one review and then one release of those 2,000 acres and be finished?
    Mr. Rippon: At the moment we follow the procedures which have been endorsed for many years, and there is a presumption against development in the green belt. I hope that the review of the green belt and the search for about 2,000 acres will be completed soon. Even then there will have to be consideration and there is, again, a presumption against development. This has to be looked at in the context of the fact that there are now 1·3 million acres of metropolitan or approved green belt. We cannot have everybody saying,
    "Do not let us have Heaven crammed;
    Let all the rest be damned."
    Counties must accept that they must, where appropriate, make provision for housing.
    Mrs. Renée Short: Is the Secretary of State saying that the county of Hertfordshire has not made its contribution to housing? Will he look at Hertfordshire's record since 1945? His statement was ridiculous.
    Mr. Rippon: I know that in its second informal review Hertfordshire made the minimum provision for housing land up to September 1974, but it allocated no more than about one-third of a year's supply for the period 1974–77. I have helped Hertfordshire by saying that I did not think it was necessary to expand Stevenage by as much as some people thought, but this is on the assumption that Hertfordshire would play its part in bringing other land forward for housing.

    Homeless Persons
    Mr. David Steelasked the Secretary of State for the Environment if he will now make a statement on homelessness.
    Mr. Channon: A circular in the joint names of my right hon. and learned Friends the Secretaries of State for the Environment and for Wales and my right hon. Friend the Secretary of State for Social Services will be sent to local authorities tomorrow on this subject.
    This circular stresses the need for local authorities to do more to prevent homelessness and to deal promptly with cases which occur. In particular it recommends that housing authorities should take the lead in this work and that there should be the fullest co-operation with both social service authorities and voluntary bodies.
    Mr. Steel: That is a most important announcement that the Minister has made. Does he accept that the legislative backing for local authorities to deal with homelessness is weaker under the recent local government legislation, both in England and in Scotland, than it was under the 1948 Act? Will he assure us that if this circular does not correct that deficiency—I notice that it does not extend to Scotland—he will consider further legislation if he finds that the circular itself does not lead to the result he obviously seeks?
    Mr. Channon: Perhaps the hon. Gentleman will be kind enough to await the circular. There has been a widespread misunderstanding of the effect of the Local Government Act on the statutory provisions to deal with homelessness. My right hon. Friends the Secretary of State for Social Services and other Ministers have told Parliament that the duty on the social services authority will be maintained through a direction to be issued by my right hon. Friend the Secretary of State for Social Services. He intends to issue such a direction next week.
    Miss Fookes: What is my hon. Friend's definition of "homelessness"?
    Mr. Channon: Perhaps I could send my hon. Friend a copy of the circular, because I do not think I could answer her question sufficiently shortly at Question Time.
    Mr. Freeson: Will the Minister tell the House when the Government intend to keep the pledge they made in their manifesto in 1970 to redefine the term "homelessness" to make it more accurately
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    acted upon? May I ask him again whether he will refer to all the reports received by his Department from all over the country—from statutory and non-statutory bodies—urging that the biggest single cause of homelessness in inner city areas in particular arises from lack of security for furnished tenants?
    Mr. Channon: The hon. Gentleman will be aware that in London the Department of the Environment, the Department of Health and Social Security and the London Boroughs Association have a new system of statistics to provide a more realistic picture of the homelessness problem. This system was introduced on 1st January of this year. I hope that it will be possible to introduce it throughout the whole of the country, and talks are going on with the local authority associations to this end.
    As regards the second point, I do not think I can add to my previous answers on the topic. I know that the hon. Gentleman holds his view strongly. I hold strongly to the view that the action he is pressing upon me would after the first few months of initial success lead to more rather than less homelessness.

    Building Societies
    Mr. Horamasked the Secretary of State for the Environment if he will make a statement on the progress of Government talks with the building societies.
    Mr. Channon: The Government are in continuous contact with the Building Societies Association through the joint advisory committee set up under the voluntary agreement on mortgage finance. I hope that in the longer run the committee will make a useful contribution to the resolution of problems in the private housing sector.
    Mr. Horam: Does not that bankrupt answer reveal what an utter failure the Government's policies have been regarding mortgages? What use is it to a young couple wanting a mortgage for which the going rate of interest is 11 per cent. to be told that there is this joint advisory committee? Why do not the Government admit that they have to all intents and purposes given up?
    Mr. Channon: What is certainly no good to young couples is the sort of remark the hon. Gentleman has made. What

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    the Government have been attempting to do has been, first, to devise a system of having a more stable flow of mortgage funds. We all know the difficulties in the short term. In the long term this committee may well make a very important contribution to the solution of the problem. The House will be aware, too, of the discussions which have been going on about the introduction of a scheme to help first-time purchasers.
    Mr. Gardner: Does not my hon. Friend accept that it is essential that everything should be done to encourage those who want to own their own homes? It is equally important that everything should be done to avoid the temporary, abnormal and, one hopes, only immediate high rates of interest which at present discourage people from buying their own homes.
    Mr. Channon: I agree with everything my hon. and learned Friend says. He will not expect me to speculate about the future movement of interest rates. That would be a matter for my right hon. Friend the Chancellor of the Exchequer. I certainly share the sentiments he expressed about home ownership.
    Mr. Crosland: The Minister said that in the long run the joint advisory committee might well produce important solutions. Unfortunately we all have many constituents who cannot wait for the long run. They want a house in the short run, and they want lower mortgage rates in the short run. It is now about 18 months since I in the House and others outside the House started pressing for the concept of the stabilisation of building society lending. Is it really the case that the joint advisory committee, which was set up last spring, has been utterly unable in that time to make a single proposal which would either affect the rate of mortgage lending or be able to stabilise the supply of mortgage funds? It seems to have been the most extraordinarily dilatory operation.
    Mr. Channon: The right hon. Gentleman is being very unfair. The committee provides a forum in which these matters can be discussed. Indeed, it provides a method of trying to ensure for the future a more stable flow of mortgage funds. What we are faced with at present is the difficult flow into the building societies
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    of mortgage funds owing to the high rates of interest which prevail, not only in this country but all over the world.

    Housing (Cornwall)
    Mr. Pardoeasked the Secretary of State for the Environment what was the number of public sector houses started in Cornwall in 1973 and the number completed.
    Mr. Eyre: Two hundred and eighty-one dwellings were started and 340 completed in the public sector; in addition there were 3,637 starts and 2,974 completions in the private sector, and a total of 2,938 improvement grants were approved during the first nine months of the year.
    Mr. Pardoe: Is the Minister aware that to disguise the first part of his answer he has given me a large amount of information for which I did not ask? Is he aware that the housing starts in Cornwall of which he has told us today are less than one-third of the starts in any of the last five years? Is he aware also that in the north Cornwall district alone this backlog has led to a housing shortage that requires 750 houses to be built in the public sector in 1974? Will the Government give the authority sanction to do that?
    Mr. Eyre: I emphasise to the hon. Gentleman that it is for local authorities to assess the housing needs and to bring forward plans to cater for them. The Government will give them every assistance in doing this. The tendering situation is expected to ease soon and there has been no difficulty in planning these contracts during the past year.
    Mr. John Wells: Is my hon. Friend aware that a higher percentage of people live in council houses in Cornwall and elsewhere in this country than in any other country except in the Eastern bloc?
    Mr. Eyre: As I have said, it is for the local authorities, which have a clear responsibility in these matters, to assess housing needs and to cater adequately for them, and the Government will give them every assistance in carrying out necessary programmes.
    Mr. Marks: Has the Minister any record of how many of the 3,637 private

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    houses are second homes, and can he say whether tax relief has been allowed on the mortgage interest paid on those homes?
    Mr. Eyre: I have no precise figures regarding second homes. Matters of taxation are for my right hon. Friend the Chancellor of the Exchequer. I emphasise that under the Housing and Planning Bill which was given a Second Reading yesterday improvement grants are to be proscribed where they relate to second homes.

    Newcastle-under-Lyme
    Mr. Goldingasked the Secretary of State for the Environment what effect the announced cuts in public expenditure will have on road works and local authority projects in the constituency of Newcastle-under-Lyme.
    Mr. Speed: It will be for local authorities to apply the cuts as they see fit to projects for which they are responsible. My right hon. Friend the Minister for Transport Industries will make a statement about the roads programme as soon as possible.
    Mr. Golding: Is the Minister aware that a roundabout on the A34 at the Parkhouse Colliery site is absolutely essential if we are to have much-needed industrial development? Will he tell the Government that the inner ring road in Newcastle-under-Lyme is also of great importance to the town?
    Mr. Speed: I note what the hon. Gentleman says about both projects. My right hon. Friend will be writing to him in due course.

    Building Materials
    Mr. Boydenasked the Secretary of State for the Environment what building materials are now in short supply.
    Mr. O'Halloranasked the Secretary of State for the Environment if he will make a statement on the supply position relating to house building materials.
    Mr. Channon: The main delays in the supply of building materials relate to steel, plaster and plasterboard. Otherwise supplies are generally sufficient to meet demand, though some local shortages of cement have been reported.
    Mr. Boyden: Is the Minister aware of the difficulties which these shortages are causing to the building industry? Does he not think that the time has come for his Department, in conjunction with the industry, to work out an allocation so that proper priorities can be established?
    Mr. Channon: I would be reluctant to do that unless forced to do so. It would be an extraordinarily difficult and complex task, and the industry is not pressing me on the matter at present. I have not shut my mind to the possibility should circumstances develop which I hope will not develop.
    Mr. McBride: The Secretary of State for Wales has informed me that in Wales there is a shortage of steel, plaster, plasterboard and sanitary ware. Would it not be correct to insert a forward planning proviso in the Housing and Planning Bill to ensure that there is a continuous flow of materials directed to the construction and improvement of houses?
    Mr. Channon: Everyone is well aware of the need to keep up progress in house building. The building materials industry is well aware of this and no legislation is required. What is needed is a return to normal working in all sections of industry.
    Mr. Marten: As one of the shortages is steel, can my hon. Friend say why we are short of steel and what is the outlook for the next three months?
    Mr. Channon: It is impossible at the moment to give an accurate assessment of the future of steel for the next three months. It all depends on many events in industry. Steel production at present is about 70 per cent. of normal production. Stocks of coking coal are at a minimum level at most works and future production will depend mainly on coal deliveries.
    Mr. Conlan: Is the Minister aware that small builders and property repairers find it almost impossible to get supplies of cement unless they are prepared to pay much more than the normal price, and they therefore believe that we are now seeing in these materials the beginning of a black market the like of which has not been seen since the war?
    Mr. Channon: I have not received that allegation from any representative of the

    1213
    industry. The average delivery time is approximately seven weeks after the merchant has received an order, which he then passes to the supplier. We must keep the matter under continuous review. No doubt the three-day working week, the electricity difficulties and the threat of a miners' strike may make the situation worse.

    Housing (Municipal Acquisition)
    Mr. Tebbitasked the Secretary of State for the Environment if he will inquire into the effect on private sector house prices of the purchasing by local authorities of existing houses coming on to the open market.
    Mr. Farrasked the Secretary of State for the Environment if he will make a statement on his policy towards the acquisition of private houses by local authorities in order to increase their council house pool.
    Mr. Rippon: I am not in favour of the acquisition of existing private houses by local authorities simply in order to bring them into public ownership. I do not think that a special inquiry is called for but I am keeping a close watch on developments.
    Mr. Tebbit: Is my right hon. and learned Friend aware that I am receiving letters from some of those young married couples over whom the hon. Member for Gateshead, West (Mr. Horam) sheds crocodile tears? The people who write the letters tell me that they try to buy houses in my constituency but that the council always comes in, overbids them and thus gets in first, thereby keeping up house prices. When will my right hon. and learned Friend take action to force councils to spend their energies on building houses and not municipalising existing houses? What action is to be taken to increase the housing supply?
    Mr. Rippon: It is right that local authorities should concentrate on their own programmes. I am glad to say that in the first 11 months of last year local authority tenders showed a 28 per cent. increase. Regarding the particular problem which my hon. Friend raised, I do not believe that the local authority ought to intervene where there are willing purchasers, as my hon. Friend suggests may be so. However, there may be cases in
    1214
    which the local authority can negotiate with a builder to purchase houses which are not finding a ready market. In such cases I ask local authorities to bear in mind the powers they have to make loans to priority categories of people who wish to buy.
    Mr. Bagier: Does the right hon. and learned Gentleman agree that the public housing sector offers one of the main means of keeping house prices down? When will the Government agree to an increase in the house building programmes of local authorities? Will the right hon. and learned Gentleman comment on how a local authority threat to buy up property would affect, for example, an offer which many hon. Members have received today of a 2-bedroom house in the Westminster area, in Smith Square, which can be secured at the knock-down price of £55,000, plus rates and leasehold costs? Is not this the type of property which should be taken from the landlord who offers it at that price?
    Mr. Rippon: I wonder whether that property belongs to the Leader of the Opposition. If it does, I cannot comment on that particular case. [HON. MEMBERS: "Cheap."] It is absurd to take a particular case in an area of that kind. On the general question, there is no barrier to the local authorities putting forward their schemes. There is no limitation at all on their expenditure. They are entitled to the full benefit of the generous subsidies under the Housing Finance Act 1972. We have had difficulty over the cost yardsticks, but we have eased them enormously and there has been an increase in the number of local authority tenders.
    Mr. Farr: Where the policy of meaningless buying of private houses occurs, will my right hon. and learned Friend ask councils to reconsider their actions? I raise this point because I wonder whether he is aware of the hardship being experienced by young married couples wishing to buy their own homes when prices are inflated by local authorities going into the market. This problem is aggravated particularly in Leicestershire, where local authorities refuse to sell council houses to people who would like to buy them if they had the opportunity.
    Mr. Rippon: That is a real problem in many areas. I am sure that my hon. Friend is right in asking that local authorities should not go into the market when what he has described is the effect.
    Mr. Stallard: Will the right hon. and learned Gentleman return to the original point in the Question? If he has an inquiry, will he inquire into the effects of the so-called fair rents and the inflated prices being asked for second-hand houses in the inner London area?
    Mr. Rippon: I have already said that I do not believe a special inquiry is necessary.
    Mr. William Clark: Is my right hon. and learned Friend aware that in inner London an additional competitive factor is that the GLC is competing for secondhand houses, particularly in Croydon, and that Croydon Borough Council is taking evasive action? This sort of competition is ludicrous. When will something be done about the borrowing powers of the GLC, which is exempt from my right hon. and learned Friend's sanction?
    Mr. Rippon: The GLC has to bring forward a Money Bill. When it does, that may be an appropriate moment to consider that aspect of the situation.
    Mr. Freeson: Is the right hon. and learned Gentleman aware that there is a grave shortage of rented accommodation in big city areas, particularly London? Does he not agree that one way to protect the market and to keep it available for tenants is for furnished properties which otherwise would go for speculative deals to be brought into public ownership through either local authorities or reputable housing associations? Will the right hon. and learned Gentleman answer the question which he refused to answer properly last night? If he believes that there should be an increase in local authority housing construction to increase the supply, why are the Government in their public expenditure survey and White Paper on improvement grants reducing investment expenditure in housing by nearly £1,000 million in the next four years?
    Mr. Rippon: I explained to the hon. Gentleman yesterday that he had his figures wrong and that he had failed to
    1216
    put them in the proper perspective. He had not allowed for the private sector or for the Housing Corporation's new borrowing powers and its opportunities to raise money privately, to give guarantees and so on. I agree with the hon. Gentleman about the problems of the inner areas. It is the purpose of the Housing and Planning Bill, which was given a Second Reading last night, to deal with them. The effect of the proposals for improvement grants concentrated on the inner areas, and the housing action areas and the new resources of the Housing Corporation on those aspects of our housing policy is that we shall be spending about £500 million a year by 1977–78.

    Heavy Commercial Vehicles Act
    Mr. Dykesasked the Secretary of State for the Environment if he will give details of any instructions or guidance notes which have so far been issued to local authority reorganisation commit tees and the traffic management departments of existing local authorities in preparation for implementing the provisions of the Heavy Commercial Vehicles Act 1973.
    Mr. Peyton: Yes, Sir, Circulars 128 of 1973 and 2 of 1974.
    Mr. Dykes: Will my right hon. Friend confirm two propositions? The first is that the Act needs a great deal of work and that, therefore, the new local authorities should begin their work very soon after April this year to deal with the complicated details of this important provision. Secondly, in the meantime, in advance of any details being elaborated over the period laid down by the legislation, there are plenty of things that local authorities can do to mitigate the effects of heavy lorries in their most sensitive areas.
    Mr. Peyton: I agree with my hon. Friend that a great deal can be done in the interval. I assure him that local authorities will not suffer from any lack of advice or of urging the need to make progress with this useful Act.

    Easington (Beaches)
    Mr. Dormandasked the Secretary of State for the Environment if he will now make a statement on the

    1217
    action to be taken by his Department on the despoliation of beaches in the Easington constituency.
    Mr. Graham Page: Everything possible is being done to reach an early conclusion but I am not yet in a position to make a statement on the action to be taken.
    Mr. Dormand: I remind the right hon. Gentleman that it is 20 months since he met a deputation from Easington Rural District Council and Durham County Council on the matter. Those councils are still awaiting a decision. Is he aware that there has been a serious deterioration of the position at the beaches within the past four months? Will he immediately make a joint offer with the National Coal Board for a 100 per cent. grant for the construction of the breakwater which has been recommended as a solution, and at the same time begin talks with the board for a long-term solution to the problem of tipping? Is it not a fact that if the beach had been in Tory Bournemouth or Torquay action would have been taken within a week?
    Mr. Page: The hon. Gentleman knows my personal efforts in the matter and how keen I am on achieving good results. The local authority feels that it needs a decision on the discontinuance of tipping before it can take any action over the breakwater at Crimdon. Conversations with the National Coal Board have been going on for a considerable time. I do not think I am unfair to the board in saying that the ball is in its court now.
    Mr. Urwin: Surely the Minister appreciates that the question, far from being with the Government for 20 months as my hon. Friend the Member for Easington (Mr. Dormand) says, has been with them since June 1970. It was a live issue when the Labour Government left office, and the right hon. Gentleman picked up reports within two or three months of taking office. The patience of the local authorities as well as the patience of my hon. Friend and myself, who are directly affected in our respective constituencies, has long since been exhausted. It is high time the Minister made concrete proposals to stop the tipping on the beaches and arrived at firm conclusions with the board and the Seaham
    1218
    Harbour Dock Company to deposit the material out at sea rather than spoil the beaches as they are doing.
    Mr. Page: I know that it was a problem for the previous Government as well as for the present Government. We have all tried to solve it. It is a question of the practical methods to be used in clearing the beaches. There is no dispute about the desire to do so. Once the tipping on land can stop, there is an 85 per cent. grant available for the tips to be cleared. It is a matter of working out the practical means, which defeated the previous Government as well as the present Government.

    Rents
    Mrs. Renée Shortasked the Secretary of State for the Environment what is the average length of time local authorities have had to wait for the decision of the rents scrutiny boards about their fair rents levels after submitting the information required under Housing Finance Act.
    Mr. Channon: Rent scrutiny board reports have, on average, been made within six months of the boards receiving the local authority's provisional assessment.
    Mrs. Short: Is it not clear to the Minister that the Government have created a monstrous and inefficient machine with entirely arbitrary powers to exercise control over local authority rents—powers that have been taken away from the local authorities? Is he aware that the Wolverhampton Council approached the rent scrutiny board in January 1973 and has still had no information, and that 40,000 tenants in Wolverhampton face an arbitary and perhaps unfair increase of 50p in their rent by 1st April? What will the Minister do to see that the board carries out its duties under the Housing Finance Act speedily?
    Mr. Channon: Rent scrutiny boards are independent bodies and I have no power to control them. However, as the hon. Lady put down the Question I had inquiries made and I understand from the board that it hopes to issue the report on Wolverhampton early this month.
    Mr. Woodhouse: Will my hon. Friend recognise that it is not an isolated problem? Does he recall that he has had for some time in his Department a letter from me on behalf of the Oxford City Council urgently requiring an answer on exactly the same point?
    Mr. Channon: I certainly recall that my hon. Friend has written to me. I hope to be in touch with him shortly about the matter.
    Mr. Julius Silverman: As rent scrutiny boards are imposing extremely high increases over existing rents, will the Minister urge tenants to accept the waiting period with patience, if not with resignation?
    Mr. Channon: I am delighted that the hon. Gentleman should join me in urging everyone to accept the provisions of the Housing Finance Act.

    Channel Tunnel
    Mr. Moateasked the Secretary of State for the Environment what is his estimate of the capital outturn cost of the Channel Tunnel, including allowance for inflation, interest during construction and financing charges, assuming inflation at the rate that occurred in 1973 and interest rates at their present level, and allowing for recent changes in exchange rates.
    Mr. Peyton: My hon. Friend's Question is based on hypotheses which I do not accept.
    Mr. Moate: Will my right hon. Friend explain why he was prepared to put forward a figure of £846 million last year on exactly the same hypothesis but on inflation rates of 5 per cent. a year and interest charges of 9 per cent? Would not the true costs show that the project is already escalating out of control and that at the very least there should be a Select Committee scrutiny of it or that at best it should be cancelled right away?
    Mr. Peyton: My hon. Friend's hostility to the project is well known. I do not think that I shall be able to satisfy him.
    Mr. Crosland: The main hypothesis in the Question is that inflation will continue. The Minister says that he does not accept that hypothesis. Does that mean that he
    1220
    is about to fight an election on cutting prices at a stroke?
    Mr. Peyton: No, Sir. It means nothing of the kind.
    Mr. Marten: My right hon. Friend must not treat his own back benchers in this way. The sum he was asked to do is quite do-able. Will he get his officials to do it even if he cannot?
    Mr. Peyton: I am very much obliged to my hon. Friend for his kindly advice.
    Mr. R. C. Mitchell: Would the Minister care to estimate the average wage which will be paid to those who dig the tunnel and say where he thinks the labour will come from?
    Mr. Peyton: Not in reply to this Question.

    Planning Appeals
    Mr. Luceasked the Secretary of State for the Environment what action he is taking to speed up planning application appeal decisions.
    Mr. Rippon: To cope with the greatly increased number of planning appeals in the last two years I have increased the number of planning inspectors from 133 at the end of August 1972 to 220 and have in the first place concentrated the effort on reducing the number of transferred outstanding appeals made in writing. Written appeals represent about three-quarters of the total. The result has been that 3,700 of these appeals were decided in the last four months of 1973 in an average time of 31 weeks. In 1973 10,890 appeals were decided, nearly twice the number decided in 1972 and a record for the Department. I am now concentrating on reducing the time taken to decide appeals involving an inquiry. I am also considering how the appeals situation generally can be improved in the light of the interim report by Mr. George Dobry, QC.
    Mr. Luce: I am grateful to my right hon. and learned Friend for that reply. In accepting, however, that there is an increasing number of planning appeals, does he recognise that the present situation is causing great distress and frustration to many people? As the average time taken to decide an appeal has increased dramatically over the past year,

    1221
    will he launch a vigorous campaign to speed up the procedures, including the appointment of an adequate number of staff to deal with them?
    Mr. Rippon: I agree that the position is not yet satisfactory. That is why I have set in hand the procedures I have outlined.

    QUESTIONS TO MINISTERS
    Mr. Urwin: On a point of order, Mr. Speaker. May I draw to your attention the reply which the Minister for Housing and Construction gave to a Question earlier this afternoon with reference to the short supply of certain building materials, namely plaster products? He said that what was required was a return to full working instead of the three-day week, and—
    Mr. Speaker: Order. I am sure that the hon. Member has been here long enough to know that the content of an answer is not a matter for the Chair. I have no control over that.
    Mr. Urwin: But, Mr. Speaker, with respect, it is a well-known fact that plaster has been in short supply for well over two years, and subject to long deliveries.
    Mr. Speaker: That is not a matter of order.

TRANSPLANT OF HUMAN ORGANS BILL
3.31 p.m.
Mr. Tam Dalyell: I beg to move,
That leave be given to bring in a Bill to facilitate the transplant of human organs.
If for the third time in four years I intrude upon the prime time of the House to ask leave to bring in a Ten-Minute Bill on the transplant of human organs, I do so because most of us have experienced harrowing constituency cases, and because some of the specialists concerned believe that about 1,000 young and middle-aged lives could be saved each year in Britain through a change in the law and an amendment to the Human Tissue Act.
In round figures, the facts are that about 15,000 kidney transplants take place annually in the world, and of these at least 75 per cent. are successful if
1222
the criterion of success be good health over a two-year period. Roughly 70 per cent. of all transplant patients are still alive, many of them working, but in Britain the number of transplant operations has increased insignificantly, being some 200-plus now per year.
There are, however, about 2,000 candidates on the priority waiting list for kidney transplant, or at least 10 times the number of transplants last year. Roy Calne, professor of surgery at Addenbrooke's Hospital, tells us that at least 1,000 could be expected to do well if there were the organs available.
Since I last tried to introduce such a measure, two things have happened which have made the situation in Britain very much worse. First, it is now regrettably apparent that the kidney donor card scheme has failed. For my part, although I thought that the Secretary of State was right to try it, alhough some of the surgeons never thought that it was more than gentle propaganda, I suppose that the motions probably had to be gone through. But the unpalatable truth remains that this scheme has failed.
Second, if I may say so, there has been the Secretary of State's own ambivalence in the House on the legal position, which may have been partly responsible for taking the steam out of the kidney donor scheme. If a relative were to complain that organs had been taken from a deceased person with a card, there is, to put it mildly, doubt about the legal position of those involved.
It is not surprising, therefore, that many coroners or fiscals, until they see a change in the law, will just not allow organs such as the kidney to be taken from a corpse until such time as the permission of relatives has been received, and the delay involved in obtaining relatives' permission—even less than an hour after death—may mean that there is irreversible damage to the kidney, so that no recipient could benefit even if permission were obtained.
Hon. Members can readily imagine what it is like for surgeons at an interview. The stunned parents of a son or daughter who has been killed are asked, within an hour of the news coming to them, whether the surgeons may have permission for the organ to be extracted.

1223
This Bill would, in effect, do away with the need, painful for the doctor and painful for the relatives, for such a sensitive personal decision to be made at the moment of maximum grief.
My sponsors and I can well understand that some hon. Members may just shake their heads and say, "In the event of fatal accident, it is obscene to try to get organs from a child or young person". Our reply to that is that it is terrible also to be approached by the parent of a child or young person, or by a young wife or husband, who knows that the child or partner will die if a matching organ cannot be found.
One may ask whether public opinion is ready for the contracting-out scheme which is intrinsic in the Bill. The reply is that in 1969 I did a detailed personal survey, the results of which are in the hands of the Department, which showed that 364 families out of 1,000 would at that time have been prepared to go for a contracting-out scheme. It seems to me that the climate of public opinion is veering towards a contracting-out scheme such as is known in a number of other European countries. Since the MacLennan Committee reported in 1969, public opinion has definitely been in the direction of contracting-out.
Therefore, as the House has other matters to think about, I simply ask leave to introduce the Bill in the hope that, in the event of this Parliament running to July or the autumn, or even into next year, there will be time for debate leading to eventual action on this complex sensitive matter which is of paramount importance to some thousands of families.
Question put and agreed to.
Bill ordered to be brought in by Mr. Tarn Dalyell, Miss Betty Boothroyd, Mr. Neil Carmichael, Mr. Richard Crossman, Mr. Douglas Houghton, Dr. J. Dickson Mabon, Mr. Robert Maclennan, Dr. Maurice Miller, Mr. Brian O'Malley, Dr. David Owen, Mr. Laurie Pavitt and Miss Mervyn Pike.

TRANSPLANT OF HUMAN ORGANS BILL
  TRANSPLANT OF HUMAN ORGANS
  Bill to facilitate the transplant of human organs, presented accordingly, and read the First time; to be read a Second time upon Friday, 22nd February and to be printed. [Bill 83.]

INDUSTRIAL AND ECONOMIC SITUATION
Motion made and Question proposed, That this House do now adjourn.—[Mr. Weatherill.]
3.42 p.m.
The Chancellor of the Exchequer (Mr. Anthony Barber): On 17th December I announced to the House reductions in public expenditure which will cut back demand in the coming financial year by some £1,200 million. That was in addition to the reimposition of hire-purchase and other credit controls. In the debate which followed, it was clear that there were some who underestimated the magnitude of the action which we had taken. In fact, the action which I announced on 17th December, in terms of demand, was more, in either absolute or relative terms, than in any other previous set of measures introduced by any post-war Chancellor. It was, as the Prime Minister pointed out, equivalent in demand terms to a doubling of the rate of VAT from 10 per cent. to 20 per cent., or to an increase of 7p in all the rates of income tax.
Since those measures were announced, the oil-consuming world has suffered a further massive increase in the price of crude oil, which has increased fourfold since the autumn of last year. As I told the House the other day, the increase in oil prices since the autumn will add about £2,000 million to our import bill As the right hon. Member for Leeds, East (Mr. Healey) has pointed out, there will be some offsets to this figure in terms of increased exports, but the fact remains that the staggering increase in the price of oil over these past few months poses an entirely new problem not just for the United Kingdom but for the world as a whole.
It is right, therefore, that I should start by dealing with the oil deficit, and then with the non-oil deficit, before coming back to the domestic economy and the dispute in the mining industry.
The price of oil has risen so sharply that the oil producers will find their overseas income rising considerably faster than their ability to spend it. The oil producers as a whole will, therefore, move into a massive surplus and the rest of the world will face an equivalent

1225
massive deficit. It is, as I said at Question Time the other day, now generally agreed among finance Ministers—and I think there is no dispute on the point between the two Front Benches—that the old orthodox solutions for dealing with payments imbalances cannot provide a practicable answer.
Therefore, the first conclusion is that the answer to the oil deficit does not lie in competitive deflation. The result of such policies would merely be to slow down the economies of the industrialised world, to create mass unemployment and, in the end, would still not achieve the desired result in balance of payments terms. The second conclusion is that the financing of the deficits of the oil consuming countries is not merely a matter for the individual countries concerned but is in large measure a matter for collective co-operative action.
Here the IMF has taken a lead. Dr. Witteveen, the managing-director of the IMF, proposed at the meeting in Rome of the Committee of Twenty that the fund should add a new financial facility to the existing facilities to help countries to follow consistent adjustment policies. He had in mind that the fund should provide credits related to the specific problem of coping with the higher costs of oil, and the details were set out in the communiqué which followed that meeting. I would only comment that I have told Dr. Witteveen that he can rely on the United Kingdom giving full backing to treating his proposals as a matter of great urgency.
The third conclusion to be drawn from the increased price of oil concerns the developing countries. It is natural that each of us in the industrialised world should concentrate on the particular consequences for our own individual countries. However, unless something is done about the developing countries the situation which faces many of them is little short of tragic. Perhaps I may give a brief instance of that. It concerns the position of India. In the Committee of Twenty I sit next to Mr. Chavan, the Indian Finance Minister, and he mentioned two facts. The first is that the increase in oil prices alone will this year cancel out 50 per cent. of India's export earnings. The second fact is that over 80 per cent. of India's oil imports are for essential purposes.
1226
Taking the developing world as a whole, I believe the magnitude of the problem can be seen from the fact that the increase in oil prices for those countries will equal the whole of the estimated aid, both private and official. No one in this House will disagree when I say that surely there is here an additional responsibility on the oil-producing countries which find themselves with enormously increased financial resources.
I now turn from the problem of the oil deficit which in varying degrees is a problem common to the whole of the oil- consuming world, to the prospective underlying or non-oil deficit of the United Kingdom. The cause of this is in part—
Mr. Denis Healey: Before the Chancellor moves on, will he give us his view about the argument that the increase in the oil prices falling on the United Kingdom will be tantamount to a tax and is bound to reduce demand by that amount? Or does he take the view that the threshold provisions of phase 3 will tend to cancel out that effect?
Mr. Barber: I shall deal later with the effect of the increased oil prices on demand.
I was saying that the cause of the non-oil deficit is in part the short-term adverse effects of the depreciation of sterling, but it is mainly due to the unprecedented increases in the world prices of food and raw materials. In the autumn before the increase in the price of oil, there was—and still is—reason to believe that our underlying position would improve during this year. But, given the substantial size of the deficit without oil, it was clear that some corrective action needed to be taken to deal with the situation, and it was for this reason, among others, that I decided to introduce the measures of 17th December.
The action of the National Union of Mineworkers has already ensured that the non-oil deficit will be particularly large in the early months of this year. However, quite apart from that, it would be wrong, as the right hon. Member for Leeds, East has said, to aim at eliminating it altogether in a single year. I have no doubt that the necessary financing arrangements could be made this year.

1227
For example, we shall continue with the policy of public sector borrowing abroad. As I have said on several occasions in the House and outside, we have a sizeable borrowing capacity with the IMF and I would not hesitate to use it if necessary.
In spite of all the problems which have been created since the first announcement of the increased oil prices on 16th October, the foreign exchange markets have by and large reacted in an orderly way, and, whatever the disadvantages of floating, it will surely be generally agreed that there would have been far more problems if we had been operating with a fixed exchange rate. While it is natural that after the long post-war era of fixed exchange rates attention should still be paid to the sterling-dollar rate, it is no longer the best measure of the international value of sterling. It is now widely accepted that one has to have regard also to the cross rates between sterling and the other main currencies and to take account of the weighted average movements of sterling against the main currencies involved in our trade. It is a fact which any objective observer will welcome that, in spite of the oil problems and in spite of the industrial disruption with which we have had to cope, both of them since the autumn of last year, the effective exchange rate of sterling is today about the same as it was last autumn.
Since the debate which followed the 17th December measures, the price of crude oil has been raised even further; it is now nearly four times higher than it was in October. But if this staggering increase in the price of oil is a new burden which the nation has to bear, the prospects for the supply of oil have now improved. Over Christmas the Arab oil States reversed their progressive reductions in supply, bringing their January output target back from 75 per cent. to 85 per cent. of the September levels. In mid-January Saudi Arabia promised us additional supplies equivalent to 10 per cent. of United Kingdom consumption, and a major agreement was concluded with the Shah of Tran. Incidentally, it now seems a far cry from that Sunday in December when the right hon. Member for Leeds, East made his irresponsible and notable contribution to the petrol-pump
1228
panic by declaring to the country on the radio
"I think petrol rationing is now inevitable."
I hope that the right hon. Gentleman will now give credit to my right hon. Friend the Secretary of State for Trade and Industry for his stand in refusing to succumb to the Opposition's demand for panic action.
There would now be only comparatively minor problems over energy for industry if it were not for the action of the NUM, which in its turn has made it necessary, in order to conserve coal stocks, to put most of British industry on a three-day week. I am sure that the whole House will want to pay tribute to the most encouraging co-operation which has been shown by both sides of industry. In order to maximise output both in the national interest and very properly for reasons of self-interest, trade unionists and employers generally have been ready to abandon practices which have hitherto tended to hold back maximum output. The common effort and the ingenuity of management and employees has been remarkable.
I attended this morning, as chairman, the meeting of the National Economic Development Council. I mentioned this again at that meeting. There was no doubt about it among the three parties on that council.
I hope that the whole House is grateful for the co-operation which has been shown throughout industry in these difficult times. The result is that even on a three-day working week the output of industry affected by the curtailment has been running at an average of about 70 per cent. of normal output.
Mr. Sydney Bidwell: Does the Chancellor recognise that a considerable number of people who are normally Conservative supporters are tremendously puzzled about the existing situation, which seems to suppose that the Government, and the Chancellor in particular, do not have it in mind that because of the international oil situation and extended prices, mining labour has been put at a new premium? People are totally puzzled by the Government's failure to come to terms with that fact.
Mr. Barber: I mentioned at the outset of my speech—for the obvious reason that I wanted people such as the hon. Gentleman to know—the sequence in which I would deal with these matters. I shall come to the miners' dispute later. I should like to deal with it comprehensively.
I was saying that with the curtailment of power supplies industry has been maintaining outputs at about 70 per cent. of normal. But inevitably there has been a considerable increase in unemployment, an increase in the number of temporarily stopped workers, and a marked decrease in the number of unfilled vacancies.
All this means hardship for the working population. The NUM must bear the gravest responsibility.—[Interruption.] Whatever the Opposition may say, it is now accepted by the country that it would have been quite wrong if the Government had not taken the action which they took to conserve coal stocks. Concerning that, we have cause to be grateful to the right hon. Member for Bristol, South-East (Mr. Benn) for finally, and inadvertently, establishing that fact beyond doubt.
Obviously, the action of the NUM means that some industrialists will take a fresh look at their investment activities, and any cut-back will inevitably have an adverse effect on both working conditions and job opportunities. But here again, it is a fact that several large companies have announced very recently that they are pushing ahead with their investment plans which are directed to the longer term and are, therefore, unlikely to be affected by the present industrial disruption.
Although the increased price of oil and the many effects of the cut in coal production are bound to affect our standard of living, the overseas demand for our goods and the need to replenish stocks at home will be such that, when we have got over the present industrial disruption, output will again rise rapidly.
Concerning the forthcoming Budget, any provisional assessment at this stage must take account of a number of conflicting considerations.
Mr. A. W. Stallard: It will not be the right hon. Gentleman's Budget.
Mr. Barber: It is generally agreed—certainly on the two Front Benches—that we should borrow to cover the cost of the higher oil prices. Inevitably we shall also run some balance-of-payments deficit apart from oil; and we shall also, as the right hon. Member for Leeds, East agrees, need to borrow to cover part of that.
It is obviously of particular importance in the difficult days which lie ahead to maintain confidence in sterling. A depreciation of the effective rate would only make the problems more difficult. Our ability to borrow abroad the money that we need will depend crucially on confidence, and for that we should be seen to be making strong efforts to reduce our non-oil deficit.
On the other hand, action which might increase the risk of a world recession must be avoided. I have already referred to the consensus among Finance Ministers about the approach to the problems of deficits caused by the rise in oil prices.
Concerning the domestic economy and the steps which might be taken to ensure an adequate improvement in our non-oil deficit, we must bear in mind the substantial action to reduce demand which I took in December and which is now beginning to work through the economy. The effect of this has to be taken into account, together with the deflationary effect of the higher prices that United Kingdom consumers will have to pay for oil, which was referred to a moment ago by the right hon. Member for Leeds, East. Some capital investment plans are bound to be held back by the industrial dislocation. Also, one is bound to have in mind the fact that as a result of that dislocation unemployment is likely to rise. So for those reasons one would be reluctant to depress domestic demand.
But also to be included in any assessment must be this fact: already the three-day working week has reduced production by more than it has reduced personal expenditure. That is partly because of payments for the guaranteed week, partly because of payments of unemployment and other social benefits, and partly because in times of difficulty, such as these, families tend to draw on their savings. That is why, as I say, the three-day working week has reduced production by more than it has reduced personal expenditure.

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As the right hon. Member for Bristol, South-East has done us the courtesy of turning up here today, I should like to say that as usual he was quite wrong—as the leader of his party pointed out—in suggesting that the effect was the other way round.
What this means is that the longer the industrial disruption, the more we shall be drawing down not only our stocks of coal but also our stocks of goods of all sorts. We must, therefore, expect that for some months, as I have already warned, there will be bad trade figures as our exports are damaged and our imports increased. All these serious, difficult, conflicting and, in part, imponderable considerations must be weighed up before reaching any judgment about the Budget.
The right hon. Member for Leeds, East has been very forthright in recent weeks in telling us of the needs which he sees for increased taxation
Mr. Harry Ewing Mr. Harry Ewing (Stirling and Falkirk Burghs) rose—
Hon. Members: Give way.
Mr. Barber: The right hon. Member for Leeds, East has proposed an increase in income tax. He has proposed
"special taxes on consumer durables like TV sets and washing machines."
He has suggested an increased car tax, and possibly an increase in the tobacco duty. Only a week ago he suggested a payroll tax. As he has made it clear that a Labour Government would also keep VAT, we are entitled to ask whether this means a reimposition of the old SET on top of the existing VAT.
But depending on the way in which the situation develops, I certainly do not rule out the possibility of increased taxation. However, as the right hon. Gentleman has been so specific and so forthcoming in his advocacy of increasing both direct and indirect taxation, it will be interesting to hear from him this afternoon whether that still remains his view or whether he agrees with many of the economic commentators whose general view now is that at present a heavy increase in taxation might only add to unemployment and aggravate our economic difficulties.
It may be that what the Opposition have in mind is the increase in taxation which would undoubtedly be necessary
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if they were to get their way and to abandon all control over incomes. As The Times made clear the other day:
"if Britain elected a Government which had abandoned incomes policy … deflation would be absolutely necessary. It would have to be large enough to dispose of the non-oil element in the balance of payments deficit, and to make good the reduction of inflation consequent on the partial success of incomes policy so far … Without an incomes policy, any government would have to deflate at least to the point at which long-term unemployment was back at the million mark. Given the inflation that was still running when unemployment last touched a million, unemployment might rise to a level much higher than that, and for a long time."
That is what the policy of the Labour Party would mean for ordinary people.
Mr. Robert Sheldon: A few moments ago, the right hon. Gentleman was saying that, as a result of the phase 3 policy, which led to the dispute with the miners, we now have a situation in which the fall in production is greater than the fall in money incomes. Is not that the definition of inflation? Have not the right hon. Gentleman's policies directly led to increased inflation?
Mr. Barber: The hon. Gentleman has made a valid point. I am in agreement with him on the point that there is inevitably a differential between the fall in output and the fall in personal expenditure that tends to operate on demand in one way, but there are also other factors, such as increased oil prices and the action announced on 17th December, which tend to operate in the other way. Therefore, it is right at this time, if one is trying to make a rational assessment of the situation—[Interruption.]—I understood that the Opposition wished to have a debate on the economic and industrial situation, and I am giving the House the best assessment I can of the situation as it is.
Mr. J. Enoch Powell: Could my right hon. Friend explain why the increase in oil prices is deflationary but the increase in all other international prices has apparently been inflationary?
Mr. Barber: The point is simple. As far as the oil prices are concerned, the consequence of the staggering increase in oil prices at present will be to put up prices in this country. The consequence of that will be to depress consumer demand. The point I am making—with

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which I am sure my right hon. Friend the Member for Wolverhampton, Southwest (Mr. Powell) will agree from his own experience at the Treasury—is that these highly relevant factors have to be taken into account in deciding and forming an assessment of the conjuncture at any particular time.
Mr. Healey: Will the right hon. Gentleman now answer the point I made earlier? Under the threshold provisions of the pay code, the Government are obligated to compensate working people for increases in the cost of living above 7 per cent. Therefore, if oil price increases come at a time when the cost of living has already risen by about 7 per cent. they will be met by increases in pay. Therefore the oil price increases will not be deflationary?
Mr. Barber: It depends entirely on the threshold. If the threshold is triggered, this is bound to that extent to increase demand because of the increase in pay as a result of the policies we put forward. I would have thought that that was understood and accepted by everyone.
I was making the point that if all incomes policy were abandoned, as I understand is proposed by the Opposition, a much bigger dose of deflation would be required than would otherwise have been the case, with all the consequences of that for ordinary working people. At this time of controversy, it is as well to remind ourselves that all the main political parties in Britain recognise that the main threat to living standards, to economic growth and stability, is inflation, and indeed all those who care about social justice and stability should be in the forefront of the battle against rising prices, because inflation hits hardest the poorest and the weakest, the pensioners, the sick, the disabled, and all those who have not got big battalions to fight for them. Other countries have learned the hard way how inflation can undermine the democratic process itself.
Therefore, with the prospect which faced us over a year ago, we introduced a policy for the statutory control of pay and prices. What we have attempted to do is lay down a fair and sensible method of deciding the maximum increase in incomes which the nation can afford. The aim of all three stages of our counter-inflation policy has been to give
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particular help to the low paid, and it is accepted by the TUC that this is what we have done, whatever right hon. and hon. Members opposite may say. We have provided the biggest proportion of pay increases for the low paid. We have also encouraged progress towards equal pay, and it is also a fact that we have given the old-age pensioners a far better deal than they ever had under the last Government.
To a considerable extent, since 1972 inflation has been the consequence of costs and prices imported from abroad and over which we have no control, but there is also an element of inflation over which we as a nation do have some control and we shall succeed—
Mr. Nicholas Ridley: My right hon. Friend has just said that the increase in prices of imported foodstuffs and goods in part has been the cause of our recent inflation. Earlier he said that the increase in oil prices would be deflationary. Why is that different from the other increases in prices?
Mr. Barber: Perhaps I can explain once again to my hon. Friend. As far as increasing prices are concerned, obviously if prices of imported goods go up, in that sense it is bound to add to inflation. On the other hand, it is also perfectly true and is self-evident that when prices go up it also tends to depress demand in the country and tends to depress output.—[HON. MEMBERS: "Oh."] It is a policy—[Interruption.]— such as—
Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. I hope that the House of Commons will live up to its reputation of being a fair place where all hon. Members, whatever the situation, get a fair hearing. I am saying this now because it may well get hotter still later on—so perhaps I had better say it now.
Mr. Barber: The Opposition's policy, which would apply only to prices and profits and would duck completely the problem of wage and salary costs, would be bound to fail because it is sheer illusion to pretend that prices can be controlled without controls over pay. The Opposition argue that their policy would avoid the difficult problem of persuading working people to accept moderation and

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restraint in the growth of incomes, but they are silent on the consequence—namely, that this would do virtually nothing to combat the underlying problem of escalating costs or, whatever the Opposition may say to the contrary, to combat the problem of rising prices.
I turn now to the dispute in the mining industry. I want first to remind the House of the course of events over recent weeks. Just under a month ago, at a meeting of the National Economic Development Council, the TUC representatives put forward a proposal. It was that if the Government were prepared to make possible a settlement between the miners and the National Coal Board, the other unions
"… will not use that as an argument in negotiations for their own settlements."
In our subsequent meetings at No. 10 Downing Street, the TUC representatives stated that they regarded the miners as a unique case and that the TUC would not come back to Downing Street to seek special treatment for any other group.
We have recognised throughout—and the TUC accepts this—the significance of the TUC suggestion, its sincerity and genuineness. But we had to point out—and this was never disputed by the TUC—that other groups had the same sort of power as the miners to damage industry, to cause hardship and disrupt the life of the nation, and that there was nothing in the undertaking of the TUC to prevent such groups from following the example of the miners and using their own industrial power in support of excessive settlements.
Mr. Healey: Is the right hon. Gentleman aware that if there is one group of workers which has the same power as the miners to stop industry it is the electricity supply workers, and they accepted a settlement within phase 3 last week because, as their leader, Mr. Frank Chapple said, they wished to make it easier for the Government to allow the miners a settlement outside stage 3?
Mr. Barber: There are other groups, as the right hon. Gentleman knows. I will mention one in particular. I will not disclose in detail the conversation which we had across the table at No. 10 on this point, but if the right hon. Gentleman would like to inquire from the TUC
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—I am sure that my right hon. Friend the Prime Minister would have no objection—about the discussions we had on the railway settlement, which is still to come, I think he will find them significant.
The TUC, with complete frankness, agreed that there was nothing more that it could do by means of its undertaking to prevent that sort of thing from happening. Subsequent to that meeting and before the meeting of the NUM executive which had been called to discuss a ballot, my right hon. Friend the Prime Minister wrote to Mr. Gormley urging the executive carefully to consider once again the offer which had been made and also the other proposals. In particular, my right hon. Friend reminded Mr. Gormley that the Government had made it absolutely clear that we were ready, as soon as normal working was resumed, to start immediate talks with the National Coal Board and the NUM on the future of the mining industry, on improvements in pensions and provisions for health, and on the pay arrangements appropriate to the industry's future and its manpower requirements.
But the NUM was not prepared even to discuss any of those proposals with the Government. Instead it proceeded to a ballot of its members. It did so not on the offer which had been put forward, as had been done previously, but quite deliberately—and everyone knows the reason—it put the issue as that of strike action. [Interruption.] I hope that this will get some cheers from hon. Members opposite Mr. Scargill, president of the Yorkshire miners, put it frankly when he said:
"We have launched a massive campaign to shut down the bloody lot of the pits."
That is how he put it. Will anyone cheer that?
Mr. Eric S. Heffer Mr. Eric S. Heffer (Liverpool, Walton)rose—
Mr. Eric Ogden Mr. Eric Ogden (Liverpool, West Derby)rose—
Mr. Barber: I have a lot more to say on this subject. On the same day on which that decision to go to a ballot was taken there was published the report on the problems of pay relativities which the Government had asked the Pay Board to prepare. We made that request in March last year. As soon as that report

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could be printed it was sent to the TUC and the CBI with an invitation to discuss it as soon as they were ready.
There then followed, as the House will recall, widespread suggestions that this report might offer a way of finding a solution to the miners' dispute. There was, in particular, the helpful approach of the Leader of the Opposition. In a letter to the Prime Minister of 29th January the right hon. Gentleman asked whether
"the Government are prepared—even as we have urged, while the miners' ballot is proceeding—to bring together as a matter of urgency and to consult all the parties relevant to the Relativities Report to ascertain whether they are prepared to agree "—
I ask the House to note the following words—
"that the miners' claim should be urgently examined as an exceptional case, as envisaged in the Relativities Report?"
The Leader of the Opposition went on, equally helpfully, to ask whether the Government were prepared to use the report to build on the TUC proposal. It was apparent to the whole country that if the Government considered the Relativities Report offered a means of dealing with the miners' dispute, there would be a broad bipartisan approach to the grave situation with which the country was faced.
The next day the Prime Minister wrote to the TUC as follows:
"I am writing to you and the CBI to tell you that the Government accepts the principles of the Pay Board's report."
The Prime Minister offered to set up the machinery as soon as the necessary consultations with the CBI and the TUC could be completed. It should be remembered that there was still a month to go before the operative date of a new settlement for the miners. My light hon. Friend suggested that if the mineworkers resumed normal working and accepted a settlement within stage 3 they could put their case for a relative improvement in their position forward for examination in accordance with the procedure described in the relativities report. All of this was in line with what everyone, except perhaps some Opposition Members, assumed to be the helpful approach of the Leader of the Opposition.
My right hon. Friend made it clear to the Leader of the Opposition—
Mr. Stanley Orme: What about the TUC?
Mr. Barber: I will come to that in a moment. My right hon. Friend made it clear to the Leader of the Opposition that we saw no reason why the necessary procedure and machinery should not be agreed and brought into operation quickly, if necessary by appointing a body such as a Royal Commission to deal with this in the first instance. On 30th January there was a speech of considerable significance by Mr. Hugh Scanlon, who has been taking part in all our talks. He said that the trade union movement was ready to do its utmost to win a settlement of the miners' dispute with the aid of the relativities report. He continued:
"If this report "—
that is the relativities report to which the Leader of the Opposition had been referring—
"can be used by either the Government or the Coal Board in discussions with the miners or if the TUC could assist in any way, and this results in an agreement acceptable to the miners and the Coal Board, it is something to which we would lend our most urgent and earnest endeavours."
What could be clearer than that? Next, the reaction of the CBI. It informed us that it accepted the principles of the relativities report and was prepared to see its procedures used as a basis for considering the miners' claim. There remains on the Order Paper a motion standing in the name of the Leader of the Opposition and other members of the Shadow Cabinet which welcomes:
"the statement of the Vice-Chairman of the Pay Board indicating the means to a rapid settlement by invoking the Report on Relativities."
My right hon. Friends and I still believe that the relativities report could provide a real solution to this difficult problem. It could enable us to make a rational assessment of the proper relative position of the miners and at the same time it could provide a means of ensuring that inflation is kept under control.
That was the basis on which we put our proposal to the TUC representatives at our meeting at 10 Downing Street on Monday. We asked them to accept this as the way to an honourable and legitimate settlement of the miners' dispute, which would build on the earlier TUC initiative. We talked with the TUC for

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four-and-a-half hours and I will tell the House why I found it one of the most disappointing meetings I have ever attended. I have been asked to deal with the reaction of the TUC.
Despite the views expressed by the Government, the Opposition and by almost every national newspaper that the Relativities Report might offer a way out of this most serious of problems, the TUC representatives said that because they would need more time before deciding whether to accept or reject the principles of the report, it followed that even if they were to accept the report in due course the relativities procedure could not be in operation sufficiently quickly in their view to provide a way out of the present dispute which would be acceptable to the NUM executive.
As if that were not enough, the TUC representatives also told us that they were unable to support the proposal that my right hon. Friend the Secretary of State for Employment should invite officers of the NUM to meet him before its executive meeting yesterday to explain to them the advantages of the possibility being offered of enabling the miners' claim for improvement in their relative position to be fully, objectively and thoroughly considered.
We must still hope that the TUC and the NUM, if only in the national interest, will have second thoughts about the use of the relativities procedure as has been so widely proposed. There are some who have suggested that the Leader of the Opposition is now back-tracking from the helpful suggestions that he previously made on this approach. If that were so, it would be irresponsible and despicable. I hope therefore that at the outset of the speech which is to be made by the right hon. Member for Leeds, East, we shall have clear reaffirmation that it remains the view of the Opposition, as of the Government and of every independent commentator, that the relativities procedure provides a sensible and rational means of dealing with the miners' dispute in a way which would be fair to them and which would maintain, in the long term, their relative position.
Mr. Heffer Mr. Heffer rose—
Mr. Deputy Speaker: Mr. Heffer.
Mr. Ogden Mr. Ogden rose—
Mr. Norman Atkinson Mr. Norman Atkinson (Tottenham)rose
Mr. Deputy Speaker: Order. I called Mr. Heffer. Will other hon. Members please remain seated? [Interruption.] Order. Let us have order, please Mr. Heffer.
Mr. Heffer: On a point of order, Mr. Deputy Speaker. Before I put my point to the Chancellor of the Exchequer, in order to stop confusion when hon. Members rise to intervene, could whoever has the floor indicate to whom he is giving way?
Mr. Barber: I am obliged. I am happy to give way to the hon. Member for Liverpool, West Derby (Mr. Ogden).
Mr. Ogden: Be it Eric I or Eric II, it is likely that my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and I would say the same thing. Would it help the right hon. Gentleman in his disappointment if he had realised that the dispute with the miners has been going on for two-and-a-half months, during which time hosts of possible solutions have been passed to him from many quarters? Why is he so surprised when they come up with a possible solution at the eleventh hour the day before the strike ballot takes place—the sort of ballot which the Government were always seeking in their Industrial Relations Bill? Are they surprised when the miners say, "We have talked enough. We have been up enough blind alleys with the Government and will have nothing more to do with them"?
Mr. Barber: I think it was right that my right hon. Friend should respond to the suggestion made by the Leader of the Opposition at that time, and also to the suggestion made by many others, including Mr. Hugh Scanlon when he made his speech on the day on which my right hon. Friend the Prime Minister made his proposals.
Mr. Atkinson Mr. Atkinson rose—
Mr. Barber: No. I am not giving way again.
Several Hon. Members Several Hon. Members rose—
Mr. Deputy Speaker: Order. If the right hon. Gentleman gives way, of course hon. Members may interject. If he makes

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it clear, however, that he does not wish to give way, hon. Members must remain seated.
Mr. Atkinson Mr. Atkinson rose—
Mr. Deputy Speaker: Order. The hon. Gentleman is a well-known parliamentarian. He knows the rules and understands that if the Chancellor does not give way I must order him to sit down. He must keep his seat. I am sure that he wishes to play fair.
Mr. Atkinson: The right hon. Gentleman posed some rhetorical questions which I am sure he now wishes a member of the Opposition to answer.
Mr. Deputy Speaker: Order. If the right hon. Gentleman wishes a member of the Opposition to answer he will so indicate.
Mr. Atkinson Mr. Atkinson rose—
Hon. Members: Name him.
Mr. Barber: I will help the hon. Gentleman, Mr. Deputy Speaker.
Mr. Atkinson Mr. Atkinson rose—
Mr. Deputy Speaker: Order. The hon. Gentleman is now going beyond the bounds, and he knows that he cannot do that. Unless the Chancellor gives way, he must keep his seat. I do not expect to have to tell him again.
Mr. Barber: I will answer my own rhetorical questions, Mr. Deputy Speaker. The next rhetorical question I shall put is: who has done best for the coal miners—the Labour Government or the Conservative Government? The fact is that over five years of Labour government the pay of the coal miners rose by an average of 1 per cent. a year faster than the cost of living. In the first three years of the Conservative Government their pay rose 5½ per cent. a year faster than the cost of living.
As Lord Robens has said, referring to the rundown of the coal industry in the 1960s:
"Mr. Wilson and the Labour Government of that day cannot absolve themselves from the very heavy responsibility of the present situation … that is why I think they have an obligation to do all they can to help the situation, to cool the situation, and not to stir it up."
Mr. Michael Stewart: On a point of order, Mr. Deputy Speaker. Is it not the usual practice in this House that speeches made by a noble Lord in another place are not quoted unless the noble Lord is a member of the Government—and even Lord Robens is not that yet.
Mr. Deputy Speaker: Speeches by noble Lords should not be quoted in full, but references may be made to them.
Mr. Barber: Instead of accepting that advice the Opposition have been doing all they can to stir up envy and hatred. That is true. They have steadfastly refused to encourage the miners to return to normal working and have instead been encouraging them to continue their industrial action. The result of their efforts can only have been to prolong the three day week and to intensify the inconvenience and hardship imposed on the British nation.
The real and most damaging condemnation of the Labour Party is that it has deliberately condoned and supported the industrial action of the miners in the hope that it would succeed in defeating the polices of Her Majesty's Government, and in the knowledge that the extremists in the NUM have been openly saying that their industrial action is designed to bring down the properly elected Government of this country.
So the issue at stake is whether our affairs are to be governed by the rule of reason, by the rule of Parliament and by the rule of democracy. The vast majority of people in Britain detest the alternative, which ultimately can only be chaos, anarchy and a totalitarian or Communist régime.
4.30 p.m.
Mr. Denis Healey: The House has listened to an extraordinary but not untypical speech from the Chancellor of the Exchequer. Right hon. and hon. Members may feel it appropriate that what may, according to the newspapers, be the last full debate in the present Parliament should be opened by the first grave digger of the present administration.
Let me start with something fairly un-controversial. I agree with a great deal that the Chancellor said at the beginning of his speech about the implications of the oil crisis for the behaviour of the

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consumer countries. However, he made two points on which I must comment now. First, he said, rightly, that it would be very damaging to the nation's interests to allow sterling to fall any further. Secondly, he said that if we are not to cover the whole of our non-oil deficit this year—and I agree that it would be a mistake to seek to cover it all this year—we shall need a good deal of help and understanding from our friends abroad.
What my hon. Friends and many hon. Members opposite find it difficult to understand is that in a situation in which, for economic reasons, we are likely to depend so much on financial and economic assistance from our foreign friends the Government should have gone out of their way to antagonise all those to whom we should first turn for help. Our relations with the United States have not been so bad at any time since Suez, and more evidence of their deterioration appear every day. Our relations with all the Western European countries except France are almost equally cold. Indeed, the only friends the Government seem to have in the world at present are to be found in the Middle East countries. Some of us find it surprising, if not shocking, that a Prime Minister who first made his name as Chief Whip of a Conservative Government drumming up support for the Suez operation should end his political career begging the Arabs for baksheesh.
Mr. Russell Kerr: Nice one, Denis.
Mr. Healey: However, the Chancellor of the Exchequer did one thing which was quite unexpected and, I think, unprecedented. He enunciated a new economic principle which startled many of his hon. and right hon. Friends as much as it startled us, namely, that the best way to reduce inflation is to increase prices. I am afraid that his tortured and painful efforts to explain why that was so had no effect whatever on the House. I shall return later to that point.
Throughout the Chancellor's tenure of his very high office, he has preferred popularity inside his own party as a smart political operator to the solid reputation which he might have gained by building on the firm foundations left to him by my
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right hon. Friend the Member for Birmingham, Stechford (Mr. Roy Jenkins). We all agree that the Chancellor is very quick on his feet; he can spin round from back to front faster than anyone. But the staggering thing in his behaviour over the past 3½ years has been his inconsistency. Throughout his tenure of office his economic policy has been neither firm nor fair.
The right hon. Gentleman started by renouncing altogether responsibility for controlling the economy and left it all to the struggle in the market place between capital and labour, subject only to the laws of supply and demand. That led to over 1 million unemployed within 18 months, the collapse of economic growth and investment in this country, soaring prices, and the devaluation of the pound. So in the middle of 1972 he decided to repeal the laws of supply and demand in the Counter-Inflation Bill. He decided that the Government should fix all wages by law and all prices except those which matter most—the prices of food and housing.
But throughout these reversals of the right hon. Gentleman's policy there was one constant theme, and that was an unremitting hostility to the trade union movement. During his "market" period, he sought, through the Industrial Relations Bill, to cripple the unions by destroying their power to negotiate. The result was that we lost more days in strikes in 1972 than in any year since the General Strike in 1926, and we had the biggest wage inflation since the war. Now the corpse of the Industrial Relations Act is rotting on a slab in the Department of Employment waiting for the next Labour Government to give it a decent burial.
During the right hon. Gentleman's second period of policy—the statutory control of prices and incomes—he tried to cripple the unions by withdrawing their right to negotiate. I do him this credit: it worked for a year because the unions saw the prospect of economic growth. Last year average earnings were kept down to the increase in the cost of living. But the operation of the right hon. Gentleman's incomes policy led to very serious distortions in the economy. Public industry lost labour to private industry; factories working on time rates lost labour

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to factories working on piece rates; large firms lost labour to small firms which were less carefully monitored by the Pay Board; people employed in industry lost out to the self-employed, particularly those working on the lump in the building industry; and, as a generalisation, manufacturing industry lost labour to the service industries where, again, the operation of the Pay Code was less easily controlled.
But the growth which led to a degree of reluctant acquiescence in the policy by the unions has turned out to be largely an illusion. It is true that there was a spurt in growth between the end of 1972 and the beginning of 1973, but we now know that that was achieved almost entirely by taking up the slack created by the 1 million unemployed in 1971 and 1972. In the second half of last year the annual rate of growth had fallen to 1 per cent. There were two reasons for that: first, growing shortages of skilled labour and materials in manufacturing industry; and, secondly, a 5 per cent. fall of productivity in the service industries which it is impossible to attribute to anything except the abolition of selective employment tax. If the Chancellor has another explanation for the fall of productivity in the service industries, we should like to know what it is.
Nevertheless, although growth was falling and the economy was overheating in many sectors, the Chancellor continued to pump demand into the economy when it was fully stretched through tax increases to the better-off, which sucked in imports and diverted exports to the home market. I defy the right hon. Gentleman to give any other explanation for the fact that at the end of last year the balance of payments deficit was running at nearly £2,500 million a year, that during 1973 we had a trade deficit with the industrial countries of the Common Market of over £1,000 million, and, worst of all, although the export industries had made heroic efforts to raise the volume of exports by 26·7 per cent. between the third and fourth quarters of last year, that the volume of imports rose nearly twice as much between the same quarters—by 47·9 per cent. The fact that devaluation was then bumping about between 18 and 20 per cent. turned this deficit in volume into a colossal deficit in money terms.
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Those are the consequences of the policy followed by the Chancellor of the Exchequer in the last few years. The central problem was well defined by the Governor of the Bank of England in a notable speech on 15th January this year when he indicated that the non-oil deficit now represents 4 per cent. of our gross national product. We must during this year reduce it, though not—and here I agree with the Chancellor—eliminate it, and try to produce the investment which has consistently eluded the Government during their first three-and-a-half years of office. The result is that there will be less of the national output available for consumption in this country.
Economists knew these to be the facts well before the end of last year, but the sudden public recognition of the oil crisis presented the economic problem in a completely new dimension to public opinion. By the end of last year there was a general recognition by men and women throughout the country that we had once again been living beyond our means, that we faced a period—perhaps years—of substantial national sacrifice, and that the Government must give a lead to the people in two ways. On the one hand, they must take direct control of the resources available to the nation and use them so as to maximise growth and employment. On the other hand, as sacrifices are inevitable, the Government must redistribute income and wealth so that the burden of sacrifice is fairly shared.
The Chancellor rightly said that I had suggested that some tax increases are necessary. That is true. They are necessary to redistribute the burden of sacrifice, and the revenue from taxes on the better off and on less essential goods must be used to keep down the price of essential foodstuffs, housing and public transport. I am glad to say that an increasing number of the Chancellor's hon. Friends have come to this conclusion purely on an objective study of the nation's plight.
Although we all sense the public mood to be one of readiness to accept a lead and to make a sacrifice, the Chancellor threw away the most remarkable opportunity he has had since the Second World War. As I said on another occasion, the whole country was ready to put its

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shoulder to the wheel and the Chancellor simply took the wheel away.
Apart from long overdue restrictions on hire purchase—which, incidentally, were not extended to cover tax-free loan interest, which is an even greater source of inflation but which affects the rich whereas hire-purchase restrictions affect only the average man—the Chancellor put the whole burden of reduction of demand on cuts in public expenditure which were to fall late in the year and fall more heavily on the poorer parts of our community who make much greater use of public services than do the rich and which, incidentally, have a minimum direct impact on foreign exchange.
Nevertheless, the Chancellor recognised that cuts must come also in private consumption but, fearing loss of popularity—the loss of the only one of his achievements so far untouched, his reputation as the man who cut taxes—he made it clear by the extraordinary new principle which he enunciated this afternoon that he intended those cuts in private consumption to come from organising affairs so that in the coming year prices rise very much faster than do wages. That is the only basis on which his policy now rests. He wants to throw the whole burden of adjustment to the failure of his economic policy on the wage-earning section of the population.
I tell the Chancellor that this is not on. To begin with, the Chancellor cannot hope to achieve his objective without withdrawing from phase 3 and introducing a phase 4 of his incomes policy which has no threshold provisions and probably involves a wage freeze.
Mr. Barber: The single biggest change that puts up prices in this country is the increase in oil prices. Does the right hon. Gentleman agree with his right hon. Friend the Leader of the Opposition that the taxation on petrol should be cut?
Mr. Healey: I do not believe that the tax on petrol should be cut, nor does my right hon. Friend. The Chancellor is wrong in saying that the biggest single increase is the increase in oil prices. If one reads what has been said by various food manufacturers during the last few weeks, one can see that a colossal increase in prices is coming apart from
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the increase in oil prices, which, incidentally, will feed through in to the Index of Retail Prices long after the deterioration in our balance of payments which starts the moment that oil is landed at the new price.
As the Chancellor has asked me a question, perhaps he will answer this one. Will he give the House the assurance that he and his colleagues have no intention whatsoever of introducing a wage freeze or abolishing the threshold provisions of the phase 3 policy?
Mr. Barber: The answer is, "No, I cannot give such an assurance".
Mr. Healey: I was hoping during this afternoon to elicit some details of the Conservative Party's election policy, and I am glad that I am already beginning to succeed.
Besides failing to deal adequately with excessive demand in the economy, except through this callous, inhuman and impracticable policy of depressing wages below the increase in the cost of living, the Chancellor took no action to deal with the main constraint on growth in our manufacturing industry. He did nothing to deal with the shortages affecting growth and, most extraordinary of all, when the greatest shortage affecting British industry is of steel, he decided to cut investment in the steel industry as part of his public expenditure cuts. His right hon. Friend the Secretary of State for Trade and Industry, who is sitting in a natural dualism with him on the Front Bench, compounded this error by recently agreeing to pay the Shah of Persia in steel, for which British industry is crying out, in return for oil costing about twice the price of the equivalent amount of British coal.
That brings me to the immediate crisis which, as the President of the Confederation of British Industries told us yesterday, is as grave as that which faced us at the outbreak of the Second World War. The tragedy is that the crisis is wholly and completely unnecessary. At a time when Britain desperately needs more British coal, which is cheaper and which involves no balance of payments cost, at a time when the miners are streaming out of the pits because they are paid less than miners anywhere else in Europe except in Belgium—even less than they are in Spain—when miners are paid less than an 18-year-old typist can command in the City

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of London, and when miners can earn two or three times as much by working in private industry in the tin mines or the Thames tunnels, the Government decided on a fight to the finish with the British miners, because they saw their claim as an opportunity for exacting revenge for the humiliation which the miners inflicted on the Government in 1972.
The Government made it clear that they were determined to force the miners to accept a settlement which was determined months earlier in a Civil Service office by the detailed drafting of the phase 3 code, with no negotiation at all.
The Chancellor in his selective account of the course of negotiations between the Government and the National Coal Board did not point out the fact that the way in which the Government handled these negotiations will go down in history as a classic case of how not to negotiate—if "negotiate" is intended. The whole of the offer which the Government were prepared to make was slapped down on the table the moment the negotiations began. The Prime Minister was so uncertain of his ability to retain his resolution throughout the negotiations that, stage after stage, he deliberately removed from himself all possible room for flexibility or manoeuvre.
The Chancellor spoke a little about the relativities report. As I understand it—and I hope that the Secretary of State for Trade and Industry will tell us the facts a little later—the report should have been presented to the Government last September. And those of us who have read it, cannot for the life of us see why it was not. Nevertheless, I understand that it was available to the Secretary of State for Employment on the Saturday before it was published to the House. Yet when the TUC asked the Secretary of State for Employment for information about it, because it saw the report as a possible means of breaking the deadlock on the Monday, the right hon. Gentleman refused to discuss it. In the meantime the Secretary of State for Energy had contrived affairs in such a way as to provoke the miners into calling for a ballot.
On the Thursday, when the report was finally published, the Secretary of State for Employment went out of his way, in answer to a Question by the Opposition,
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to say that there was no possibility of using the report to break the present crisis. He said that it would have been quite improper to use a long-term affair of this nature to deal with an immediate industrial issue. In fact, at every stage where the Government have appeared to make some concession, they have made it in such a way that they have left no effective time for negotiation to take place.
Indeed, the Government, instead of negotiating, decided instead to attempt to turn public opinion against the miners by bringing in the three-day week. The Minister for Energy is still offering to solve the energy crisis by issues of luminous toothpaste and compulsory bingo. But the result of the three-day week has been a fall in output of between 20 and 30 per cent.—a fall which led the OECD to predict a 9·5 per cent. fall in British output for 1974 as a whole. I understand that it has already cost the economy £75 million a month because of the increase in the balance-of-payments deficit.
When the Government failed to swing the public against the miners through the imposition of the three-day week, they then told us that the three-day week was unnecessary after all. This provoked the miners—and the Government must have known this—to call for a ballot, a ballot which the Government had been asking them to call ever since the dispute began.
If the result of the ballot proves anything, it proves to the hilt that those who lead the British miners in the executive of the NUM are not just a handful of agitators but represent a larger majority of their membership than any political representative could ever claim to represent. The size of the vote was higher than we have had at any General Election, except one, since the Second World War. The size of the majority given to the leaders of the NUM was almost double that ever obtained by any British Prime Minister in history.
What the House and the country find difficult to accept is why the Government still refuse to allow negotiations on the only issue that is in dispute. I refer to the amount of money to be made available to the miners. It is true that the Government have offered to use the relativities procedure, but they have also

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made clear that there is no chance of this procedure producting a result for a long time and are not able in any way to predict the result. I cannot blame the miners for refusing to accept vague promises. After all, they are still waiting for the implementation of the seven-hour day promised to them by the Sankey Commission in 1919.
There is one aspect of the dispute which is widely misunderstood in the country and which The Times newspaper has got quite wrong in its editorial this morning. To settle outside the provisions of the phase 3 code would not be contrary to the counter-inflation policy. When the Secretary of State for Employment in his first appearance in the House after his appointment referred to the possibility of settling within the counter-inflation policy rather than within the limits of phase 3, many of us believed that he would do the sensible thing—namely, that he would make use of the powers which the Government asked the House to give him when the Bill went through the House. He could either amend the code—and he could still do that at any time he liked—or set aside the code in the national interest. Could there ever be a situation in which the national interest was more at stake than it is today?
The second point on which The Times is wrong, and has been misled by the Government, is in arguing that by making an exception provided for in the Counter-Inflation Act the Government would be opening the floodgates to waves of new claims of this nature. The fact is that 6 million workers have already settled within the phase 3 limits—almost all the workers who were due to negotiate during the winter period. All their representatives have formally endorsed the TUC proposal that the miners should be given exceptional treatment. In an intervention earlier in the debate, I quoted what Mr. Frank Chapple said on this subject.
The right hon. Member for Barnet (Mr. Maudling)—and I am sorry he is not here this afternoon—was right to point out in a letter to The Times the other day that the Government have got their phase 3 policy accepted. Why the dickens do they not make an exception of the
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miners when that is in fact the case, even though it is not legally the case? The most extraordinary thing is that, on top of this, the Government are undertaking, by nods and winks, that the miners will get more any way—perhaps later in the year, backdated as early as 1st March Why on earth can they not offer this now and get the miners back to work? The fact is that the Government are crucifying the nation on a clause in a code which has already lost all practical meaning.
I have some personal sympathy for the Prime Minister in this dispute.
Mr. Dan Jones: Why?
Mr. Healey: Because I believe that in one aspect of his personality he wants to move the country towards a new way of dealing with industrial relations. But there is an element of stony rigidity in his make-up which tends to petrify his whole personality in a crisis. He should never have allowed himself to be manipulated into this dead end by an oddly assorted quartet of his colleagues, who are now trundling him like a great marble statue towards the precipice.
Two of this obvious quartet are survivors from the eighteenth century. The first is the Leader of the House, an amiable man whom we all like but a man who is totally out of touch with the industrial realities of the modern world, as he told us once when he asked us to eat peaches. He reminds me of one of the more brutish Hanoverians, perhaps George III.
Then we have the noble Lord, Lord North—I apologise to the House: I mean Lord Carrington. He is one of the last great aristocratic amateurs in the Whig tradition. He finds no difficulty in combining scrupulous attention to his responsibilities as the landlord of rolling acres in Buckinghamshire with his rather more sordid duties as Chairman of the Conservative Party. He even finds the odd moment to visit his new Department of Energy.
Many of us find these two a rather agreeable pair. But they are joined in the conspiracy by two very difficult characters who we see sitting side by side on the Treasury Bench at the moment. I refer of course to the Chancellor of the

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Exchequer and the Secretary of State for Trade and Industry, who I feel would be rather more at home in contemporary Washington than in eighteenth century London. They have made it clear that they see this whole operation as a means of manipulating the Government into a General Election before the consequences of their own mismanagement catch up with them. They are consequences which are plain enough to anyone who reads the City pages in our newspapers.
No one can now deny that, whatever the outcome of the present disputes, it is now clear that 1974 is likely to be the worst year for the British economy since the war. The level of gross domestic product will fall, unemployment will rise, there will be a record balance-of-payments deficit and the rate of inflation will accelerate.
The Chairman of the Stock Exchange told us last autumn that the stock market was a barometer which indicated confidence in the Government's will to govern and the Government's ability to govern. We can look at the barometer. Yesterday, the share index fell below 300, and it is still bobbing round the 300 mark. It is a very accurate barometer.
I understand that some Ministers and Government supporters on the back benches may want to run for cover, or may have the more limited objective of ensuring that Parliament is not sitting during the first three weeks of a miners' strike when difficult decisions have to be taken. But the question which has puzzled me in the past 24 hours has been, if the Government call an election, what their programme is likely to be. Will they stand on their past record? Will they stand on the fact that they brought the value of the pound down below 75p, that they raised the cost of food by more than 50 per cent., that they doubled the cost of housing and that they produced a devaluation which is bumping round 20 per cent.? Will they run on their promises for the future that, if we re-elect this Government, in 1977 the pound will be down to 50p, the cost of food will have doubled, houses will cost four times more than when the Tories first got in and devaluation will have reached 40 per cent.? Somehow I doubt whether they will stand either on their record or on this kind of programme.
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Some people suggest that they may run on a doctor's mandate. But the Government are responsible for the disease. They are a group of bacteria—the lot of them. Do the Government expect to seek a doctor's mandate, speaking as a bacillus? I doubt somehow whether that will be the answer.
Will they fight on the issue of who governs Britain—the people or the Pay Board, Brussels or London? Is that to be the prospectus that they put before us?
I suspect that the Government's intention—and the Chancellor of the Exchequer rather confirmed this by the tone of his speech—is to confine the issue to the miners' dispute alone. If they do that, they will have two questions put to them at every meeting, in every newspaper, every morning and every afternoon throughout the campaign. If they win the election, the moment that it is over will they settle with the miners outside phase 3, as many people believe and as the right hon. Member for Wolverhampton, South-West (Mr. Powell) has said? In that case, how do they justify inflicting three months of misery on us all? If that is not their intention, will they continue slugging it out until one day either the miners or the Government collapse from exhaustion? If that is their intention, even if the operation is a great success the patient will have died long before it is completed. There will have been thousands of bankruptcies, millions of unemployed, the collapse of living standards and what is worse, irreparable damage to the social, economic and political fabric of the nation.
Mr. John Page: The right hon. Gentleman suggests that a General Election may be called, say, tomorrow or the day after. Will he and his right hon. and hon. Friends use their influence to try to stop the miners going on strike, thereby saving the nation from all the difficulties that he is underlining?
Mr. Healey: My party has been trying to stop this strike for the past four months. There is only one way in which it can now be stopped and that is by giving the miners freedom to negotiate with the National Coal Board.
It is quite clear that the second option is what the Government claim to intend and to want. But no one else in Britain

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wants it. Even the CBI's mind has been concentrated wonderfully in recent days by the prospect that it will be hanged tomorrow—
Mr. Ian Mikardo: And by the telegrams that it has had from its members.
Mr. Healey: Of course, and I for one would be very glad if the CBI carried out a similar ballot to that of the miners. The result might be extremely interesting.
I ask the Government to reflect on what I have said and to think again, even at this late stage. After all, they have a responsibility to govern. If they abdicate that responsibility, we on this side of the House will be only too happy to take that responsibility from them.
5.8 p.m.
Mr. David Knox: The last occasion on which I was called immediately after the right hon. Member for Leeds, East (Mr. Healey) in a debate on economic affairs was in the course of the Committee stage of the Finance Bill in 1972, when he made his notorious devaluation speech. It might be said that the right hon. Gentleman has been rather more responsible today than he was on that occasion, although he has at the same time been very much more boring.
The right hon. Gentleman said that my right hon. Friend the Chancellor of the Exchequer thought that inflation was cured by putting up prices. That is certainly true when a Chancellor is dealing with demand inflation. If it is not, perhaps the right hon. Gentleman will say why his right hon. Friends the Members for Cardiff, South-East (Mr. Callaghan) and Birmingham, Stechford (Mr. Roy Jenkins) put up taxes and so put up prices to deal with a demand inflationary situation when the Labour Government were in power. At the same time, perhaps he will tell the House why in the past 12 months he has been advocating increases in taxation to put up prices and so to reduce demand inflation.
The right hon. Gentleman is making a cheap debating point here, which is not worthy of him.
Mr. Joel Barnett: Will the hon. Member for Leek (Mr. Knox) say which of the programmes of the Chancellor of the Exchequer he accepts—allowing price increases to deal
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with inflation, or the other way round? Which does he accept?
Mr. Knox: The hon. Member for Heywood and Royton (Mr. Joel Barnett) knows more about these matters than the right hon. Member for Leeds, East. The hon. Gentleman knows that it is important to differentiate between cost inflation and demand inflation in this context and that a great deal of the misunderstanding from which we suffer has resulted from the fact that people do not make that distinction.
The right hon. Gentleman made a great deal about my right hon. Friend the Chancellor's policy being to ensure that prices rise faster than wages in the next 12 months. One of the great advantages of stage 3 is the threshold agreement which gives protection to people against price increases. If the right hon. Gentleman and his colleagues had supported stage 3 and if the National Union of Mineworkers' executive had accepted the offer that was made under stage 3, I am certain that my right hon. Friend would have been able to give an assurance this afternoon that there was no question of the threshold agreement being withdrawn. His reluctance to do so was because he was not certain, as no one is, what will happen in the British economy in the next six months.
I thought that the right hon. Gentleman's remarks about the miners' dispute gave a prejudiced outline of events. As any reasonable person knows, the Government have bent over backwards again and again to be conciliatory and the TUC and the CBI has bent over backwards to be conciliatory. The one group of people which has made no effort to be consiliatory has been the executive of the NUM.
If the right hon. Gentleman is trying to make the argument stick against the Government that within the Pay Board's report on relativities the miners will get an increase from 1st March and considers it a point of criticism that the Government are not making a definite offer now, it is equally a point of criticism against the NUM.
We are facing the most difficult, probably the worst, economic crisis that has confronted this country since the end of the war. We could probably have withstood and overcome the oil difficulties on

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their own. Indeed, there is a great deal of evidence that we were doing so. Industry was adjusting to the reduction of oil supplies. The supply position turned out to be rather better than we had reason to believe a short time ago. My right hon. Friend the Chancellor of the Exchequer pointed out that management had made a great effort to overcome the difficulties and to maintain output at an extremely high level despite the shortfall in oil supplies.
The quadrupling of the price of oil is causing severe international financial difficulties, but there appears to be the will to deal with them without doing too much damage to western economies. However, though we could have overcome the oil shortages and the increased prices without too much difficulty, it is obvious that the miners' dispute coming on top of those problems has created the desperately serious situation confronting us today.
Thus far things have been bad enough in British industry. The consequences of a prolonged dispute in the coal mining industry inevitably mean that they will get much worse. Industry has shown itself remarkably adaptable in the short term, but the longer these problems go on the more difficult it will be for industry to improvise in the manner in which it has done already.
The Leek and District Manufacturers' Association has expressed to me in strong terms today its worries about the future if the dispute is prolonged. As time passes the shortage of supplies and other difficulties will make the achievements that industry has obtained so far much more difficult. Inevitably, a prolonged miners' strike will cause a great deal of damage to British industry.
The current dispute has highlighted one of the most important questions confronting any Government in Britain today or indeed anyone with the responsibility for running a modern industrial economy—whether, on the one hand, to puruse full employment policies and to restrain price and income increases by a prices and incomes policy, or, on the other hand, to deflate the economy to the point where insufficiency of demand in the economy as a whole in relation to the supply potential will keep inflation under control.
I am firmly in favour of the first of these alternatives. I believe that a
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modern industrial economy works best at a high level of activity. I believe that most of our economic problems, particularly the lack of investment, arise because there has been far too much "stop" and not enough "go" in recent years. I believe that the maintenance of full employment is of tremendous importance, because I abhor so utterly a high level of unemployment with all the waste that is involved in it. If the economy is to be run at a high level of activity, there must be a high level of demand for goods and services which in turn means that there must be a high level of demand for labour in relation to the supply. In free market conditions that means that wages and salaries will rise excessively and cause rapid cost-push inflation. In such circumstances it is necessary to intervene in the labour market to restrain increases in wages and salaries if excessive cost inflation is to be avoided.
Politicians and political parties, particularly in Opposition, do not like to make that admission. The Labour Party took office in 1964 pledged not to introduce a statutory prices and incomes policy. Events forced it to do so. The Conservative Party took office in June 1970 pledged not to introduce a statutory prices and incomes policy. Again, events forced it to do so. In a full employment situation a prices and incomes policy is absolutely essential. Because I believe in a full employment economy, I accept that a prices and incomes policy is indispensable.
Mr. William Hamling: The Government do not have a prices policy. It is only an incomes policy.
Mr. Knox: That means that such a policy must be observed.
The purpose of any prices and incomes policy is to prevent people using to the full the bargaining power that a full employment economy gives them. So far stage 3 has been successfully implemented in this respect covering about 6 million people. Therefore, there is no particular reason, nor any justification, for any exception to the rule, especially in view of the fairly generous offer that has been made to the NUM and the offer of a relativities report as well.
In a free market situation the miners could get more. But an incomes policy

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is specifically and directly about restraining individuals and groups of individuals from fully exploiting their market position. I find it strange that the Opposition, a so-called Socialist party, should support the miners' claim in the manner that they have done with arguments which have more to do with and owe more to Adam Smith and a capitalist economy than to Socialism and the intervention that is inevitable in Socialism. It is sheer humbug, as hon. Gentlemen opposite know perfectly well.
It is necessary to ask those who do not believe in a prices and incomes policy, but believe that the price of labour should be determined solely by supply and demand and that the miners' demand in particular should be determined on that basis, to face the logic of what they are saying. The logic is that they are for hyper-inflation or that they believe that at all times there should be substantial slack in the economy, that total effective demand should be substantially below supply potential that capital should be under-utilised and that there should be a large continuing pool of employment. I emphasise the word "large".
Ten years ago we could probably have got away with half a million unemployed. Experience in 1972 has shown clearly that 1 million unemployed did not restrain cost inflation. I do not know exactly what level of unemployment would be necessary now to stop cost-inflation. I suspect that it would be about 2 million.
If 2 million people out of work is the price to be paid for allowing free collective bargaining in Britain without inflation, it is a price which I am not willing to pay and it is a price which I am sure the British people are not willing to pay.
I appreciate that some are willing to pay this price. I think that my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) is willing to pay this price. At times we get the impression from the Labour Opposition that they, too, are willing to pay this price, if we can judge by the speeches that are made by the right hon. Member for Leeds, South-East who is the Opposition's spokesman on economic affairs. He has been telling us for some time that he believes in balanced Budgets. He believes also in eliminating the
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borrowing requirement. He has rejected Keynesian economics on a number of occasions recently. He is in favour of free collective bargaining. I should like him to spell out in absolute detail what this attitude means in terms of unemployment, because I believe that the level of unemployment required to enable the Government to forget about free collective bargaining is much too high.
Since the right hon. Member for Leeds, South-East took over as his party's spokesman on economics the Opposition have got into something of a mess. They have returned to the worship of balanced Budgets and all the other things that Philip Snowden stood for 40 years ago. The right hon. Gentleman is on record as supporting such outdated financial ideas.
I do not know who it was who first said that the British Labour Party owed more to Methodism than to Marx. Today he would have to alter this and say that the British Labour Party owed more to Montagu Norman than to either of these two sources. In the past few years we have seen the spectacle of a once radical party scorning radicalism and affecting the theories of defunct and old-fashioned economists. Today Montagu Norman seems to be the spiritual inspiration of the British Labour Party. It is tragic that, merely to avoid the slight unpopularity of small groups of people that support of a prices and incomes policy brings, the Labour Party should oppose such a policy. It is even more tragic when the logic of the position the Labour Party has adopted is that the level of unemployment must be very much higher as a result of this.
If there is to be an election in the near future I believe that it is very important that the electorate should realise clearly what the price of the Labour Party's economic policy is in terms of unemployment.
5.23 p.m.
Mr. Adam Hunter: As we conduct this debate the prospects are that we are getting into a horrible economic mess. Nine years ago I came to the House unexpectedly because of my social background and my work as a miner. Never in my wildest dreams did I expect to find in the House indications that we were about to go into

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a catastrophic decline through the fault of the Government.
We all know that the problems are varied. The problems besetting the Government are a mixture of national and international ones. Invariably little or nothing can be done about international events. Surely something can be done about national events. The Government have a working majority and they should be able to control many of the things that happen domestically. The Government have failed completely to remedy the country's ills.
The Government have also failed to honour nearly all their promises, particularly those in relation to curbing inflation and putting the economy right. The miners' overtime ban, compounded with all the other problems, means that we are in a very serious position and it all adds up to a prescription for national disaster in the coming months.
We on this side indict the Government for causing industrial and economic chaos and for allowing so much bad feeling to be engendered, particularly between workers and the Government. This is a situation which has been fostered rather than one which has merely developed.
All of this is blamed on the miners because they imposed an overtime ban. If in the past the country had had to depend on my working overtime, and if all the miners had been like me, Britain would have faced this problem long ago and probably the problem would have been solved by now.
In my constituency I live among the miners. I have attended many rallies organised by the National Union of Mineworkers, Scottish Area, and the Scottish Trades Union Congress. I know that there is a feeling among the people that the present situation is very like that in the 1920s when there was so much industrial confrontation between employers and employees. We have not allowed the miners to forget that period in history.
I can say from my experience among miners, and knowing the result of the ballot, that the strike will continue for as long as is necessary to secure the miners' just rewards.
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The Government admit that the miners are a special case even in normal times. We are not living in normal times. The whole energy situation has been altered. Everyone agrees that because of the importance of coal the miners are a special case. The Government seek a way out by wanting to refer the matter to a body to decide this in accordance with the Relativities Report, but the miners' union not prepared for the matter to be settled in that way. I meet miners, their families and people living in mining areas regularly. I know that they still consider that the Conservative Party is their traditional enemy and they are still suspicious of Conservatives.
The miners have been angered, particularly, about electricity supplies and the confusion over coal and oil stocks at power stations. I believe that the miners have good reason for anger.
The Government, particularly under the recent Coal Industry Act, have been generous to the coal industry and have implied that the miners have a good future ahead of them. This is simply because of the new energy situation. To prevent all the troubles and difficulties that Britain will face would it not be a gesture of good will for the Government to give the miners a little more now?
My colleagues have repeatedly said in recent debates that the miners have had too many promises made to them which have remained unfulfilled and this is one reason why they are not prepared to accept what the Government say about the Relativities Report. The confrontation with the miners is politically motivated. The miners are correct in not accepting what is offered to them in phase 3.
The Government could get themselves out of this serious difficulty by going further, either within phase 3 or a little outside it. The Government are in a serious difficulty over the three-day week. If the strike takes place and continues for any length of time there will probably be a two-day or one-day week. The problem could be settled simply by offering a few million pounds to the miners, and I suggest that the Government do that.
The Minister for Energy was in the Chamber a little while ago but has now left. Had he remained I would have reminded him that in 1965 he went down several English pits with me, a few young

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Conservatives and my mining colleagues. The Minister would agree, I am sure, that the conditions which he saw down the pits warrant much more than £35 a week for underground workers.
The miners are determined not to forget past years when coal was considered to be in decline. Nor will they forget the long period of run down in the mining industry, nor the callous way they were expected to stay in the industry until what seemed to be its inevitable demise.
The miners have co-operated patiently and have almost passively allowed the pits to be run down, knowing all the while that if the decline continued to the end their job security would go out of the window. In the past when oil was in the ascendency the Labour Government, as well as the present Government, argued that oil would replace coal in power stations. The accent seemed to be on oil-fired power stations. Now the situation has changed completely and the flow of oil from oil-producing countries is not what it used to be.
The miners have been patient. They suffered for at least a decade because of the run down in the pits. It was unfair to expect men to stay in the pits, particularly when they saw that the coal industry was gradually diminishing. That is one reason why men in the pits are so much concerned about their future. In the past wages in the pits were not high. Let us compare the years of the run down with what happened in America. There was also a great run down of the coal industry in America and other Western countries. In America the miners accepted the run down. The situation in the American mines was completely different from that in British mines because the American miners had excellent conditions. John L. Lewis, who represented the miners in America at that time, did a great job for them.
I am not surprised that the miners are now so militant, bearing in mind that they have been greatly exploited in the past. Everyone agrees that the mining industry and the miners are an important part of our economy. The miners are now bargaining from a position of strength and no workers who have been depressed in the past can let such an opportunity go by. We are now in a situation in which we can demand anything for working
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in the pits. The House should bear that in mind.
There is a rumour that there could be a General Election in the near future. If there is, and even if the Tories win, they will still have to improve on the present offer to the miners. The Government have tried to make the miners the scapegoats for the country's economic ills. That is nonsense. The miners are now going on strike and they have the support of many trade unions. The Government still have time, even at this late hour, to negotiate, as Joe Gormley, the president of the miners' union, said last night. All the Prime Minister has to do is to agree to negotiate. If the Prime Minister were to accept this opportunity it would not be a victory for the miners but a victory for common sense.
5.35 p.m.
Sir Robert Cary: I am happy to follow the hon. Member for Dunfermline Burghs (Mr. Adam Hunter). He is a miner and he knows mining inside out. He may wish to know that I had the privilege, during my first ten years in the House, or representing a mining constituency. As a young candidate in the early 1930s I lived in rooms with miners at Swinton and Patricroft. I descended most of the pits in the area and had a close view of the miners' working life. It is a hard life. It is hard for those who get the coal underground and it is hard on the surface for the families. That was particularly so in the 1930s. Perhaps there is no community more valuable in our society than the mining community. I agree with the hon. Member for Dunfermline Burghs that the miners have a vital, almost superior, place in society. With him I deplore the run down of that source of energy which is so natural to our country.
The decision of the National Union of Mineworkers yesterday morning sounded for me a note of tragedy and sadness. The decision was taken on Tuesday, 5th February. It was on a Tuesday—4th May 1926—when the General Strike was started by the TUC in support of the miners. I recall the miseries which I witnessed in the 1920s and again in the 1930s during my association with the mining community at Swinton and Patricroft.

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I agree with my hon. Friend the Member for Leek (Mr. Knox) that in a world of often mass unemployment there has to be a high price which we can pay in this country in managing our economy in such a way as to create unemployment which many people regard as intolerable.
Mr. E Fernyhough: The hon. Gentleman referred to the 1926 General Strike. That was the outcome of the miners deciding that they were not prepared to have their working day lengthened or their wages reduced. Did the hon. Gentleman regard the miners' stand at that time against their already low standards as defensible?
Sir R. Cary: I agree with the right hon. Gentleman about the circumstances of those years. But he must go back to the time when a German Chancellor of the Exchequer, with a taxable population of about 80 million people, imposed a surcharge on all electrical goods sold within the German frontiers, which enabled him to give a subsidy in 1922 and 1923 to the German coal owners, so that the Germans undersold our bunkering coal exports. From that flowed the tragedy of 1926 and the low standards—
Mr. Mark Hughes: May I say with the greatest deference, as an economic historian, that less than 7 per cent. of our coal produced in 1923, 1924 and 1925 was for bunkering purposes. It cannot be said that a diminution of coal prices over the whole range of coals was consequent upon bunkering coal competition.
Sir R. Cary: I am thinking of the effect of that German subsidy on the coal industry in South Wales. But I agree with the right hon. Member for Jarrow (Mr. Fernyhough) that miners were being asked to accept standards which were too low.
In 1926 we had not just a miners' strike but a strike by the TUC, which declared a General Strike in support of the miners. That ended in nine days, but the miners continued their strike until the middle of November.
Mr. Mikardo: They were locked out.
Sir R. Cary: That is an easy alibi. The miners went back to work in November of that year. I agree that the shut down of mines was a great national mistake for which both sides of the House were responsible.
We heard today from my right hon. Friend the Chancellor of the Exchequer the strongest appeal I have heard for the Relativities Report, which could bring a solution to our present crisis. My right hon. Friend the Secretary of State for Employment tried almost at the eleventh hour to bring about a discussion with the National Union of Mineworkers, at 9 a.m. yesterday before its executive meeting. I bitterly regret the executive's attitude.
Mr. G. Elfed Davies: I have been privileged to be present at most of the meetings and discussions between the Executive Committee of the National Union of Mineworkers and the Prime Minister and the Secretary of State for Employment. On each occasion we have had the same tale, without any change, and the miners' executive now says, "We are not going again for abortive talks. We want something there now, and then we shall negotiate."
Sir R. Cary: But the relativities board will have the power to make recommendations after its examination, and if there is an additional payment to be made to the miners it will be backdated to 1st March.
Mr. Fernyhough: The Government have the power to do that now.
Sir R. Cary: Yes, but my right hon. Friend the Chancellor has made that appeal to the NUM, even at this late hour. Joe Gormley himself says that there is still the ebb tide.
All I plead for now is that the NUM shall do the courtesy, not only to the Government and the CBI but to the whole British people, of taking one more look at the whole situation, by coming into conference with the Government and the CBI to reconsider the possibilities of the Relativities Report. Cash on the table takes many forms. If the relativities board recommends a payment to the miners over and above the present offer, the Government are under an obligation, and they are bound in honour to discharge it.
5.44 p.m.
Mr. E. Fernyhough: Irrespective of the relativities board report, any Minister who wants to settle the dispute has powers under existing legislation. The Government had it written into the Act, so I do not know why it has not been used. The Secretary of State for Employment is in a position to say, if the National Coal Board and the National Union of Mineworkers negotiate a settlement unacceptable to the Pay Board, "I use the powers which the Act gives me to say that this agreement shall become operative." I cannot understand why the powers should have been sought except for use in such a situation as the present.
During the past three or four months in particular the Government have been getting into greater and greater difficulties. The people obviously had to be told a different story from that which they were told during the honeymoon years. If the Government had to tell a completely different story because the facts did not square with the myths they had spread, they had to find someone responsible for the great worsening in Britain's economic position. Someone had to be found to whom the guilt could be transferred.
The Government have decided that the miners shall take that role. Apparently the miners alone are responsible for all the difficulties now facing Britain. There is not a single intelligent man or woman who does not know that if the miners had not started an overtime ban, if they were not going to strike this weekend, the changed circumstances facing the country would be such that the Tories would inevitably be very unpopular, because it is their policies which have created the situation.
One of the things that the Government must learn quickly—I hope that the hon. Member for Leek (Mr. Knox) will learn it—is that it is no good saying that prices and incomes must be controlled when the workers feel that only incomes are being controlled, not prices, and when they know that only some incomes and not all are being controlled. Last Saturday I read in The Guardian the following headline:
"Directors' total rise is 136 pc".
What will the Pay Board do about that? About three months ago it made laundry
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employers who were paying wages of £17 a week take 10p a week off those already low wages.
The miners see what the National Coal Board says in its advertisement, and they know what hon. Members on the Government side have been saying in the country, conveying the impression that the NCB is offering the miners a 16 per cent. rise. But they know that that is a lie. The National Coal Board is not offering the miners a 16 per cent. rise.
I have no right to speak for the miners, but I go so far as to say that, if the leaders of the NUM were told on the telephone tonight that the increase would be 16 per cent. overall, there would probably be a settlement. Yet constantly at Question Time and in their constituencies hon. Members say that the miners have been offered 16 per cent., when everybody knows that, in fact, the offer is roughly 10 per cent., and there are an awful lot of qualifications about the rest, and again the Pay Board comes into the picture. If they genuinely want a settlement, hon. Members should fairly and accurately describe what the miners have been offered, without plussing it up in the hope that no one except the miners will understand.
It is obvious from the Chancellor's speech today that we are to have a "Who governs Britain" election, and talk of "Reds under the bed". One would think that the miners had never been out on strike in earlier years, long before the Communist Party was ever heard of. The British Communist Party was not established until 1917. Has no Hon. Member on the Government benches read the story of the miners' strike in 1911, or read Richard Fynes' "History of the Northumberland and Durham Miners"? They struck for months and months. They were not led by Communists. If the Communists disappeared tonight, the situation would not change in the coalfields.
To imagine that 250,000 miners are being led by a handful of militants into a dispute which they do not want is tantamount to believing in fairies. It is about as intelligent to blame the Communists for the present dispute as it is to blame the Catholics for all the troubles in Ulster. Everyone knows that there is another side to the coin in Ulster, and it is nonsense to pretend that all the

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blame lies with the Catholics. There are others. Similarly, with regard to the miners, it is cheap to pretend that 250,000 of them—as intelligent as any other group of people in the country—are the dupes of cunning Communists who can lead them into decisions and actions which they would never undertake if the Communists were not there.
Miners can read and write. They know what is going on. They know about the directors to whom I referred a few minutes ago. They know what is done by land speculators and property speculators. If easy millions can be made by that type of person, without any sweat and effort and without risk to life and limb, and the Government do nothing to take a penny of it, the men who are risking their lives and their limbs every day they work will have a natural reaction—"If it does not apply to them, to people who are producing nothing for the nation, why should the restrictions apply to us, who are producing Britain's lifeblood?"
Until the Government begin to deal with property and land speculators, with directors who increase their own fees and with the gentlemen who have their salaries in the Cayman Islands—until they are prepared to remove those sores from the body politic, they ought not to expect the co-operation and understanding of men who do work such as the miners do.
Who governs Britain? Who took us into the Common Market? Was it the miners who gave away so much of our parliamentary power? Was it the miners who demoted the House of Commons?
Sir R. Cary: It was Labour's application.
Mr. Fernyhough: It does not matter whose application it was. It was done on Tory votes. We have a right to ask who governs Britain. The present Government not only took us into the EEC against the will of the British people but, what is more, they have paid for our membership fee of the EEC three times as much as would have provided a generous settlement for the miners. If half of what we are paying as our membership fee to the Community could be offered to the miners tonight, the strike would be called off. I should much prefer to see part of that money going to our
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own miners, who are now so important, instead of going across the sea for purposes of which I do not approve.
Over the past two or three weeks, we have heard a lot of talk about who governs Britain and about obedience to the law. Generally speaking, the philosophy behind it is one to which I should subscribe. But there always have been exceptions, and I want the Prime Minister to take these exceptions into account. At various times in our history, men who thought, as he does, that they were big men and absolutely right, when they faced a situation in which they had either to climb down or almost ruin the country, decided that it was better to show a little humility and make a compromise.
I beg hon. Members on the Government side to turn up the Report of the Royal Commission on Trade Unions and Employers' Associations. Let them read appendix 6, where the story is told of what happened to the Betteshanger miners. During the war, it was illegal for men to come out on strike. The men went on strike, and they were prosecuted. As a result of those prosecutions, their leaders were sent to prison.
What happened? The permanent secretaries of Ministers at that time went to the gaols to negotiate with the men who were in prison. In order that we might have coal, we decided to ignore the law. Ministers at that time decided that it was not worth it, that to enforce the law and lose tens of thousands of tons of coal which the nation desperately needed was suicidal and indefensible. The Ministers of the wartime cabinet, with all their responsibilities and as much as they wanted to save face, nevertheless realised that it was better for them to climb down in the national interest than to save face and probably ruin the country.
Conservative Members ask whether we support the miners. I make no bones about that. I am backing the miners. There would be something wrong with me if I did not, given my background, my relatives and my experiences. There would be something sadly wrong with me if I did not side with the miners in a dispute of this kind. Conservative Members accuse us of stirring up men to defy the law. Many of my hon. Friends will remember the debates we had on the industrial training boards. The levy by the training board for agriculture was

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hotly disputed by the Conservatives. They constantly pilloried the Minister about it. They encouraged the farmers to defy the law. The Labour Minister subsequently had to compromise and instead of the farmers paying the levy which the law said they should pay, it was taken into account at the annual review.
The Conservatives saw nothing dishonourable in backing the farmers in not observing the law. They felt that the farmers had a legitimate grievance and that if they defied the law the law must be changed to suit the views of the farmers. In the present situation the Government, knowing full well what the consequences for Britain must be, ought to reconsider the stand that they are taking.
So, what about the miners? They have made and always will make a bigger contribution to the welfare of Britain than any Conservative Member and they will never get half enough pay for it. Some Tories say that the supplementary benefits should be stopped. They say, "Let us go back to 1926 and starve them back to work." The hon. Member for Manchester, Withington (Sir R. Cary) knows the poverty and misery of those days. Would he stand for cutting off the miners' supplementary benefit?
Sir R. Cary: Of course not. There is no attack upon supplementary benefits. If there is a strike the miners' wives and children should be considered in the proper way under the 1966 Act. No doubt the right hon. Member for Jarrow (Mr. Fernyhough) listened to that excellent miner's wife on television on Sunday night who was asked about going for supplementary benefit. She said she would sink her pride. She would not go for herself but she would go for her children.
Mr. Fernyhough: Of course I saw the programme and I am glad to have the hon. Member's confirmation on the point. Unfortunately he cannot speak for the whole of his party because some of his hon. Friends are on record expressing a contrary view.
Mr. Ray Carter: Yes, the hon. Member for Harrow, West (Mr. John Page).
Mr. Richard Kelley: In 1926 the wives and children of strikers—including my wife and two children—were allowed what was in those days called parish relief which was the same as supplementary benefits now. Surely we are not to go back to 1926.
Mr. Carter: The hon. Member for Harrow, West (Mr. John Page) would.
Mr. Fernyhough: I believe that the vast majority of Conservative Members are more civilised than that. Nevertheless, a few of them are uncivilised enough to take a different view, but if they can get a television interview or write a newspaper article it is all lolly to them so what does it matter?
Mr. Ralph Howell: Does the right hon. Member agree that before 1966 nobody in need was denied help? In 1965 under the Labour Government only £66,000 was paid out in benefits to strikers or their dependants.
Mr. Michael McGuire: There were no strikes.
Mr. Howell: There were a considerable number of strikes. In 1972 as a result of the 1966 legislation, when benefits were given as of right to strikers—
Mr. McGuire: Not to strikers. The hon. Member is wrong.
Mr. Howell: I stand corrected. The benefits were given as of right to the dependants of strikers.
Mr. John Page: My hon. Friend was right the first time.
Mr. Carter: He was wrong.
Mr. Howell: Benefits were given as of right to the dependants of strikers and £9,500,000 was paid out in 1972, £5,500,000 to striking miners. The funds of the NUM were not used for the maintenance of its members. Do you agree that this is a proper state of affairs?
Mr. Speaker: As the hon. Member for Norfolk, North (Mr. Ralph Howell) has addressed me I will intervene: I must point out that what is happening is an abuse. The hon. Member I know is seeking to catch my eye to make a speech. This is a debate and hon. Members on both sides are somewhat to blame for these interruptions and for what is happening.

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I hope that the right hon. Gentleman will be allowed to go on with his speech and, in time, to conclude it.
Mr. Fernyhough: In reply to the hon. Member for Norfolk, North (Mr. Ralph Howell) I make only one point which is that with a Government whose industrial policy is such as inevitably to provoke strikes he must naturally expect that the amount paid out in supplementary benefit will be greater than under a Government which did all they could to avoid strikes.
The Prime Minister has made many U-turns. As the hon. Member for Leek said, the Tory manifesto said that they utterly rejected any control of wages and so on. I do not know the difference between utterly rejecting and simply rejecting. The Prime Minister made a U-turn and now he supports that control with an iron determination. In the past Ministers and Prime Ministers have made determined statements, but in the light of events they have been wise enough to realise that they could not stand by those statements unless they were prepared to see the country damaged, and in some cases, ruined.
That is the situation the Prime Minister faces tonight. There is no need for him to be so obstinate on this issue. I would make a gamble with anyone that if the Prime Minister were at this eleventh hour to decide that the time had come once more to make a slight diversion, while there might be a few of his hon. Friends who would cry like wolves outraged, many in his party would support him for being reasonable and sensible in the light of events and so would the country. Not only would many of his party back him but also the overwhelming majority of members of the CBI, the whole of the trade union movement and a very substantial proportion of the population of Great Britain—if we exclude the backwoodsmen.
The Prime Minister has a chance to go down in history as the man who took the nation to the edge of the precipice and then decided that he would resist rather than go over the top. I hope that he will have the wisdom and courage to make the necessary change.
6.10 p.m.
Mr. Ian Lloyd: The right hon. Member for
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Jarrow (Mr. Fernyhough) has made two points on which I wish to comment. He quoted from The Guardian an article, which I have not seen, to the effect that in some way directors were not subject to phase 3 and that their emoluments and fees were not being regulated under phase 3. He ought to know that I made a specific inquiry of the Pay Board about a certain case affecting directors' fees. The ruling was absolutely catagorical. All directors resident and employed in this country were subject completely to exactly the same rulings as anyone else. If that it not applied, it is a most extraordinary state of affairs. But that is a relatively minor point. [Interruption.] If it is correct that it is not applied, it is a major point; but it is not.
My other point is of relatively greater substance. So much that has been said recently—the miners' strike has emphasised this—tends to suggest that the only real economic value in this very complex modern society is that produced by someone making, digging up or growing something. That is a very dangerous and, nowadays, an extremely primitive concept of economic value. How would Opposition Members value the work of Dr. Borlaug? I do not think that he has ever made or produced anything, except with his brain. But he was responsible for the green revolution, and throughout the world he made two blades of grass grow where one grew previously. I suggest that Dr. Borlaug and those like him—scientific workers who work with their brains—make a far greater contribution to humanity in the longer term—and, indeed, the short term—than practically any other category of worker. It is a very dangerous thing to suggest that human beings—however important they may be—who are not in those simple categories of production make no economic contribution to human society and deserve no reward.
Mr. Fernyhough: The comparison that I made was with miners and property and land speculators. I had nothing to say about scientists, because I know that they make a contribution.
Mr. Lloyd: I am glad to hear that the right hon. Gentleman has greatly narrowed his particular choice.
Mr. Fernyhough Mr. Fernyhough indicated dissent.
Mr. Lloyd: If he has not narrowed it, that is regrettable. But he has narrowed it, and I accept his qualification.
I should like to deal with two remarks made by the right hon. Member for Leeds, East (Mr. Healey). It seemed most unfortunate that at this critical stage of the nation's affairs, he should have used the term "baksheesh" in commenting on our relationships with the Arab States.
It is an unfortunate term, for reasons which all hon. Members will understand. It would be surprising if the Arabs living in the Arab States were not far more afraid of importing the English disease than we were of importing the consequences of baksheesh.
The other point made by the right hon. Member for Leeds, East is of some significance. He referred to the indices of soaring prices in this country and to a number of other economic indicators. On that basis he attempted to make sweeping condemnations of the Government. The interesting point is that in the indicators for every country in the OECD, without exception, irrespective of the character, colour or political complexion of their Government, in the last 18 months the record has been virtually the same. But what does the right hon. Member for Leeds, East say? Are all these Governments equally responsible, equally culpable and equally incompetent? If so, how does he relate that to their political complexions? That is the point with which I intend to deal in the rest of my speech.
The questions which the nation is entitled to ask are these. Where and with whom does the responsibility lie for inflation? Does it lie with commodity prices? Does it lie with the unions? Does it lie with the speculators referred to by the right hon. Member for Jarrow (Mr. Fernyhough)? Does it lie with some other perhaps less discussed and hidden factor?
Then the nation is asking whether a cash-on-the-table solution for the miners which is not inflationary is available. That is a sensible and an important question. Does the relative position of miners really justify some form of treatment beyond the level of the current offer? I shall not enter into a dispute about whether that is 10 per cent., 13 per cent. or 16 per cent. It follows logically from that question that if the
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miners' relative position is to change upwards, in a situation of constant national income whose is to go downwards? The one follows the other as night follows day.
Mr. Mikardo: Harry Hyams and the Lonrho merchants.
Mr. Lloyd: Possibly. All Opposition Members have their favourite categories of those whose incomes they would reduce. But if we are to produce increased wealth for substantial sections of the community on this scale, I do not see the resources being supplied by the type of measures which they would seek to apply to their favourite categories of those whose incomes they would reduce.
There are other vital questions which we should be asking, such as are we producing any increase in real wealth in the country? Can and should an anti-inflation guarantee be given generally to the community? Can we get through the next three or four years with virtually stable real incomes per head?
First, with whom does the responsibility for inflation lie? [HON. MEMBERS: "With the Government."] Hon. Members must exercise patience. They will probably be surprised at what I shall say. A fashionable doctrine is going around that a considerable proportion of our current inflation is imported. I direct the attention of hon. Members to a very interesting analysis recently produced by the OECD and commented upon by Dr. van Lennep in a recent speech in which he pointed out—it is a very important factor—that 80 per cent. of the rise in incomes resulting from higher commodity prices is to be found somewhere else in the country concerned or in another OECD country. Half of 1 per cent. of the rising prices referred to in the OECD report is attributable to the rise in the price of commodities imported from countries outside the OECD area. The OECD as a whole is largely responsible for its own inflation. Eighty per cent. is the degree of dependence. It is 80 per cent. self-sufficient in crude primary raw materials. Therefore, most OECD inflation is home made.
Then, with high raw material and energy inputs into agriculture, with a large proportion of rising food prices merely reflecting rising agricultural input costs, it seems to me to be unwise

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if not fallacious to say that there is a completely exogenous independent factor known as rising food prices which somehow aflicts the community and bears no relation to other causes of inflation.
Again, we are indebted to the OECD for a most fascinating analysis of the relationship between rising food prices and inflation, which shows that a substantial proportion of all rising food prices in the developed world is directly attributable to the high quality, complex inputs into the agricultural industry. Wage inflation hits that as well and is also very often an explanation for rising food prices. We are told that the developing countries' terms of trade accounted for nearly ·5 per cent. of the 10 per cent. rise in the OECD prices.
Let us look now at the question of the unions. Every economic chart in every major economic publication dealing seriously with these matters shows that there is an almost complete identity between the rise in prices and the rise in earnings. It is not confined to the United Kingdom but applies virtually to the whole developed world and to other parts as well. If that is so, is it the answer to our question? Can we say that the contribution made by wage costs to inflation is negligible and is entirely the responsibility of the Government? I do not think we can.
Mr. Mikardo: I am listening carefully to the hon. Gentleman's hard worked and carefully researched speech. But is he not over-generalising? Should not one particularise as between different sectors of price rises? For example, whose wage increases were due to the considerable rise in housing rents imposed by the Housing Finance Act? Whose wage increases caused that?
Mr. Lloyd: In this place one is always in danger of generalising because of the over-compression that we have to do. But the rise in the basic wage costs involved in housing—builders' and plasterers' wages, the lump and the rest—must be considerable. It cannot be negligible. This is a mutually reinforcing situation and we cannot pretend that one factor is not a cause.
I am not making the fundamental point that the unions are the prime cause of inflation. I think that they go with the
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whole cybernetic process, largely because they have to and for a variety of other reasons. I will pass briefly over the popular explanation known as "speculation". When one looks at the scale and magnitude of inflationary forces in Western Europe, I doubt whether even if 300 Centre Points were scattered throughout the Continent and their contribution was magnified by 10 times we should get even something like 0·01 per cent. of the inflation in Western Europe. If we are looking for the causes of inflation, we must look not at Centre Point but elsewhere.
Monetary policy is a matter of great importance, but Governments have steadfastly refused to face up to the public expenditure deficits, almost without exception, throughout the Western world since the war, almost without discrimination by political colour, and for such Governments to say that monetary policy is not a cause of inflation is interesting but untrue. They have failed to impose income restraint or to bring rises in money income into line with output, and they are not going to sabotage their own economic policies by monetary restraint. It would be equivalent to cutting the cables of a very overloaded suspension bridge. What has the bridge been asked to carry in the last few years?
I come now to the central theme of my argument. If we look at the world monetary situation between 1970 and 1972 we find that the official international liquidity in the Western world increased by 69 billion dollars. If I am asked where the prime cause of inflation in the West and of the economic and social stress we and others are facing lies, I find the answer in that figure of 69 billion dollars in those two years. Then there was another 10 billion dollars in the first quarter of 1973, and it is estimated that in the second and third quarters of 1973 the total had again risen, this time by about three billion dollars a quarter, much of it originating in the United States. If we are to ask ourselves where the prime cause lies, we should look to the United States budgetary deficit and its consequences for Western Europe.
There are two main sources of this liquidity. The first is the United States deficit, which was 51 billion dollars in 1971–72, and the second is the contribution made by the European Monetary

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Co-operation Fund, which in the second quarter of 1973 was 750,000 billion dollars and in the third quarter 1½ billion dollars. We see where the prime generator of inflation began and what the consequences must be.
Governments which pretend, as ours and others do, that they are really controlling these phenomena, are living in cloud-cuckoo-land. They are not controlling them. They are being carried along on a great monetary tide over which they have virtually no control. The statistics support this contention, and if we accept it a great deal follows.
No special drawing rights of the International Monetary Fund were issued in 1973. There was some realisation that the situation had got seriously out of hand before the end of 1972. It takes about two years for the economic system of the West to begin to absorb increases in liquidity on this scale. The net result is the massive inflationary creation of credit which has taken place. It has worked its way into the world monetary system and has had the result that in 1973 OECD trade increased by 14 per cent. in real terms, and prices by 9·11 per cent. in world trade and in local currency by 20 to 22 per cent. throughout the area, of which we are part and to which we make our contribution. The corresponding total trade figures were 26 per cent. in local currency and 37 per cent. in dollars.
This affected the whole OECD area and our phenomena being regarded as domestic and the responsibility of the Government suggests a most extraordinary macro-economic delusion, as though the Government and the Opposition have some economic equivalent of the field-marshal's baton which they can wave in order to produce rapid and effective economic results. It is totally untrue.
Mr. Carter: It is the claim on which the Conservatives fought the last election.
Mr. Lloyd: It may be so. I did not fight my election on it.
The next question is whether the relative position of the miners justifies special treatment. The answer could be, "Yes" only on the assumption that they can escape the conflagration in some way.
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My contention is that they cannot escape it, because they live in the same house as the rest of us. What they are really doing, therefore, in a house that is on fire is asking us to throw petrol on the flames, in some way thinking that they themselves will escape the consequences.
Finally, who will accept a downward adjustment as a result of all this? The New Earnings Survey of 1972, a comprehensive document giving virtually all the relativity information we could possibly require—there is really no need for a relativities board, because it is all here—shows the average gross weekly earnings of major occupations. The miners come a long way down the list—the figures are for 1972, when their average wage was £36·6. Who are the people we must ask to change their relativities? We are always being asked to increase the wages of teachers, but teachers in further education come top of the list, with an average wage of £57·2. Next come electricity supply workers with £55, followed by Civil Service technical and scientific staffs at £54 and railway salaried workers at £44. Altogether, 15 groups of employees would have to agree to their relativities being reduced so that those of the miners could be increased. I do not think that they are likely to do that.
I come now to the most important element in the speech of my right hon. Friend the Chancellor of the Exchequer. He was discussing the popular view that because of the increase in oil prices we should all be 100 per cent. Keynesian in our view of the economy and should not allow ourselves to be dragooned into any form of sudden and massive deflationary policies. This is interesting, because we are told that it is a common view of the Chancellors of Western Europe I believe that we are dealing not with the balance of payments paper tiger but with a fundamental medium-term shift in the terms of trade, which technology and time alone can reverse. There has been imposed on Western Europe an oil surtax in which the size of the tax is virtually proportional to our energy imports.
If these premises are correct, certain conclusions follow. First, the scale should be neither exaggerated—there is no danger of that—nor concealed. Secondly, the scale is such that it is of a different order of magnitude from any conceivable

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contribution that can be made by re-distributive taxation. Thirdly, what is known as and popularly described as recycling of Arab funds is justifiable on only two conditions. The first is if it is to facilitate the basic readjustment required in the economies of the West. We must support it in that event. The second is if it is to postpone the readjustment Then we must look at it more cautiously because we are borrowing Arab capital and in a sense living on it.
That is justified only to the extent that the people of this country are prepared to use their savings to buy energy. Those savings are presumably available to be bought by the Arabs and, when the savings are exhausted, we shall have to find some other way. Nothing is more dangerous or disastrous than to say that by some monetary sleight of hand the basic readjustment need not be made. The IMF seems to have acquired, by some process of intellectual osmosis, a character defect of the national Governments whose creature it is—the capacity to create credit without apparent limit.
No conceivable form of IMF paper credit can alleviate or alter this situation for its energy-importing members as a whole. The shift in the fulcrum of the balance of trade is profound and is likely to be permanent. If such paper were issued to the Arabs in exchange for western currency balances they would soon control the IMF. Do we want that to happen?
I cannot see the Arabs agreeing to the IMF's acting in the rôle of a monetary incinerator, because that is the only rôle it can play which would wholly justify this modern, unanimously supported Keynesian concept of dealing with our international problems. That is my principal argument. The electorate's confidence must be firmly placed behind any policy we put forward. We shall not recover that confidence unless we are brutally realistic in the situation I have described and present the facts as we know them.
If there is a tear in the fabric of our industrial civilisation it will not be covered by Arab loans or IMF paper. We should pay our way. We should make whatever readjustments are necessary to enable us to do so. Above all, we do not want to subscribe to a doctrine of so-called reflation—the most dangerous,
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misleading and damaging word in the economic vocabulary of the post-war period. It is a word repeatedly used in a situation where virtually no Government have yet succeeded in eliminating or controlling inflation. When we reach once again the miracle position of 2 per cent. to 3 per cent inflation, then and only then can we start talking about reflation.
Mr. Deputy Speaker (Sir Robert Grant-Ferris): Order. We are losing ground very badly. If two hon. Members are to take nearly an hour between them what hope is there for the rest of the House? I hope that hon. Members who have had to wait so long will not think it amiss if I ask them to help.
6.35 p.m.
Mr. Cyril Smith: The one statement made by the hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd) with which I can agree is that we should be brutally realistic. Throughout my life I have had my ideals, like most hon. Members. At the same time, I have tried to be a realist. Being a realist means facing the facts as they are and not as we would wish them to be. The fact is that this country cannot afford a miners' strike. It can manage without the right hon. Member for Bexley (Mr. Heath but it cannot manage without coal.
My colleagues and I have repeatedly made suggestions to the Government which could have helped towards a settlement of the miners' dispute. I believe, as do my colleagues, that the initiative taken by the TUC ought to have led to a settlement of the dispute. Having listened to the Chancellor this afternoon I am bound to ask him—perhaps he will reply tonight—why he expects the TUC to trust him when he is not willing to trust the TUC.
The overtures which the Liberal Party has made over the past few weeks, many of them behind the scenes, have met the same response as overtures from every other part of this House and from sections of the community outside. We have met with obstinacy and a deep-rooted belief that the Tories are God's gift from Heaven; that they are the only ones with any answers to the problems. It has been proved that they have no answers at all. My hon. Friend the Member for Cornwall, North (Mr. Pardoe) made a suggestion in

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December which we still believe provides a solution which would be acceptable under phase 3. This was that there should be a production employment premium. I draw the attention of the Government to the fact that the initials of this phrase spell the word "pep"—something which the Government need in this situation.
Mr. Mark Hughes: Nice one, Cyril !
Mr. Smith: This premium is not a productivity bonus. Under it, cash could be given to the miners now. It is estimated that one ton of coal is the equivalent of between 4½ and 5 barrels of oil, depending on the quality of the oil. Oil is now fetching approximately 10 dollars a barrel. This means that coal is worth at least £18 a ton when compared with oil. The generating stations are paying £7 a ton for coal. If we could increase coal production over an agreed figure of, say, 122 million tons in 1974, we could afford to distribute much of the saving that would consequently accrue in cash to the miners.
Every million tons of coal now produced must be saving us £11 per ton in oil costs. Every additional ton would save us £18, less the cost of producing the coal. Therefore, if we talk only of increased production, let alone the saving gained by using coal as opposed to oil, and if we manage to increase production by the small amount of 3 million tons a year, it would allow us to distribute an additional £50 million to £65 million per annum to the miners.
That would be a wage increase, on top of the present offer, of between £3·60 and £4·80 per week—according to which figure one uses—across the board. I accept that those figures may be slightly too high or too low, but with the information I have they are based on the most conservative estimates. I would have thought that that might at least appeal to the Government. It would mean that we were paying for increased production.
I come to the point made by the hon. Member for Portsmouth, Langstone, who said that it was not possible to increase the miners' wages without causing inflation. If we increase those wages in relation to increased production we take away the inflationary spiral of the wage
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increase. If that is not acceptable, I suggest that the Government should make the miners an immediate weekly salary offer and refer the rest to some kind of relativities board, with the guarantee now that any reference from it would be accepted by the Government and would be backdated to 1st March.
Clearly a solution has to be found. Clearly one will be found. Clearly such a solution will mean more cash for the miners.
An hon. Member said earlier that he was on the side of the miners. I am on the side of the country, not just the miners. This means that if we do not want to have one- or two-day working, or that we do not want to lead the country to bankruptcy, we have to settle with the miners by giving them extra money. I cannot understand why the Government should be willing to push the country to the verge of bankruptcy when they know that in the end, election or no election, they will be forced to settle—or their successor will have to do so. Settling the dispute will mean giving the miners extra money—so why push the country to the verge of bankruptcy?
I hope that the Government will find it possible, just for once, to be realistic. If they do, it will mean, in my language, that they stop fiddling and messing about and achieve a settlement by giving the miners more cash. In short, my appeal is "Get on or get out".
6.43 p.m.
Mr. Peter Rost: On the last occasion, in November, that I had the honour of being called by you, Mr. Deputy-Speaker, I suggested that a solution to the dispute might result from a settlement based upon a long-term contract, accepting that it was not possible in the national interest to put more money on the table at that moment, but accepting also that on the relativities and the long-term arguments there was a genuine case for an upward adjustment and that it should be on the basis of a long-term contract. Unfortunately—many of my constituents in my mining community in Derbyshire and the rest of the East Midlands agree—the NUM has decided not to accept such a proposal, which has now been made.
We realise that the NUM is not prepared to negotiate; it is prepared only

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to dictate. I agree with the hon. Member for Rochdale (Mr. Cyril Smith) that we need coal, and need it now more than ever. I agree with him also that we cannot afford a strike. Nor, on the other hand, can we afford further inflation. This, surely, is the dilemma; we must have coal and we must control inflation.
I suggest to the Government that rather than watch the mining industry being wrecked by a prolonged strike, which would mean many pits never re-opening, watching the economy being ruined and the whole nation brought to the brink, and paying ransom money which we cannot afford, we should examine an alternative which has not to my knowledge yet been suggested. There is an alternative—to pay ransom money which we cannot afford or to sit out a strike which will wreck the industry and the economy. The alternative is drastic and radical, as befits a desperate situation. I suggest that the alternative is that we hand the industry back to private enterprise.
Is there any good reason why the coal mining industry should still be nationalised, apart from the sacred cow of nationalisation with which we are still indoctrinated on both sides of the House? Has nationalisation proved an efficient form of management control? Has nationalisation improved productivity? Has it produced profits? Has it served national interests? Has it created harmonious industrial relations? [Interruption.] I prefer to develop my own argument, and do not wish to delay the House unduly.
There are plenty of other natural resources in this country which are developed far more efficiently by private enterprise. Our oil and gas are minerals which are being developed efficiently without industrial relations which tear the whole country apart. What is so sacrosanct about coal that it should remain nationalised, apart from the dogma of the Labour Party? I know that it is an alien concept that we should even consider denationalisation.
My proposal is that the NCB be dissolved immediately, that all employees be dismissed—that includes the miners—and that private enterprise be invited to tender for individual pits or groups of pits immediately, in the same way that
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tenders for North Sea oil leases have been invited and accepted. I suggest that payments for taking over reserves and pits should be nominal, but that royalties should be extracted from the coal produced.
Opposition Members may regard that concept as ridiculous. I am glad that they are playing to the dogmatic standards which one expects. But I suggest that the economics of the industry have now so dramatically altered that there is no reason why coal should not be produced economically. Arguments which applied in 1947, based upon the historical, social and economic history of the industry, certainly do not apply today.
As the hon. Member for Rochdale has reminded the House, coal is underpriced. If it were managed by private enterprise coal should be allowed to be sold at the free world market price, which would be substantially higher than the current price. I suggest that those Opposition Members, and my hon. Friends, who have said as I have that it is important to conserve our energy resources and use them efficiently, would regard it as an incentive that our energy supply should no longer be subsidised. There would be a much stronger incentive for converting and using energy more efficiently than at the moment. Further, for the first time since nationalisation, coal can be produced economically and profitably.
The tenders which I suggest should be invited should be accepted on the basis of the following three criteria: first, those who are successful in tendering for pits or groups of pits should guarantee immediate production. They should be able to guarantee that there would be no delay in getting the coal moving again. Secondly, those who are successful in tendering should produce evidence of their mining expertise. There is plenty of mining experience—indeed, international mining experience—in this country. We have only to consider the activities of companies like ICI, RTZ and Consolidated Gold to realise that plenty of miners are not mining coal and are not in the NUM. Those members of the NUM who are about to go on strike would have the choice of deciding whether they wished to stay in the mining industry or to seek employment elsewhere.

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The third basis for accepting tenders should be evidence that the group successful in tendering had signed up a work force on a long-term contract in order to manage the mines. Therefore, the alternatives to the miners would be much wider and much more attractive than they are now, because those who decided to stay in the industry would be able to sign up on the basis of higher productivity. No doubt absenteeism would be lower and there would be much more attractive profit-sharing and even profit-participation and productivity bonuses than there are now. There is no reason why some of the present members of the mining industry should not themselves tender on a co-operative basis. They might well be successful, and would make a much better job of it than is presently the case.
I suggest that solution in all seriousness, because it would immediately solve the nation's dilemma. It would be a long-term solution, because it would create for the people employed in the industry higher incentives, greater rewards from productivity and far more security, because customers would again have confidence in the product. Output would be greater and the industry would expand. By better working practices and more intensive utilisation of the industry we would achieve not only higher productivity but higher output.
Mr. Cyril Smith: As the miners are due to commence their strike on Saturday, can the hon. Gentleman guarantee to get a buyer before then?
Mr. Rost: I should not have given way. I was about to deal with that point.
If what I suggest was done with haste there is no reason to suppose that industry would not respond quickly to the challenge, in the same way that it would respond to further licences offered for North Sea oil development or any other mineral development. The economics of the coal mining industry could be such that there would be profitability, and private enterprise would not waste the opportunity of having a go, particularly as the national interest is very much involved. Industry in general would be anxious to protect its future energy resources and companies would wish to tender in order to secure their own supplies.
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I have no doubt, therefore, that there would be a fairly substantial response to my suggestion.
This is the time when we must try a radical policy, to restructure rather than sit back and face ruin. The desperate deadlock situation which confronts us, with the pollution of industrial relations, demands a radical solution. Such a solution is to return the industry to commercial, competitive, free enterprise management. The social and economic circumstances which led to nationalisation in 1947 are not applicable today. The coal mining industry has become one of the unacceptable faces of Socialism. I should like to see it become one of the acceptable faces of capitalism.
6.56 p.m.
Mr. Ian Mikardo: While listening to the speech of the hon. Member for Derbyshire, South-East (Mr. Rost), I was watching carefully the faces of the occupants of the Government Front Bench. They were a study in mournful embarrassment. I am sure that all of them were thinking, as they listened to the hon. Gentleman, "If only we had enough supporters like him we would not need any opponents".
I much enjoyed the hon. Gentleman's speech. It was the most hilarious entertainment to which I have listened for many years. My only regret about it is that our proceedings are not televised. If they were, I am sure that the hon. Gentleman's performance would have gone down a bomb in the mining villages of South-East Derbyshire, especially among the miners, who would have noted that the first item in the hon. Gentleman's recipe was that they should all get the sack.
In considering this dispute between Government and miners—it is not between miners and employers—I take as my starting point the massive vote of confidence which the mineworkers, in their ballot, gave to their national executive committee—a much bigger vote of confidence, as my right hon. Friend the Member for Leeds, East (Mr. Healey) pointed out, than any political party in this country has ever had. Indeed, Mr. Gormley received a much bigger measure of support from his constituents than any hon. Member has received from his constituents.

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The massive mineworkers' vote disposes once and for all of two myths. The first is that the leaders of the National Union of Mineworkers, as of other trade unions, do not represent the views or carry the support of the mass of their members. Only people like some hon. Members opposite who had never seen a mineworker in the flesh and never talked to one face-to-face could ever have believed and propagated that myth. Now it is dead for all time.
The second myth, or stupidity—my right hon. Friend the Member for J arrow (Mr. Fernyhough) referred to it briefly—which has been totally exposed by the mineworkers' ballot is the concept that has been flown as a kite by hon. Members opposite over the last couple of weeks that the miners could be frightened off giving their executive authority to call a strike by the threat to withhold welfare benefits from their families. It is a typical characteristic of the proponents of hard-faced Toryism that they should want to inflict suffering and deprivation not only on strikers but on their non-striking wives and children as well.
It is in the natural order of things that this piece of dehydrated Christian charity should have emanted from Edgbaston. I know Edgbaston well. It is a pleasant, airy, leafy, affluent suburb. A substantial part of it—with its large and opulent, if rather ugly, houses—was built up by the 19th century Birmingham ironmasters, who were also masters of the art of grinding the faces of the poor. It seems that their ghosts still walk amongst its comfortable greenery and still inspire their heirs, who speak for them.
Leaving aside the repugnance that any decent person will naturally feel about this obscene suggestion, it will not wash on practical grounds because it is in direct conflict with British standards of legality. A Government of this country can punish people only when they break the law. Except in a small number of specialised cases, there is no law in Great Britain that makes it illegal for a worker to go on strike. The only country where such laws exist are those run by totalitarian dictatorships, and that is not the sort of rule that commends itself to Britons. All this talk of punishing strikers by making them and their families go hungry is absolutely foreign to us.
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Welfare benefits are not charitable largesse handed out by the Government. Every worker contributes a sizeable part of his wages every week towards the funds from which the benefits are paid. He therefore gets those benefits, when they are payable, not as a gift at the discretion of the Prime Minister but as a contractual right which he has paid to secure for himself.
Mr. Patrick Cormack: I agree with all that, but when the hon. Gentleman talks about totalitarian States not allowing strikes, are not those the very States that Mr. McGahey believes to be Utopian?
Mr. Mikardo: I never heard such rubbish in my life. I challenge the hon. Gentleman to produce one word I have ever said or written which gives the least substance to that statement. I will give £100 to any charity named by the hon. Gentleman—
Mr. Cormack Mr. Cormack rose—
Mr. Mikardo: I am not giving way again. Go and get the evidence—
Mr. Cormack: On a point of order, Mr. Deputy Speaker. I was not accusing the hon. Gentleman of anything. I mentioned Mr. McGahey.
Mr. Mikardo: I beg pardon. I am not responsible for Mr. McGahey. He is not an ally of mine, he is an ally of the Prime Minister. The Prime Minister is delighted with Mr. McGahey Mr. McGahey has nothing to do with me; he belongs to your lot over there. If he had not existed, the Prime Minister would have invented him.
To come back to the jolly little ploy of threatening the miners—we know from the ballot on Monday that the ploy was utterly counter-productive. Anyone who knew the miners at all would have expected that. I spent part of last week end in the Nottinghamshire coalfield talking and listening to miners in their welfare clubs—
Mrs. Jill Knight: I thank the hon. Gentleman for his courtesy in writing to me before the debate to tell me that he would refer to me. I assure him that there was no question of a ploy to force the miners not to strike in my suggestion that the taxpayers objected to having to finance

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actions which were against their best interests. The hon. Gentleman referred to the massive support the NUM executive had had from the miners' vote. I received far more than 85 per cent. support from outside for the remarks I made in the House. It is suggested that most people accept that just because people pay taxes they can withdraw their labour at any time they prefer to say at home and still receive benefits from the State, I am afraid the hon. Gentleman is wrong. Should not he make his remarks to the NUM and not the Department of Social Security?
Mr. Mikardo: If I had known that the hon. Lady's inevitable intervention would be as long as that I might not have been so ready to tell her what I was going to say. She is wrong. I do not believe that there is a wave of indignation. I am sure that many people write to her, but any crank who makes a cranky speech gets a lot of letters. I could cook up letters at any time; there is no difficulty about that. Has the hon. Lady worked out how much of the contribution paid by each taxpayer in 1973 was used for paying welfare benefits to the wives and children of strikers? It was 3p per taxpayer.
Mrs. Knight: That is irrelevant.
Mr. Mikardo: To resume my speech after the speech of the hon. Lady, I was talking about the reaction of the miners to what the hon. Lady said. Only a small number of miners were angry. The ones who were angriest were those who do not get welfare benefit anyway because they are single men. They were more angry on behalf of their married colleagues than were the married men themselves, but they were a minority. The great majority of the miners I met in the Nottinghamshire coalfield thought that the suggestion of withholding benefits from the non-striking wives and children of strikers was so much beneath contempt that it was not even worth getting angry about.
I turn to consider what is the level of wages which the country should pay to the miners. I begin with one point that is not controversial. Despite all the differences of view, arguments and controversy, the one thing about which we are all equally agreed is the necessity of maintaining a good, efficient mining
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industry with at least the level of output which we are getting now and preferably an even higher level of output. In the present energy crisis of the world and the nation nobody doubts that we absolutely must do that.
I recall that when I was Chairman of the Select Committee on Nationalised Industries a few years ago and we were investigating the National Coal Board we heard evidence from the board and the National Union of Mineworkers, on the one hand, who wanted the industry's output target to be set at 155 million tons a year, and, on the other hand, from the Labour Minister, who wanted a target of 135 million tons a year. In the end the Government got their way, as Governments generally do, and we had the lower target. What would we all give now only to have the 100 million tons of coal that were lost as a result of accepting the lower target?
The basic threat to our energy position, and hence to our capacity to maintain ourselves as an industrial nation, is not the short-term threat of a mine-workers' strike. It is the long-term threat that in 10 or 15 years' time we shall not have any mineworkers at all. The industry is losing 30,000 men a year. I talked to an ex-miner the other day. He left the pits four months ago and now works on a chicken battery farm, in lovely countryside and nice sunshine, and earns £6 per week more than he earned when working on his belly down the pit. He is one of 30,000 a year who are leaving the mines and voting with their feet.
The rate of recruitment is nowhere near sufficient to compensate for that and to maintain the labour force. From that fact I derive a simple and straight answer to the question, "What should miners be paid?" The answer gets away from the nit-picking points made by the Chancellor of the Exchequer in his speech this afternoon and also avoids the abstruse complexities of the argument put to the House by the hon. Member for Portsmouth, Langstone (Mr. Ian Lloyd). It leans heavily on the point so rightly made by the hon. Member for Rochdale (Mr. Cyril Smith), because it is based not only on what is right for the miners but also on what is right for the nation. My simple answer is that mineworkers should be paid enough to ensure that the rate of wastage goes down and the rate

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of recruitment goes up until the recruitment rate overtakes the wastage rate.
I do not know—nor does any Government supporter—what is the wage level or how many pounds a week are necessary to achieve the objective of a lower wastage rate. The figure can be discovered only by trial and error.
My guess—and it can only be a guess—is that the amount the mine workers are asking for now would be too low to achieve a favourable balance between recruitment and wastage. I suggest that we should try and then see the result. I believe that we should pay the mine workers their full claim now and then, in the next year, watch the figures of recruitment and wastage very closely. If at the end of the year the labour force was still running down we should not wait for another claim from the mine workers, much less wait for them to ban overtime or to go on strike; we should offer them more money until we get to the point when recruitment overtakes wastage. If we do not take such a course we shall not have the labour force which both industry and the whole nation need.
This is a simple exercise in the law of supply and demand and is fundamental to the philosophy of the Tory Party. The Tories will no doubt protest that what I propose is inflationary, but in other matters they have always been willing to accept the law of supply and demand, irrespective of the inflationary effects. What is happening to the price of oil is also a simple exercise in the law of supply and demand. I did not observe any members of Her Majesty's Government, or, indeed, any of the Conservatives who have spoken today, resisting the demand of the oil sheikhs because they were inflationary. The Government may talk bravely about standing up to the miners, but they send two Ministers to grovel at the feet of the Shah of Persia.
The Government's obstinacy has inflicted great damage on our economy because of the three-day week—and, as my hon. Friend the Member for Dunfermline Burghs (Mr. Adam Hunter) said, the nation could well end up with a two-day week or even less. The overt and obvious effects of this damage are clear enough for all to see and bad enough to make us all suffer. They include unemployment, discomfort, loss of exports and additional price rises.
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Besides all this, there is one major effect of such a dislocation which is not so obvious and which, even if the dispute were settled tomorrow, would take us a long time to overcome. That hidden effect is the run down of investment in British industry, and especially in manufacturing industry. It is that factor, and not the mine workers' dispute, which is the endemic element in our economic crisis. The hon. Member for Leek (Mr. Knox) said that we were doing all right with all the other problems in the economy and would have succeeded if it had not been for the miners, but the fact is that this dangerous and almost lethal run down in investment in British manufacturing industry began long before the miners' dispute. In 1973 investment in the manufacturing industry in Britain, in real terms, was lower than it was in 1970—and the current mining dispute had nothing to do with that. Since the Tories have been in power investment in British manufacturing industry has been running at half the rate of the Japanese and at two-thirds the rate of most countries in Western Europe. Now that figure will drop even faster.
I thought the Chancellor of the Exchequer was over-optimistic in his speech—a speech which did not endear itself very much to either side of the House—and indeed complacent about the future of industrial investment in a year or two. Under a three-day week, what is the inducement for a manufacturer to buy new machinery when he is allowed to run his existing machinery for only 70 per cent. of the time? In many medium-sized companies—and this is a fact of life in many of our constituencies—managements are running out of cash reserves. If they want to re-equip they must borrow money at today's astronomical rates. What incentive is there for them to do that? Even if they were to re-equip, they would find themselves because of the three-day week, in a vicious circle because they cannot get machinery delivered on time and they cannot get new buildings put up when they want them.
These are the cold, hard facts of the situation. They will remain cold, hard facts and will not be changed one whit if we were to have an early General Election. An election might change the composition of this House, but it will not change

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the labour force in the coalfields. Whatever Government are returned, they will still have the same miners to deal with. If the unexpected and unthinkable were to happen and the right hon. Gentleman the Prime Minister were to find himself back in Downing Street, he would still have to deal with the same problem and would still face the same miners.
Let us make an extreme supposition and ask what would happen if the Conservative Party won the election on a huge landslide victory and the Prime Minister were to find himself in power with 200 more supporters behind him. What would he do with them? Would he send them down the pits to dig the coal? Would he send them out with cudgels and whips to force the miners back down the pits? Would he send them to Waterloo Station to drive the trains? Would he send them out as evangelists to persuade British industrialists to resume the investment programme which they have given up because they have no confidence in the Government's policy? Would he send them overseas as export salesmen to try to arrest the rapid balance of payments deficit? What on earth would he do with them? What simple problem would we solve by their existence?
There is, however, one huge prospective advantage to be derived from a General Election. The incoming Government will be able to deal with our severe problems—and their task will not be easy—on their merits and without being hog-tied to the necessity of saving the Prime Minister's face.
The Prime Minister and those four other troglodytes who were so brilliantly described by my right hon. Friend the Member for Leeds, East are leading a rush to destruction at a rate which makes the Gadarene swine look like a field of hamstrung selling platers. Surely even now there must be one or two right hon. and hon. Members on the Treasury Bench who can persuade the Prime Minister to change course.
7.20 p.m.
Mr. Christopher Woodhouse: I begin with a slight digression, addressing myself to one point vigorously made by the hon. Member for Poplar (Mr. Mikardo).
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The hon. Gentleman had a great deal of merry fun at the expense of my hon. Friend who wanted to denationalise the coal mines. As it happens, I agree with the hon. Gentleman that this is not a practical proposition, but I wonder whether he studied a few weeks ago a letter in The Times by Professor Kaldor, who was an economic adviser to the previous Labour Government, in which he argued forcefully that if the coal mines were in private ownership there would be no miners' dispute today and that the economic problems of the coal mines would be solved. Incidentally, of course, the solution would at the same time deal with one of the matters to which the hon. Member for Poplar attached importance, which was that the wage structure of the coal mining industry should be such that the recruitment rate overtook the wastage rate. It is very unlikely that such a wage structure will ever be achieved under nationalisation under any Government, but the doctrine adopted by my hon. Friend and Professor Kaldor might appeal to the hon. Member for Poplar as solving his own problem as well.
That is a digression. It is not the main substance of my speech.
I have observed with some regret that so far the debate has tended to follow the common form of debates on the economic crisis. The common form is for Government supporters to lay the blame on the obstructiveness of militants in the trade unions and for Opposition supporters to lay the blame on the mismanagement by the Government of their economic policy. To be honest, all of us know that there is an element of truth in both allegations.
I propose to reverse the usual order of priority by addressing myself to one or two of the Government's mistakes first, so that no one can say that I tried to gloss over them. I shall put the obstructiveness of militants in the trade unions second so that no one can say that I put it first.
The basic mistakes of this and every Government over the past 10 years can be summed up in one word or, perhaps to follow a phrase of the late, memorable Sam Goldwyn, in two words—"discontinuity".

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It has become customary for every incoming Government to emphasise their own originality and innocence of past error by dismantling as much as possible of the apparatus set up by their predecessors. This is a bad doctrinaire habit, and it was not always the case. But in the last decade there has been far too much chopping and changing and swapping horses not simply in midstream but on the very edge of a cataract.
I will not go back to 1964. That is a matter for the consciences of Opposition Members. But, going back just to 1970, it seems to me that many of the Government's misfortunes and most of their mistakes illustrate this fatal principle of discontinuity. I am not saying that every breach of continuity was a mistake. On the contrary, some departures from the policies of the previous Government I approved entirely, especially those affecting defence, education and taxation. What I am saying is that every mistake was a breach of continuity.
The most glaring example which occurs to me—though I know that it may not appeal to the Opposition, judging from some of the unenthusiastic noises which I heard earlier in the debate—was perhaps the dismissal of Lord Robens from the National Coal Board, but for which I am confident there would have been no miners' strike in 1972 or today. The other less spectacular mistakes were the abolition of several useful institutions set up by the Labour Government, some of them only after that administration had dismantled useful institutions set up by the previous Conservative Government. Some of the examples within the last few years which I have in mind are the Industrial Reorganisation Corporation, the National Board for Prices and Incomes and the Consumer Council. That these were mistakes has been in effect admitted by the present Government's subsequent passing of the Industry Act, the Counter-Inflation Act and the Fair Trading Act.
It seems to me in retrospect that it would have been much wiser to accept and adapt these institutional arrangements rather than to abolish them and then belatedly to replace them. I hope that it is not too late to press the Government at least to reconsider their decision to abolish the regional employment premium and instead to adapt it to a new
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purpose, perhaps by turning it into a subsidy for skilled training in development areas as the CBI suggested when the REP was first introduced.
The process which I advocate is, after all, the characteristically British way of carrying through economic and social change—not by revolutionary radicalism, not by the eradication of either the Left or the Right, but by a democratic radicalism in adapting existing institutions to new purposes.
I hope that not only on the Government benches but on the Opposition benches the validity of this principle will be recognised. If the Opposition were prepared to recognise its validity, they would for example cease to declare their intention to renegotiate the Common Market treaty, which means in effect to abrogate it, and they would cease to declare their intention to repeal the Industrial Relations Act rather than to adapt and adjust it. It is certain that the Industrial Relations Act will have to be amended drastically. I have said this before, and I have already urged the Government to take the initiative in declaring their intention to amend the Act. Last time I said this I added that I hoped that they would do so in this Parliament. That is still my hope. But it is equally certain that, as in any Act of 150 or more sections, a great deal is, in practice, common ground between all reasonable people concerned with industry and that perhaps as much as a half or two-thirds of its provisions would have to be re-enacted in some form sooner or later even if the Act were repealed.
My plea, of which all these are illustrations, is for continuity and adaptation rather than for constant bouts of radical upheaval. The significance of this argument in the present context is that sooner or later—and preferably before a General Election—we shall have to arrive at a multilaterally agreed system for vetting and controlling incomes and prices within the limits of what is practicable and reasonable—at first inevitably with statutory backing but later on a voluntary basis—involving everyone concerned with industry and Government which everyone will know will survive changes of Government. That will have to come. That means getting Opposition, TUC and, incidentally, CBI agreement. That is

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why the recent initiative by the TUC is so important. I say "is", not "was", because I hope that it still is.
It is important not solely or even primarily in the context of the miners' dispute but chiefly in the much wider context of the whole future of industrial relations and economic management.
If institutional arrangements to secure such a permanent outcome—such a permanent system which would survive changes of Government—could be elicited from the recent TUC initiative, it would be a prize to which the ending of the miners' dispute would be relatively secondary. Indeed, if—but only if—that greater prize could be won, almost any settlement of the miners' dispute would be cheap. The alternative, if neither prize is won, if the TUC initiative is finally let slip, needs no words of mine to elaborate it.
7.32 p.m.
Mr. Alan Fitch: I should like to comment briefly on something said by the hon. Member for Derbyshire, South-East (Mr. Rost) about the mining industry reverting to private enterprise. This idea is absolutely unthinkable. Furthermore, I should like to remind the hon. Gentleman of the days when British mines were in private ownership under the old coal owners who, without exaggeration, were the most reactionary and inefficient bunch of people imaginable.
Mr. Rost: Is the hon. Gentleman suggesting that there has been no change in economic or social conditions since then? Is he further suggesting that the present situation in the mining industry is all that glamorous?
Mr. Fitch: Obviously conditions must have changed. However, I maintain that it would be unthinkable and completely wrong. I am sure that even the most reactionary Conservative Government would not think of taking that step.
I vividly recall, in the early 1960s, accompanying the late General Secretary of the Lancashire miners, Mr. Edwin Hall, to meetings held in various parts of the Lancashire coalfield to launch a campaign sponsored by the Lancashire miners to persuade local authorities, clubs and industry to heat their buildings by coal-fired rather than oil-fired plant. At that
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time and, indeed, in the decade that followed, the oil industry had been successful in getting industry and local authorities to install or replace coal-fired plant by oil-fired plant. The miners' leaders unceasingly warned the country about the danger of relying on supplies of fuel from a politically unstable area like the Middle East at the expense of our own indigenous coal. Unfortunately, that advice fell on deaf ears—Members representing mining constituencies were often accused of tedious repetition because their speeches always contained that warning. Our views were listened to politely, but were completely ignored.
Times have changed since 1970. Oil prices have risen to such an extent that coal is now cheaper than oil. Only a year or two ago the National Coal Board estimated that the price of oil and coal would coincide by about 1978. That process has already taken place. The price of coal can go up at least £2 a ton and still be competitive with oil.
I believe that the whole country realises that our most reliable form of fuel is coal. On the other hand, it would appear that our future oil supplies could depend on the passing whims of the sheikhs.
It is against the background of the increasing importance of the coalmining industry in the energy crisis that we ought to consider the mining dispute.
In view of the new situation, I cannot understand the inflexible attitude of the Government in their dealings with the miners and the TUC. Every constructive proposal that has been put forward by these two bodies has been rejected by the Government.
The first lesson to be learned from the present energy crisis is that the miners should be at the top of the industrial tree as regards both pay and social benefits. If this crisis teaches us nothing else, it ought to teach us that.
It is as well at this time, when the miners are being unjustly criticised for their lack of patriotism and for putting, as we are told, sectional interests before the interests of the community—we hear a lot of these sentiments expressed by Members of the Conservative Party—to analyse coolly and rationally what the miners have contributed to (he industrial peace of this country since the war.

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I was working underground when the five-day week was introduced. No sooner had that taken place than we were asked to forgo it and work six days, which we did without a murmur, without any opposition, in the national interest. Then followed a period when miners' wages were in the middle-rated group—perhaps eighth, ninth or tenth. Certainly we did very little about that. There was no industrial action whatsoever.
That was followed by a period of drastic pit closures. Whilst the NUM very properly and rightly objected to many of the closures, as far as my memory serves me, there were no large-scale industrial disputes. There may have been certain industrial disputes about the closures, but they were not widespread.
Therefore, during the last 25 years the miners have shown great patience and have contributed greatly to the industrial stability of this country. Is it any wonder that the great majority of miners, who are politically and industrially moderate, are tired of being fobbed off with promises of jam tomorrow, but never today?
I should have thought that a hard-headed businessman like the Secretary of State for Trade and Industry would at once recognise the validity of the miners' claim to sell their labour at the market rate, especially now that the oil crisis has made coal even more essential to the economy, or, to put it another way, that the miners should be paid the market value of the coal that they mine. I should think that philosophy would appeal to such a hard-headed businessman as the Secretary of State for Trade and Industry.
I come now to what I consider the real crux of the problem. The way to industrial peace is to get our priorities right. I do not think that we shall ever have industrial peace—I am not talking particularly about the mining industry, but industry in general—until we get our priorities right.
I should like to illustrate what I mean. Six months ago a young miner and his wife—constituents of mine—came to see me. They were worried and perplexed. They had put down a deposit of £700 or £800 on a new house which was to cost about £3,000. During the time that the house was being built the builder kept
1302
increasing the price. The house was eventually completed, but the builder maintained that it was not completed and, as justification, pointed to the fact that such things as doorknobs had not been fitted. The house remained vacant for another 12 months. Then the builder said that the young couple could have the house for £6,000 although they had signed an agreement to buy it for £3,000.
That was rank profiteering. How could I ask that young couple to abide by phase 3—not that I would—when the Government have blatantly assisted and encouraged land speculators in building property and have done little or nothing to eliminate the many spivs who remain in society. Until we get these things right and until our priorities are got right there will not be, and we cannot expect there to be, industrial peace.
I refute the charge that the National Union of Mineworkers is defying the law. My hon. Friend the Member for Poplar (Mr. Mikardo) touched on this question. The overtime ban and the strike following on a perfectly proper ballot are not illegal. They are legal weapons. There is too much loose talk about workers in general defying the law and too little talk about the vast majority of trade unionists who gain their objectives by legal means.
The Government have not invoked the Industrial Relations Act, because it is in disrepute. The body of men most responsible for making this ridiculous Act look irrelevant and unworkable—I do not think that sufficient tribute has been paid to them—were the railwaymen who in their dispute in May and June 1972 implemented the provisions of the Act. The railwaymen had a cooling-off period, they had a ballot, and they voted to strike. The Government could do nothing about it. Ever since then the Government—perhaps wisely—have not resurrected the Act.
Those Conservative hon. Members who are happy at the thought that we are about to embark on an election should remember that the vast majority of gains made by the unions have been made in a perfectly legal way. The Industrial Relations Act has been proved to be highly irrelevant and bad for sensible industrial relations.

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I appeal to the Government to re-open talks with the NUM leaders with genuine proposals to go some way to meet the miners' claim. The offer of the Trades Union Congress was genuine. I believe that the 6 million trade unionists who have settled under phase 3 are the same people who have said openly that the miners' case should be treated as a special one. If the Government were to give the miners extra cash, I do not think that there would be any discontent amongst those who have already settled or any demand that they should have more money.
Any election on the theme "Who governs the country?"—I know what is in the Government's mind; obviously it is a question of the Government versus the trade unions—would be a non-starter. The Government seem to have overlooked the fact that we in Britain live in a mature democracy, and that the people will not be fooled by such a slogan. Ever since the Government took office in 1970 their relations with the trade unions can be described as a general botch-up. They have failed psychologically and literally in their dealings with the trade union movement. Even at this late hour I ask the Prime Minister to think and think and think again.
7.45 p.m.
Mr. John Page: I particularly wish to be considered uncontroversial in what I say tonight. In the hope of taking hon. Members opposite with me I shall make two criticisms of the Government and one of the National Union of Mineworkers and then make my speech.
My first criticism will be of particular interest to my hon. Friend the Deputy Chief Whip. Although we have had from the hon. Members for Wigan (Mr. Fitch) and Poplar (Mr. Mikardo) and from my hon. Friend the Member for Oxford (Mr. Woodhouse) particularly significant and important speeches, it is very disappointing that there is no senior Minister present, especially as there are six Cabinet Ministers to deal with industry and economics and nine Ministers of State, though, interesting enough, there are only four Under-Secretaries. Much as I admire the Under-Secretary—my hon. Friend the Member for Harrow, Central
1304
(Mr. Anthony Grant)—when he passes on to my right hon. Friend the Prime Minister particularly urgently what I have said this evening it is possible that it will be considered to be favouritism. I remember that when I was in Opposition I criticised the lack of Ministers—
Mr. Arthur Lewis: They are all on strike.
Mr. Page: I am trying to make a serious contribution. It would be courteous to the House if, tomorrow, there were more Ministers present to listen to our contributions which so many of us have taken a great deal of trouble to prepare.
My next criticism is that we are in this mess because the Government decided to adopt a statutory prices and incomes policy and because of this have got boxed in. In Committee on the Prices and Incomes Bill the hon. Member for Poplar fought his right hon. Friend the Member for Blackburn (Mrs. Castle). I do not know whether the hon. Gentleman voted against the Prices and Incomes Bill.
Mr. Mikardo Mr. Mikardo indicated assent.
Mr. Page: I wish I had had like courage. I abstained on stages 1 and 2. I wish that I had had the courage to go into the "No" Lobby. It is only by back benchers showing that they mean what they say that they can produce results.
I was in support of the draftsmen of stage 3. I believe that it was drafted with the greatest care so as to allow the miners the best deal possible. It is an awful pity that Mr. Daly was not invited to the Department to agree the draft of stage 3 so that he knew where we were going. I regret that the hon. Member for Wigan said that for the miners it is always a case of "jam tomorrow". The miners are not getting everything they want, but I believe that the offer to them is proportionately more advantageous than offers made to people in other industries.
It is disappointing that the miners realise that the present, with oil supplies cut, is the moment that they have the greatest power, which they have decided to use ruthlessly to attain their ends. To insist solely on having money on the table is not a genuine form of negotiation.

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We need a pay policy which in certain industries would be non-statutory and which should be acceptable, but we should not go in for gross deflation. I have come to the conclusion over the past year that we have to differentiate—as we should have done in the Industrial Relations Act—between people employed by nationalised industries, in local and central government and those employed in private industry. Private industry should be sufficiently grown up as to be able to sort out among employers, employees and the unions how best to get along. I do not believe that Government interference is needed here. I do not agree with my hon. Friend the Member for Oxford—who left the Chamber immediately after I said something nice about him—that we must have continuity in the maintenance of a prices and incomes policy. Private industries and their employees and unions should get on with it.
There may be some employees in private industry, such as newspaper workers, who, though relatively few in number, can cause great damage and have great influence. I do not agree with either the hon. Member for Wigan or my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) that when there is a monopoly position in the provision of work the ordinary methods of supply and demand can operate.
We must designate for special treatment certain industries, and possibly groups within those industries, such as groups of people who can in a short time cause a lot of damage to the country as a whole. These industries or groups should be treated in such a way that they would be considered as a kind of elite and not as a kind of works council. For a start, the mine workers, the electricity, gas and water supply workers, certain transport workers, dock workers and certain airport workers could be included. The police, and probably the Services, would not be included. My list is small, but other hon. Members can add other industries which they feel could qualify for this elite category. An Act of Parliament would be necessary to give these groups special status. The Act would give them security of employment and specially advantageous pension and redundancy arrangements.
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How would the scales of pay for these groups be arranged? I am sorry that the hon. Member for Poplar is not present, because I believe that the Act would have to provide that wage scales were determined on the basis that there was a shortage of suitable labour in the industry concerned. Alternatively, the criterion would have to be comparability with other workers not in those groups.
Mr. Arthur Lewis: Where would the property speculators fit in?
Mr. Page: I will not be drawn. I always enjoy a rough and tumble with the hon. Gentleman. I would not mind the rough on this occasion but I would not like him to tumble on me.
If agreement cannot be reached between the employers and the workers there would have to be a compulsory independent arbitration.
Mr. Dennis Skinner: Bring the wives in.
Mr. Page: The arbitrators would have to be carefully chosen. The Act of Parliament would lay down that the arbitrators should not be allowed to take into account any propositions from the Government or be influenced by the Government of the day in making judgment on the shortage of labour in the industry concerned and on comparability with wages in other industries. This would be the only way to bring back a sense of acceptability into compulsory arbitration.
These are the more attractive elements in my plan. If the compulsory arbitration is found to be unbiased and produces excellent results for the groups involved, the idea should become acceptable. On the other hand, there should be no restriction on the right to strike. However, if the workers did strike they would not be paid social security benefits. If they chose to go on strike they would have to be paid from union funds or use any savings they have. Most people—certainly it applies to me—work to provide for their families.
Mr. Skinner: What about the kids?
Mr. Page: The main task of my work is to provide for my family. I consider that that is my prime responsibility.
Mr. Skinner: Tell us about all your jobs.
Mr. Page: The hon. Gentleman is demeaning himself even more, when I am trying to make a serious contribution to the debate. He might just sit back for a moment and try to acknowledge that for once, instead of listening to his own verbal diarrhoea, which I find as revolting as the colour of his socks.
We come now to the perhaps most complicated and least attractive of my options, which is that if people do not work reasonably according to their normal work pattern—if they work without enthusiasm, work to rule, go slow or refuse overtime—there should be a mandatory agreed deduction from their pay.
If the railway rule book is brought up to date and perhaps cut by half its present size, it will say that the driver must ensure that the doors of carriages are shut before the train leaves the station. He could walk along the platform and inspect each door, but that is not what he normally does. Reasonable working will be difficult to define, but it should not be beyond the wit of sensible and responsible people to decide what it is and what it is not. Working to rule can mess up the industries of the elite groups to which I have referred almost as much as a strike. The public must be protected.
Mr. Arthur Lewis: Will the hon. Gentleman give way?
Mr. Page: No. I cannot accept interruptions.
We have talked a little today about social security benefits. No developed country provides social security benefits for those who go on strike, except Germany in a narrow instance when there is an official strike. In Sweden, which is so often held up as an example of good industrial relations and which is a long-term Socialist State, it is considered by both unions and employers that it would be wrong for the Government to provide benefits for those on strike, as it would be an unwarrantable interference in the dispute between employers and employees. It is not properly realised that we are unique in that the taxpayer subsidises those who go on strike.
I am grateful to my hon. Friend the Under-Secretary of State for Trade and
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Industry for having listened to my speech. I hope that he will take it as a serious contribution to what might be done after the election, which I hope will take place on 28th February. When we return after the election, I recommend the Government to adopt my suggestions as a means by which they can throw away a statutory prices and incomes policy and bring a sense of fairness and reality into the life of the country again.
8.4 p.m.
Mr. Roy Hughes: The hon. Member for Harrow, West (Mr. John Page) has been in a very reasonable frame of mind tonight, rather different from that which the correspondence columns of The Times sometimes reveal. But Harrow is a long way from coal mining, and therefore I do not propose to follow the hon. Gentleman's line of argument.
The country faces a serious industrial and economic situation. I represent a steel constituency. Steel is an important industry in Wales, and it is important to the country as a whole. It employs more than double the numbers employed in mining in Wales. The steel industry faces serious difficulties, and any disruption of that industry will have a serious effect on other industries.
There, are already widespread shortages of certain steels. The British Steel Corporation is importing coking coal, which is scarce and expensive. Dr. Finniston, the chairman of the corporation, has said that after eight weeks of a miners' strike no more steel could be produced, and after four to seven weeks there would be a trickle of steel that had already been made, and then it would be curtains to this key industry. That would have a grave effect on the motor car industry, our biggest export earner. British Leyland would be in jeopardy, in a very difficult financial position.
The miners can last out for more than eight weeks. They have shown by their recent ballot what a determined frame of mind they are in. The 1972 strike lasted for no fewer than 50 days. Britain is now much weaker economically. Last year we had a trade gap of £2,350 million.
The three-day week has already had its effect on production, exports and profits. The increase in the price of oil

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has added massive burdens to our balance of payments problems. Inflation is still rampant. The whole outlook is gloomy.
Much of the present situation is due to the Government's mismanagement. They failed to realise that immediately the Arab countries used oil as a bargaining counter to seek redress of their legitimate grievances, phase 3 was as dead as the dodo. The Prime Minister has shown little understanding of the situation. He is trying to prove that he has hairs on his chest. He is determined on a policy of confrontation with the trade unions.
The miners' overtime ban has continued for about 13 weeks. To meet their claim in full could be well justified, because coal is basic to our economy. Good pay is necessary to retain the labour force in the industry. The miners are essentially reasonable people, and the dispute could have been settled for less than the full claim.
In the past few days, the Prime Minister has spoken of a Royal Commission. Naturally, the miners are a bit sceptical about that. They have long memories. My right hon. Friend the Member for Leeds, East (Mr. Healey) reminded the House of the Sankey Commission and the promises which were made to the miners at that time. I have taken the trouble to turn up the text of the letter written at that time by Mr. Bonar Law to the general secretary of the miners' union. It was dated 21st March 1919, and said:
"Speaking in the House of Commons last night, I made a statement in regard to the Government's policy in connection with the Report of the Coal Industry Commission. I have pleasure in confirming, as I understand you wish me to do, my statement that the Government are prepared to carry out in the spirit and the letter the recommendations of Sir John Sankey's Report."
In fact, those promises took 28 years to be realised—and by a Labour Government, in 1947, when the coal mines were taken into public ownership.
Mr. Arthur Lewis: Even today, the report has not been fully implemented in the sense that it should have given a clear seven-hour day. I know that there has been an arrangement, but even to this day it has not been fully and wholly operated.
Mr. Hughes: My hon. Friend will appreciate that the miners always laid great store by the public ownership of the industry, and that was the basic point of the Royal Commission at that time.
The present crisis has to do with the personality of the Prime Minister. He is insensitive to the needs of the situation. His stubbornness has known no bounds. There have been plenty of opportunities to settle the dispute before now. There was the offer on waiting and winding time. There was the offer by the TUC, expressing its constituent unions' offer to hold back and minimise their own claims so that the miners' claim could take precedence. There has been the pay relativity issue, and only at this eleventh hour has the Prime Minister seen fit to become interested in that. The duty which hon. Members on the Government side now owe to the nation is to get rid of the Prime Minister.
The dispute has been revealing also of the class nature of our society. My hon. Friend the Member for Poplar (Mr. Mikardo) has already dealt with the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) and her reference to the miners as the enemies of the State, together with the suggestion that social security payments to miners should be stopped, going back to Dickensian workhouse conditions. That is what is being advocated now.
Mr. Mark Hughes: Less eligibility.
Mr. Roy Hughes: Less eligibility, as my hon. Friend says, going back to Edwin Chadwick's day and to 1834. Undoubtedly, statements of that kind have had their effect in the miners' ballot, making them even more determined to stand by their leaders.
Then there was the outburst by the Minister of State who is responsible for the arts.
Mr. Hamling: He knows a lot about mining, of course.
Mr. Hughes: Another expert on mining, as my hon. Friend says. On 23rd January, the Daily Mirror reported the hon. Gentleman as saying:
"I would like to see what a miner would do with the inadequate and irregular payments on which our actors and actresses have not only to exist but to look glamorous."

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His remarks, the Daily Mirror tells us,
"brought jeers from guests at the Evening Standard awards ceremony. Producer Joan Littlewood, who led the heckling, said last night: 'It was bloody annoying to hear someone talk about the miners like the Minister did. Some entertainers can get paid £30 for one hour's overtime when working on something like a TV commercial. Try telling that to the miners'.
Guests at the lunch ate smoked salmon and guinea-fowl, and drank toasts in red and white wine".
Mr. Arthur Lewis: Is my hon. Friend aware that the Minister who made that remark used regularly to get £80 for a 45-minute contribution to "Any Questions", including a free dinner?
Mr. Hughes: I am glad that my hon. Friend has reminded the House of that revealing fact.
A week or so ago, we had an interesting contribution from Mr. Justice Faulks, another expert on mining, one might say. The Western Mail, reporting his judgment in a divorce case on 29th January, quoted these words, with reference to the man concerned:
"If he had been a miner in South Wales, I might have overlooked it. But he was a cultured gentleman living in a respected part of the community, and that would not do".
This was a man who had been kicking his wife. My father was a miner. He left the mines at an early age, with the miner's disease of nystagmus, and in his latter years he was nearly blind. Both my grandfathers were miners, and my mother's brothers were miners. I was not aware that they treated their women folk in that way.
On top of all that, we have had the Tory "Red scare". There have always been Communists in the miners' leadership. Arthur Horner, the miners' general secretary over a long period, was a lifelong Communist, and a patriot if ever there were one. He led the miners in the post-war period when we faced a difficult economic situation. The nation was crying out for coal, and he led the miners then along moderate paths, when they could have got almost any wages they desired. But, instead of that, the National Coal Board was supplying coal to industry at below the production price.
Arthur Horner was succeeded as general secretary by Will Paynter, another Communist. I have taken the trouble to turn up two of Mr. Will Paynter's newspaper
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articles, written in 1967, when he pleaded with the then Labour Government, on both economic and social grounds, not to run down this vital industry. Who was the patriot at that time? Was it Mr. Richard Marsh, then Minister of Power, or was it Mr. Will Paynter, the miners' general secretary?
In the Evening Standard last night, one read—some of us knew it already—that our miners are the lowest paid in the whole of Western Europe. I am sure that that must make a lot of people think. There has been a deluge of misrepresentation about the National Coal Board's offer to the miners. Hon. Members constantly talk about a 16½ per cent. offer, and we read the same talk in the newspapers. It is nothing but lies. For a start, 3½ per cent. of the so-called 16½ per cent. is hypothetical, in respect of productivity. It is not yet negotiated, it might take 12 months to negotiate, and it would then have to be approved by the Pay Board. Moreover, 6 per cent. of it would be for night shift work, but almost every other industry gets additional payment for night shift work. Why discriminate against the miners? We are therefore left with the basic 7 per cent.—the whole basis of phase 3.
The Government should settle with the miners. Even the president of the CBI is saying so and it would be the best possible thing that could happen to this nation.
8.20 p.m.
Mr. David Madel: I agreed with the first part of the speech by the hon. Member for Newport (Mr. Roy Hughes), when he pointed out the danger of the shortage of steel supplies to the car and truck industry and to other manufacturing industries. This will happen unless there is a speedy solution to the dispute and an end to the three-day working week. The first part of his speech underlined three main points of the debate—the importance of coal, the importance of an incomes policy of sorts, and the various suggestions about a possible Budget following what my right hon. Friend the Chancellor said today.
I am glad that my right hon. Friend opted for caution in saying that it would possibly be dangerous to depress demand any further. Not only would that be dangerous for manufacturing industry in

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the south of England; it would have a quick effect on manufacturing industries which have moved to the regions. This particularly applies to firms which have been persuaded to invest outside the sphere of their normal investment area. If demand were further depressed I could foresee a sharp rise in unemployment in the regions.
The question has been raised whether purchasing power should be further reduced for salary and wage earners. We cannot possibly guess what the situation will be in a month's time, but one point of any possible Budget would be further increases in pensions which would presumably mean increases in national insurance contributions. For many people that would be another form of increased income tax. A casual reference was made by the right hon. Member for Leeds, East (Mr. Healey) about washing machines and other so-called luxury goods, and he asked whether there was not a case for increasing the tax on these items. Although they may be regarded as luxury goods they are often manufactured in the regions, and to depress the demand for them could have a deleterious effect upon the employment situation in the regions.
My right hon. Friend the Chancellor also warned of the danger to exports, and said that there was a good opportunity for increasing exports if we could move out of the present energy situation. For instance, the car and truck industry still has a high level of export orders and in order to sustain its investment in the regions it needs a high level of demand at home. Another factor which has emerged from the energy crisis is the need for the motor manufacturers to develop smaller engines, which use less fuel. The investment in and development of such products cannot come about overnight. We hope that it will come about as quickly as possible, and we hope, too, that the investment needed for research will be provided by a high volume of sales and production this year. We have seen what happens to industry in general if the car and truck industry is used as a yo-yo. That is why I welcome what my right hon. Friend the Chancellor said about exercising caution about depressing demand any further.
I turn now to the tax on fuel oil and petrol. According to the newspapers
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the oil companies have applied to the Price Commission for an increase of about 6p a gallon on petrol. I see my hon. Friend the Financial Secretary on the Front Bench. I have corresponded with him and asked him many Questions about the petrol tax. I believe it is wrong to group petrol, drink and tobacco together. It might have been right to have a special regulator tax for these three items in 1961 but, in 1974 with the huge increases demanded by the oil-producing countries, the time has come to remove petrol from the influence of the regulator.
The Arab countries have constantly quoted the tax paid on petrol as a reason for further increasing the price of oil. Petrol is essential. Not everyone has a car, but the effect of an increase in the cost of petrol spreads throughout the cost of living and I reiterate that it is wrong that petrol should continue to be considered with drink and tobacco under the regulator.
We have all promised to be fairly brief and I shall therefore spend little time dealing with the Pay Board and its activities under stage 3. Inevitably it is easy for a board operating an incomes policy to work well under phase 1, phase 1½ or phase 2. After all, it did not have much to do. There was a freeze for three or four months and then a very rigid norm—or perhaps it might be called severe restraint. Therefore, from November 1972 until the beginning of stage 3 the board had a relatively easy task. When stage 3 took effect its mistakes began to become apparent. Let us take the power engineers for an example. As if the country did not have enough energy problems and industrial difficulties, the power engineers decided to operate a ban on out-of-hours working from 1st November. They claimed special payment for that work and the Pay Board appeared to say "No." For seven weeks the country was on the brink of widespread electricity disruption. On 3rd January a settlement was announced and the general secretary of the power engineers, Mr. John Lyons, said they had achieved the essence of what they were seeking. Why could that not have been put right early in November? Why was the Pay Board not seen to convene a meeting between the Electricity Council and the engineers to try to settle the dispute? By the time

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phase 3 of an incomes policy has been reached the country is looking to the Pay Board to help people to settle under phase 3. Manifestly it was not seen in that light over the power engineers dispute.
Another example is the mining dispute. Nearly everything that could be said has been said about it, but has there been a meeting between the Pay Board, the National Coal Board and the NUM? It is not necessarily only for the NUM or the NCB to convene a meeting. Surely it is within the remit of the Pay Board to ensure that such a meeting takes place, and to see what can be settled under phase 3. If we are to have a relativities body, which will in a sense be a national incomes commission, it will presumably take over the function of the Pay Board. It should have an easier task than in 1972. Most of the people who settled up to the Wilberforce levels in 1972 did so after the report of the inquiry into the mining dispute. It is the other way round now. Most of those who were involved in wage negotiations and high settlements in 1972 have already settled under stage 3.
I therefore suggest that it is within the power of a relativities board to make suggestions to get us out of the current difficulties. How long would such a board take to report? Perhaps a month. Perhaps we could persuade the NUM to postpone any action for a month, so that such a board could be seen to be trying to bring about a solution. I emphasise, however, that if we are to have a national incomes commission, relativities board, pay board, or whatever it is, when we have progressed thus far from a statutory freeze, it must be more active. Such a board must have sensitive political fingertips.
Mr. Arthur Lewis: Will the hon. Gentleman give way?
Mr. Madel: No. I am approaching the end of my speech. On the subject of the power engineers' dispute the Pay Board was not as politically sensitive as it might have been. We must have an early improvement in its performance.
8.29 p.m.
Mr. Mark Hughes: As a young boy brought up in a coal-mining
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village, to me the adult world was divided into two groups of people. Those to whom one said "Hey Mister" were one's natural friends. Those to whom one said "Please, Sir" were one's natural enemies.
Any Government trying to deal with the economy of a country must start from that very simple proposition. As long as the Government demand that they should be referred to as "Please, Sir" and that the miners should come to them saying "Please, Sir" instead of coming on a basis of equality and saying "Hey, Mister, I want my rights", so long will the Government get it wrong.
Economics, at its root, has that psychological relationship that, whether it was picking windfall apples as a little lad or settling the miners' dispute today, the rate for the job for the "Please, Sirs" was three times as much as the rate for the job of picking apples for those to whom one said, "Hey, Mister".
The present Government have consistently and continually got that crucial pre-economic relationship wrong. I have here a very simple letter about a datal worker underground. It comes from No. 77 Quarry Crescent. Bearpark, County Durham. It is about a husband and wife and two children. The husband has spent 41 years underground. The letter states:
"I pay £4·19 rent now and 60p school dinners.
Yours faithfully,
Mrs. Gibbon."
What is the pay chit at the end of 41 years in the pits? It is £23.70. What does this man get out of the offer currently in front of him? He gets 7 per cent.—after 41 years of saying "Please, Sir." He still gets only 7 per cent. of £23·70 take-home pay. That is why men like him, Durham miners with a pedigree in the mining industry longer than that of any noble Lord bar two in the other place, and people like the Ramshaw family, whose name is to be found on the first pay chits in the early 18th century and one of whose descendants will be the first mayor of Durham under the new reorganisation, these hereditary miners, bring to the present economic dispute something of the economic arithmetic.
It is not simply the calculations of econometric figures of inflation. It is the problem of pride of a group of men who have received from a succession of

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Governments massive injustices. Any Member of the House who has seen "Close the Coalhouse Door" will realise the depths of disillusion with the nationalisation which affected the mining community. To pretend that that does not exist is to delude ourselves. The new National Coal Board is as much "Sir" as its predecessors.
What miners are asking for now is not a short-term measure. The long-term build up of dissatisfaction in the case of County Durham—which I know best—is compounded with a new feature. Whereas until 10 years ago there was no real alternative—it was the dole queue or the pit; that was the simple world in which people lived—now for the first time there is the alternative of highly-welcome factories such as those of Mullards, Courtaulds, and Black and Decker, and the new industries which have been brought in, with which we are delighted. But when men see their daughters aged 22, for example, with little training, earning more as clerks in those factories than they can earn working underground after 30 years in the pits, can one wonder that they become bitter?
These are not men who take strikes lightly. Almost on the fingers of one hand can the strikes in the Durham coalfield over the past 150 years be counted—1833, 1844, 1892, 1911, 1926 and 1972. Those are the only times the Durham coalfield has gone on strike. These are not men who lightly go on strike, who vote by an 86 per cent. majority to give the mandate to their leaders to call a strike because of the actions of a minority of agitators of Communist leanings. These are men whose whole history is a compound of patriotism
Anyone here who knows something of the recruiting figures for the Durham Light Infantry or the South Wales Borderers or the Duke of Wellington's Regiment in South Yorkshire knows that these men when it comes to a real call to patriotism stand prouder than any other group, and they will not be blackmailed by the media telling them that they are reneging on their duty to the country. They have never been found wanting in that respect.
Yet these are the people whom the Government, by accident or design, have forced from the moderation of Sam Watson, Alf H. Hesler and others into the intransigent position they now hold. How is it that a group of men so committed to moderation for so long can be transformed into militants?
The answer to which I come, regrettably, is that the Prime Minister and his acolyte, the Chancellor of the Exchequer, and the activities of the Government have led the miners into this position of hostility. It is no joy to me to see the deep personalised hostility towards the Prime Minister. It is an acceptable part of political life that there should be a difference of opinion, forcibly expressed, as miners are in the habit of forcibly expressing opinions. But when I find in the working men's clubs and the pit lodges and elsewhere this acid, this burning personalised hatred of the Prime Minister, I become deeply disturbed, because what is then at issue is not merely phase 3 or the status of the Government—it is the status of this whole House and of the political institutions of the country, which have been brought to a level of disrepute and disrespect that can do no other than great damage to the whole country. That damage is of a different order of magnitude from any damage that a four-week or seven-week miners' strike can induce.
Probably few in the House now can recall in person the speech which Stanley Baldwin made in this place immediately following the 1926 General Strike. Although he is not the most popular figure in present-day mythology, it would be right for the public at large and for hon. Members, particularly members of the Government Front Bench, to reread what Baldwin then said—that it was not the rôle of any Government to use their undoubted constitutional power to impose their will upon a minority. That is one of the most significant remarks of any British Prime Minister this century. What Baldwin said in 1926 needs to be said today, that for the Government to stand upon their undoubted constitutional right to insist upon phase 3 is to do the constitution not a service but a disservice.
The men whom I have the privilege to represent are not miltant by nature. They are not men easily moved to wild action. These are men whom circumstances and the Government have forced into a position where they can do no other. Like Luther they will stand and like Luther, or the miners of 1833, they will eat grass before they give in because they are convinced that only thus can they hold their heads erect in the social strata in which they belong. It is that misunderstanding of the situation that is the greatest condemnation of this Government.
8.42 p.m.
Mr. Ralph Howell: The whole House will have been impressed by the sincerity of the speech of the hon. Member for Durham (Mr. Mark Hughes) even if all hon. Members cannot agree with all that he has said. I agree with much that he said. Whatever happens now, the events of the past three months will be damaging to everyone in the country. The longer the confrontation goes on the more damaging will its effects be.
When the history of this period is written we shall look back in amazement to see how the high standard of living achieved in the past three years—the best standard of life we have ever had—was recklessly thrown away by this self-inflicted injury. I am particularly concerned with the damage it will do to the elderly, the retired and the low-paid workers. I represent a constituency with one of the highest percentages of elderly people. In addition, our agricultural workers are low down in the wages scale. When they accepted their award under phase 3 no protest was raised anywhere in the House.
I am particularly concerned with those pensioners who have tried to save to achieve a better standard of living than they would have had if they had relied solely upon their pensions. All our efforts to contain inflation have been directed towards helping such people maintain the standard of living for which they have worked and saved.
What is all this confrontation about? It has little to do with miners. I have listened to debate after debate in which we discussed the merits of miners' wages,
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their conditions of work, their health hazards, and so on. We have been missing the point for a long time.
I want to raise two matters. First, it is an odd society which can be brought to a three-day working week merely because 3 per cent. of the work-force decides not to work overtime. That is something which needs correcting rapidly. I believe that the miners have merely been pawns in this power game. It is no coincidence that the power workers, the railwaymen and the miners had their industrial actions simultaneously in the middle of winter, especially when the nation was confronted with the oil crisis. At the worst possible time these three industrial disputes were phased in to cause the maximum disruption.
I am convinced that this was carefully engineered, phased and planned, and that the miners have been merely thrown into the battle, largely against their wishes—because only a few months ago they voted for no industrial action. Yet, under phase 3, with the best offer of any group of workers, they are suddenly whipped into this confrontation.
This problem [Interruption.]—I shall attempt to develop my argument if hon. Members will give me the chance—is largely to do with Communists, anarchists and Maoists who are determined to wrest power from the House of Commons. It is of as much consequence to Opposition hon. Members as to we on the Government benches. Many Opposition Members are deeply concerned at what is happening. A small group of people are determined to wreck democratic government—not just to bring down this Government but to make it impossible for any democratic Government to govern. It is time that the Prime Minister drew attention to these people, identified them and spotlighted their numbers.
I do not believe that there are Reds under every bed, by any means. [Interruption.] Yes, there are one or two Reds on the benches. The creed, and the record, of the Communist Party is alien to this country. In 1966, 62,000 voters voted Communist; in 1970, only 37,000 voted Communist, which means that the Communists are getting nowhere by the ballot box but are, nevertheless, determined to gain power by other means. If one works out that voting strength, it means that only one in 800 voters voted

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Communist. Yet if one examines the amount of power that Communists wield on the executives of the country's 12 major unions it will be seen that one in eight are Communist, which gives an idea of the degree of power that they have gained in recent years.
Mr. Peter Hardy Mr. Peter Hardy(Rother Valley)rose—
Mr. Howell: No, I cannot give way. I have 10 minutes and I need it all myself. My second question is: how is it that this small number of people can wield as much power as they do? [An hon. Member: "Tell us."] That is just what I intend to do. I believe firmly that it is the system which we are operating—the system which has been developed over the last 30 years, with layer after layer of mistakes in our taxation system, in the social security system and in the employment system—which has created the conditions under which practically every strike is successful. Much has been made of the miners' overtime ban, but it has little to do with the situation. Over many years, every industrial action has been successful. Much more serious are the continual strikes in the car industry and the fact that wages in that industry have rocketed, making all other sections of the community dissatisfied. A few weeks ago, on inquiring why Massey-Ferguson tractors were not coming on to the market, we were told that there were 19 strikes currently affecting the production of those tractors.
I have continually drawn attention to the fact that it is utterly absurd for the present Government or any other to pay benefits to strikers' dependants as of right, because it is a misappropriation of public funds. In 1966 the Government made a serious mistake—and once we have made a mistake we do not seem to have the ability to correct it—in giving benefits to strikers as of right. Prior to 1966, there was provision whereby anyone who could prove hardship could receive benefit from the State. In 1965, only £66,000 was paid out in that respect. In 1972, the miners' union decided not to pay its members out of union funds and £5½ million in State benefits was paid out in that strike alone.
It is not the Government but the people generally, and most of all, the elderly and lower-paid people, who are
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financing strikes which are damaging, inconveniencing and even endangering them. That is wrong. It is one reason why responsible trade union leaders are losing control of their unions and power is passing from the leadership to the shop stewards. Many trade union people recognise the danger of any irresponsible person being able to call a strike regardless of whether money is to be paid out of union funds.
Secondly, the ease with which people can leave their employment and get other part-time work and at the same time draw benefits needs tightening up.
Mr. Peter Hardy: In mining areas?
Mr. Howell: I am talking not about mining areas but generally.
Thirdly, something needs to be done about the taxation system, whereby as soon as a person stops work he receives a PAYE refund.
The combination of all those factors creates a situation in which striking or acting irresponsibly is painless and as a result virtually every strike is successful. I am convinced that until we can correct these matters industrial relations will not be satisfactory. No amount of Industrial Relations Acts will correct the situation. We must create conditions in which it pays people to work, and work well. The Government must take note of this. Whether or not we have an election, until conditions are created in which it pays to work well we shall never succeed and Britain will never be prosperous.
8.55 p.m.
Mr. William Hamling: The hon. Member for Norfolk, North (Mr. Ralph Howell) needs to learn something about industrial relations. He should go and live in a Durham village for a month or two to learn the character and disposition of the men for whom my hon. Friend the Member for Durham (Mr. Mark Hughes) was speaking. To a certain extent the debate has been unreal. We have heard the accents of Newport, Dunfermline Burghs, Jarrow and Durham, and we have heard many other hon. Members who represent the miners who have been the subject matter of much of the debate.
The hon. Member for Manchester, Withington (Sir R. Cary) referred to the 1926 General Strike. I remember well

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the General Strike and the 26 weeks' lockout. I admire the humanity and sincerity with which the hon. Gentleman spoke—in stark contrast to the speech of the hon. Member for Norfolk, North. I remember not only the damage that was done to the industry of the nation in those days but the damage that was done to the social fabric of the country, damage that took 25 or 30 years to repair. Those of us who remember those days approach the debate with a certain amount of responsibility.
The Chancellor of the Exchequer's concluding remarks, in which he attacked the miners, were not worthy of him, and I will tell him way. The miners have served the nation well in the past. They are not men who by tradition or experience want confrontation. I, too, know the Durham mining areas and I know my hon. Friends the Members for Durham, North-West (Mr. Armstrong) and Fife, West (Mr. William Hamilton) and others of my hon. Friends who come from mining families and mining places. They are not men who seek conflict. The miners simply want to negotiate their wages and conditions freely with their employers.
This dispute has been going on for a long time. Many of the proposals that have been made in the last two weeks could have been made 10 weeks ago. My hon. Friend the Member for Blaydon (Mr. Woof) knows this well. He is another of the reasonable men, another of the ordinary miners who are as English and at patriotic as anyone in the House. I speak as one who during the war held His late Majesty's Commission. There were miners serving with us who deliberately gave up a sheltered occupation to join the Royal Navy or the Royal Marines. These are the men whom hon. Members stigmatise as enemies of the country. They are as English as anyone. All they ask—I speak as an Englishman—[HON. MEMBERS: "British."]—I speak as an Englishman. The Scots can speak for themselves; they often do; and the Welsh even more often. I speak as an Englishman, as one who represents an English constituency.
All they ask is that they should be treated with the respect that in a democratic society one is entitled to expect—that they should be able to negotiate freely
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and not be subjected to the kind of intemperate attacks to which the right hon. Gentleman subjected them this afternoon. I know he had provocation. I understand that, but I ask him, sincerely, to consider that we face in the next few days one of the most critical times we have ever faced. If we do have a strike there will, as a result, be no victors. No one will win, not the Government, not the miners, not the country: no one.
These eyeball-to-eyeball confrontations may suit old-fashioned cavalry officers, but they cause awful carnage amongst the troops.
Moderate people such as ourselves tremble when we hear people talk about confrontation, talk about fights to the finish, talk about battles. We are all citizens of the same community. We are all citizens of the same country. All that we on these benches ask is that the Government recognise that, and that the Government recognise that there is a better way than the path of confrontation on which they have set their steps. There is a better way. The better way is to talk; the better way is consultation; the better way is negotiations. That is all that we on these benches ask.
We are all moderate people. None of us here is undemocratic. None of us seeks to overthrow the constitution of this country. All of us who, in the Labour Party, have come here, came as convinced democrat. We have pledged our lives to this parliamentary method. We know no other. When the time comes for an electoral confrontation the people of this country will decide it is time to have a Labour Government, but, however that may be, we accept these democratic methods. That is the way we were brought up. That is the way the miners were brought up. That is the way the steel workers were brought up. That is the way my father, a railwayman, was brought up.
I can remember the 1926 strike. We had enough of it then. We do not want any more of it now.
I appeal at this late hour to the Government to seek means of securing an honourable settlement with justice to both sides. People have talked about "face". All of us have lost face. All of us have accepted a compromise at some stage or another in negotiations, in

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our political life, in our private lives. Are the Government not big enough, not men enough, to make some small compromise—not just a compromise for tomorrow, but something tangible, something real they can offer to the miners? They are a special case.
At one stage during the discussions it was said that the TUC offered, "We will not take advantage of the situation". The Prime Minister himself has boasted in this House that 6 million people, trade unionists, have sought settlements under stage 3. Is not that an earnest of the sincerity of those unions affiliated to the TUC?
My own union, the National Union of Teachers, has claimed a special position for teachers, yet in line with TUC policy, since we are affiliated to the TUC, we accepted a settlement under phase 3 so that the Government could obtain the assurance they wanted. What more do they want? They have been given these assurances, but have turned them down.
I say to the Government, before it is too late, before we tear ourselves apart and destroy our nation, that they should bring some rational thinking to bear in the situation. Instead of wild talk, let us have a little peace talk.
9.6 p.m.
Mr. William Shelton: In the few moments that remain to me in this debate, I wish to say a few words about some of the underlying causes and solutions which have been proposed in this debate and in the last few weeks in connection with some of the industrial disputes which confront the nation—in particular, the miners' dispute.
The first solution to which I should like to draw attention was that which was so admirably advanced by the hon. Member for Ebbw Vale (Mr. Michael Foot) on 21st January, in the debate on the divided nation. The hon. Gentleman propounded the theory that if we had more equality we should have fewer disputes. His solution was that we should have a radically fierce Budget, which would level incomes and wealth.
It is probably true that we have too much inequality, but in an economic sense the argument was admirably answered by my right hon. Friend the Secretary of State for Social Services. I shall not go into detail, since the debate is fully set
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out in HANSARD. My right hon. Friend referred to the size of the cake and emphasised how fast its size had increased. The important factor which he stressed was in terms of the amount of wealth which we are gaining in this country rather than the way in which it is divided. He said that when one looked round the country one saw the division between various groups, such as that between ASLEF and the NUR, rather than any division between rich and poor.
My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) has propounded his belief in the use of the monetary supply by which he suggested that our problems could more or less be cured. Mention has been made of a hypothetical figure of 2 million unemployed, which we may need before any end to industrial strife is reached. I am sure that nobody would countenance such a figure. Nevertheless, my right hon. Friend also put forward the other day the appealing argument that if the miners were offered and given more money, and if the monetary supply were not increased in any way, it would not matter because someone else would have to pay less. Theoretically he is right, but I believe that the people who would have less would not be the unions but the old-age pensioners, the poorer people, the weak and the sick. It is the Government's duty to protect those people. Therefore, one must disregard that argument.
I then come to the solution propounded by many Members of the Labour Party, which is that we should have price control but not wage control.
Mr. James Hamilton: The Government want it the other way round.
Mr. Shelton: Perhaps the hon. Member for Bothwell (Mr. James Hamilton) believes that there will be restraint on the port of the trade unions. What I was saying was that the course propounded by the Labour Party would inevitably lead to inflation—
Mr. Hamilton Mr. Hamilton rose—
Mr. Shelton: I am sorry that I cannot give way to the hon. Gentleman, but I must conclude in a moment or two. I was saying that such a course would inevitably lead to inflation and

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possibly to rationing. That was precisely the programme started by the ill-fated Government of President Allende of Chile a year or two ago. I make no comment on that, for that is quite true.
The fourth solution, which I regarded with some doubt a year or two ago and which I now believe to be the only solution, is that of prices and incomes restraint. I am afraid that the free market solution failed in 1972, and in the present situation we have to stay with prices and incomes restraint. It may or may not be socially unfair. I have not time to argue that, but what I can argue is that those who say that it is unworkable are quite wrong, and I advise them to read the recent review of the Price Commission published a week or two ago, which shows that about 16·5 million people settled within phase 2, that there were about 7,000 agreements within phase 2 and that, as we know already, there have been about 5 million in phase 3. That, in my view, must be the way ahead for this country.
9.11 p.m.
Mr. Eric G. Varley: If this debate has done anything, it has proved to those who have attended it and the public outside who read about it tomorrow that the moment of truth has come. In the interests of truth, the Opposition are determined to ensure that the country knows the facts about the tragic and unnecessary dispute in the mining industry.
It is a dispute which has been brought about by the stubbornness and arrogance of the Prime Minister who, I am afraid, understands nothing about the miners of Britain and nothing about the ordinary people of the country. It is a dispute which has been deliberated exacerbated to give the most discredited Government for the past 30 years a chance to make a bolt for it and to dodge retribution for the collapse of all the policies on which they swindled their way to power.
I speak proudly as a former mine-worker. So long as my father, who has a 20 per cent. pneumoconiosis disablement, coughs out his lungs in the pit village where I was born—my father who saw service in the trenches in France in the First World War—I am damned if I will put up any longer with the tissue
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of lies and libel being poured out from the Government benches.
The Government are trying to libel men who have given their health and in some cases their lives to provide wealth which has made it possible for those who now abuse and revile them to be well fed and well paid. Some of them make more in a year than the average miner will ever see in a lifetime.
Too many Government supporters cheer smugly and complacently when the Prime Minister repeatedly describes the pay offer to the miners as "generous". My right hon. Friend the Member for Jarrow (Mr. Fernyhough) analysed that pay offer. So often have Government supporters cheered the Prime Minister for describing that offer as being one of 16½ per cent.—and the right hon. Gentleman has repeated it so often that it is now bandied around—that the time has come to look at it in detail.
The miners have been offered a 7 per cent. increase in basic wages. Under that offer, the surface worker would have his basic rate of £25·29 increased to £27·59, the underground worker would have his basic rate increased from £27·29 to £29·86, and the coal face worker would have his basic rate increased from £36·79 to £39·36. That is the "generous" offer to which the Prime Minister refers repeatedly and about which I have no doubt the Secretary of State for Trade and Industry will tell us shortly. That is money that no hon. Gentleman opposite would look at as a reward for his strenuous efforts. I doubt whether any hon. Gentleman opposite would go down a pit for that kind of money.
On top of this 7 per cent. basic increase comes money for night work. At present miners get 2½p—6d in the old money—extra for each hour of night work. Face workers do not get even that at the moment. Under this so-called generous offer all of them will get an extra 17p for each hour worked between 8 p.m. and 6 a.m.
Mr. Neil Kinnock: If they are allowed to do it.
Mr. Varley: If they are allowed to do it. Night allowances like that would get a horse laugh from print workers in Fleet Street who have the unappetising duty of setting up articles by better paid

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journalists such as Bernard Levin and others admonishing the miners on how unpatriotic they are for turning up their noses at this generous offer.
Added to the basic and the night money is another 1½ per cent. providing better holiday pay and extra days off—a few more days in which miners can see daylight probably in their gardens. Miners take great pride in their little gardens at the backs of their cottages in the pit villages. They regard them with great pride. But those gardens are nothing compared with the 154 acres in Buckinghamshire which Lord Carrington is hoping to sell for £10 million. I would bet that is an increase of more than 16½ per cent.
Mr. Reginald Freeson: Does my hon. Friend appreciate that the existing use value of that land would be about £300,000? That is a measure of the profit margin involved.
Mr. Varley: Exactly. I am sure that Lord Carrington would regard that as a generous offer.
The increase that the miners have been offered on their basic rate of pay and the extra allowances for night work and holiday pay add up to 13 per cent. Where does the other 3½ per cent. come in to bring that total up to 16½ per cent? The answer is that it does not exist, except as a gleam in Mr. Derek Ezra's eye. What hell that man has been put through by this Government who, twice in two years, have refused to let him negotiate with his workers.
We are told that this mythical 3½ per cent. is possible under a productivity deal which has yet to be negotiated and which has not been submitted to the Pay Board for its approval. We are reliably informed that the Pay Board has already given the thumbs down to that 3½ per cent. productivity offer. That is very odd. A waiting and winding time agreement, which could have ended the dispute months ago, is ruled out by the Pay Board before its possibilities can be probed. Yet a mythical productivity deal, which has never been officially put to the Pay Board, is included by the Prime Minister as part of the offer in an attempt to deceive the country into believing that the miners are being offered 16½ per cent., which they are not.
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Under stage 3 many workers have come off better than the miners. I do not want to take up the time of the House unnecessarily, but there was an exceptionally good article in last Monday's Daily Mirror by Mr. Geoffrey Goodman, its industrial editor, in which he said that the Government know that others have got much more than the basic offer that has been made to the miners.
This phoney 16½ per cent. offer has been trumped up to make other workers jealous of the miners—that is what it is all about—to try to induce them to condemn the miners for turning down the offer and to set worker against worker in the hope that the outcome will be a divided nation. I tell right hon. Members opposite that they have been rumbled. Nobody sees it as a 16½ per cent. offer. It is not a 16½ per cent. offer.
The House should know the facts about the offer because we are told by the Prime Minister that the House has some special responsibility for it. Hon. Members may not be aware of it, but according to the Prime Minister this offer has been put before the House and endorsed by it. I do not remember it even though I have attended every debate in the House on the coal industry for the past 9½ years. However, we have the Prime Minister's word for it. On Monday of last week in that party political "Panorama" programme the Prime Minister made a remarkable statement. I am certainly obliged to the Daily Express for reprinting that broadcast in full. In it the Prime Minister declared that this offer was
"an offer approved by Parliament".
I do not know when we approved it in the House. I do not remember it. I remember the Prime Minister repeatedly trying to rebuke my right hon. Friend the Leader of the Opposition for allegedly attempting to negotiate on this matter across the Floor of the House. It seems that we went one better and actually approved the deal. Perhaps it went through as unopposed Private Business at half-past two when we were not looking, or something of that kind.
In any event, the Prime Minister adds this unaccepted offer to the other pay increases under this Government and says how much better it all is than what the miners got under Labour. He does not

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say how much of this increase was not voluntarily conceded but granted only after the first of the pit strikes which have been the Prime Minister's personal contribution to our "Better Tomorrow". He does not mention the way in which miners' wages, like all wages, have been eroded by price increases which have been the result, not of wage inflation or world prices, but of deliberate Government action.
As my hon. Friend the Member for Poplar (Mr. Mikardo) asked, what about rent increases under the Housing Finance Act? These are not caused by wage inflation or world prices. What about mortgage increases caused by the Government's dear money policy? They were not caused by wage inflation or world prices. What about dearer school dinners, the abolition of free school milk, increased prescription charges, higher food prices consequent upon our entry into the Common Market? All the Common Market countries have had to put up with higher world prices, but in 1973, a year of wage freeze and wage control, Britain's food prices soared way ahead of all our eight EEC partners.
There is another myth that the Prime Minister has now decided to propagate. He is rewriting history so fast that he will soon be eligible for the editorship of the Soviet encyclopaedia. Yesterday, in answer to a question by my hon. Friend the Member for Bolsover (Mr. Skinner) the Prime Minister had the nerve to tell the House
"the NUM … has never been prepared to negotiate on any aspect of the subject"—[OFFICIAL REPORT, 5th February 1974; Vol. 868, c. 1032.]
That is what the Prime Minister said yesterday. They were his very words. I have no doubt that perhaps over the next week or two he will use those words over and over again.
In that case what were all those talks about just before Christmas? What were those meetings between the Secretary of State for Employment and the miners' negotiating team on 20th December—the nod and wink talks, as they have come to be known? Were they not negotiations? What about the talks on protective clothing and pensions held on 21st December between the National Union of Mineworkers and Mr. Norman
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Siddall, the Deputy Chairman of the National Coal Board? Were they not negotiations? What were the talks, for example, on 27th December when the National Union of Mineworkers brought up the question of winding time and waiting time? Were they not negotiations? They actually sent round at that time for the Deputy Chairman of the Pay Board saying, "Will you come round and interpret some of these things for us?" They were negotiations.
Why did the National Coal Board send men to 42 pits solemnly armed with stop watches to time how long it took a miner to prepare to go down the pit and have a bath and clean up afterwards? Were they not negotiations? Was that just part of the Christmas pantomime season?
What was the outcome? One set of negotiations led merely to another set which in turn was a prelude to a further set of negotiations, which broke down in the first week of January because of the Pay Board's veto. The miners have negotiated in good faith and are still ready to do so. Hon. Members on the Government side of the House may suggest that the miners should go and see the Prime Minister. I do not blame the miners for not wanting a lecture from him, or not wishing to have a sanctimonious letter from him. Why should they go to see the Prime Minister in an atmosphere in which he may try to get them to agree to a wholehearted consent to phase 3, which is now in tatters as a result of the quadrupling of oil prices, which the Government are tumbling over themselves to pay?
When the Prime Minister says that the miners have never been willing to negotiate he is not telling the truth. It is the Prime Minister who is not prepared to negotiate. I understand that at one time the Prime Minister was called a "man of integrity", yet he has certainly not allowed the negotiations with the miners to take place in a meaningful way.
Mr. Hugh Dykes: Can it be inferred from what the hon. Gentleman says that he supports the Gormley formula of cash on the table now?
Mr. Varley: I do not know where the hon. Gentleman has been. The formula he mentions is the only way to get

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out of the dispute. That view is taken not only by the Labour Party—it is also the view of the Confederation of British Industry. Perhaps the hon. Gentleman would care to consult the Chancellor of the Exchequer on that point.
The Prime Minister says that the miners have never been willing to negotiate. But there is another matter upon which the Prime Minister persistently seeks to mislead the nation. He trots out repeatedly—it was in his sanctimonious letter to Joe Gormley on 24th January—his boast of how the Government are providing £1,100 million of public money for the coal industry. That claim was first propagated by the Secretary of State for Trade and Industry, whose removal from the scene of the coal industry was the best thing that happened to the industry for a long time.
What about this £1,100 million provided by big-hearted Peter and generous Ted? It does not exist—like the 16½ per cent. offer to the miners. The whole myth has been exploded by the Minister for Energy, who was kind enough to provide me with the truth behind the sham. It seems that he is throwing a little light on something. He tells me that £275 million of the £1,100 million is simply written down assets—just a paper transaction—while another £175 million of this bountiful £1,100 million is a write-off of accumulated deficits—yet another paper transaction. These two paper transactions account for £450 million of the much-vaunted £1,100 million.
What about the rest of the £1,100 million? Most of it does not exist. It is just a paper figure—a ceiling for possible grants which may or may not be made between now and 1978. Nobody knows how much of that total figure will be paid out. That is up to the Secretary of State for Energy, when he can spare time from his principal job as Chairman of the Conservative Party, at Central Office.
What we know is the estimate for the current financial year, which is £154 million. It can be only an estimate, because there are another two months to go. Therefore, what that £1,100 million boils down to is a possible £154 million.
This is humbug. I hope that the Secretary of State for Trade and Industry, who probably thought that he had a triumph in the last debate on the matter, will
1334
not trot out again that £1,100 million and tell us how it has been committed to the mining industry.
There has been a great deal of talk and humbug from the Prime Minister about the coal industry in the past few weeks. One would never guess that it came from a man who, as Leader of the Opposition, told the House,
"In my opinion, the closure of pits should move forward as fast as possible, and faster than it has been doing "—[OFFICIAL REPORT, 1st December 1966; Vol. 737, c. 658.]
The right hon. Gentleman has turned into reality his dream as Leader of the Opposition. Under him, all the pits are closing down at a stroke. He is turning the closing down of pits into a grand old British custom. They will be able to set it to music and sing about it over the next few weeks at all those marvellous concerts the Prime Minister has in Downing Street, although perhaps all that will come to an end, too.
Conservative Members have no idea of the feelings of ordinary people about the shabby treatment the Government are meting out to the miners and about their attempt to stoke up and exploit the pit dispute for their own squalid purposes. The feelings of working men are being expressed on the factory floor and in the clubs. The Prime Minister may well be more impressed by the views of someone who is obviously very sympathetic to him personally, and who wrote a letter to The Times last week, from a respectable address in New Bond Street, London, W1, saying:
"I am in the process of engaging a new secretary and am currently interviewing applicants. I have seen a number of young women aged round about 20–25, who have said they would require salaries ranging between £2,000 and £2,500 per annum. In addition, they would have three weeks holiday a year, luncheon vouchers, would work in a pleasant office, in a most agreeable part of London.
I cannot believe that the service rendered to the community by miners can be less than secretaries, and I would suggest that they have been grossly underpaid in the past.
Mr. Heath commands a great deal of respect as a man of integrity and determination, but I think he has completely misjudged the mood of the nation who, on the whole, feel that not only are the miners a special case, but a very special case, as distinct from any other class of employees.
The dispute will be settled one day, better sooner than before the nation is mortally damaged. Talks with a fresh offer should start

1335
immediately, coupled with a statement that this would be the only case permitted outside Phase Three."
There will have to be a settlement. There is talk—I do not know how true it is—that this is likely to be the last debate in this Parliament. We shall soon know. If it is true, we shall soon be in the middle of a General Election campaign. I believe that the British people will seize with both hands the chance to hurl this discredited Government out of office.
But whoever wins the next General Election will still have to settle with the miners. Nothing on earth will get a miner down the pit if he is not prepared and willing to go there. The Prime Minister should understand that, and understand it quickly.
I have lived among miners all my life, and I thought that I knew them pretty well. But last weekend I was surprised and saddened when I went round the pit villages to find how deep the bitterness had gone.
Sir George Sinclair: The hon. Gentleman and his Friends stirred it up.
Mr. Varley: That is the Prime Minister's personal contribution to "One Nation". That is what he is doing, and I hope that he is proud of it.
I urge the Prime Minister, even at this late stage, to allow negotiations to take place. The miners want to negotiate—nothing more. I urge him to authorise a settlement which will allow all involved to emerge with honour. If he does that, he may well enhance his reputation. But if he decides otherwise, as everyone is now speculating that he will—or already has—and he opts to make a bolt for it, the decision will be in the hands of the British people. We on this side are confident that the people of Britain will vote to get Britain back to work.
9.36 p.m.
The Secretary of State for Trade and Industry (Mr. Peter Walker): The hon. Member for Chesterfield (Mr. Varley), who has always taken a close interest in every debate on coal, has for the first time, speaking from the Dispatch Box, suggested that the Coal Industry Act was of no importance. He went out of his way to give the incredible impression
1336
that £1,000 million was, in fact, no more than £150 million. He knows perfectly well, having taken part in the debates on the Bill, that the pension provision for miners was doubled and the payments to miners made redundant due to collieries running out of coal were substantially increased.
In fact, the Coal Industry Act was welcomed by the National Union of Mine-workers as a major reform. If the Opposition have now reached a stage at which they endeavour to suggest that measures such as that Act, very much to the benefit of the coal industry, are of little importance, it only shows their ignorance and misunderstanding.
The debate began with the right hon. Member for Leeds, East (Mr. Healey) giving his views on the economic scene. He was followed by my hon. Friend the Member for Leek (Mr. Knox), who devastatingly exposed the way in which the right hon. Gentleman wished to pursue, in economic terms, policies which his own party strongly opposed in the period after the last election. He laid claim to the great success of his predecessor in the last Labour Government, the right hon. Member for Birmingham, Stechford (Mr. Roy Jenkins), in what he achieved as Chancellor. But it was his own party at its conferences following the General Election which strongly condemned the way in which those policies had endangered growth, had endangered public expenditure, had endangered the social services and had increased unemployment. In almost every debate within the Labour Party at that time we were told that it was a period noted for stagnation, noted for rising unemployment, and noted also for substantial reductions in public expenditure in the very spheres in which the Opposition now say they wish to see no cuts.
Therefore, the Labour Party in all its analyses of the economic scene has endeavoured to advocate policies contrary to those which we thought it recognised had failed when it was in office. The right hon. Member for Leeds, East missed some fundamental factors in his analysis of the economic scene. He spoke of the position of world trade without in any way pointing to the fact that in 1973 the British economy enjoyed considerable progress in obtaining for the first time since the war an increased share of

1337
world trade. Likewise, when he repeated, as he has frequently repeated, his comments about the failure to obtain investment and to see that British industry modernised, he failed to say that there was plenty of evidence that substantial modernisation and investment had been taking place in recent months. That is clearly indicated by the orders placed with the machine tool industry. In the first 10 months of 1973 they were half as high again as the year before. It was illustrated, too, by the many announcements by major industries of modernisation on an unparalleled scale.
Mr. Healey: Will the right hon. Gentleman give us the figures—since he obviously has them at his fingertips—of the level of industrial investment in 1970 compared with 1973? Does he not recognise that there was fall of 18 per cent. in investment between 1970 and 1972 and that therefore the increase he claims for last year did not get half way back up to the level of the last year of the Labour Government?
Mr. Walker: Again, the right hon. Gentleman is wrong. The figures I gave were for orders for the machine tool industry in the third quarter of 1973. They were at a record level. The right hon. Gentleman constantly endeavours to play down the modernisation that is taking place in British industry and his comments are extremely detrimental to the potentiality of British industry.
One of the spheres of investment that the right hon. Gentleman mentioned was steel. He said that this was one area where there was a considerable shortage of capacity and it was therefore wrong to have sold steel to Iran. I shall deal with the question of Iran later, but it is worth noting that the shortage of steel-making capacity last year was due to total neglect to invest in that industry during six years of Labour Government. It was the Conservative Government which announced the major modernisation programme which the Labour Government should have put in hand but which they failed to do.
As for the situation on Iran, two factors have affected our economy in recent months, one of them of an international character and the other self-inflicted. The oil situation is the most important. I was delighted to hear the right hon. Gentleman confirm that it was never his view
1338
as Shadow Chancellor, or the view of the Leader of the Opposition, that petrol tax should be reduced. He argued the opposite case. However, he was wrong because the Leader of the Opposition categorically stated that he was in favour of reducing petrol tax. The moment the news of the Arab oil price increases was announced the Leader of the Opposition said:
"Petrol and some oil products are heavily taxed. The Government should do all in its power to stabilise oil prices by corresponding reductions in taxation."
Does the policy of the right hon. Member for Leeds, East prevail in the Labour Party, or does the Leader of the Opposition's view find favour? Perhaps the right hon. Member for Leeds. East would like to answer. That is another basic disagreement on the economic policy of the Labour Party.
Regarding the balance of payments, there are certain new opportunities in regard to the oil producers. I noticed that the right hon. Member for Leeds, East unlike his right hon. Friend the Member for Bristol, South-East (Mr. Benn), treated the deal with Iran rather in the same way as the hon. Member for Poplar (Mr. Mikardo) and one or two other Labour Members, as something which should not be done, and treated the relationship with Iran as something which was humiliating and bad. I hope that the view of the right hon. Member for Bristol, South-East prevails on this occasion. It is seldom that I have that hope. But if the Labour Party does not recognise the importance of establishing good economic relationships with a country such as Iran, with its considerable economic potentiality, it will be making a considerable mistake.
In regard to the transaction with Iran, the right hon. Member for Leeds, East mentioned the position of steel exports. Of the total of £110 million-worth of British exports which will take place as a result of this agreement, only £6·6 million worth is connected with steel, and that is for items which the steel industry considers will have no adverse effect upon the supply to British industry. Presumably the Labour Party has some respect for the judgment of the British Steel Corporation, which is a nationalised concern. The corporation considers that the greater availability of oil as a result

1339
of this agreement will mean that the steel production in total will be that much higher, and that it will, therefore, be to the benefit of steel consumers in Britain. I hope that we shall not have any more loose talk such as we have had this afternoon to the effect that the great bulk of the deal was about steel.
Mr. Ogden: Will the right hon. Gentleman try to show that he realises that in three days, two hours and fifteen minutes' time the coal miners will be on strike, and that if that happens there will be no steel? Will he give his attention to good relationships not necessarily with Iran but in respect of our immediate problems?
Mr. Walker: I should like now to deal with the speech of the hon. Member for Chesterfield and come to the point about the current situation regarding relationships with the miners. First, the hon. Member condemned the method of negotiations which have taken place. He said that the Government had negotiated badly because they had left no further room for negotiation. I remind the hon. Gentleman that throughout the talks my right hon. Friend the Secretary of State for Employment has made it perfectly clear to the miners that there are considerable spheres in which important negotiations could have taken place. There was the sphere of pensions, which throughout has been available for negotiations. The NUM has taken no advantage of the constant invitations to look at the manner in which miners could benefit there. There are a number of spheres concerning various health factors.
When the hon. Member for Chesterfield quotes his figures and various indications of certain categories of people who will get less than he thinks they deserve, he also knows that the NUM could always have renegotiated the package in a very different way, with a different emphasis on different categories of miners, and that the NUM has never done so.
The hon. Member for Durham (Mr. Mark Hughes) made a very moving speech in which he outlined his personal relationship with the mineworkers and stated how much he regretted that a fierce hostility had been built up. A similar tone was struck by the hon. Member for Chesterfield. He created
1340
a pitch and quoted figures. His figures were listened to with attention by both sides of the House. I hope that the same will also apply when I provide figures as to the changes which have occurred in the NUM position.
If the NUM had accepted this offer even without the productivity agreement, it would have meant that face workers over less than four years of the present Government's period of office would have had an increase of £18 a week in their earnings. [Interruption.] I hope the House will listen to these important figures. They would have attained an extra £18 a week—that is, an average of £4·50 per year—[Interruption.] The Opposition might like to hear this. We listened to the figures which the hon. Member for Chesterfield gave. [Interruption.] If the Opposition really want the country to know the facts, they will listen to these figures.
Over the past three or four years of Conservative Government, the miners have had an average increase of £4·50 a year. I remind the Opposition—who, in the debate, have shown such passion on behalf of the miners—exactly what happened during their six years of office. In the first year of the Labour Government, the miners had an increase of 86p; in the second year, which was the best year ever for the miners under the Labour Government they had an increase of £1; in the third year, their average earnings went up by 59p.; in the fourth year, they rose by 38p. All this was under the rule of the party which now condemns us as being unfair to the miners. Where were all these emotional speeches about the miners then? In the fifth year of the Labour Government, the miners' average earnings went up by 80p.
Mr. Mikardo: Without a strike.
Mr. Walker: In the sixth year of the Labour Government, the average went up by 83p, and, as the hon. Member for Poplar (Mr. Mikardo) said, without a strike, which is a very significant point. Under the Conservative Government, the miners' average earnings have increased by £4·50 a year.
Let us look at the figures in total. During the six years of Labour Government, the earnings of face workers went up by £4·46—less than the average each year under the Conservatives. Let us also look

1341
at the question in relation to inflation. In five of the six years the face workers had an increase less than the rise in the cost of living. One can imagine the emotional speeches if the Conservatives had treated the miners in that way.
Mr. Kinnock: I agree that it was a terrible thing that the miners did not demand or get more—they should have done—but will not the right hon. Gentleman acknowledge that throughout these years and many other years previously these wage agreements were put to the ballot and were overwhelmingly accepted by a democratic vote, whereas this latest offer has been rejected by an 81 per cent. majority?
Mr. Walker: The hon. Gentleman has raised an important point. The miserable increases that I have listed were being given each year to the miners and were, for the face workers, less than the rise in the cost of living. Yet we did not have the then Prime Minister urging his colleagues to go into the pits and find out how badly the miners were being treated. During that period of neglect of the miners, when many miners were becoming redundant and unemployed and when there was no Industry Act, the party which showed such passion today because there is a Conservative Government in power remained silent about the plight of the miners.
The hon. Member for Durham referred to miners being paid less than typists. Perhaps in 1964, when they were being paid £15 a week, they were getting less than typists. But the Labour Party was not interested in the comparative position then.
The significant thing about today's debate is the manner in which both Labour Front Bench spokesmen have failed to deal with the point made by the Chancellor when he asked why the Leader of the Opposition changed his whole attitude to the question of relativities and their importance the moment the Government tried to get a settlement on that basis. The fact is that the letter which the Leader of the Opposition wrote to the Prime Minister on 29th January clearly implied that one solution to the problem was to do something quickly about the relativities report.
When the Government told the TUC and the CBI that they were eager and
1342
anxious to act quickly there was never one word from the Leader of the Opposition to encourage the TUC to do this. Throughout the whole of the period the Leader of the Opposition has by his silence shown complete irresponsibility. To claim to be the Leader of the main opposition party when he is unwilling to say whether he is in favour of a strike or against it, to put forward a suggestion and, when it is accepted by the Government, to drop it immediately, shows that if Left-wing extremists can be accused of playing party politics on this issue, then certainly so can the Opposition.
Mr. J. D. Concannon Mr. J. D. Concannon (Mansfield)rose—
Mr. Bernard Weatherill (Treasurer of Her Majesty's Household): I beg to ask leave to withdraw the motion.
Mr. Deputy Speaker (Mr. E. L. Mallalieu): Order. The hon. Member for Mansfield (Mr. Concannon) was on his feet before the hon. Gentleman sought leave to withdraw the motion.
Mr. Concannon: I want to clear up some of the basic untruths uttered by the Secretary of State for Trade and Industry in speaking about miners' wages. What he forgot to say was that during the period he was talking about most of the miners volunteered not to take a wage increase so that they could help lower-paid miners in Scotland, Wales and elsewhere to catch up.
They were not then negotiating with the Government. They were freely negotiating within the industry, making and taking their own decisions. Everything the right hon. Gentleman said tonight was sheer hypocrisy—
It being Ten o'clock, the motion for the Adjournment of the House lapsed, without Question put.

INDUSTRIAL AND ECONOMIC SITUATION

  EXPENDITURE
  Ordered,
  That Mr. Ron Lewis be discharged from the Expenditure Committee and that Dr. Miller be added to the Committee.—[Mr. Kenneth Clarke.]

  EXPENDITURE

    ADJOURNMENT
    Resolved,
    That this House do now adjourn.—[Mr. Kenneth Clarke.]
    Adjourned accordingly at one minute past Ten o'clock.

ENVIRONMENT
  Housing
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  Improvement Grants
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  Rent Rebates
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  Waste Materials (Recycling)
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  Parliamentary Building
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  Jaywick Sands (Compulsory Purchase Orders)
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  Blandford (Main Drainage)
  Road Building
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SCOTLAND
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  NEW RIVER COMPANY LIMITED
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SOCIAL SERVICES
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ENERGY
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AGRICULTURE, FISHERIES AND FOOD
  Dairy and Beef Cattle
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  Food Prices
CIVIL SERVICE
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DEFENCE
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EDUCATION AND SCIENCE
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  School Building (Stretford and Urmston)
  Public Expenditure (Lancashire)
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EMPLOYMENT
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  SECURITY FIRMS
  SECURITY FIRMS
NATIONAL FINANCE
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  Child Endowment Scheme
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  Estate Duty (Works of Art)
  Estate Duty (Works of Art)
  Gross National and Domestic Products
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  Fuel Tax (Mobile Shops)
  Fuel Tax (Mobile Shops)
NORTHERN IRELAND
  Herr Niedermayer
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POSTS AND TELECOMMUNICATIONS
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TRADE AND INDUSTRY
  Weights and Measures Inspectors
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  "Pisces III" Submarine (Sinking)
  "Pisces III" Submarine (Sinking)
  Ammonia
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  Norton Villiers Triumph Limited
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WALES
  House Building
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  Llantrisant
  Llantrisant

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

GASIFICATION OF COAL UNDERGROUND
LORD WAKEFIELD OF KENDAL. My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what progress is being made in the underground process of coal gasification.
THE SECRETARY OF STATE FOR ENERGY (LORD CARRINGTON): My Lords, the National Coal Board are taking a fresh look at the prospects for underground gasification in this country as a very long-term possibility.
LORD WAKEFIELD OF KENDAL: My Lords, while thanking the Minister for that reply, may I ask him whether he is aware that his Answer will give considerable satisfaction? Is he further aware that since work was undertaken there have been considerable technical developments in other spheres of activity which may now make the gasification of coal underground a viable commercial proposition? Is he also further aware that there is extensive work on this process going on in America at the present time; and that in Russia a great deal of work on this problem was done until easily obtainable natural sources of energy were found? For all these reasons, will my noble friend press on with the very important research and development work which is still required?
LORD CARRINGTON: Yes, my Lords, I will give that undertaking. I think that there still are some technical problems about the whole problem of gasification, and I think it would be undeniable, too, that there are environmental
772
problems; but this is certainly something which we shall continue to explore.
LORD SLATER: My Lords, is the Minister aware that this question of the gasification of coal is nothing new and has been under constant observation for quite a long time, but no one has yet found a solution?
LORD CARRINGTON: That is absolutely right, my Lords, but I think that with the change in the prices of different forms of energy it is certainly worth while having a look at these things again, bearing in mind the technical advances which may have taken place in the years since we ourselves abandoned our experiments.

EXPORT OF LIVE ANIMALS
2.38 p.m.
BARONESS STOCKS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether, in view of their assurance that no new licences are at present being given for the export of live animals for slaughter, they can say how many such animals are still being exported under old licences still in force.
THE PARLIAMENTARY SECRETARY, MINISTRY OF AGRICULTURE, FISHERIES AND FOOD (EARL FERRERS): My Lords, no animals are now being exported for slaughter overseas as there are no old licences still in force. The export of live animals overland from Northern Ireland to the Irish Republic is not subject to licensing control, and such exports are continuing.
BARONESS STOCKS: My Lords, am I not right in thinking that there are still unexpired old licences which allow the export of live animals?
EARL FERRERS: My Lords, there are no unexpired licences which permit the export of live animals for slaughter. The last one came to an end on January 16, and the last exports of animals for slaughter under the old licences, took place in the week ending January 5, when 33 animals were exported.
BARONESS STOCKS: Can I be assured then, my Lords, and can I assure my correspondents, that in fact no animals for slaughter are now being exported under any licences at all?
EARL FERRERS: The noble Baroness is quite correct. She may assure her correspondents that no animals are being exported for slaughter, and that there are no licences in existence now which permit that.
BARONESS STOCKS: My Lords, I thank the noble Earl for his Answer.
THE EARL OF ONSLOW: My Lords, could my noble friend say what effect this ban on the export of live cattle has on the home price to the British farmer for beef, bearing in mind the fall in the value of beef over the last twelve months, and especially relating this to the vast increase in the cost of foodstuffs?
EARL FERRERS: My Lords, it would be quite a complicated exercise to work that out, but in view of the fact that only 33 animals were exported in January I doubt whether it would have any significant effect.

E.E.C.: U.K. FINANCIAL COMMITMENTS AND GAIN
LORD SHINWELL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what the financial commitments are to the E.E.C. since the Treaty of Accession was signed, and what is so far the financial gain to the United Kingdom.
THE MINISTER WITHOUT PORTFOLIO (LORD ABERDARE): My Lords, the Government contribution to the Community Budget is estimated at about £150 million in respect of 1973. Receipts from the Budget in 1973 were about £65 million. Both contributions and receipts will continue on a rising scale during the transitional period.
LORD SHINWELL: My Lords, does it not appear from that reply that our benefits have been minimal, and is it not about time we put an end to this farce
774
and stopped making ourselves bankrupt in order to suit the French?
LORD ABERDARE: My Lords, we never entered the European Economic Community with the idea of making a short-term financial gain; we entered because we thought it was in the long-term economic interests of this country.
LORD GLADWYN: My Lords, will the Government take an opportunity to point out to anti-Marketeers with a similar outlook to that of the noble Lord, Lord Shinwell, that the whole object of creating a community of nations is to increase the wellbeing of the community as a whole, and not simply, and always, to make a calculation based on that of individual gain and loss?
LORD ABERDARE: Yes, my Lords, I would agree with that.
LORD BLYTON: But, my Lords, surely the Minister will agree that in our first year the cost has been colossal, with a deficiency of £1,120 million in the balance of trade, 1 per cent. of V.A.T. and our contributions to the Agricultural Fund, plus our contribution over the Exchanges. Surely we ought to be told the whole facts as to what it is costing us.
LORD ABERDARE: My Lords, in point of fact the net contribution to the Community Budget, estimated at £100 million, turned out, so far as we can estimate the 1973 figure, to be £85 million.
LORD SHINWELL: My Lords, does not the noble Lord recall speeches made in your Lordships' House when we debated this subject before the Treaty of Accession was signed, when many Members in your Lordships' House who are associated with industry and commerce and finance in this country paraded the virtues of association with E.E.C. because it would mean financial gain, opportunities for investment and a market of 250 million from which vast benefits were going to accrue to us? Does the noble Lord recall those speeches?
LORD ABERDARE: My Lords, I recall in particular the vote taken on that occasion; but I would also draw the attention of the noble Lord to an Economist survey published on December 29 last year, which showed that 84

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per cent. of leading companies believe that membership of the Community will be helpful in the longer term.
LORD SHINWELL: My Lords, may we now accept definitely the ipse dixit of the noble Lord that we are not concerned about financial gain? Is this associated with the "unacceptable face of capitalism"?
LORD ABERDARE: My Lords, I said, immediate financial gain.

FUEL COSTS AND ELECTRICITY TARIFFS
LORD AVEBURY: 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 have considered the introduction of fuel cost adjustment clauses into electricity tariffs for all domestic and commercial customers; and if so, what conclusion they have reached.
LORD CARRINGTON: My Lords, the possible extension of fuel cost adjustment clauses to domestic and other tariffs which do not at present contain them is one of the questions affecting electricity prices which is being considered as part of the consultations envisaged in the Chancellor's Statement on December 17. The Government have not yet reached a conclusion.
LORD AVEBURY: My Lords, could the noble Lord confirm that such a plan was submitted by the electricity industry the day before yesterday? Would he not agree that it is illogical, when by means of a massive advertising campaign, including television spots, the Government are exhorting the consumer to use less electricity at the same to encourage the consumption of electricity by refusing the industry the right to recover the increases in charges for primary fuels which it has to bear?
LORD CARRINGTON: My Lords, I can, of course, confirm that this matter is being considered, as I said in my original Answer. The arguments in the supplementary question which the noble Lord has put are among the things being considered by the Government.

INDUSTRIAL AND ECONOMIC SITUATION
2.45 p.m.
LORD BESWICK LORD BESWICK rose to call attention to the industrial and economic situation; and to move for Papers. The noble Lord said: My Lords, I beg to move the Motion standing in the name of my noble friend Lord Shackleton; and I rise to move it knowing that today our country needs all the courage, all the wisdom and all the patience that it can muster. It has been apparent to nearly all of us that the fabric of our society can be torn, probably irreparably, if we citizens of the same country continue to pull in opposite directions. Because this is so, and because we have had a glimpse of the economic and social consequences of conflict, many in the past few days, and especially Members of your Lordships' House, have sought to build bridges, to seek common ground and to counsel compromise.
There was, for example, the letter which was featured prominently in The Times last Friday which was signed by a noble Lord from each of the three main Parties in this House, and by the noble Lord, Lord Fulton, from the Cross-Benches. That letter asked for a new initiative and the signatories ended by saying that while they normally might approach these matters from a different viewpoint, they consider it essential in the current circumstances to find common ground. As I see it, that letter is as true, or more true, today than last Friday. But I have a special reason for knowing that it is not easy to agree an area which one can call common. Moreover common ground must also be firm ground and to establish the fact that it is firm ground we should welcome the most searching inquiry and the exchange of opinions in this debate.
My Lords, the crisis which has been developing inexorably, frighteningly, over the last two or three years now finds its sharpest and most immediate expression in the threatened stoppage in the mining industry. Without compromise, effective compromise, we face consequences spelled out by the Sunday Times in its leader last Sunday in which it said:
"A strike would be intolerable …. Once begun it would not speedily be ended. Several

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pits could suffer such damage by neglect that they would not reopen. The worsening shortage of electric power would extend the effects into the lives of working people all over Britain. A great many factories would close for good. The electrical transmission system could decline into disorder which would take months to repair."
My Lords, those words almost certainly underestimate the physical damage which would be done to our industrial and commercial structure by a prolonged strike in the mining industry. For example nothing is said in that estimate about the coking ovens in the steel industry. There is no word about social bitterness and its consequences, but the editorial went on to say—and I doubt whether any here will deny it:
"A prolonged miners' strike would do incalculable harm to the life of this country as a manufacturing and trading nation."
It is this harm—this unnecessary harm—which, even now, must be avoided.
Mr. Macmillan, in his latest memoirs, At the End of the Day, wrote this:
"Mr. Baldwin is said to have made the reflection at the end of his long political career that there were three forces, in conflict with which it was very unwise for a British politician to engage. They were: the Vatican, the Treasury and the National Union of Mineworkers."
Mr. Macmillan and Mr. Baldwin were as wise as any contemporary Conservative Minister, if not wiser; but despite that, if it were shown to be essential in the clear interests of the nation to engage in such a conflict, then I would range myself alongside those who say "Fight". But it has not been proven essential. On the contrary. No one has proven that our present economic plight is due to inflationary wage settlements.
After all, Phases 1 and 2 of the Pay Code have been observed, according to the Government, and they tell us repeatedly that 5 million workers have already accepted Phase 3. It cannot be proven, either, that paying more than Phase 3 ostensibly provides, will be a mortal economic blow. Indeed, the Government's plea to the miners is that, provided they do not strike, they can expect more at an earlier date, though under another heading. "Another heading"— that really is what this issue is all about. Would such an extra payment be considered unfair by other unions? The other unions themselves say not; and at least one of them—the E.T.U.—has settled
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under Phase 3 as a declared gesture of support for the miners' claim. Tom Jackson, of the Post Office Workers, a brave and eloquent advocate of an incomes policy, has said publicly that he thinks the miners deserve more than Phase 3. So the unfairness argument just will not stick.
What of the "floodgates" argument—that it will let loose all others if we give now to the miners what is promised later? We have had the T.U.C. undertaking, and we have had the confirmation by constituent delegates of the T.U.C. of that undertaking. But even if it is still argued that the T.U.C. initiative is not enough, does anyone in this House really believe that a union which intends to press a claim will not press it, if the miners are forced back? If the miners go back voluntarily with an honourable settlement and with the T.U.C. assurance as part of that settlement, and then if some other union presses a claim which might be considered excessive—is there any doubt then where public opinion would be? Would not resistance to an unreasonable claim be strengthened rather than weakened if the miners have been treated separately and fairly?
The detailed statistics and merits of this claim have been dealt with elsewhere and in this House—notably on January 9, by my noble friends Lord Taylor of Mansfield and Lord Jacques, and on other occasions by my noble friend Lord Blyton. But I wonder whether the Government realise that their own case has not attracted support by the less than frank reiteration that the miners have been offered a 16½ per cent. increase. I should like to ask two questions on this, and to make two further points. The weekly pay of a coal-face worker is now £36·79: he is being offered £39·36. I ask noble Lords opposite whether it is correct that, taking into account tax and insurance deductions, which will of course be taken off both the present and the offered pay, as the result of the 10 per cent. increase in the cost of living, the coal-face worker under the present offer would in fact be nearly £2 a week worse off as compared with his last settlement. If this is true—and I challenge the Government to say that it is not true—does this not emphasise, in their own interests, that a delayed settlement must be an increased settlement

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because of the increasing inflationary tide?
LORD DAVIES OF LEEK: My Lords, they are the worst paid in Europe.
LORD BESWICK: My second question relates to the so-called "exceptional generosity" of this pay offer of 16½ per cent. to the miners. Is it so exceptional, if we compare that figure with what was so quietly given to some civil servants recently? According to the Economist on January 19, the cash increase to officers in the Executive Grade of the Civil Service was 14·8 per cent. on the salary bill. At the Principal grade, the cash increase was £517 a year, despite the fact that we were told there was to be a rigid £350 limit per year for those earning over £5,000 a year. Are those figures correct and, if so, what were the special circumstances or the anomalies that could not be applied also in the case of the miners?
I quoted just now the present and offered basic rates. Usually those who tend to support the Government, as against those who speak for the miners, talk of "earnings" and not of the basic rate. If we are seeking common ground, ought we not to express an opinion on this? Ought the miners to have to rely on overtime? Might we not even raise coal more economically if we geared production to a properly paid, no-overtime day? My noble friend Lord Taylor of Mansfield very movingly told us on January 9 how, after the Sankey Commission, there was legislation to reduce the miners' working day from eight hours, which it had been since 1908, to seven hours; with a promise of a further reduction, in view of the special circumstances, to six hours per day. That was in 1919; and to-day the basic rate is for 7½ hours. There are those in Parliament, and in at least one national newspaper outside, who say: "Of course, pay should take into account earnings." If we are to discuss any figures I hope they will be figures of basic pay and not of earnings.
My final point on the miners' dispute—it is in some ways the core and it relates to the wider issues—concerns this so-called "league table of incomes". In one compilation we were told that the miners were eighth in the league in April,
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1972, and now we are solemnly told they are 16th, but that they could go back to their previous position if they accepted the N.C.B. offer. That means they could climb over the rubber workers, the aircraft workers, the brewery workers, the iron and steel workers and so on. But those who talk in these terms of a carefully calculated league table of wages are talking in terms of a world which does not exist. The real world includes other people besidse those organised workers. There are 11 million affiliated to the T.U.C. but there are 23 million or more gainfully employed. Put the miners into that larger league table, and see how they stand then.
Of course there are cases within the 11 million group which stick out like sore thumbs. I understand, for example, that there is currently a loss of production in Fleet Street because some printers reject the idea that, because of lack of newsprint, they should fall back upon their minimum or basic rate. I wonder what would have happened if the miners had stood out, for example, for the same basic rate of £79 a week. But these isolated cases of abuse of union power should not distract from the deeper, wider issue. The Times in its fascinating collection of letters had several which touched upon this point. For example, there was one writer who said:
"No pay offer currently under consideration for the miners would place them, as you put it, at 'the head of the earnings league'. Reference to your advertisement columns for office vacancies will show the absurdity of such a claim".
There was another writer who said:
"I am in the process of engaging a new secretary and am currently interviewing applicants. I have seen a number of young women aged around 20 to 25, who have said they would require salaries of £2,000 to £2,500 p.a. In addition, they would have three weeks' holiday a year, luncheon vouchers, and would work in a pleasant office, in a most agreeable part of London".
That same writer goes on to say—and I ask noble Lords opposite to listen to this—
"Mr. Heath commands a great deal of respect as a man of integrity and determination, but I think he has completely misjudged the mood of the nation who, on the whole, feel that not only are the miners a special case, but a very special case, as distinct from every other class of employees".
But of course it is not only the jobs advertised in The Times: there are a whole range of spivs and speculators

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who have been doing so well in our modern society. The truth of the matter is that in recent years it has been the least essential whose incomes have gone up most. Our contemporary society undervalues those who drive our trains and ambulances, who teach our children, who tend our sick or who mine our coal. It is this instinctive feeling among the politically sensitive miners that these things are wrong which gives a political tinge to what some say should be just an industrial dispute. The truth is that here we are dealing with a political issue as well as an industrial dispute, and unless we have the imagination to recognise this we shall not get anything like a lasting settlement.
It is possible that this Relativities Board could, over the years, help to sort out this unfairness, the anomalies of the contemporary scene. But to help solve the immediate crisis we need a recommendation quickly. To set up a Relativities Board which is going to work we need time—time for discussion and consultation. I have paid tribute before, and I am glad to pay it again, to the pioneering work of my noble friend Lord George-Brown in this field of an incomes policy. Looking back at what he did, from a time some distance ahead, we shall see that work was an important point in the development of what one day must come. But the Prime Minister is absolutely right in his letter when he confirms the Pay Board view that this new machinery should be generally acceptable. To think otherwise would be to repeat the grave mistakes which led to the imposition of the Industrial Relations Act and, indeed the present Pay Board apparatus. Looking back, how much better we should have been had the Government not scrapped, impetuously, with Selsdon prejudice, the old prices and incomes machinery! How much better had they allowed it to grow, to adapt and improve with experience!
The Relativities Report has great potential but it must grow naturally and unforced. Can we not agree that such an important potential development should be established with the fullest, most mature consideration. That means that some offer to the miners, on account, must be made without prejudicing later consideration. The noble Lord, Lord Carrington, is said to have great influence
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in the Government, and I can understand that that is so. I hope to see from him this afternoon some sign that there may yet be discussion about money.
One unhappy feature of this recent controversy has been the readiness of some to say that all could be solved if it was not for a few "Reds" who are leading the rest astray. Nothing, no single argument or action, has done more to anger the moderates than that they are dupes of the militants. The miner is a self-respecting man. He is far too sturdy and stolid in his judgments to be deceived by insincerity. I say that with feeling because I grew up among them.
Historically it is not unusual for those whose case is unconvincing, or who move away from, or never know, the shop floor, to describe their opponents as "Red" or, before that term was invented, something similarly emotive. Once before in my county of Nottinghamshire, the workers were compelled to protest against their intolerable conditions and the Establishment of the day derided them as a mob which should be put down by military force, as was said in your Lordships' House But it was Lord Byron who declared in his maiden speech to this House:
"It is the mob that labour in your fields and serve in your houses, that man your Navy recruit your Army."
Had he been speaking seventy years later when the collieries were developed around his Newstead Abbey, he undoubtedly would have added, "and mine your coal." But he did go on to say that it was this mob, these 19th century "Reds",
"that have enabled you to defy all the world and can also defy you, when neglect and calamity have driven them to despair."
There is another feature of that period on which we should do well to ponder. The serious industrial unrest of that day was caused not by the mob, not by any "Reds" of the time, but by rising prices and inflation, exacerbated, writes A. L. Morton in his People's History of England, by the Government's reckless borrowing and their readiness to print paper money. Let us not forget, when we seek agreement to-day, that the basic cause of our present plight is the devaluation of our currency. Let us not forget, when Mr. Barber says that more than £40 million in wages for the miners would

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be inflationary, that it was he who distributed £300 million in tax cuts to the higher income bracket. Let us not forget, if we are complaining about the stubbornness of Mr. Gormley, that it is Mr. Barber who insists that if you borrow enough, for speculation or otherwise, the interest on that personal loan can be set off against tax liability.
We cannot forget either that at the beginning of the year when Peers on all sides of this House said that increased taxation would be an acceptable way of curbing inflationary demand, Mr. Barber said he preferred to cut back public expenditure, by which he meant cutting back, among other things, on hospital and educational facilities. I do not press these charges to-day, though the material to do so is at my hand. All I wish now to show is that it does not befit the Government to adopt an unrelenting, uncompromising posture as the champions of good against evil. In this matter we have possibly all made mistakes and in this matter may be we all must do a little more to get agreement.
It would not worsen the record of the Government, and it could well enhance it, if in the remaining days of this week they got around the table again to talk, not of the need for the miners to give way, but of a sum of money which would enable the miners' leaders to recommend their members to keep at work. That I believe is what the majority of industry really want: both sides of industry, management and men, who in recent weeks have done so much together to get over the short-time working. That is what they want. That. I believe, is what the majority of this country wants, and that I hope is what the noble Lord will tell us is what the Government propose to do. I beg to move for Papers.
3.11 p.m.
BARONESS SEEAR: My Lords, I should like if I may to begin with two general points about the attitude of the Liberal Party towards the present situation. No one I think can accuse us of a record of "union bashing". We are proud to have supported the unions and the development of unionism throughout this century.
But the issue before us to-day is not to be for or against the unions. We
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accept that there are interest groups whose interests clash. We accept the inevitability of some degree of conflict. But we also say—and we believe that in this matter not only the members of our Party but the great majority of the people in this country would agree with us—that for any civilised society to exist there must be a set of rules which people can rely upon and know will be lived by. For that civilisation to be a democratic civilisation, those rules have to be promulgated and supported by the Government and the elected Parliament of the country. When it is the decision of a Government and of Parliament to take a certain line of action, that action cannot be challenged and overthrown by any power group in the country, however much one admires and respects in other ways that particular group.
SEVERAL NOBLE LORDS: Hear, hear!
BARONESS SEEAR: The second point I should like to make is that we know that the greatest problem facing this country remains the problem of inflation. We know too that if there were to be a change of Government, and any other Party came to power they would have the conquest of inflation as the first item on their agenda. If it should be that the noble Lords now sitting on the Opposition Benches found themselves charged with the job of ruling this country, they would be the first to say that public enemy No. 1 remains the battle against inflation; and we will say it too, my Lords.
We have said all along that we support a statutory incomes policy. Would that all Parties in this country had said the same. We have been critics of Phase 3, both here and in another place, from the time that it was introduced; critics of the details of Phase 3 as a document that is too inflexible and indeed too inflationary, though the criticism of its inflationary element has increased greatly since it was introduced as a result of the changes brought about by the oil situation. We have criticised it, but we have supported the need to stand by it while advocating its change by agreement. May I say, because there have been reports of a contrary nature, notably in to-day's Press, that this has been consistently the attitude of the Liberal Party both here and in another place? It is quite incorrect to say that we

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have been prepared to go against the application of that agreed incomes policy, although we are working all the time for adaptation of the policy.
Having said that, my Lords, nobody can be anything but profoundly anxious as to how, at one and the same time, we are to maintain those two cardinal principles—the need for the rule of law and the need to maintain the fight against inflation. How can we maintain those principles and deal with the situation in which we find ourselves at the present time? With the threat of a disastrous strike liable to start at the end of this week, we believe that there are three things which the Government should do straight away. We know that the Government themselves, or members of the Government at any rate, agree that in the Relativities Report—whatever one may think about it as a document to guide us in the long run, and I for my part do not think very much of it for that purpose—none the less I believe that in paragraph 61 of that Report suggesting the setting up of a Relativities Board, there is a possible way out. If that Board could be set up at once—and we appeal to the Government: can it not be set up quickly? Is there really any need for delay?—it would not take more than five minutes for the Secretary of State to decide, as paragraph 1 requires him to do, that the miners' case is one that needs to be referred to such a body. The body could be set up, if the will were there, straight away. Even if the miners themselves are not prepared at this stage to co-operate, the Board could still go on with its inquiry. The data, the information, is there. The Board is open to receive evidence from all quarters and it could go ahead. We ask, indeed we demand, that that Board should be set up without delay.
Secondly we say, echoing indeed what Mr. Ezra has been saying, both last night on the B.B.C. and again this morning, let us start straight away with this inquiry into the long-term affairs of the coal industry and the conditions which it is necessary to have over a wide front; not merely the questions of pay immediately to be settled, but also the total conditions to be offered in the new situation in which the coal industry finds itself at the present time. Cannot that inquiry be got under way straight away?
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We on these Benches would also say: having by the development of the Relativities Board done something to modify the inflexibility of Phase 3, let us recognise too that it is in fact far too inflationary in itself for the conditions of the present time. We shall have to move quickly to a new kind of policy. Is it too soon for all interested parties to get together to discuss what that is going to be, knowing full well, as everybody in this House knows, that the policy which follows Phase 3 will, for a period of time at any rate, have to be a great deal tougher and a great deal more unpleasant for all of us than Phase 3 has been. Of course, the longer the present crisis goes on, the longer the strike—if strike there has to be—continues, then the worse that following phase will be.
Although we stand by Phase 3 while it remains the Government's policy, it has become a symbol of dissension, and the mere starting of discussions which must take place on what comes after Phase 3 would be a third move in the right direction. In our view all these things would help, but time is not on our side. Time between now and the end of the week gives us not many hours, indeed not many minutes, in order to stave off this disastrous downward trend in our affairs.
I have said that we stand by the idea of an incomes policy. The purpose of that policy is to fight inflation. It is of the essence of a fight against inflation that we do not pay out more money unless more goods are produced to justify that money. But, my Lords, is it not possible that the miners—the mining industry as a whole, the N.U.M. and the Coal Board to decide on the distribution—could be offered a production bonus on all the coal produced above the total level, (which I gather from the latest estimate is about 122 million tons, allowing for present losses) at the price which that coal will now fetch in the market? I know that the mining industry and the N.U.M., for very good reasons, dislike productivity agreements where the opportunity for one coalfield to earn is so much greater than another coalfield. That is not what we are suggesting. We are suggesting that, on the measure of the total official coal produced, the additional money be made available for distribution across the hoard, if that be the wish of the N.U.M. and the Coal Board,

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to all the miners. This is additional money, but it is not an inflationary addition, because it is given only when the extra coal has been produced.
Your Lordships will be aware that this idea has been put forward in a number of quarters and it is being viewed with some interest by many interested parties. It is a way, within the objective of Phase 3, of containing inflation, of seeing that more money is available. I would go further than that. I would say, as is not infrequently the case with production bonuses, that because of the need to have the extra money available, it would be possible to say to the N.U.M.: "It will be guaranteed that a payment will be made against that increased production, a guaranteed minimum of that bonus, whether the production is immediately forthcoming or not, and for anything which is produced above that level there will be extra payment"—a guaranteed production fallback, as it were.
The advantage of this is that that payment would be paid straight away once the miners started full working again and the coal started coming up. I do not believe that this offer should be made without any conditions. It should be made only if, on the one hand, the strike were called off, and on the other hand, if it is fully understood, taking up the spirit of the T.U.C. offer of the week before last, that no other unions will expect additional pay outside the terms of Phase 3. There would be a guaranteed fallback of production bonus, and payment over and above that as the extra coal comes out, to be paid on a monthly basis. There would then be extra money available, but it would not be inflationary. Surely that is fully within the spirit of Phase 3.
My Lords, a great many noble Lords wish to speak this afternoon. We on these Benches, as everywhere else, I am sure wish most urgently, most sincerely, that some way may be found to get out of the present problem. However, it must not be at the price of making the future still more difficult. The rule of law and the control of inflation are even more important than the solution of this immediate problem, vital though that is.
3.25 p.m.
LORD CARRINGTON: My Lords, we are confronted to-day by one of the most
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serious crises in peace time that any of us can recall. The issues at stake are as important as any that could face us. It is therefore all too easy for those of us with different political philosophies and different views on the best way forward to sound extreme and partisan. I hope we shall try to avoid that to-day. All of us are in public life, I imagine, above all to serve the public interest. That should govern what all of us say, both in this debate and in the weeks ahead.
My Lords, I want to begin by reviewing the background to the crisis, and the way it has developed. During the life of this Government I believe that we have had to tackle two great problems. First, we wanted to increase the growth rate of our economy, and hence raise the standard of living of the British people with higher investment, productivity and exports. Second, we have sought ways of containing inflation at a time when world prices have risen at a totally unprecedented rate.
Our drive for growth has been criticised by many as too ambitious. I wonder whether that is fair. I never really understood why a Chancellor of the Exchequer is thought to be brave and sensible if he drives with his foot permanently on the brake. It was surely right that we should have given this country, through a more flexible exchange rate policy, tax cuts and so on, the chance to expand and prosper at the same rate as that achieved by many of our friends abroad, in Europe and elsewhere, since the war. Whatever the views of your Lordships on the rights or the wrongs of the Government's growth strategy, what no-one can deny is that that strategy was urged upon us by representatives of unions and management, in the T.U.C. and the C.B.I.
At the same time as we were attempting to improve the country's economic performance we were also trying, like every other Government in the Western World, to contain inflation at tolerable levels without resorting to the kinds of methods employed in the 1930s, unacceptable. I should have thought, to the vast majority of all of us. I agree very much with what the noble Baroness Lady Seear, had to say about inflation. A Government can succeed in that objective only if it can encourage or impose a degree of restraint

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on those who sell goods and on those who sell their labour, increasingly nowadays from a position of monopoly strength. We attempted, in the wake of the last miners' strike when wage inflation was threatening to run away with the economy, to reach a voluntary agreement with the T.U.C. and the C.B.I. on a fair and effective way of restraining prices and incomes. After hours, and indeed weeks, of talks we failed. We were driven by events, and by our responsibilities as a Government, to introduce statutory controls—controls which we had made clear, again and again, ran counter to our philosophy as Conservatives. These controls in Phase 1 and Phase 2 had more success than many people are prepared to admit. We were remarkably successful at restraining the domestic causes of inflation which actually lie within our control. But we still had to pay more for the goods we had to buy from abroad. So prices continued to rise last year, and in particular food prices, which really hit the family budget—though I believe that without Phase 1 and Phase 2 we should have been swept into a hyper-inflationary spiral that would have done permanent and serious damage to our economic and social life.
And so we came to last autumn. The Middle East war and its results totally changed the picture. As the noble Lord, Lord Chalfont, said in the economic debate before Christmas, our world has been irreversibly altered. First, there was the interruption of oil supplies and the deflationary effects on the economics of the developed countries, and indeed on other countries, too, which that must cause. But even with any return to something like the previous flow of oil, the massive increase in price will have long-term effects and implications for us all, which totally change the context in which we as a country earn our living in the world. The price of oil has quadrupled in three months.
LORD BROWN: My Lords, would the noble Lord permit me to interrupt to ask him to agree that about half of the increase in the price of food and normal commodities is due to the Government's own loss of control over sterling, and that part of the increase of the price of oil would also be due to those same causes? Would he, in mentioning these facts in future, draw attention to the Government's
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own part in those increases in import prices?
LORD CARRINGTON: My Lords, I did not interrupt the noble Lord, Lord Beswick; nor did I interrupt the noble Baroness. I am trying to make a closely argued speech. I hope your Lordships will do the courtesy of listening to it. If the noble Lord has a point he wishes to make in the course of the debate, he is very welcome; but I hope he will see, when I have finished, that I am arguing the whole case for the Government.
LORD BESWICK: My Lords, will the noble Lord bear in mind that this same point was made by the noble Lord, Lord Windlesham? We did, I think, argue it out. We showed that it was not altogether a good case, and it is a pity therefore that it has been brought out again.
LORD CARRINGTON: My Lords, I really do want to continue with my argument, if the noble Lord will forgive me, because I think that when I have finished my speech he will see that I have covered the situation.
What made our position more difficult is that we had recognised that part of the short-term price of trying to lift the country's growth rate was a substantial strain on our balance of payments—a strain made more troublesome by the increase in world commodity prices. The rise in oil prices therefore hit us at a time when the balance of payments was in substantial deficit. But I believe that we could have coped with the impact of the oil crisis on our economy without too much dislocation and hardship. Of course we should have had to tighten our belts; we should have had to settle for a much lower rise in our standard of living over the next year or so: no one denies that. But we should have been able to cope with some confidence because, thanks to our national resources, we are better placed in the medium term than any other Western European country to deal with our energy problems ourselves. We have more nuclear know-how than any other country of our size. We are literally surrounded by oil and natural gas fields. Our problem is how to tap those resources as soon as we can. Finally, there are immense coal resources, both in existing fields and in the new Selby field, and in others too, I believe.

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Shortly before we were hit by the oil crisis, the Government had finalised the proposals for Phase 3 of our statutory policy. Many people say that that crisis has made those proposals too generous. But what is certain is that among those quite properly treated most generously under Phase 3 were the miners. I do not think it is a secret that when we drew up the Pay Code we were well aware of their special position and importance. The National Coal Board therefore made the miners what amounts to the largest offer ever put forward in the industry's wage negotiations, at a time when the coal industry's future looked brighter than it had for a very great many years.
It must be common ground to us all that during the 1960s, under Governments of both Parties, the coalmining industry had run down. For example, during the period of office of the Labour Government 249 pits were closed, and the number of miners was cut by over 200,000. Over the same period there was a decline in the miners' position, compared with that of other workers. In October, 1960, miners' average earnings were 7½ per cent. above the average earnings in manufacturing. By October 8, 1970, they had fallen to 3 per cent. below. The 1972 settlement restored the miners, in April, 1972, to 7 per cent. above the manufacturing average. However, as a result of leapfrogging by other industries, by October, 1973, they were only 4¾ per cent. above. The Coal Board's present offer would leave them nearly 8 per cent. above manufacturing earnings, even at the end of Stage 3.
My Lords, acceptance of the present offer would mean that miners' wages had increased under the present Government twice as fast as prices. They have been better treated in real terms, in absolute terms and in relative terms. What is more, we introduced the Coal Industry Act providing a massive new capital investment programme for the industry, and wages and job prospects are better than they have been for years. I do not think it can be said by anyone that the Government have treated the coalmining industry shabbily. On every count—wages, investment, miners' pensions, health provision, and so on—the record of this Government is, in general and in detail, substantially better than that of
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any previous Government. And it is nothing less than a tragedy that, at this very moment of promise, the National Union of Mineworkers decided to take industrial action in protest against the Coal Board's offer.
The National Union of Mineworkers decided to take industrial action at the beginning of the winter, some months before their present pay agreement expires at the end of February. At the same time we were confronted by the oil crisis and by the industrial action taken by ASLEF. In order to avoid running out of coal and power, and jeopardising basic and vital community services, we introduced our prudent fuel-saving measures, and in particular the three-day week. These measures were bound to be damaging to the economy, but I find few people to-day who question their necessity, given the Government's determination to operate a fair incomes policy. I cannot help feeling, my Lords, that anyone who really did believe that the N.U.M.'s action was not responsible for the three-day week must have lost confidence in that view when Mr. Gormley made clear that, because of our collective success in saving fuel, his union would have to contemplate more drastic action.
As soon as we received the information that coal stocks at the power stations were holding up better than we had expected, because of the weather and because of help from industry and the public, we considered whether it would be possible to move to a four-day week, or better, if possible. We were surely right to do so. For a Government to take the earliest opportunity to save men's jobs and to return to higher industrial production must be their first priority. The immediate reaction of the National Union of Mineworkers—and this, unfortunately, is not a matter of argument but a matter of record—was to announce a strike ballot. For some weeks, as we introduced the three-day week, the N.U.M. did not feel able to ballot their members on the Coal Board's offer. When it became clear that the coal stocks were holding up better than expected, and that the Government would not meet all their demands, the Executive of the N.U.M. called for a ballot—not on the offer, but on whether or not the Executive should be able to call a strike.

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My Lords, we are now faced by the prospect of a strike next week. The industrial action taken in the last three months or so has been bad enough. It has been, as has been said often enough, a self-inflicted wound at a time when world problems are crowding in on us. From the outset of this dispute, and indeed before it began, the Government have tried every reasonable way of avoiding this situation. We have not sought confrontation—far from it! We have searched for a solution which recognises both the national interest of a fair and effective containment of inflation and the need to give the miners a square deal to-day and in the future. Within these reasonable parameters we have shown at every stage the will to settle on terms which can be regarded as fair and reasonable.
We did so first by treating the miners under Phase 3 as a special case. Then we offered, in addition to that settlement, a long-term look at the future of the industry, at the future wage and job prospects. We offered to look at pensions; we offered to look at health hazards. Then with the publication of the Pay Board's Relativities Report we offered as an alternative that if the T.U.C. and the C.B.I. would accept the Report in principle the Board set up to examine wage relationships could look straight away at the miners' case, and in turn at other cases. We thought—and there seems to be substantial support for this view—that an examination of the miners' claim on top of the existing offer, and in the context of the claims of other groups with weaker bargaining powers, could provide a fair and reasonable way out for everybody. There was a time when in taking that view we appeared to have the support and encouragement of the Leader of the Opposition, but now that we have acted it seems that the Opposition view has changed. I am not sure—and I put it no higher than that—that many moderate Leaders of the Opposition will look back at that episode with much pride. The Prime Minister and the Secretary of State for Employment have appealed to the miners.
LORD SHACKLETON: My Lords, may I interrupt the noble Lord? He has asked not to be interrupted, but if he makes many more provocative remarks of that kind he will be.
LORD CARRINGTON: My Lords, I do not really think that when I said that the Leader of the Opposition in the Commons had changed his mind that there can be very much dispute about that. If the noble Lord will look at the Notices and Questions on the Order Paper in another place on February 5 he will see the Motion moved by Mr. Wilson, and will see what Mr. Wilson had to say on that occasion about the use of the Pay Relativities Report. I will not read it out but I would ask the noble Lord to look at it.
My Lords, the Prime Minister and the Secretary of State for Employment have appealed to the miners week after week to reach a fair accommodation in the national interest. I fear that these proposals have fallen on stony ground. Now the N.U.M. refuse even to talk to us. My Lords, the Government have continued to seek a settlement ever since this dispute started and the National Union of Mineworkers has not budged from the declaration that it made last July.
LORD BESWICK: If the noble Lord is going to pursue this line, that they are so right and others so wrong, the only implication of which is that they are going for a General Election this week, would the noble Lord be good enough to say what they are going to do after that Election which they now refuse to do before?
LORD CARRINGTON: Perhaps the noble Lord will allow me to get on with my speech.
The response to our efforts has been the Trades Union Congress offer, an offer made in very good faith (I have said this on more than one occasion): that if the miners were immediately given a settlement outside Phase 3 such an award would not be used as an argument in other wage bargaining. A great deal has been said about that offer. I will only add this: the offer did not commit any other union to bargain within Phase 3, and it did not offer an effective way of restraining wage bargaining within the limits which we can afford.
My Lords, on the Relativities Report which could still, even at this late stage, provide us with the basis for a solution, the Trades Union Congress have not yet

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been able to offer an agreement in principle to the Pay Board's central argument that there should be a fair way, whether under a statutory or a voluntary policy, of deciding between the claims of different groups in the community for special treatment and so pave the way for a settlement of this dispute. At present, as the Prime Minister has said, wage relationships and the value placed on different jobs and professions by the community are too often decided by jostling in the queue. Under that system it is the weak and the vulnerable—the teachers and nurses, and the agricultural workers—who get the smallest rewards. There must surely be a better way of running our affairs. It is no part of Conservative philosophy that the law of supply and demand should be allowed to degenerate into the law of the jungle, and I am quite certain that it is not the philosophy of noble Lords opposite.
Despite all our efforts we are faced within a few days with a strike by the miners—a strike which, if carried through, would do untold damage to this country. What else could the Government have done to avoid this? What can we do to-day? There are those who tell us that there is an immediate answer to hand. They say that we should abandon our attempt made in the interests of everyone in this country to contain inflation, and that would be a smaller price to bear than the widespread disruption caused by the miners' action. The line of least resistance has always had its advocates. For years people have en-encouraged us to take it. In the short term, perhaps they are sometimes right; but in the longer term the results have been bad in the past and would, I think, be disastrous in the future. I will try to set out for your Lordships as simply as I can why I do not think the Government should take that road.
First, I believe that to abandon our policy would be unfair to those who have settled under Phase 3 provisions. The miners, of course, are important to our economy—very important to our economy. But, as I have said before to your Lordships, so too are many others. It would not be right for this Government, or for any Government, after the restraint shown by those who have
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accepted, to accede to the principle that, at the end of the day, those who can cause, or who choose to cause, the greatest damage should be able to get more or less what they ask for.
My second reason is this. There comes a point at which any Government which seeks to contain inflation has to draw the line. The Leader of the Opposition in the Commons himself has conceded this in arguing that the miners should get more than they have been offered but less than they are demanding. He has not been specific; he has given no figure: but he has supported the principle. My Lords, what safeguards are there in circumstances such as this? I do not believe that there are any except the will and common sense of the Government and the people. If Phase 3 is shattered everyone will suffer—pensioners, wage-earners and the miners themselves, just as they suffered from the leapfrogging which followed their big pay award in 1972 and led directly to the introduction of a statutory policy.
My Lords, the third reason for not allowing Phase 3 to be torn apart is that to do so would, I believe, encourage extremism and discourage moderation and ensure a bitter future in industrial relations. As The Times said near the beginning of this dispute:
"If one believes that moderate trade unionism is the only hope for the industrial future of Britain it is essential that extremists should not be able to demonstrate a crucial breakthrough".
In the debate on the economy held before Christmas, the noble Lords, Lord Chalfont and Lord Shawcross, argued that there are some people who are seeking precisely that, and a darker political purpose as well. Well, my Lords, we have all read some speeches in this context, and I am pleased that very many members of the Labour Party have condemned those inflammatory remarks. But I have sought this afternoon to show that the Government have not been obdurate. We have sought a reasonable settlement, fair to everyone and certainly not a confrontation. I imagine that all of us hope that somehow reason will prevail. Some time it will prevail: it must prevail. There is no other way that this country, with its traditions and institutions, can survive. I hope that there will be no strike.

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I hope that before long we can be working with the miners, to build together the sound and prosperous future which could be theirs. I hope that we shall seek and build on a fair way of containing inflation and of weighing the claims of one group against another. I believe that all these aspirations are shared by most people in this country. With their support I believe that even now, at this late hour, we may be able to turn those aspirations into reality.
3.52 p.m.
LORD ROBBINS: My Lords, this afternoon we are debating a subject on which, as the very distinguished speeches which have already been made by representatives of the three Parties demonstrate, there is considerable conflict of view. But surely we all share one common anxiety: the fact that we are confronted now with what unquestionably is the gravest economic and political crisis in the lifetime of most of us now living. As I see the situation, most of us feel that the crude outline of the position presents itself, so to speak, in the shape of two alternatives: either there is a strike, with colossal losses on the part of industry, with considerable privations on the part of all sorts of people not immediately concerned with the dispute in question, and I mention last, but not least, overwhelming damage to our credibility abroad, just at the time when it stares one in the face that we need help from abroad as at no other time in the history of this century, save perhaps at the termination of World War II and the cancellation of lend-lease.
I am an humble Cross-Bencher and my thoughts on this subject do not run completely on the lines which have been adopted either by the distinguished speaker for the Government or the distinguished speaker for the Opposition. Perhaps I may be permitted in all candour to discuss the position as it presents itself to an isolated individual with no Party affiliation, but one who has spent a considerable part of his life considering these questions of the overall equilibrium or disequilibrium of the economy.
First, let me make a few very banal remarks about inflation in general. In confronting this problem in general, and in drawing morals for what is to happen here and now in the crisis with which we are confronted, we have to bear in
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mind a fundamental proposition—an arithmetical banality, if you like—with regard to the relationship of spending and production. It is this: if the volume of spending on a national scale does not exceed the value of current domestic production for home consumption, plus the value of imports, then all will be well as regards the value of money and as regards the dangers of inflation. But, if the volume of expenditure exceeds that amount then, other things being equal, prices will rise and in all sorts of ways inflation will permeate the system.
One must always be cautious in using effectively turned words. I should not like to suggest to your Lordships that all inflation is intolerable. I think history shows that industrial countries can survive, although with a certain amount of friction, a rate of inflation of, let us say, 1½ per cent. per annum, 2 per cent. per annum and, for short periods at any rate a little more than that. But equally I think that rates of inflation such as have occurred in the last four years are not in the long run tolerable to societies such as ours. It may be that in Latin America, at the cost of a vast inroad into social relations and public morality, rates of inflation higher than the rates I have mentioned may be tolerated, year in, year out. But, frankly, I do not believe—and I imagine that this thought is shared by most of your Lordships—that that sort of thing can go on year in, year out, without destroying this society.
If we are agreed on that, then there are two main ways of dealing with the problem. The first way, and the way which has been adopted in the last two or three years, is a control of prices and incomes. I mention prices and incomes together, but in the last analysis (I hope this will not be thought to be the hard sell) with the exception of outrageous examples and monopolistic prices, it is the volume of income which determines whether one is in an inflationary situation or not. If under such a system the total of incomes is reduced to the value of domestic production plus imports, then sooner or later inflation stops. I do not say for a moment this can be done overnight, but certainly some progress can be made if the object of the policy is, so to speak, a convergent series, the volume of income increasing more slowly

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and the volume of production eventually catching up with it.
My Lords, the second method of dealing with a situation of this sort is direct operation on the sources of expenditure, the imposition of taxes, the proceeds of which are not spent; or a more fundamental control of the basis of all expenditure, namely, the volume of money and credit, a diminution of the volume of borrowing, both public and private. If the money is not available, then in the end the excess demand for goods and services will cease. There one has, so to speak, the tedious arithmetic, the banalities of the subjects, and I apologise for reiterating them. Let me now come a little closer to reality.
My Lords, I personally doubt the long term viability of statutory control of prices and incomes. I respect the views of those who think that it can succeed in the long run. That view has been argued adequately again and again in this House by noble Lords of more than one Party, and I have made enough mistakes in my life to know that in differing from them I may be wrong. But my own belief is that while statutory control of prices and incomes may be effective for a time, in the end it puts strains on administration, on social relations and on the efficiency of industry, both private and public. Therefore, in the long run I believe that the solution to this problem is much more to be found in financial and monetary policy than in the adoption of these centralised and detailed controls, of the hundreds of thousands of bargains made in regard to goods and services every month of the year. Nevertheless, as I have ventured to say to your Lordships' House on earlier occasions, I am certainly prepared to accept the statutory control of prices and incomes as a temporary measure.
The alternative which I prefer as a long-term policy, the control of the source of expenditure and borrowing money, may be a very harsh medicine if the inflation has already become very brisk, as it has here, and if expectations of business are already geared to a continuation of inflation. In such circumstances, the adoption of a policy of this sort as a temporary measure seems to me to be not only admissible but wise. After all, past experience shows that
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prices and incomes controls do not break down immediately.
But there is one fundamental condition of success for policies of this sort; namely, that financial and monetary policy should be in harmony with such a policy. There should be no further feeding of excess expenditure from these sources. By this, I do not mean a sudden application of the fiscal and monetary brake which would clearly be folly; but I do mean a gradual reduction of deficit financing, a gradual reduction of the rate of increase of the money supply.
My Lords, this is not what has happened in the last few years. The cost inflation has been financed by the extension of the credit base. Let us face the fact that on the demand side there has been a policy, no doubt engendered by good will (I do not in the least disagree with the noble Lord. Lord Carrington, on that), of deficit financing which I think has no precedent in the financial history of this country, save in war time. At the same time, the main indices of credit expansion have been expanding at a rate at which I defy anyone to believe that production can increase in this country or, indeed, in most other countries of the world. The result has been what would be expected, I would have said, on grounds of pure principle: a continuing inflation, not only as regards the cost of living but—and this is more irritating to a great many people—as regards property and so on.
What is more, and this has a two-edged moral (although what I am about to say will not be agreeable to the Government Front Bench) it has meant an aggravation of our balance of payments difficulties. If the inflation had been less here, if there had been less pressure of demand on production resources to satisfy demand at home, then the troubles caused by the increase of prices abroad (I am not thinking about oil for the moment, but of what the noble Lord, Lord Carrington, was referring to), then more production resources might have been turned by the ordinary pressures of the ordinary operation of the market to production for export, and so diminish our difficulties in that respect. Do not let us underestimate those difficulties. This Government inherited from their predecessors a balance of payments surplus

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of something of the order of £1,000 million. Before the oil trouble began, the deficit on current balance of payments account was approaching the order of £2,000 million, a switchover which surely is a matter of very great anxiety indeed.
What I have just been saying is pretty severe criticism of some, not all but some, of the policies which have been adopted by Her Majesty's Government. But what about the attitudes elsewhere? I welcomed, I must say, the candid and forthright declaration of the noble Baroness, Lady Seear, with regard to the attitude of her Party to continuing inflation. But I must confess I am in some doubt as regards the attitude of the Labour Opposition, and my perplexity resides in this quarter. I do not know whether, shall I say the Labour movement, in order to make my generalisation all-embracing, do or do not want a statutory incomes policy. Certainly, as I have said, I have heard most eloquent pleas for such a policy from Labour Benches in this House, and, as I say, I have treated them with respect.
But I cannot refrain from noticing that the idea of a statutory prices and incomes policy, or incomes policy at least, is definitely repudiated by many of the leaders of the trade unions; if I am not mistaken it is repudiated by the Trades Union Congress itself. Those who make this repudiation seem to favour rather a free-for-all in the matters of the labour market. Well, I can conceive of an argument being put up in favour of that point of view, even in regard to the present crisis, although this is not my view. But, I ask, do those members of the Labour movement who repudiate a statutory incomes policy accept the corollary of a sufficient restriction of aggregate demand to prevent the free-for-all degenerating into an inflationary scramble? If they do accept it, then they must accept too, especially at the present time, a very considerable increase in taxation, not merely taxation of the very rich—that is not wholly, but very largely, a mirage; it means the taxation of most of us here; it means the taxation of people enjoying even smaller incomes, and it means, too, the most rigid control of the rate of increase of the credit base, which in the short run, at any rate, might lead to even higher rates of interest than prevail at present. If they do accept these things, I appeal to them to say so. If not, then
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do let us be clear that at the present time, in the present circumstances of this country, the free-for-all in the labour market means hyper-inflation.
LORD BESWICK: My Lords, may I intervene? As the noble Lord says that he has never heard anyone on the Labour Benches face up to this need for higher taxation, may I tell him that at last year's Labour Party Conference the largest cheer for the Shadow Chancellor was when he said that very thing.
LORD ROBBINS: My Lords, I am never so much in disharmony with the noble Lord, Lord Beswick, as he sometimes appears to think. I was asking whether those who advocate a free-for-all also accept this strong medicine; because if they do not accept it, do not let us deceive ourselves, the outcome must be hyper-inflation on the Continental scale, and eventually—because these things all come to an end; the trees do not grow up to the sky forever—a new money to replace sterling. That is not a joke.
May I say just a word or two about something nearer home, the present crisis. First of all, may I say a word about the effect on the Western world as a whole of the quadrupling of oil prices. I do not think there can be any doubt at all that this carries with it a danger of some deflationary influences in the world at large. I do not know how much; quantitative prediction in this respect would be a fool's game. After all, one does not know what the sheikhs are going to do. But I do know that unless their increased receipts are put into active investment in some part of the world or other, then there will be deflationary influences abroad off-setting the inflationary influences of the last few years. To that extent I have some sympathy with those financial commentators who have argued that in the world at large, neutral rather than astringent fiscal and monetary policies would be in order. They are quite right in saying that we should not always be fighting the battles of the last war. But I am afraid there is very little comfort for us in this reflection.
Our position is much worse than the position of many other leading countries. As I have said already, our balance of payments was sufficiently alarming before the oil crisis developed. It may be quite permissible to advocate financial neutrality as regards, let us say, Germany or the

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United States, but our position is much more delicate. We certainly shall need to borrow extensively if we are not to go back to wartime austerity. How shall we persuade people to lend more to us if internal chaos continues?
May I conclude (I have already spoken too long) by offering three reflections on the industrial dispute under consideration. The first point I want to make—and I hope it will not be thought I am a wicked man—is that in my judgment what has been revealed so far has meant an offer to the miners which is not by current standards ungenerous. I accept the view, which I think was implicit in what the noble Lord, Lord Beswick, said, and doubtless will be said by other noble Lords in the course of the debate, that you can argue until the cows come home about the exact percentage significance; but compared with settlements that have already been made under Stage 3, this is not an ungenerous offer. And, after all, Stage 3 is out of date; the oil producers have made it out of date. Stage 4, if it ever comes in, will have to be more rather than less severe. I ask the question, with all respect to those who ask us to extend understanding and compassion to the position of the miners: have they had a much better offer in the past, and how does the position compare with the position of those who have settled already under Stage 3?
BARONESS GAITSKELL: My Lords, may I interrupt the noble Lord? They are bottom of the league in the European Economic Community with regard to wages.
LORD ROBBINS: My Lords, I believe the noble Baroness, Lady Gaitskell, is right, as she usually is. But I humbly submit that comparisons with other countries in Europe are irrelevant in this context because in general we are rather near the bottom of the European league. We are the poor members of the European Community. We have been overtaken by France, Germany and others. It is humiliating to read about our position in the table with regard to national income per head in relation to the position of other countries.
My second reflection is that this is a dispute in a nationalised industry. It is not a question of a dispute over the disposal of excess profits made by private
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enterprise. The employer in this case, in the last analysis, is the nation. When I was young and in my salad days, I was a rather rabid young Socialist, and in those days we used to say that if the means of production, distribution and exchange were nationalised the problem of industrial relations would evaporate. Well, we know better now. The last thing that I wish to do is to bring an indictment against the miners as a body, but unless the history of the negotiations revealed so far in the Press, through the media, and by the noble Lord, Lord Carrington, is utterly false, some of the leaders of the miners—I am not calling them "Reds"; I am perfectly aware of the danger of exaggeration, particularly at this stage in this respect—have shown themselves absolutely unyielding. All expedients have been rejected.
LORD BLYTON: My Lords, would the noble Lord give way? Is he not aware that at all the meetings that the Mineworkers' Union have had with the Government, suggestion after suggestion has been put forward to solve this problem, and they have always been turned down by the Government That is why the miners have said that they do not want any more abortive meetings.
LORD ROBBINS: My Lords, I will not argue with the noble Lord on the detail of this case; I am simply giving the impression, which I think is widespread among men of good will, that there has never been any disposition to settle within the framework of Stage 3.
My third reflection is that we would do well to remember the terrible troubles which are ahead if the strike goes on. The dislocation of industry which has followed the three-day week is absolutely nothing to what must be expected if the strike actually breaks out. There will be internal privations on a large scale, and external discredit. Great companies will go bankrupt or will have to be helped out by injections of bank credit, which will not make the control of inflation any easier. As I have said before, we shall be back in something like the position in which we found ourselves after the cancellation of Lend-Lease—more or less bankrupt without external assistance. But, alas! there is the additional complication that at the moment, with all the good will which is incipient in the atmosphere of this House, we are, let

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us face it, a divided nation. The temptation to settle, therefore, and to risk the consequences is very great.
That is all I have to say. I would only add that I agree with those who say that we must watch anxiously for any opportunity to break the hitherto unyielding attitude of those concerned. But—and this is the last thing I have to say—there are moments in the life of an individual, or in the life of nations, when we have to make fateful decisions. I think that I have made it clear that I do not completely admire the policy which has been pursued as regards public finance by the present Government in the last two years, and even more recently, but I am clear in this—the Queen's Government must be carried on.
4.26 p.m.
LORD GEORGE-BROWN: My Lords, I suspect that what I have to say is going to please my friends in some parts and infuriate them in others, and maybe thereby do the opposite service for the other side of the House. So anybody who feels inclined to cheer or hiss in the early stages had better wait for what is coming later. May I make two comments on the two speeches immediately preceding mine. If he will allow me to say so, I found the approach of the noble Lord, Lord Carrington, depressingly dreary. He began with the only statement in his entire speech with which I could agree: that we faced possibly the gravest problem any of us have known in peace time. Then he delivered every bromide that I have ever heard in nearly forty years in politics, and he read into the Record something which is no doubt already being mailed to every Conservative office in the country. If we are facing the gravest problem we have ever faced in peace time, I suggest that we ought to approach it a little more seriously than he did.
To the noble Lord who has preceded me, may I say to him, with all the greatest respect in the world, that we are not, for the same reason, at a moment where we really need Reith Lectures. We are not in an extension of the academic year of the School of Economics. We are facing the realities of the human and political world, in which we are geting very near to a breakdown of peoples' trust, belief and understanding, and many of
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the interesting theories with which the noble Lord entertained us have jolly little relevance to a world outside this Chamber that is almost about to break down. The problem is not only as grave as the noble Lord, Lord Carrington, said; the problem is much more deeply seated than the Government even now realise. Income levels, income relativities, cannot be dealt with in isolation from the general economic and social policies which the State, through the Government, is pursuing at this time.
Before I come to my main points, which may annoy some people, may I just say this—and this will not please some people, either. The last time I intervened in this House on this subject was in an interjection at Question Time. I accepted then that the leaders of the National Union of Mineworkers could have, and should have, accepted with profit to their members, with honour to themselves, and with advantage to the country, the offer that was put before them. I said that then and I do not go back on it now. Equally, I accept a point which the noble Lord, Lord Carrington, did not forget to make, that there are—if I may upstage his words—villains all over the place. Indeed, I would go so far as to say that possibly the only bonus that has come out of this confrontation is that the degree of penetration of these people inside the Labour Movement can no longer, and Will no longer, be regarded as the obsession of a few of us who have been saying this for some time. It is now obvious, it is now open, as is the degree of penetration. I warned the noble Lord, Lord Carrington, not to start cheering too soon.
LORD CARRINGTON: I wondered why.
LORD GEORGE-BROWN: They were taking my advice. He should, too. But that is now open and obvious, just as is the extent of what I regard as the supine acceptance by many of the so-called moderate leaders of the infiltration of the Labour Movement. It has become true—I have said it before and I do not go back on it now, and I get rid of it at the beginning—that there is a degree of inhibition amounting almost to virtual control over the action that the Labour leadership is currently able to take. So I say it. It is not a concession

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and I believe it. I repeat that the one bonus that has come out of this confrontation is that the position is now clear.
But having said that, however disagreeable it is to my friends, however much it may give cause for a temporary moment of partisan smiling or giggling on the part of the noble Lord, there is one greater thing that needs to be said. Any Government's business, in any set of circumstances, is so to make policies and so to direct the nation's affairs that the nation prospers, that it develops, that people's actual real standards improve. The test of that is always that the people feel it to be so, not that the noble Lord, Lord Carrington, can read a beautifully drafted piece, impeccably enunciated, to show to his satisfaction that it is so. It is that the people feel it to be so. The truth that the Government have to face is that they have demonstrably failed to do this. They can blame anybody else they like. They can blame the things I have just mentioned. But the fact of the matter is that, at the end of the day, they were elected to do it and if people do not feel it is so, then they have failed.
Let us just recall a little recent history before I come to what I would do in the present situation. The Government, stupidly in my view, destroyed all the mechanisms for economic and industrial management that we left behind us, before they found out what parts of their Selsdon thinking, what parts of their Manifesto, were inept, and therefore before they knew what mechanisms they needed to keep in order to achieve what they wanted. They were forced to recant bit by bit, step by step, and they have done so meanly and uneasily and expensively all the time. They reversed the lame ducks' proposal over Rolls-Royce and other things. They did the national image enormous harm when they destroyed the name, the standing, of Rolls-Royce. They then, having clumsily recanted, paid out far more money, far more effort than was needed to retain Rolls-Royce had they kept the Industrial Reorganisation Corporation.
Similarly with their conversion to an incomes policy which they still do not understand. They go for a Price Commission separate from an Incomes Board, each operating on different bases with
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faceless anonymous civil servants, with drug chemists in charge, and now they produce a Relativities Commission, none of it set in any identifiable context. Partly because of their hatred of Mr. Aubrey Jones, who was never forgiven by them for being what they like to call a Quisling, they destroyed the Prices and Incomes Board which we left behind, before they found out whether they would need it. When they did so find out, in order to save face they had to make it different from what we had left behind. So it became much less effective—there can be no dispute about this—much less convincing, much less pointed, and it is totally unrelated to any national overall plan for the use of our resources and for their development.
The point about an incomes policy is that it cannot be in isolation. The point about a prices policy is that it cannot be in isolation. The point is that they have to be arrived at from the forecast of resources that you will have, of how you want to use them and of what can be available for this, that and the other. There has not been any general concept within which you can sell an incomes policy to people—workers, managers, industrialists. The same goes for the Government's social and taxation actions. I shall not go into all of these, and will try to keep my speech as short as I can. But there has been nothing in what they have done in the social policy field, or in what they have done in the taxation field, which would make intelligible or acceptable what they were asking people to accept in the incomes field. In consequence, we have seen the general reaction of people—and I repeat that at the end of the day in a democracy, it is the people in the country, not the bureaucrats and not the Ministers, who know best.
The Government have had some bad luck—there is no doubt about that—but I have never yet seen a Government that did not; and all Governments have to come to expect this. When I looked at the weather at about five o'clock this morning I said, "Good Heavens! Old Joe Gormley will be ever so pleased; he has now got the Clerk of the Weather on his side as well as all the others". All Governments get bad luck; but the point about the present Administration is that they have compounded their bad

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luck with appallingly bad management, and it is for that that they must answer.
Now, my Lords, as Lord Robbins said (he said it after 38 minutes; I have got there after 14), let me come to the immediate situation, and what to do now. I accept that it is no comfort and no particular use to say that had we been handling affairs we would not have got into this position. Had I been going to Edinburgh I do not think I would have started from Waterloo Station. It is no use, no comfort, saying that. But it is absolutely true: we would not have got here. But we are starting from here, so what do we do now? I start with one proposition. When all the moral protestations have been made and all the heroics have been gone through, I say this: no Government have the right to shut the nation down, whoever they think they are in conflict with. Whatever their feeling of what they regard as justified anger, Governments come and Governments go—and I am a living memorial to that. Ministers are expendable and are replaceable—and I am an even greater living memorial to that. Policies can be picked up again and tried again at a better time; but the nation cannot be. The nation is not expendable or replaceable. The nation cannot be picked up again and dusted off once it has been shut down. I watched Michael Clapham last night on the television; I hope that Ministers watched him. That man wished to give the Government every comfort and support he could. His face was that of a tortured man who knows that if you shut the British nation down industrially you finish it. Lord Carrington, particularly, had better understand this.
Any policy you like, however good you think it is, however much you attach to it, involves the balance of advantages and disadvantages; and in a democracy, which is what we are trying to run, all policies have limitations. They are the limitations imposed by the frailties, if you like, of human beings. No rationally minded Government would lose sight of this, and no rationally minded Government would drive any policy to the point where it is made too obvious that in a democracy you cannot carry it through. When you find this out you back off. You back off at the best moment and in the best way. You never make it clear that you are being defeated; but in a
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democracy you can be. But I repeat: no rationally minded Government would do that, which leads to only one conclusion. The Government we have at the moment lack rationality. The first requirement any Government in Britain have to accept is that their business is the British nation's prosperity; living within our limitations, within our existence. We are not a Continental Power, although we are, I hope, still going to continue being a part of a Continental organisation, whatever the difficulties there are.
We in Britain do not have every kind of indigenous raw material, although shortly, I hope, we shall have rather more than we have had in the past. For us to be prosperous—and that is what the Government are there for: to direct our affairs and our policies to achieve prosperity—we must make things, we must sell things, largely overseas, because we must be able to import things. I do not, I am sure, have to spell it out to the Government. If you shut industry down you cannot make; and if you cannot make you cannot sell, and if you cannot sell you cannot import. Surely Ministers can get this into their heads. Would it not have been better if Lord Carrington had explained to us this afternoon how their policy will achieve this, instead of reading out all those bromides addressed to the Keighley Conservative Association or those in any other marginal constituency they are greatly bothered about?
If we are to make and if we are to sell, then businesses need a cash flow. All right—so I am a Socialist; so I am a trade unionist. I have many friends in the West Midlands. They have their bills and their wages to pay. People are not paying them. The banks are charging them 20 per cent.—41,000 on £5,000—and are beginning to call in. How do the Government think that industry, even on three days a week, can do this for long? It is losing money; and once the banks say so, it stops. Raw materials, partly converted materials, have to be available for conversion. Credit has to be available on other than ruinous terms—selectively, I accept.
The Government's present position, however righteously Lord Carrington may feel it, however morally right in their hearts they think they are, is disastrous for an industrial and trading

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nation like ours. The so-called three-day week has got by so far to-day, I can tell Lord Carrington, in case he never meets industrialists, because it is a farce; because they are fiddling about with their entitlements and their rights, and are moving it from here to there. Even then they are only just getting by. If the noble Lord really thinks, or if any industrialists on the opposite Benches were to tell him, that it is possible to go to a two-day week, I am bound to tell your Lordships that they are not just irrational—they are daft. It is impossible. You cannot run the boilers if all you are operating is a two-day week. The mechanics do not work; the overheads are too great. You effectively shut it down, whether or not the steel stops—and of course the steel will stop. Some kilns and some ovens will go cold; and when they go cold they crack, they break. So a two-day week is not a starter.
Again, on this, let me say to the Government that they will pay out more in grants, in subsidies and in aids to keep industries and factories nominally going. They will pay out more in dole, in benefit to people laid off, than any settlement—however wrong they might think it to be—they might have made with the miners would have cost. You may say that the miners are rapacious. You may say, as I said in your Lordships' House once before, that they push their luck too hard. But I repeat, the Government will pay out more to make it look as though we are keeping going than they would have paid out on a settlement. And do remember, and let many of the industrialists on the Government Benches please tell their colleagues, and the Government, that many a medium-sized and small business in the Midlands will go out of business in a few weeks' time. Do let us understand the cost of what these righteous Ministers are doing.
I have recently come back from a visit to the States and, since then, from a visit to the Continent. I beg the Ministers, for heaven's sake! to bear in mind the lasting impression of ourselves that we are giving to people overseas who want to place contracts with us and whom we want to place contracts with us, and people with whom we want to invest. I will not develop that point in detail because of the time, but these people believe that we
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are going to go down with our own death wish. They are saying so, and they are cancelling. I can send letters to the Ministers if they want them, but they must know, or they can find out from their own friends. These people are cancelling contracts, cancelling orders which will not easily come back. Lastly, on this part of what I have to say, for heaven's sake! again let us understand that once the colliers are out and others have been drawn into the dispute, and the bitterness and the frustration has escalated, as it will, a settlement will still have to be made by somebody; and it will be a lot more costly, and the knowledge that the Government and the State have been defeated will be much more evident and obvious.
So, my Lords, what is to be done? It goes in quite a large way against the grain for me to say this; but I say to the Government: Settle now as best you may. You have hung around too long; you have handled it badly; there have been too many meetings that got nowhere and frustration has grown and grown. As I wrote in a paper the other day, you have managed to create a situation where there are no moderates now. I think of the constituency which obligingly kicked me out a couple of years ago. The idea that the colliers of South Derbyshire—good gracious me!—would not vote in this number is ludicrous. You cannot blame it on an artfully worded ballot paper. You cannot blame it—at least not there—on Left-Wing "Reds under the bed".
I would say to the Ministers: Something has happened and you have done it. You have created a spirit, an atmosphere of frustration, disbelief and distrust. You have done too much damage already. Go on holding out and you can only do more damage to Britain. Do not go on digging in. And I repeat, you have no right. Ministers are quite temporary, whether they win the next Election (and I will come to the Election in a minute) or whether they do not. Ministers and Governments are always temporary. You have no right to add to Britain's already troublesome trade and economic position. The fact that the figures have become astronomical does not mean that they are less serious. The noble Lord, Lord Robbins, referred to this point. A little while ago £1,000 million, one way or the

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other, was fantastic. We now have sums like £6,000 million and £10,000 million in the red. We can hardly visualise it. But that fact does not make the figures any less serious. This is where Ministers are getting us. We shall be "Weimarish" very soon. So I say: Settle; get that done, and then the longer-term policies in which I am more interested can be reexamined, re-stated and re-formed. The economic plan for productivity—
VISCOUNT ECCLES: My Lords, may I interrupt the noble Lord? I have listened to him with interest and I should like to ask him one question. Is he really saying that whenever an industry which is, let us say, of great importance to the economy as a whole puts in a claim, if the employers do not want to grant it someone should come along and give it to those in the industry just because of its importance?
LORD WIGG: George, isn't it terrible!
LORD GEORGE-BROWN: My Lords, what I am saying is that in this case, of course, the employers do want to pay it. In this case, all other employers want it to be paid. In this case, the C.B.I. and the T.U.C.—everybody—wants it to be paid. But I will also answer the kernel of the noble Viscount's question. If it is of such a degree of importance then do not land yourself with an unwinnable fight. The noble Lord, Lord Crathorne, and I both had our periods at the Ministry of Agriculture, and there were times when he and I both knew that the farming community was able to twist—I almost lapsed into the vernacular, but the noble Lord will know what I mean. We sometimes knew that we had to give way although the papers told us that we should not. Of course there are moments when you do not push the matter too far, even though there may be reasons for doing so; and the noble Viscount does this in his own affairs.
For heaven's sake! let us get back to the longer-term policies, the economic plan for productivity. You may evolve a better plan than I tried my hand at in 1965, but get back to something of the sort. Get back to the control of prices. Every night, if I go home early, I sit with my wife and I watch on the television the "Nationwide" programme and something called a Consumer Unit. They
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instance Tesco, David Greig or Sainsbury's and, taking a tin the top label of which says 27½p, they peel it off; the one underneath says 21p, and they peel that off; the one underneath that says 18½p, and they peel that off. Finally, we get down to what the tin was originally intended to be sold at—which is 11p or 13p. It is no use asking or telling working people that you have got to control their incomes—even though, as I know, you have got to have an incomes policy—unless you are pretty evidently controlling prices; and of course you can do so.
Then there is the social policy. Of course you should not go on arbitrarily pushing up the rents and housing costs. You can do it some time later—it may or it may not be right—but not now. Of course you must do something about pensions, now, in this situation. Of course you must get a taxation policy. All these things I should like to discuss. But, first of all, let us stop this frozen, mock-heroic drift into defeat and disaster. There are Ministers in this Government who served in a distinguished way, and nobly, in the forces. If Auchinleck and Wavell had not been willing to retreat, and had not known when to retreat, Montgomery and Alexander could not have been victorious. Each one of the four played his part—the fellow who knew when to come back, as well as the fellow who knew when to go forward from the safer ground the other chap had found. Of course it was less glamorous to retreat: it led to the "chop". But it also led to the victory.
Finally, regarding an Election—and this is where I am afraid I may be about to say something that some of my friends will not like—really, I care little for the idea. If the Prime Minister and the other hard-liners of whom we read cannot be otherwise replaced and if the more rational members of the Government cannot have their way, so be it. But I say to my friends on this side of the House that if the replacement for this Government is to be a Labour Government, then our Party has to face, and very quickly resolve, our own tensions, our own stated commitments and our own involvements. The rag-bag of propositions which we issued under the ironic title of a manifesto a few weeks ago had better be handed back to Mr. Ron Hayward, the General Secretary of

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the Party, for re-interment in his Labour Party resolution folder; and this Party had better replace it quickly with a relevant and short-term commitment to re-establish this nation's base.
It is all very well for Mr. Crosland and Mr. Healey to refer to it in speeches, but we must have a stated position. Whether this can be done in the present Party and trade union situation is, to say the least, questionable. So, if we have an Election the result might be that no one Party could, by itself, govern. I swallow hard over this next sentence as I say it. Perhaps in the present situation that might be no very bad thing. It is quite conceivable that the hard decisions this country has to take could not and would not be taken by any one-Party Government, and perhaps the only way we can be brought to face the situation is after such an Election result. I warn my own Party—and, indeed, I warn the Government though I am not so concerned about them—that I think there is good reason for believing that a large section of the electorate see the matter in this way, too.
5.3 p.m.
VISCOUNT AMORY: My Lords, in 25 years I cannot recall having had the experience of immediately following the noble Lord, Lord George-Brown. If I had the choice of speaking immediately after him or before him, I believe I should be content with my present position. If he will forgive my saying so—and I do not say this disrespectfully—I find the speech he has just made to be "all over the shop". But when a whirlwind has passed it takes a little while for things to settle again, so I am going to take the noble Lord's advice and neither hiss nor praise at this time. I can well understand that after the whirlwind many of your Lordships will want to withdraw and perhaps take a cup of tea.
It is a tragedy that at this moment when as a nation we should be rallying to the urgent task of saving ourselves, there is a danger of tearing ourselves to pieces. We are behaving as though the divisions among us are deep, bitter and unbridgeable. Yet I suppose that never in our history has there been a time when our everyday lives have more in common than is the case to-day. I, for one, refuse to believe that widespread
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bitterness is a dominating feature of our national life to-day. Our real trouble is not yet bitterness, although bitterness may grow: it is a curious kind of inability to appreciate the consequences of what is happening around us. Our situation cries out for moderation, statesmanship and understanding to an exceptional degree; but those attributes must be a two-way process, people to Government as well as Government to people. If moderation and understanding are expected (as they are) of Government, then the same qualities must be demonstrated by other sections of the community.
Sometimes we may feel that the influence of this House is inconsiderable and that the ripples of our debates do not spread outwards very widely, but I believe that the collective example of this House may not be insignificant or without effect in a situation like this. In our debate last December, the noble Lord, Lord Diamond, made an appeal for inter-Party co-operation, the spirit of which was echoed by, I believe, more than twenty speakers from every part of this House with approval. On his side, the noble Lord was supported by various other speakers, including the noble Baroness, Lady Burton. As I understand it, the appeal then was not that we should paper over our Party differences or pretend that they do not exist, but that we should recognise there are some situations which are so serious for the nation that we should temporarily subordinate our Party views to common action to safeguard the nation's life. There is a deep instinct which tells all of us that that is right; and the present is surely such a situation. I shall hope to say a little more about that before I finish my speech.
I have noted with pleasure since becoming a Member of your Lordships' House that we are generally disinclined to spend too much time quarrelling about the past. The noble Lord, Lord Beswick—and no one in this House would regard him as anything but a deep lover of his country—in his hard-hitting speech, animadverted to the past and in doing so acknowledged that all of us have made mistakes. I hasten to say that if sackcloth and ashes had been handy, I should certainly have donned an appropriate share for myself.

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One trouble about concentrating too much on the past is that most of us, when we do so, build up over-rigid positions and become prisoners to them. We must remember that in this business we are all the time exploring new ground, because the ground has shifted, and is shifting, under our feet. The main shift in the past twelve months has concerned the terms of trade, which have turned against us more violently than during any comparable period and will shortly add several thousand million pounds a year to our national import bill. This means such a radical deterioration in the economic situation that nothing less than complete mobilisation of our maximum strength will see us through. That strength cannot be deployed until the present deadlock has been resolved.
In our understandable pre-occupation in recent weeks with our two major industrial disputes, one has noticed a tendency—not evident, I am glad to say, in to-day's debate—to place them foremost and forget the terrible enemy which is still gnawing of our vitals; namely, inflation. That is still our common national enemy. As evidence that it has been going strong, there was a figure in the paper this morning showing that the importation of cars for last year went up by 36 per cent. That is just one item, but it indicates the scale of the matter. I was glad that the noble Baroness, Lady Seear, dealt extremely well with the disease of inflation. It was with the aim of getting the better of this disease that the Government tried first to reach agreement on the voluntary incomes policy and, when those efforts failed, turned to a statutory policy with Stages 1, 2 and 3.
It is too early yet to attempt to quantify what additional economic burdens will arise from the current short-term working, but they are bound to be enormous even with a three-day week. Few of us would be bold enough to forecast what Stage 4 should be, except a certainty, as has been said already, that in the aggregate we shall have to pay ourselves less in real terms perhaps for several years ahead. In some quarters the Government are accused of being too obstinate about Stage 3. We can all agree that Stage 3 is not an end in itself, but it is the present incomes policy in operation and 6 million people have settled under its terms. If it collapsed
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now there would be no incomes policy in existence. The only practical alternative—and this would apply whatever Government were in power—would be massive deflation, and it would have to be massive indeed. No one can surely deny that since these industrial disputes have broken out the Government have made exemplary efforts to keep discussions open. The Prime Minister's recent letter to Mr. Wilson seemed a model of moderation and restraint. Speaking personally, the speech made this afternoon by my noble friend the Leader of the House justified the same terms—
LORD SHACKLETON: Lord Carrington.
VISCOUNT AMORY: I apologise, my Lords. I have made that mistake before; if I make it another time my noble friend will be justified in sending me home! As my noble friend the Leader of the House is not in his place, I have no opportunity of apologising personally to him.
The mining dispute has reached a point of seriousness which simply cannot be exaggerated. The miners seem completely obdurate. A strike with or without an Election will be catastrophic for the economy; industry cannot live without steel. I do not propose to develop that any further. The best immediate action at this stage would be to seek again to get agreement with the T.U.C. and the C.B.I. to set up a Relativities Board forthwith on the lines of the Prime Minister's suggestion in his letter to Mr. Wilson without, I fear, at this stage the support of the National Union of Mineworkers. The Pay Board Report, prepared very quickly, may or may not have devised the perfect machinery. In this field, an immensely complicated one and a novel one, too, a new instrument is only likely to be perfected in the light of experience. But if, as I expect, some kind of national incomes policy is going to be with us for the foreseeable future, bearing in mind that relativities and differentials are always the crux of wages and salaries settlements, a start must be made at once on job evaluation on a national scale, and here is an opportunity to start. Sooner or later a settlement with the miners will have to take place, and when that opportunity occurs a Report from a Relativities Board may be invaluable in helping to quantify the basis of

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settlement. Is there any other action that can be suggested at this very late hour to break the deadlock?
Returning again to the spirit of Lord Diamond's appeal, to which there was an active response in our December debate, would it not be wise if the Prime Minister were to invite the leaders of the other two Parties, each accompanied perhaps by one or two senior colleagues, to meet him and share with him the fullest information available to the Government and let them together make one final effort to find a way out of the present deadlock?—a way out which must be consistent with the full maintenance of the nation's fight against inflation. I agree with the noble Baroness, Lady Seear, that that ought to be a prerequisite of every effort, or we shall be defeated in the long run in all our national aims. The only essential condition I can think of is that it should be consistent with the fight against inflation. Any conclusions that might be reached jointly would carry unrivalled weight with the nation. Such a meeting would be in no sense derogatory of Parliamentary responsibility, and could I believe do much to reassure the people that all Parties were united in a determination to defeat inflation and safeguard the nation's life. Parliamentary democracy is indeed in danger, and such consultation at this late hour would surely be in accord with our highest traditions. The final words of my noble friend Lord Carrington's speech to-day epitomised the situation; let us pray there may still be time.
5.18 p.m.
LORD RHODES: My Lords, when I was a young Member of Parliament I used to travel with a colleague to Manchester on a Friday. On one occasion we went into a first-class compartment where a little boy was sitting. As the time approached for the train to move out of the station we began to wonder why he was there. My friend, who was of a curious and inquiring disposition, kept asking the boy questions. He said, "Where is your mother, lad?" The little boy replied, "She died last week". My friend said, "Where are you going?" The little boy replied, "I am going to Manchester, sir". My friend said, "Are you nervous, going to Manchester all on your own?" The lad replied, "No, my
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father is driving the train". That showed more confidence than this country has in the people who are driving the national train at the moment.
My Lords, this is not 1926. Cynicism, disbelief, disillusionment, is everywhere. Everything to-day is being called into question: education, drugs, violence—even our own Parliamentary system and the Party system in which we have been privileged to serve for so many years is under fire. Discontent is worldwide. A search for a more equitable form of society is taking place on a scale that we have never seen before. It is taking place in every industrialised country, and the realisation that equality may not be practicable does not prevent tremendous pressure being put on Governments to work towards it.
Only out of such a background can there be confidence in a Government, only from a Government seen to be working towards equality can come agreed solutions to pressing problems of the day, such as the problem of the differential wage. That is what we have been mentioning in this House for a long time. The record of the Government is not good enough, in my opinion, to give confidence enough to workers. Four years ago they said that they could deal with prices "at a stroke". We have heard about lame ducks like Rolls-Royce, and we will not labour that point. The Government took fright at the small increase in unemployment and went berserk. They handed out money right, left and centre on an enormous scale, believing that if they pressed on with this "sustained growth", as they called it, somehow or other things would come right.
The Government spokesman said that external prices have been responsible for our inflation. But this Government have gambled that world prices would come down, and they are responsible for a good deal of home-made inflation. One aspect is the jacking up of interest rates. They hoped that we could live off "hot" money until our economic miracle could be worked out, breaking the pattern of nearly 100 years, and emerging with a high growth rate. Look where this has led us! If I had £10,000 to hand over to a bank today they would pay me 15½ peg cent. interest on it. Now if in line with what I have done all my life up until

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comparatively recently—that is to manufacture articles for sale as honestly as I have known how—I invested the same amount of money in a concern to make cloths, I could look for an average return on my money of only 9½ per cent. Ask yourselves the question: how far down have we brought ourselves in this country to the situation where you can jolly well make more money by loaning it out than you can by manufacturing? What are we at? Are we a manufacturing country, or what? Or are we becoming a country of "spivs"? I lunched with the directors of a bank a fortnight ago, and the man who was sitting on my right could talk of nothing else all lunch-time than what a wicked thing it was that business concerns were borrowing money from his bank to lend to somebody else at a higher rate of interest. That was only a fortnight ago.
Recent events have been so sudden, dramatic and explosive that they have tended to obscure the fundamental changes which are taking place in every industrial society in the world. All the comments that have been made this afternoon about the importance of inflation are paramount. But during the last two months we have heard precious little about what steps they are going to take to deal with this problem. We have had our noses put to the grind-stone over the confrontation between Government and miners only. Do the Government not realise that we are faced with the situation of a "no growth" rate? Does there enter into their thinking the implication that if in the future you have no growth rate, there is going to be more trouble than ever? You are going to have campaign after campaign to divide up what there is.
Raw material costs have been mentioned. The advance prices that we are required to pay for raw material will make it impossible for us to be able to balance our payments deficits for a long time. Here I agree with the noble Lord, Lord Beswick, that the No. 1 consideration of any Government of any Party should be to see that their currency value is kept. The noble Viscount, Lord Amory, was talking about calling in the heads of the other Parties and perhaps their lieutenants. I believe, too, that it should be possible to agree on two or three basic elementary principles which
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any Government should pursue in running a country, and the principle of keeping the value of our currency is No. 1.
Much has been said to-day about the expediency of making an approach to the miners. I think that the Prime Minister should have taken the offer of the T.U.C. with both hands. Although the Labour Government were bitterly disappointed with the behaviour of the T.U.C. after they had promised the Prime Minister of the day that they would voluntarily take care of the wage applications and increases—which they did not do—I am certain that it is a different T.U.C. to-day and the Prime Minister would have got a better response from the T.U.C. than the Labour Government got in the last week of July, 1969. The offer should have been accepted and the responsibility for carrying out their pledge put firmly on their shoulders. It has been said so often this afternoon that we cannot afford a stoppage. Neither can we, and whether or not the outcome of this will be that one side will say, "Yes we have won", nobody will win in the long run.
VISCOUNT AMORY: My Lords, I tried to catch the eye of the noble Lord earlier. I listen to every word the noble Lord utters. He said that the Prime Minister should have put the responsibility fairly and squarely on the shoulders of the T.U.C. But from everything I have read, I have gathered that the T.U.C. were not willing to have the responsibility to which the noble Lord referred put fairly and squarely on their shoulders because they felt they had not the power to deliver the goods.
LORD RHODES: No, my Lords; but they went considerably further than any organised body of labour has ever gone before and they ought to have been taken up on it. There are honourable men in the T.U.C. who are willing to have a go in order to make a success of an incomes policy, and I think that the Government made a big mistake in not taking them up on it. If we drift to an Election or a strike it will be a disaster that will ruin the country. The speech of the noble Lord, Lord Carrington, was in my opinion nothing more than an electioneering one. I think that some time he may regret that he has made it. But if this were to go to a trial of strength, not only would I support the noble Lord, Lord George-Brown, in what

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he was saying about a compromise, but I would advise the Government to look at the fourteenth Chapter of St. Luke and see what it says about the king who sees an enemy approaching which outnumbers him by many, and about the expediency of sending out an embassage before being defeated by superior numbers. Perhaps it it not too late to ask the T.U.C. to come to see the Prime Minister again. I notice the Bishop sitting there. Perhaps he will find the Prime Minister a Church of England Prayer Book and ask him to read the General Confession. If he were then to send for the T.U.C. to come to Downing Street it would please many more people than there are in this House: it would please the country.
5.32 p.m.
LORD BALFOUR OF INCHRYE: My Lords, since the end of July we have had a series of economic debates, and I have not dared to open my mouth. But I think the time has now come when everybody who has anxiety and sadness in his heart should say what he thinks without thought of approval or disapproval from any quarter. At risk of a rebuke from the noble Viscount, Lord Amory, I want to deal somewhat with the past. The first thing I want to say is that this situation should never have arisen. It is not for me to evaluate or apportion the responsibility, but I repeat, with all sincerity, that I believe the situation should never have arisen.
We have been saying all afternoon that in our individual lives not one of us could look round without wishing, in certain circumstances, that we had made different decisions in situations from those we made. If individually we must all admit errors in the past, it is surely logical that collections of men, forming either the Government or the Opposition, should also be vulnerable and realise that there may be situations in which they wish they had acted differently. In order to see whether we can learn something which can help the present situation, I should like to look for a few moments where I, as a Conservative individual, think we may have been in partial error as a Government and as a Party, and then I would look, if I may, at where the Labour Party and the trade unions seem to me equally to have gone wrong.
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My Lords, I speak as a supporter of the Prime Minister in his absolute determination to maintain unbreached the bulwark of Stage 3 against the dangers of a flood of uncontrollable inflation which would swamp the economic and social life of our country. I question whether we have brought home that great truth sufficiently to the public. The Prime Minister, in speech, in writing and on television, has covered the issues before us. Still the man in the street does not appreciate why Stage 3 is absolutely vital to our national safety, and why, to use the words of the noble Lord, Lord Carrington, "We must not see Stage 3 torn apart." The Prime Minister has spoken about the 5 million men—and the number is now, I am glad to say, 6 million—who have accepted Stage 3 who are quoted as examples to the miners. What is not stressed is why the leaders have accepted. It is not because they think there is no more money to be squeezed from the Government; it is because they see and understand, in the national interest, the vital importance of maintaining Stage 3. I believe that the whole weight of the Government machine in Press, television, radio, by poster and publication, should drive home the single point far more widely and forceably—the dangers before us if Stage 3 were abandoned. If there were a General Election, that would all be changed, but I am assuming for the moment that the Election is not decided.
My Lords, the next question I ask myself is whether, in the minds of the public, the Government are considered fair? If I had been asked that question six months ago, I should have said, "Yes". If you ask me now, I have doubts. As a Party, it seems to me that we do the right thing—but often rather too late. The Government record on pensions, on allowances and social services is something we can all be proud of. But to-day the rising cost of food and the general costs of living are bearing too hard on pensioners and the lower paid. I question whether these can or should wait for the next Budget. Ten pounds at Christmas really is not enough. We should have acted before now.
Next I should like to take the general national resentment which has been

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expressed at land and property speculation, and exorbitant profits. The Government have now acted firmly, fairly and wisely; but why wait so long as to make it appear that Government action is in response to a national outcry, rather than a forward-looking Government who have seen the dawn of an unacceptable position? We are now warned that a tough Budget is coming for us all. Should we not consider putting into suspense some of the justified, overdue and encouraging tax reliefs which were given to the better-off, which are appropriate to a booming economy?
I must confess that I find it hard, even as a Government supporter, to justify the offsetting of tax on large sums of borrowed money. But if these are matters some of us now regret, to the Party opposite there are graver matters of indictment. My main charge is that, in hopes of gaining electoral support (and I can think of no other reason), their Leader has constantly refused answer to two questions to which the country is entitled to a reply. The first question is: Does Mr. Wilson support the firm maintenance of Phase 3 as a bulwark against inflation? There is no answer. My second question is: Does Mr. Wilson support the miners' strike, or does he advise acceptance of the 16½ per cent. offer combined with the review of the future of the industry? Failure to give clear answers to those questions is, I believe, reflected in the disillusionment of the public with the Party opposite, and can only be described as inverted political courage.
My second indictment of the Party opposite is a criticism of some miners' leaders. They seem to be ruled from below instead of leading from above. These men appear to be just delegates who have to be ruled from below, often by militants in control below, who call the tune to which these leaders have to dance. If any National Union of Mineworkers' leader, seeing the national picture, wished to counsel moderation publicly, he would under present practice and organisation find it almost impossible; and he has to toe the line.
My Lords, I shall be concluding in a moment, but to come to the present and the future, cannot we all learn lessons from the past? It is the very sadness of
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the situation that hits me—seeing fine men in positions where they have to choose between loyalty to their union and loyalty to their country's interests. I believe that a new spirit must sweep through our land if we are to recover social and economic balance. I pray that it is not too much to hope that, even at this eleventh hour, the Government can bridge that divide between the miners and their trade union supporters and the rest of the community, and rebuild communication with the public. Again I say that if an Election comes, all I say goes away. But I would urge the Government to consider not waiting some weeks for the tough Budget, but to ease now the pressures bearing on the poorer sections of the community while standing absolutely firm on Stage 3.
If the Government did this, might not the climate of accepting Stage 3 be altered and the present exhibition of the exercise of naked industrial power by powerful minorities become repellent to a nation more united than at present? The miners have the power. The miners know they have the power. The miners are the jewel in the national crown. The miners are fine men, badly treated in the past. But surely, if the Government play their part in checking national disaster by standing by Stage 3, at the same time appreciating the difficulties which the present circumstances have put upon the lower-paid members of the community, the ordinary people might play their part and we might see a country more united than at present.
My Lords, I conclude with these words. Always at my age there is a prospect of any speech being the last—probably to the relief of some of your Lordships—though I hope not. But whether this be true or not, I want to finish on a note of complete confidence in the soundness and goodness of our people. We have had past troubles in war and peace. I would remind your Lordships what William Pitt said:
"There is scarcely anything around us but ruin and despair".
I should like to remind your Lordships that Wilberforce, in the early 1800s, said that he dared not marry, the future was so dark and unsettled. I should like to remind your Lordships that the Duke of Wellington in 1851, on the eve of his

827
death, thanked God he would be spared from seeing the
"consummation of ruin that is gathering about us".
My Lords, each time the prophets of doom have been confounded, and years of industrial prosperity have dawned; and that, I feel certain, will be the case once again in this country.
5.46 p.m.
LORD SHINWELL: My Lords, I have no wish to follow the general trend of the speech to which we have just listened, but perhaps I might make one comment. It is with regard to the questions which the noble Lord, Lord Balfour of Inchrye, believes should be addressed to the right honourable gentleman the Leader of the Labour Opposition. It is not customary to ask questions of the Leader of the Opposition, or of the Opposition in general. Questions are usually addressed to the Government of the day, except in a General Election. When a General Election comes along in due course, no doubt the electors will have the opportunity of asking the Leader of the Opposition the questions to which the noble Lord has just referred. I can answer his questions, not that I can compare with the Leader of the Opposition in intellectual or even political stature. My answer to the first question—would I be in favour of Phase 3?—is that I am in a similar position to many prominent industrialists, and even the noble Lord, Lord Robbins, an eminent economist, who cast some doubts about the desirability of having stages or phases of any kind associated with an incomes policy.
As regards the second question which the noble Lord, Lord Balfour, thought should be addressed to the right honourable gentleman the Leader of the Opposition—is he in favour of the miners' strike?—it is not for anybody but the miners to decide what is the proper answer to that question. We have to concern ourselves with only one question, despite all the irrelevancies that some Members of your Lordships' House have indulged in their speeches this afternoon—inflation, the mistakes of various Governments, of course including the last Labour Government. Some Members of your Lordships' House, out of their vast knowledge, could turn themselves blue in the face asking all kinds of questions,
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pertinent and impertinent. They are all irrelevant to the vital and fundamental issue which should be the only subject of this debate: what are we going to do about this impending strike? That is the position.
If I may venture to say so, not a single speech, however eloquent—except in some respects the speech of my noble friend Lord Beswick who opened the debate and made some reference to it—would persuade the present Government to change course. This is the reality of the situation which confronts us and which we must not dismiss. Nor should we brush that aside or shrug our shoulders. That is the question we have to consider. If the speech of the noble Lord, Lord Carrington, who no doubt is engaged elsewhere on Government business—though I would not expect him to be present to listen to me, that would be asking too much—is any indication at all then instead of spending a lot of time he might have repeated what he said a few weeks ago. "No surrender". That is what he said. I remarked at the time that this was a surprising statement for a Minister to make when there were doubts whether a strike would develop at all and when the Government and others were engaged in delicate negotiations. The noble Lord, Lord Carrington said, "No surrender".
LORD MOYNE: My Lords, the noble Lord, Lord Carrington, is not here, but I did ask him whether he ever used those words and he said that never in his life had he used the words, "No surrender". It was the newspapers put them into his mouth.
LORD SHINWELL: All I can say to the noble Lord who seeks to disturb the thread of my discourse is that the noble Lord, Lord Carrington, when I ventured to make the remark in his presence, never challenged it. However, his speech was a clear indication. No surrender. That is the attitude of the Government. That is what we have to face this afternoon. All the fine highfalutin phrases about how to deal with inflation—we can all say a great deal about that subject. If I may say so with the utmost respect and good will, in the most inoffensive fashion, the last people this country should depend upon if it seeks a viable

829
future are the economists. They are almost as bad as the Press.
This brings me to a very interesting leading article in the grandmother of national newspapers, The Times. I must be careful not to blot my copybook. I may not be asked to write an article. They have asked me before but I refused; I may not be asked again. Indeed I may not receive even a paragraph in the newspaper itself. They published a leading article this morning. The strike has not yet occurred, but they have it already—a General Election and all the questions that are going to be asked of the electors. In the leading article are a surprising number of these questions. One that interests me is where the electors ask the contending leaders, "Should we have gone into the EEC?" I could give an answer to that at once. We have enough disasters on our plate. I recall that the editor sought to win the Chester-le-Street division in Durham. He lost his deposit, so he became the editor of The Times. I am sorry to say that The Times appears to be in a state of decomposition. I say deliberately and emphatically, so far as political influence is concerned, influence on the electors, much less on the miners, it is dead but it cannot lie down. They can put that in their pipes and smoke it.
There is another newspaper, the Daily Telegraph. The only reason I read it every day—I have done so for years—is that because when I am dissatisfied about my own Party I turn to the Daily Telegraph and am immediately consoled. From the beginning of this conflict they have been venomous, vicious, splenetic, spiteful, as nasty as could be, condemning the miners outright; not a good word to say for them and sometimes not even a good word to say for the Government.
What are we going to do? What is the alternative to a strike? I should like an answer from the noble Lord who is going to wind up. What do the Government suggest? The answer is in The Times newspaper and in other newspapers; in the minds of many Conservative Members of Parliament, and no doubt in the minds of many Members of your Lordships' House—a General Election. "We will teach the miners! We will show them what we mean! We will stand no dam' nonsense from them! We have had enough of the militants and
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the moderates!"—sometimes they mix up the militants with the moderates; it suits their purpose—"No, we will teach them a lesson; we will have an Election." And then what happens? Will it produce any more coal? Will the situation improve?
That brings me back to a comment made by the noble Viscount, Lord Amory. It seemed to be an afterthought with him, something not contained in his notes. He suggested that even now, at this late stage, the Prime Minister might ask Mr. Wilson and the leaders of the political Parties, with perhaps some prominent people, to come and talk the matter over. Does he recall that in our December debate after my noble friend Lord Diamond had made an allusion to this subject I ventured to suggest that the Prime Minister should consult Mr. Wilson, Mr. Thorpe, the C.B.I., the T.U.C., some prominent Members of your Lordships' House who are engaged in industry, commerce and finance who have expertise at their disposal, and diagnose the complaint—not merely the question of the miners' impending strike but the economic financial complaint and then seek a solution, though I did not believe it was possible to get a complete solution. This idea is nothing new; but it is too late now, and I deplore it.
One other reference to that December debate: I said that in my experience, perhaps a longer experience of politics than any Member of your Lordships' House, seventy-odd years—though perhaps other members of your Lordships' House may subscribe to it—I have never experienced a crisis like this with all the potential dangers. I can remember crises before the First World War—vast industrial disputes. If it had not been for the outbreak of the 1914 war the country would have been engaged in a calamity of colossal magnitude. I remember, as many Members of your Lordships' House can recall, the crisis of 1931; but it was fundamentally a financial crisis. This is different.
I venture this opinion; and I hate to say it: I deplore the consequences of what I am about to say. If this strike takes place, if we cannot find some alternative before next week, I doubt whether for many years to come we can look forward to a viable economic future for this country. Already the prestige of this

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country has been weakened. We all know that and we deplore it. It has been weakened not merely because of this crisis but because of a succession of events for which various Governments have been responsible; and now we are faced with this situation. This would be a disaster which would be almost irreparable—irrevocable—no means of escape.
What are we to do about it? Have a General Election? One of the troubles is that there are too many Members of Parliament and too many members of the Press and too many leading articles which indicate preparedness—that is the term used in military circles—preparedness for events: obtaining the aid of volunteers, preparing the mechanism—lorries and all the rest. For what purpose? Is it civil war that we contemplate? How can we escape from this morass, this chasm?
I listened to the speech made by my noble friend Lord George-Brown. I noted that he was not too happy about the miners' demanding more in the way of wages, but I dismiss that. He made an eloquent appeal that the Government, even at this late stage, should do something about it. I understand the position of the Government; I have been in Government myself. It is a question of loss of face, but it would be far better for the Government to lose face than that we as a country should lose everything in the next few years. After all, it would not necessarily mean—and what I am going to say I mean earnestly and sincerely—that Mr. Heath would have to resign; it would not mean that we impugn his motives; it would not mean that he would appear to have less integrity and honesty than he possessed before. Not at all. It might well be that it would enhance his prestige if he were to say: "Well, I do not like this at all. I wish the miners had agreed with me and would have accepted Stage 3. I wish they would have helped me to counter inflation in the interests of our country. But in the circumstances I have to face facts. Let us be realistic and admit that we may have to give something away."
My revered noble colleague, Lord Butler of Saffron Walden—Rab Butler as I used to know him—spoke of politics being the art of the possible. It is sometimes essential for those in authority to
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compromise, to be resilient, to give way a little. I can assure noble Lords that if, even now, the Prime Minister were to declare that in the circumstances and for the salvation of our country, looking ahead at all the dire consequences that confront us, he would ask the miners to come along and negotiate again, something could be achieved. But what is the Prime Minister saying? He is complaining that the miners would not negotiate with him. But how was it possible for the miners to negotiate when he said, "I stand by Stage 3"—finish—the last word—point of no return. One cannot negotiate with a brick wall; with such an obstacle. Even now he should be resilient and give way a bit. I believe there are elements in the Cabinet who would be inclined to subscribe to that. It is a question of losing face. Some of the county members of the Conservative Party—the remnants of the old aristocracy—would say, "We can't have the Conservative Party and the Conservative Government giving way to the miners". No, they would rather have civil war.
A NOBLE LORD: Rubbish!
LORD SHINWELL: My Lords, I am not making an appeal to the Government because, after all, I do not count for much. I am just a Member of your Lordships' House; but I want this country to prosper just as much as any other Member of this House. I believe it can, although in the state we are now in it will take time and we may have to suffer. There has been some talk to-day about taxation. I was surprised when I heard the noble Lord, Lord Robbins, who ought to know better, say that the question of taxation had never been discussed by the Labour Party. Mr. Healey got into a great deal of trouble in the Labour Party for actually declaring that when we form a Government we should have to tax heavily. What a row he got into from the Press for saying that! Of course we may have to tax; we may have to do a lot of things we dislike doing. But rather do that, and do it as early as possible, than have to suffer this strike and all its consequences. But if we have to do it, let us do it quickly. Do not let us delay. I am not making an appeal; I am presenting the facts realistically. A General Election—and what? The end of the strike, and some hope.
6.7 p.m.
LORD GORE-BOOTH: My Lords; it is a great privilege to speak in this debate immediately after the noble Lord, Lord Shinwell, whom I regard in mining terms and from very much below, as a neighbour of mine, since my associations are with Yorkshire. I felt that at the climactic moment of his speech he was thinking along lines upon which many of us have thought, although I feel that the conclusion he arrived at is still a little difficult, for reasons to which I shall shortly return. Perhaps I might begin by saying that I find myself a little more in the mood of the noble Viscount, Lord Amory. Coming after the noble Lord, Lord George-Brown, I thought the noble Viscount was going scriptual and would say "After the earthquake, a still small voice". If I may say so, it was a most effective small voice, in the spirit in which a number of people have approached this debate, with the best intentions, even if those intentions have not quite lasted the quarter of an hour which the rest of the speech occupied.
In each of these debates we have to bring ourselves up to date in our thinking on the present emergency. I believe it is our duty—and here I find myself very much in agreement with the noble Lord, Lord Shinwell—not to shirk what we ought to try to do in the next day or two, because that is really what we are talking about. But we cannot quite reach the next day or two without putting a finger on a few events that have happened in the past two months, so with your Lordships' permission I will start with them and then I promise to arrive at this week.
First, may I be the exception to the rule and at least mention, in the prevailing gloom, a few of the positive things that have come out of the pressure of this emergency, and they are by no means small. For instance, the pressure of events since October has compelled the Government to accelerate the formation of a team to conduct a dynamic national energy policy. I think I am right in guessing that this might not have come so quickly had the crisis not come upon us first. Again, another most important acceleration which may yet have a bearing on our present troubles has been the publication of the Report on Relativities and on job evaluation. Again, a valuable point gained from this crisis.
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Thirdly—and I was going to say it would be controversial, but I now need not say so because the noble Lord, Lord George-Brown, laid it on the line, as they say—and thanks to a number of speakers from this House, notably the noble Lord, Lord Chalfont, the question of the influence of people with extreme and dogmatic views on institutions in this country is now a matter of national debate. It has hitherto been too much suppressed by public apathy and the timidity of the media. Now it has come out; and one cannot ask for more than that, because public debate means awareness. When one is aware, one reads what some of these people say, and then, although I say it with slight regret, one cannot be quite so naive about it as my good friend, the noble Lord, Lord Beswick, was in his speech.
Those are some of the things we have gained; but there are very sad sides to this situation. One very sad side, to my mind, was this. In a previous speech I ventured to allude to psychological moments when trade union leadership has to decide: "Yes, some time, but not now". This moment was missed in October when the overtime ban was decided on. I fear very much that the decision to go ahead with industrial action came at the worst possible moment in the history of the mining industry. It came at a moment when Arab action over oil gave the coalmining industry a sudden great prospect, not simply of modernisation but even of expansion. If the National Union of Mineworkers could have refrained from action at that time I have a feeling that planning would have gone ahead very much in that direction. Now, any expert and any investor must hesitate about that in a way he would not have done a few months before. I am afraid that is the development brought about by the decision of the miners' leadership.
My Lords, perhaps I should say that, if I am going to criticise the National Union of Mineworkers, I am also, in my Cross-Bench capacity, going to criticise the other side. I say that simply to anticipate any fear that I may be wholly partial in this matter. The other and, I fear, rather important mistake that I must impute to the miners' leadership is this. The noble Lord, Lord Shinwell, said the Government had nothing to offer; but

835
I think one has to ask, in reference to that, whether, if a trade union say it simply will not go to Downing Street unless it is offered some money, this is not somewhat confusing the roles of the trade unions and the Head of Government. I would have thought—but perhaps I am old-fashioned or radical—that if one is invited to No. 10, one goes to No. 10, even if for only 10 minutes. I also think that what was being demanded is something more than just a little money. What was in fact being demanded was that the Government should go back on a law which it had initiated, and which Parliament has passed, and should pay the National Union of Mineworkers something additional in advance. I cannot see that that is in the right proportions in the relations between any institution and national Government. So I fear some serious mistakes have been made there, and I can only express the hope that even in these remaining few days some of this could be re-thought. I shall come back to that in a moment.
My Lords, I have spoken of tensions that have arisen from that side and, chosing my words as carefully as I can, I must now express my agreement with a line taken very forcefully by the noble Lord, Lord Balfour of Inchrye, and I will trace it to a particular moment, though the individual Member of the Government I mention I am not in any way seeking to attack as a person. But there must have been a great many people all over this country who were shocked when, after the first T.U.C. meeting with the Prime Minister and his colleagues at No. 10, the Chancellor of the Exchequer, with a brevity that seemed to me, over the television, to amount to asperity, simply told us the T.U.C. initiative was no good. It seemed to me that in taking this initiative the T.U.C. were taking a considerable risk in respect of principles they had upheld in opposition to Stage 3, in opposition to the Industrial Relations Bill, and many other things, by making this offer. It must have been quite an effort for them to do that. No doubt the offer as made on that particular afternoon was insufficient, but surely, with a proper feeling of proportion, the Government should at least have publicly paid respects and compliments to the T.U.C. for taking that very important initiative.
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I feel that in too many cases the Government have missed opportunities of that kind. The Romans had a word for it. I apologise once again for quoting Latin in your Lordships' House, but the Romans had an eloquent kind of shorthand for these occasions; and for this occasion they said, "suaviter in modo, fortiter in re," which means "Let your manner be gentle, but be strong in purpose." By all means be strong in purpose, and the Government have had to be, but for goodness sake cannot one be a little more suave and more gentle in manner?—because this affects not simply people like the T.U.C. to whom you are speaking, but it rebounds throughout the country.
My Lords, what should we do now? There are a number of suggestions that have appeared in the Press. For instance, there is Dr. Kaldor's suggestion that perhaps industry might be able to make a once-for-all contribution to the situation. There has been the suggestion by Mr. Maudling that it might be possible to arrive at a situation in which the vast majority of trade unions had accepted not as doctrine, but in fact, settlements under Stage 3; and the Government need have no fear then of treating the miners as a real and financial exception. And then there are all the ideas that have been expressed, first by the noble Lord, Lord Diamond, that at least the public would be reassured if political leaders could meet, not to reach an agreement, not even perhaps to issue a communique, but at least to re-establish the rules of the game so that some of the tactics to which many people have objected during the last months could be ruled either legitimate or out of court.
My Lords, if I may also turn to the matter of method—perhaps your Lordships may find this a little too reminscent of my profession—there is a great deal to discuss. Could not some way be arranged in order that some of these matters could be discussed by people who are directly interested, but in something of an atmosphere of quiet diplomacy? I cannot believe the principals give themselves a chance if they meet for a long, long time, and we do not know what happens. We assume they discuss things seriously, and then they come out of

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No. 10 and fall, hook, line and sinker, straight into the trap of the television camera, and have to make on the spot the kind of commitment from which they cannot subsequently escape.
All these things, I entirely agree, are a little fragmentary; they do not decide anything, but I hope I have at least suggested that there are things that are worth discussing. Where I do not quite agree with the noble Lord, Lord Shinwell, is in saying flatly, "The Government must give way". In all these things there has to be a little give on both sides, because both sides have face to win, and face to lose. Whether we are still in the position in which that can still be done I do not know, but at least I have the temerity to suggest it is still possible.
My Lords, I have two more points. In this situation I should like to make this something of an appeal. We need more help from the media. Yesterday I happened to see the 5.45 B.B.C. Television News. In fairness, I will say that Mr. Ezra and members of the Government have been spoken to since. The B.B.C. advanced on Mr. Gormley and asked the wrong question. They asked who was going to be hit first and how quickly these people would be hit. Surely the one question which the whole country was wanting Mr. Gormley to be asked was, "Given all the damage and the suffering that this is going to cause to industry, to other groups of people, to the community as a whole, including miners' wives, are you sure you have to do this?" Mr. Gormley knows the answer, but surely that should have been the question. I think that in these ways our media have to consider very carefully exactly how they express themselves. We want to be told the whole truth, but we do not want to be gloated over.
Finally, my other motive for intervening in this debate is simply that I think one consideration has been left out in all the talk we have had about mining as a profession. The noble Lord, Lord Blyton, and the noble Lord, Lord Taylor of Mansfield, have spoken about the dirt, dust and danger in the mines, all of which is true. But I do not think anybody has mentioned, and I have some pride and pleasure in mentioning it, that one of the great characteristics of that profession is its dignity. The dignity
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of labour among mining people is something very exceptional, and something of which they are rightly proud. I think the reason why all of us hate the present situation is that we feel that that dignity has not been upheld, and we should like to see it restored. But we would like to see all this happen before not only the miners' lamps but also all the other lamps go out.
6.22 p.m.
LORD CHALFONT: My Lords, may I begin by apologising, and especially to my noble friend the Leader of the Opposition and to the noble Earl, Lord Gowrie, if I have to be absent for some of the later stages of this debate. It is for a very cogent reason. I have not done this before in your Lordships' House and I hope I shall not do it again. But I felt that this debate was so important that I hoped your Lordships would understand if I took part in the debate even though I cannot be present for the whole of it.
This, as many other noble Lords have said, is no time for polemics or abrasive criticism. I have made no secret of my belief that in this crisis the very processes of democratic government are in peril. I had not intended to dwell on this factor in this particular debate, but my noble friend Lord Beswick, in his opening speech to-day, has referred with some asperity to those who have been concerned with pointing out the dangers of extremism, and particularly Left Wing extremism in this country. As I am one of those who, as the noble Lord, Lord Gore-Booth, has said in his characteristically thoughtful speech, has been associated with pointing out this danger, perhaps I may say that I do not believe that the moderates in the trade unions, and particularly in the National Union of Mineworkers, are the dupes of these extremists. I believe they are people of too much common sense and too much intelligence for any of us to be as simplistic as that. What I do say is that these extremists exist and that their aims are clear. It may suit some people and amuse others to talk of "reds under the bed".
The noble Lord, Lord Beswick, has said that this alleged campaign has done more to alienate moderate opinion than anything else. I take leave to doubt that statement. But I would make another

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and it is this, that those who pretend that this threat does not exist do a great disservice not only to the moderates but to this nation as a whole. If we have a miners' strike, if in the long run there turns out to be no way of avoiding it, I can assure your Lordships that there will be not much doubt left in the minds of many after a short while that militants and extremists do exist in our society, and they will use every means, not short of violence, to exploit the industrial unrest for their own political ends.
But to-day I want to make a few brief comments of what I hope will be regarded as a more constructive kind. The noble Lord, Lord Shinwell, in his typically robust and fighting speech, said that what we must all be concerned with now is what we do about the current problem. Of course he is right. I should like to make three points. First, I would endorse the proposal which has been made by Lord Shinwell, by the noble Viscount, Lord Amory, by the noble Lord, Lord Diamond, in a previous speech in this House, by the noble Lord, Lord Gore-Booth, and many others, even at this late hour, that the political Parties might get together to diagnose the problem and see whether they cannot reach some joint solution to it.
There is talk now, with what authority I know not, that we are about to enter a General Election campaign, with all that that means in the way of political bitterness, divisive attitudes and the slanging matches of a characteristic General Election campaign. And this at a time when we should be uniting in our attitudes and our approach to this problem, and not creating more and bitter and perhaps lasting divisions in our society. There are ideas, like, for example, the Relativities Report, which offer some hopes of order and sanity in our pay structure and industrial affairs in the long term. A General Election is not going to solve any of these basic problems. Whoever is returned as a result of that General Election is going to be faced with the same problems and will have the same appalling difficulty in solving them. It seems to me that we should be talking now not of General Elections and of getting at each other's throats, but of getting together to see whether together we can find a way
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out of what threatens to be a terrible and perhaps irretrievable disaster for this country.
Secondly, I should like to endorse something the noble Lord, Lord Gore-Booth, has referred to, the need for a better system, a better way, a better manner of explaining policies and problems to the people of this country. They are intelligent people, the most politically intelligent people in the world, and they deserve to have policies and problems explained to them calmly, courteously and lucidly. Ignorance is the ally of confusion and it is the breeding ground of oppression. I believe that whichever Party is in power in this country in the immediate future it will need to look closely at the machinery which it uses to acquaint the people of the country with its decisions and the reasons for them. I believe that if one criticism more than any other can be levelled at the present Government it is that they have failed almost totally to explain to the people of the country what this crisis is about and how they are proposing to deal with it.
For my third point I want to suggest that in the solution of this immediate crisis there might be a larger role for organised industry, for that side of industry which is commonly referred to as the C.B.I. It is a pity, I think, that for many people in this country the endorsement of an idea by Professor Kaldor is regarded as the kiss of death. I think this is a shame, because I believe that in his recent letter to The Times there was the germ of an idea which might yet be important in the immediate solution of this problem. In my view, inflexible negotiating techniques on both sides of this dispute have led to this implacable confrontation. The noble Lord, Lord Gore-Booth, referred to the practices and uses of diplomacy. He will know, and many of your Lordships will know, that one of the first rules of negotiation is always to leave the person with whom you are negotiating room for manoeuvre; do not pen him or yourself into a corner. This is, of course, what has been done.
I do not wish at this stage to go into any details of how organised industry might find a way of helping the Government and the trade unions out of the impasse in which they find themselves. I would simply point out that I think that

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we are talking in terms of a gap over a period of a year—the gap between what the miners are prepared to accept, and what the Government are prepared to offer under Phase 3—of something of the order of between £50 million and £100 million. The net before tax profits of the thousand largest firms in this country is of the order of £7,000 million a year. Suppose that we agree that the immediate problem is to tide us over the next three months until long-term policies can come into effect; we are talking about one-quarter of 1 per cent. of net before tax profits of the thousand greatest companies in this country.
It is for that sum that it seems to be proposed that the country should be plunged into a strike, and possibly into a General Election, and into the kind of division in our society which may do lasting damage to the whole democratic system to which we all subscribe and of which we are all, so rightly, proud. I will say no more about that, except to express the hope that if the C.B.I. should make some proposition to the Government, I hope that the Government and the miners will examine it with care and with sympathy. There has been too much inflexibility and too much intransigence. I believe that there is still time to put that right. I believe that the good sense and the moderation of the great bulk of the people of this country will, in the end, prevail. Whether it will prevail before too much damage is done is another question.
I should like to end, as the noble Lord, Lord Gore-Booth, ended, on a note which is more directly relevant to the actual business, profession, occupation of mining coal. The noble Lord, Lord Beswick, spoke of growing up in a mining community. I too grew up in a mining community in a mining valley in South Wales. Whatever strictures may be directed at anyone, I have not forgotten the roots from which I came. I have not forgotten some of the bitterest experiences of my childhood. I have not forgotten walking through an almost silent village in a South Wales mining valley and seeing knots of silent, hopeless and desperate men on the street corners. I know what a coal miners' strike is like from the inside, and I know what a general strike is like from the inside. I
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was very young at the time, but these are memories that never fade.
Perhaps if my eloquence is not enough to paint the picture of what a general strike means to the ordinary people of this country, noble Lords might wish to be reminded of an essay which George Orwell wrote many years ago in The Road to Wigan Pier. It is called "Down the Mine", and it is one of the most moving and vivid descriptions of the occupation of mining coal that I have ever read, and that anyone else could ever read. With your Lordships' permission, I should like to quote simply from the few words at the end of the essay called "Down the Mine". Orwell says:
"In a way it is even humiliating to watch coal-miners working. It raises in you a momentary doubt about your own status as an intellectual ' and a superior person generally. For it is brought home to you, at least while you are watching, that it is only because miners sweat their guts out that superior persons can remain superior. You and I and the editor of the Times Lit. Supp., and the poets and the Archbishop of Canterbury and Comrade X, author of Marxism for Infants—all of us really owe the comparative decency of our lives to poor drudges underground, blackened to the eyes, with their throats full of coal dust, driving their shovels forward with arms and belly muscles of steel."
That is as true and as apposite now as it was when Orwell wrote it in 1937. The miners are an integral, essential and vital part of the economy of this country, but if we cannot solve their real problems—and these are not imagined problems—the whole of this country is going to suffer, and suffer bitterly, and with the rest of this country the miners will suffer too, because they cannot be separated from the rest of the community.
I hope that, in spite of what has been said by some noble Lords, it is not too late; that it is not too late for all Parties, and both sides of industry, to get together and, as the noble Lord, Lord Shinwell, has said, to examine the problem, diagnose it, and together attempt to solve it. This is no time to concern ourselves with prestige—Party prestige, personal prestige, with face or self-esteem. I believe that if we do not get together we shall be embarking next week on a path that will lead to disaster. But I believe that there is still time in the few days that remain to us. A noble colleague has said to me tonight that we are not at the eleventh hour, we are at the eleventh hour and fifty-ninth

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minute, but it may be that in the short time that is left there will be enough men of vision in all three Parties, and in both sides of industry, to take the one single step that might, in the end, avert disaster for us all.
6.36 p.m.
LORD COLERAINE: My Lords, there is very little in the speech of the noble Lord, Lord Chalfont, with which I would disagree. Like others of your Lordships I was very much moved by his childhood recollections in the Welsh mining valley. Indeed, people like myself, who sat for industrial constituencies throughout the 1930s, have the same bitter memories of the hopeless young and middle-aged men standing at street corners, leaning against walls, looking into space. I am sure that all of us on this side of the House value the work the miners do. The noble Lord read out the passage from George Orwell, and I would not dissent from it. But I would say that the same could be said about other classes of the community—trawlermen, for example, whom I represented, to the best of my ability, in another place—upon whom "superior persons" like the noble Lord and myself equally depend.
As the noble Lord, Lord George-Brown, was speaking. I reflected, not for the first time, that the House of Lords is like unto the Kingdom of Heaven by comparison with another place. Like the Kingdom of Heaven, it contains many mansions. There is room in it for the Hyde Park Corner speaker, as the noble Lord, Lord George-Brown, was at moments, and there is room in it for the professor of economics, delivering with the most timely and phenomenal clarity an exposition of a most complicated theme. Why the noble Lord, Lord George-Brown, should have thought that it was inappropriate to discuss economic theory in a debate which hinges largely on inflation, I cannot understand. Perhaps one day he will explain it to me.
Every speaker in this debate has realised the seriousness of the times. Most have said that never in peace time have we been in such a critical situation. For my own part, I believe that we have never been in such a critical situation, because in war time, whatever the dangers
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may have been, we were one people; and the real danger facing us to-day is that we are no longer one people. Some six or seven months ago, a very distinguished and intelligent European observer, Mr. Arthur Koestler (I am not sure whether or not he is now British) addressed the British Academy. He said:
"At the end of the war, Britain was at a height of influence in Europe which had never been surpassed. Within 20 years that influence had been all but whittled away."
He went on to say:
"Seen through continental eyes, the Englishman's proverbial castle is crumbling with dry rot."
That was said last June. I do not know what Mr. Koestler would have to say to-day.
Why has all this happened? There was a time when we could say that we were exhausted by our war effort, but surely we have recovered from that by now. There was a time when we felt, rather stupidly, that we had done so much for the world that the world owed us a living. We must by now be disillusioned of that. It is true that we are lazy. It is true that we have had trade disputes. But we have always been lazy and we have always had trade disputes. The real cause of this dry rot, this fungus, is a disease, insidious, progressive and, if it is allowed to take its course, invariably fatal; and that disease is called "inflation". I do not think that there is a Party in this House which is entitled to throw stones at the other on that score.
As the noble Lord, Lord Robbins, reminded us, there was a time when we accepted, quite happily, inflation of 1½, 2 or 2½ per cent. It was rather agreeable. It lubricated the wheels of industry on its onward path. But to-day we have inflation on a scale which ten years ago none of us would have even dreamed of, and if we had dreamed of it we would have taken very good care to wake up a great deal sooner than we did. I do not blame our present difficulties upon the present Government. By the time they came into office, inflation had gathered such momentum that it was very difficult to resist. It seemed to be like a vast Boeing aeroplane driving down the runway at increasing speed until it reached the point at which we are now, where it either came to the end of the runway or became airborne.

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I do not blame the Government for what has happened, but I do blame them for what I believe to be their lack of understanding of the inflationary process and for their faulty diagnosis. Like others of your Lordships, I have listened to and read pronouncement after pronouncement by Ministers on the fight against inflation: what a stern battle it was; how important it was to win it! But all these clarion calls, all these calls to arms, inevitably boil down to this one proposition; that inflation is caused by rising prices, and rising prices are caused by excessive wage demands and the wickedness and selfishness of profiteers and speculators. That, my Lords, is simply not true. No one knows better than the noble Lord, Lord Robbins, that I am no economist, but I think he will probably bear me out. It is inflation that produces these things. It produces the rising prices; it produces the excessive wage demands, and it produces all the evils with which, unhappily, we have been living for the past few years. I do not believe that the Government under-stand that, even to-day.
My noble friend Lord Carrington indicated that the Government had been faced with a choice between, on the one hand, the policies of deflation which produced the 'thirties, and, on the other the policies of growth which they have pursued and which have so greatly contributed to inflation to-day. But I do not believe that the choice was anything like so stark as that. The Prime Minister, speaking in Birmingham last week, said that some advisers had recommended that massive unemployment would be a check upon the intransigence of the trade unions. I think he was understood to have been referring to Mr. Enoch Powell; but Mr. Powell has never, so far as I know, advanced any such proposition. What Mr. Powell has argued is that there is no painless escape from inflation; and anyone who has thought seriously about the subject must agree. The real charge that can be levied against successive Governments is that they have pretended to themselves, pretended to the public and pretended to the voter that there is some painless escape. I do not believe that such an escape exists, and I think we are all beginning to understand that fact.
In the early part of his speech, the noble Lord, Lord Chalfont, said that he
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feared greatly for the Parliamentary process, or the democratic process. I fear greatly, too, and for this reason. Parliament traditionally exists on Party conflict, upon the one side persuading the voter that its policy is better than the policy of the other side. In ordinary things that system is well and good, and it has worked very well. But when it is a question of dealing with the problem of inflation the situation takes on a very different complexion, because you have one Party trying to persuade the voter that it has a painless solution while the other Party has not, and vice versa. I do not know how you are going to get over that dilemma, I do not see how Parliamentary government can deal with that kind of situation, unless, it may be, by some kind of Coalition or some kind of suspension of normal Party activity.
I remember, 34 years ago almost to the day, rising from my obscure seat in another place, facing the Prime Minister of the day and saying, in the House and to his face, that I did not believe that unity could be achieved under his leadership. As noble Lords may realise, I was not a very popular figure To-day, 34 years later, I ask myself the same question: can the necessary unity be achieved under the leadership of the present Prime Minister? It is not that he is not a man of integrity: he is a man of great integrity. It is not that he is not a man of courage: he is a man of great courage. He has pertinacity. If there is any quality he lacks, I think it is antennae. But he is a good man; and he is doing, and has done, his best. But because of the history of the past four years I have the feeling that he represents in his own person an obstacle to the unity which we must have.
My Lords, what is it that has made us a great people? It is, I think, on the whole, that the rich man in his castle and the poor man at his gate—every section of the community, of the people—have realised that they are members of one another. That is the feeling which, somehow, we seem to have lost; and that is the feeling which, if we are to be saved, we have got to recover.
6.54 p.m.
LORD KAHN: My Lords, I. too, have to apologise, especially to the noble Earl, Lord Gowrie, and to the noble Lord,

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Lord Shackleton, because I shall probably have to leave the Chamber before the end of the debate. Tomorrow's locomotive drivers' strike in the Eastern Region and an important college meeting early tomorrow morning make it imperative for me to catch an early train back to Cambridge.
I find it very difficult to believe that the Government are really admitting that the situation is completely out of control. How it would help to submit the situation to the electorate I, as the noble Lord, Lord Shinwell, and the noble Lord, Lord Chalfont, fail to see. Even if the Government did get back, what additional powers would they have gained? Meanwhile, valuable time would have been lost, with the economic position deteriorating at a disastrous rate. There is no need for me to devote time to emphasising the catastrophic damage to the country's economy that would result from a protracted miners' strike.
My Lords, I am one of those Members of your Lordships' House who has consistently praised the Government for their courage in carrying out a real counter-inflation policy based on Statute, and in doing so renouncing their deeply held beliefs. I entirely agree that it would be disastrous if the counter-inflation policy were undermined. If better relations with the leaders of the T.U.C. and the N.U.M. could be restored, it should be possible to demonstrate that the miners, more, perhaps, than any other sector of society in this country, are going to benefit enormously from the preservation of the fabric of the counter-inflation policy. In saying that, I am well aware that the Government have tried very hard to deploy that argument.
Before I come to my constructive proposal, I wish to say a few words on this question of relations with the leaders of the T.U.C. and the N.U.M. I am fully conscious that the leaders of the Government have, on the whole, exercised considerable patience and devoted much thought and time to cultivating good relations with the trade unions, though I agree with the criticism made by the noble Lord, Lord Gore-Booth. The leaders of the Government complain that the miners' leaders are refusing to enter into discussions, but it must be recalled
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that there has not been very much to discuss with them. It was unfortunate that the opening offer of the National Coal Board was the maximum that could be offered within the bounds of Stage 3. It left nothing to negotiate about. An unfortunate diversion was caused by the suggestion that something might be done about part of the time spent by underground workers at the pithead. The final rejection of that idea must have caused bitterness.
It is very unfortunate that the Pay Board's Report on Relativities became available so late. It had been expected by the end of 1973, but it was not signed until January 19. While it need not take much time to establish the machinery proposed in the Report, the body to which the responsibility is given, whether it is the Pay Board or some other body, will need time to establish general principles—which were not arrived at in the Report of the Pay Board—before it can get down to the particular problem of miners' pay.
The upshot of last Monday's meeting between leaders of the Government and leaders of the T.U.C. is a bitter disappointment. The serious issues of to-day are too pressing for a post-mortem to be useful at the moment, but there is one particular phase in the negotiations to which I draw the Government's attention, because I feel that if the leaders of the Government were to reflect on it they might find that it helped to explain the bad relations which have developed with the leaders of the T.U.C. In my pocket diary there is an entry, made at that time, for Monday, January 14. It reads, written in red ink: "Government rot sets in'. The Pay Board's Report on Relativities had not yet been signed. As I have said, it was signed on January 19. Had the activities of the week beginning January 14 been postponed by one or, perhaps better still, by two weeks, the position to-day might have been entirely different.
In the week beginning January 14 there were two long meetings between the leaders of the Government and the members of the T.U.C.; one lasting I think for five and a half hours and one for three hours. Between those meetings, the leaders of the T.U.C. held a meeting with the leaders of most of the trade unions. On paper, and no doubt orally

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too, the trade union leaders were not prepared to concede more than that if an exceptional increase outside the bounds of Stage 3 were granted to the miners, they would not quote it in evidence in pressing any claim that they were putting forward. It is difficult to see how the trade union movement could have gone further than that. While no doubt continuing formally to oppose an incomes policy in general and Stage 3 in particular, their offer makes sense only within the context of a statutory incomes policy and of Stage 3, and it implied that it was in the general interest to maintain the fabric of a statutory incomes policy and Stage 3 notwithstanding a further concession to the miners.
The Government asked for a guarantee that was variously described either as "cast iron" or "copper bottomed", that no leader of the trade unions would put in a claim outside the bounds of Stage 3. Well, my Lords, one very important claim had already been put in. It is well outside the bounds of Stage 3. But it is fairly clear that the leaders of the union concerned will feel that they have done very well if they secure a settlement within, but close to, the bounds of Stage 3. Union leaders recognise the financial difficulties of many employers at the present time and this knowledge is curbing their negotiating enthusiasm. I suggest that in asking for a guarantee that was cast iron or copper bottomed the Government must have known that the T.U.C. Executive exercises no legal authority over its members and is not in a position to give such a guarantee. Nevertheless, I think it can be inferred from the proceedings of the fateful week to which I am referring that the trade union movement, in effect, regard the miners as constituting quite an exceptional case. It is on that basis, my Lords, that I put forward my proposal.
My suggestion is that under Section 2(1) of the Counter-Inflation Act 1973, an Order be made amending the Counter-Inflation (Prices and Pay Code (No. 2) Order 1973 in such a way as to make it possible for the Pay Board to approve for the coal mining industry, and only for that industry, an increase of the average pay bill by a certain percentage, which I will refer to as X, in addition to the maximum increase which can be granted under the main Order in its
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present form. Such an amending Order would be subject to Affirmative Resolution. It could not be made until after consultation with representatives of the consumers, persons experienced in the supply of goods or services, employers and employees; and, no doubt, the leaders of the C.B.I. and the T.U.C. and other persons, and also the Pay Board and the Price Commission. It sounds a rather formidable list, but I do not see why such consultation need take up more than a few days.
The magnitude of X might be negotiated between the Government, the T.U.C., the C.B.I., the N.U.M. and the National Coal Board. Once the Government accepted the principle of such an amendment to the Order it could be reasonably said that there was cash on the table, and this would constitute a perfectly good reason for the leaders of the National Union of Miners to enter into discussions. Alternatively, the Government might think it preferable, without consultation, to name a figure which they would be prepared to stick to. I do not feel competent to judge between these two alternatives. I have a figure in mind, my Lords, but I feel that it would be wiser not to mention it. I want to say that I believe the figure should concede for the miners rather less than they are claiming. In addition, after this procedure has been concluded there might, or might not, be a further increase in miners' pay as the outcome of the operations of the relativities machinery. I humbly, but very earnestly, commend my proposal to the immediate attention of Her Majesty's Government.
7.7 p.m.
LORD ROCHESTER: My Lords, I have little to say and I shall be brief. It is when our country is in danger that we most feel the need to draw together. I am sure it is the instinctive recognition of that need which has caused so many of your Lordships, first in the debate in this House on economic policy before Christmas, in the interval between then and now, and again in the debate to-day, to try to devise a common ground on which we could build together in seeking a solution to our present terrible problem. I continue to believe that the current dispute should be settled within the limits of the incomes policy approved by Parliament. This is not to deny the

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miners their due reward. It is because, in my view, at the present stage of our development—and I listened carefully to what was said by the noble Lord, Lord Robbins, who is a much greater economist than ever I shall be—that policy is all that stands between us and either uncontrolled inflation or deflation and intolerable unemployment.
If now the miners are given more money than is permitted under Stage 3, without at the same time ensuring that such an award is related in a rational way, and under a procedure which is applicable right across the board, to the pay of other powerful groups of workers, I fear that it will be seen as a surrender to industrial force and a defeat for Parliamentary authority. The correct conclusions will be drawn by the miners themselves when their next pay claim is submitted in a few months' time, and by other strong unions when opportunities arise.
Having said that, I nevertheless believe that a great responsibility rests now on the Government, on the C.B.I., on the T.U.C. in general and on the National Union of Mineworkers in particular, to see even now whether a strike may be averted and, de facto at least, an incomes policy preserved—for, as has been said, we all have to go on living together and sooner or later a settlement will have to be reached in this dispute. The question therefore which we should continue to ask ourselves right up to Saturday night (and, if necessary, afterwards) is not, "What are our differences?"—but, "How can we help each other and what is the common ground on which we can try to build together?" It is with that in mind that I should like to support the suggestion put forward by the noble Viscount, Lord Amory, and other speakers to-day, that the three Party leaders should meet together on an informal and privileged basis to share information which they may now be withholding from one another, and in this way to see whether even at this last hour some means can be found of reconciling the need of the miners to see more money on the table, as they put it, and the need of the community for an incomes policy to be preserved.
I should also like to support the suggestion made by my noble friend Lady
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Seear and taken up, again, by the noble Viscount, Lord Amory, that the Secretary of State, under paragraph 61 of the Pay Board's Relativities Report—which we must remember is concerned with the treatment of relativities within Stage 3; and it is those three words which I think need to be emphasised—should himself take action in selecting the miners' case as the first to be examined for special treatment. The Pay Board in their Report, understandably, say that it would be advantageous if the C.B.I. and the T.U.C. were associated with the selection process; but they also say that the Secretary of State should be free to select cases for consideration on the grounds of national interest. The body making the examination should presumably be the Pay Board, because it already exists, and, as the Report says, this would ensure consistency and coherence in the operation of the wages policy. I believe it should now be appointed by the Secretary of State as the examining authority and should then simply go ahead and examine the miners' case in depth and in public, as the Report itself recommends. This should be done with the greatest urgency, so that the Board may report its findings to the Secretary of State and the Secretary of State should then make his decision. The Pay Code could be amended and the Secretary of State should issue a specific directive providing for an increase beyond the pay limit.
All these measures are in conformity with the Report of the Pay Board. It is true that this would not immediately put more money on the table, but that could be soon done. All would be done within Stage 3, and account would be taken of the position of miners relative to other groups. Even if the miners go on strike this week-end, there is no reason why they should not give evidence to the examining body, particularly if that body took the form initially of a Royal Commission. If they refuse to do so, that would be disadvantageous, but no more. Evidence could still be given by the Coal Board, and other unions would have the incentive to give evidence on their own behalf if they felt that their interests might be adversely affected by the outcome of the examination of the miners' case. I hope, my Lords, that the Government will give consideration to this suggestion and that it may yet prove to be, in the words of the Book of

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Common Prayer, a way of finding "a happy issue out of all our afflictions".
7.16 p.m.
LORD BROWN: My Lords, I must apologise for absenting myself from the middle section of this debate, but I had a public engagement which I could not "duck out" of. I begin by declaring my position by making the statement that I believe the Prime Minister's refusal to the T.U.C. offer was the biggest political "clanger" of the century. I have listened on two occasions to Party spokesmen from the Liberal Benches saying, "We must support the law"—and then proceeding to appeal to the Government to change the law. I can see very little psychological difference between accepting the T.U.C. assurance and giving the miners an exception to Phase 3 as it stands, and, on the other hand, seeking to give the miners what would settle the issue by going into details to change the law. Psychologically, there is no difference between the two things at all. Both represent a loss of face for the Prime Minister which, in his maturity, he really ought to be able to face in the interests of the nation as a whole.
However, I should like to move on to longer-term issues. I believe that, unrealised by most of the people in this country, we are facing a constitutional crisis. Phase 3 can go on for some months more, followed by Phase 4; but this is a way of dealing with wage differentials which cannot endure for the rest of time. We are faced with the existence of power groups in society; and if we have power groups in society which have no constitutional means of making their power felt so as to achieve better conditions, or whatever it may be, then they will use disruption. This has been the lesson of history.
Let me go back into history for a moment. After the Napoleonic Wars, there were newly emerging power groups in society which were not represented in our legislature. The cities of Birmingham and Manchester, for example, had no representatives at all in the House of Commons. The Whigs at that time proposed reform, and it is one of the disgraces of this House that the Conservatives, led by the Duke of Wellington, held up that Reform Bill for two years. But eventually it was passed, to the distress of the Conservative Party, who believed
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they were handing over the British Empire to the grocers of England, or something of the kind. But the disruption and bloodshed which preceded that Act faded out; and if you look at the 19th century you will find it a story of English-I speak as a Scotsman—genius for arranging evolution as against revolution. It was a series of Reform Acts which extended the franchise of the emerging power groups in society—and indeed this has gone on into the present century, because women gained the vote by proving that they too could make infernal nuisances of themselves. Indeed, I believe that the Labour Government, when they gave the vote to 18-year-olds five years ago, were influenced, perhaps unconsciously, by a similar appreciation of the growing power of the teenager.
To-day, one cannot so easily enfranchise the existing power groups, the trade unions: there is no question of extending a vote to them. These are citizens in their occupational roles and we have no such thing as occupational constituencies in the formal sense. I believe it is absolutely essential that we should go in for constitutional change. I am not alone in this: no less a man than Winston Churchill, in his Romane lectures in the 1930s, proposed that there should be a third House of Parliament, a House of Industry. I did not agree, and I do not agree now, with the proposals, because they involve employers and trade union representatives who were to be appointed and not elected. Nevertheless, the germ was there and L. S. Amery was writing on the same theme in those days.
We seem to have forgotten the thoughts that were occurring then. I believe that we have to bring these power groups within the Constitution, because they will not just go away. They are there; and they are going to use disruptive power to get increases of wages when they feel like it. If we set the scene where this is to happen, the underlying determinant of behaviour in the employment zone of industry is that in every type of occupation in industry, however small or powerless, the imperative is for them to form a trade union, to become as powerful as possible and engage in the fight to preserve the standard of living of that particular occupation. That is what faces us in the future; and, incidentally, it

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faces every industrialised country. They will come to this malady very rapidly. We happen to be in an advanced stage of it.
So I propose a great social bargain. I propose that some Government—probably not the present one—should set out the terms of the bargain on their side. I will not go into details because they have already been discussed in society a great deal. It would involve a much fairer deal for the lower income groups of this country; it would involve a better deal for the pensioners, putting the land speculators and those who speculate in commodities in their place. It would involve putting individual people who exercise great economic power in their place. There is no place today in our society for people who can buy up twenty companies a year and close half of them down without thought for those whom they are displacing. It would involve taxation of inter vivos gifts to distribute wealth better. I am not going through the whole catalogue, but I believe that our society generally—I am not talking only about lower income groups; and this is especially true of the middle classes—is realising that unless we create a fairer society we are in for the gravest possible trouble in the future.
What is the other side of the bargain on the side of the T.U.C.? The T.U.C. should accept the establishment of an entirely new institution. I call it the National Council for the Regulation of Differential Wages. On it should sit representatives of every trade union in the country. Parliament each year should decide by what amount the national wage bill is to be increased—maybe it will be 5 per cent. or 6 per cent. A great political debate should take place at the time of the national Budget but it is the missing factor from every Chancellor's national Budget. He bases predictions on an assumption about the rate of rise of wages, but he does not disclose it. The 6 per cent., or whatever it might be, would be put at the disposal of the new National Council for the Regulation of Differential Wages.
I have been lecturing all over the country on this Council—I call it the N.C.R.D. They should be empowered to decide how much of that wage cake
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should go to the different employment groups in the country. And by "employment groups" I mean the Civil Service, the Health Service, the engineering industry, chemical industry, docks and railways, and so on. The N.C.R.D. should award differential percentages to those groups in the light of their intuitive assessment of what was a fair distribution, and they should do it by unanimous vote. If they could not agree in the one year allotted to them in which they had to agree this tortuous subject, wages should be frozen until they did agree. Their agreement should be a recommendation to Parliament which Parliament could either accept or reject. If Parliament accepted the recommendation, it would make it law. It would then become obligatory upon every employer to pay the given percentage to every one of his employees on top of their existing wages or salaries.
If people struck against these N.C.R.D. differential awards there would be sanctions. The sanctions would be deprivation of strike pay—it would be illegal for a trade union to pay strike pay or for an employer to pay income tax refunds or back pay until the employees had returned to work. These strikes would not be against the employer because the employer would be completely absent from the body that I am proposing. Employers have never had an insight into or interest in national differential pay.
LORD BESWICK: My Lords, I am very interested in and sympathetic to what my noble friend is saying; but could he answer a question which is put to me by miners? "All right, you say you are going to have sanctions against withdrawal of labour. But what are you going to do if the men simply refuse to work in that industry and move over to another?"
LORD BROWN: My Lords, I do not want to spend too long answering questions. If you create an institution which will put the whole question of differentials into the hands of a national body, and indicate clearly to the country the way in which a particular occupation can protect its place in the pecking order of differentials, then you change the psychological climate of industry. Maybe the miners would all go out on strike—I do not know. No great innovation is ever

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safe from the possibility that it will not work. But I think that this proposal will work and something like it will have to be done.
I should deal with the question of internal differentials within employment institutions by leaving an employer with the power to increase wages above the national awards to a section of his employees only so long as that increase was agreed by the other sections of his employees. Here I draw attention to a principle which is the theme of what I am saying. Differential wages are based on what the sociologists call field theory; if you alter one part of the field that alteration interacts over the rest of the field. This is so with differentials. If you increase the wages of one occupation or one department of a factory and that changes in degree all the others, you have set in motion a procedure whereby all the others will attempt to re-establish the status quo. Every industrial man and trade union man knows this. The Pay Board did not realise it, and that is why theirs was an extremely bad Report. It would be left to the employers and representatives of employees to change differentials within the firm above N.C.R.D. differential awards, so long as they could get agreement on the part of all that, relative to the rest, some sections of the employees were underpaid.
This is a brief account of something on which I could expand at much greater length, but I want to go back to the principles involved. In society you cannot have loose power groups that are not within the Constitution. If you do, they will disrupt the Constitution to make their presence felt. If you bring them within the Constitution something happens. It happened all through the nineteenth century. In contrast, if you look at what was happening in France, Italy and other European countries, you had revolution instead. We must face in the long term that a Constitutional change is necessary to-day. We can go "dickering" about with Phases 1, 2, 3 and 4; we can go "dickering" about with the improbable solutions which have been proposed by the Pay Board, where all you do is to elevate the bargain to a continuous argument between the C.B.I. and the T.U.C. at national level. But you will not solve it that way. You
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will only solve the problem of power groups by giving them Constitutional responsibility, and our eyes have to be turned towards changes of that sort.
7.30 p.m.
BARONESS GAITSKELL: My Lords, I think that my noble friend Lord Brown is a man to whom one should listen on the subject of industrial relations and particularly on the subject of differentials and relativities, because he is an expert on them. I wish I could understand everything he says, but even if I cannot I am always interested in what he says.
We have come to what looks like a point of no return in the negotiations between the Government and the miners. I personally long for a miracle solution, but without much hope, because at this late hour pride and prestige, two of the most dangerous attributes of government, have invaded the arguments, leaving very little room for sanity. I wish I were convinced that the Government were all along determined on a solution in the miners' case. I am afraid that I am not yet convinced. The danger signal appeared when I realised that the Prime Minister regarded his conflict with the miners as a crisis of authority. Of course, the Prime Minister thoroughout has claimed and proclaimed that the will to compromise and conciliate has always been there. I find little proof of this will, even though it is repeated by Ministers and in the media ad nauseam.
In his interview in the Daily Mirror the Prime Minister pointed to his forty hours of talks with the T.U.C. and the millers' leaders. It sounded to me, however, like forty hours of repetition of the words, "Phase 3". There seemed to me to be no hint of conciliation or compromise which emerged. Every suggestion, big or small, was brushed aside with one excuse or another; no opportunity was grasped by the Government. And the most serious missed opportunity was the rejection of the important, farseeing and constructive suggestion by the T.U.C. General Secretary, Mr. Len Murray, in seeking special treatment for the miners and saying that other unions would not press for special treatment for themselves. When the Government demanded a guarantee from the T.U.C., I knew that this was a transparent evasion of their good intentions to conciliate.

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The Government were even lukewarm and dilatory about their last-minute presentation of the Relativities Report, which offered a ray of hope—though it is a document for long-term study by men like the noble Lord, Lord Brown, and not tailored for an emergency operation. Personally, I cannot understand why the Government led the miners to the brink of a ballot. What did they expect from the result? Did they expect a low poll?
Then, some of the Government's propaganda has been very misleading. For instance, the so-called 16½ per cent. rise in wages offer to the miners has been repeated so often that, as with goods described in an advertisement, the public has bought the product. The 16½ per cent, is a complicated package, and in fact only about a quarter of the miners qualify for it; the rest get much less. Even last night on the radio, in "The World Tonight", Mr. Ezra, the Coal Board Chairman, was asked: "Is the strike really about money?" And another rather shocking question: "Why are the miners so bloody-minded?" I was disappointed that Mr. Ezra did not kick this ball back into the Government's court. He is usually very good when he speaks on radio. Whatever one may think about Phase 3, no one can honestly say that the miners are overpaid. As for the Communists in the N.U.M., are they not behaving like "hard-line" capitalists in a mixed economy, bargaining hard because their value to our economy has been pushed up by the oil embargo? What do we expect?
There is much talk to-day of an Election. But what will an Election solve for the Labour or the Conservative Party? If the Labour Party wins it will have the unenviable task of dealing with the greatest balance-of-payments deficit in the history of this country. If the Conservative Party wins it will have to deal with the most divided society of the century, with bitterness between the Government and the trade unions—bitterness which can only provoke the hostility of the whole trade union movement for years to come. These are desperate days we are passing through, and industrial disruption can only worsen inflation. There was one particular comment that my noble friend Lord George-Brown made, and it seemed to me that he put
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his finger right on the real point. He accused the Government of shutting down shop in industry.
It is very difficult to make sense out of the Government's stand against the miners since the miners introduced their overtime ban. When we consider the Government's collision course towards the catastrophe of a miners' strike, and the possibility of a General Strike, I am reminded of the mysterious behaviour of the lemmings, those small Scandinavian rodents, which, at intervals over the years, have marched in great numbers down the mountains to the plains, slowly and steadily, and always in the same direction, regardless of obstacles, down to the sea, committing voluntary suicide by perishing in the waves. This behaviour seems to me to bear a distinct resemblance to the course the Government have taken so far. But to be serious, my Lords, we should have liked to hear from the noble Lord, Lord Carrington, to-day where the Government are going to lead us if there is a strike. I hope and pray that there will not be a strike, and that the Government will not worry about losing face but will come forward with suggestions for a compromise.
7.37 p.m.
LORD O'HAGAN: My Lords, I, in common with the rest of your Lordships, always admire the sincerity and moderation of expression of the noble Baroness, Lady Gaitskell, but I shall not be tempted to follow her detailed arguments, mainly because I am incapable of doing so. I am rather surprised to find myself intervening in a debate on the industrial and economic situation. I do so for one reason and one reason alone, and hope that it will not seem impertinent to your Lordships.
I cannot possibly offer any constructive criticisms or put forward solutions as to how we should deal with the details of this situation, but I should like to offer your Lordships some deep worries about the effects of the industrial and economic situation on Parliamentary democracy in this country. I do so as someone who through experience in your Lordships' House has begun to appreciate that there is no real alternative, for the individual and for this country as a whole, to our present democratic system. I do so as one who, in my short time in your Lordships' House, has learned a great deal

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from what I have seen of the potential of this system, and I do so from the experience of seeing in the European Economic Community something which is profoundly undemocratic at the moment, which has the elements of democracy in it, but which will never work satisfactorily, I am convinced, until it becomes democratic. From going to the rest of the Continent, often two or three times a month, and seeing Members of other Parliaments and appreciating the differences between their systems of Parliamentary Government and ours, I make this small intervention tonight in a mood not of despair but of deep disquiet.
From the noble Lord, Lord Robbins, and other economists in your Lordships' House, we have heard of the kind of economic plight that this country was in before the miners' strike. I cannot add to their words but I feel that in this situation, now that the possibility of a miners' strike has come upon us, we should assess what effect this continuing economic crisis is having and could have on our democratic system.
I am sure the noble Earl, Lord Gowrie, will remember the words of Wordsworth written in 1802 on the extinction of the Venetian Republic. I am not saying that we as a country are about to become extinct, nor am I going to indulge regularly in reading poetry to your Lordships. It is something that I find an instructive habit when spending a long time on the Continent. This poem, written in 1802, describes the end of what had been a system of government, and of a country that had commanded considerable admiration:
"Once did She hold the gorgeous east in fee;
And was the safeguard of the west."
Then later on Venice is described as, "the eldest Child of Liberty" and finally,
"And what if she had seen those glories fade,
Those titles vanish, and that strength decay;
Yet shall some tribute of regret be paid
When her long life bath reached its final day:
Men are we, and must grieve when even the Shade
Of that which once was great is passed away."
I am not inviting your Lordships to join in a communal funeral oration for British Parliamentary democracy, but the tone of that poem is the tone of many inquiries that I have received from my
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colleagues on the Continent. The types of comment that I have to try to answer—this was something that the noble Lord, Lord George-Brown, said—are in the tone of condolences to a patient on his death bed. In the debate we are having to-day, we should examine exactly what further pressures we, as a country, are subjecting our democratic system to.
I am not going to deal with the question of Communists because I have neither the knowledge of what they are doing, nor the wit to suggest how they should be dealt with. I feel that this is a problem that is exaggerated, and one which should, perhaps, receive slightly less attention than it does. What I would ask your Lordships to do is to examine some of the emotional "gut" reactions that we have had, not only from the Government but from other informed commentators who, over the past months, have tried to indicate to the country the seriousness of our economic situation. The noble Lord, Lord Rothschild, reminded us that Queen Victoria was dead, and that we as a nation should not seek to play a role that is no longer in our grasp. One felt that strong-armed men might be about to descend on him at any minute. When the Governor of the Bank of England recently broke silence and gave us a factual account of the position of the economy so far as he saw it, some politicians criticised him as a traitor.
My Lords, nationalism is fine, but it must be kept under control. If we allow this moment of crisis to give rein to those who are going to beat outdated drums, and drum up all kinds of activistic feelings, then we will pass from one economic crisis into another. It is no use thinking that our economy is independent in this era of interdependent economies, when every worker and every manufacturer is more and more in the pocket of the other, and when the world of economy is becoming more and more interlinked. It is no use thinking of isolationistic solutions to economic problems, such as futile notions of negotiating withdrawal from the E.E.C. Equally, my Lords, it is no use saying that Parliament can play a great role in dealing with this situation if we are to shackle Parliament from re-equipping itself to deal with modern conditions, and if we are to go back to a

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vision of Parliament as it might have pleased Bagehot, but that hides away from the television viewer and makes Parliament more and more remote.
This may seem unconnected with the acute dilemma that the Government are now in. I do not want to pour acid into any wounds—the wounds are wide open enough—but as an interested but ignorant observer, I think it must surely be true that nobody can mine coal except miners. You cannot mine coal with bayonets. Even if Community solidarity were at its best, we could not ring up Mr. Brandt and say "Can we borrow some of your 25,000 Turkish miners from the Ruhr to come and mine our coal while we are having a little trouble with our own miners?". This is not the world we live in.
I should like to tie together some of the threads in this rather rambling contribution. I said that I spoke mainly from a concern for Parliamentary democracy. Maybe that is a strange thing for a young hereditary Peer to do—maybe it has something to do with heredity. All four of my great-grandfathers were Members of your Lordships' House, and all four were Members of another place before they came here. Whatever be the reason for my concern, I think that we must realise that the strains to which we are subjecting our democratic system are really getting to the pitch of being intolerable and that Parliament, and government in general, are criticised if not discredited. Yet all the solutions to our present troubles seem to have been conducted outside Westminster—sometimes almost without a bow to Westminster. That is why I, in common with so many others in your Lordships' House, have welcomed the spirit if not the letter, of the suggestion made by the noble Lord, Lord Diamond. I would respond to the invitation of the noble Lord, Lord Chalfont, that the C.B.I. might volunteer a contribution to the solution of this difficult problem. However, I hope that such a solution would be sanctioned by Parliament. I would hope that we would not use such an extraordinary solution without making sure that it was subject to Parliamentary approval and control; and by "control" I mean discussions in an all-Party forum.
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My Lords, many of your Lordships have more experience than I of elections and the consequences of elections. The noble Lord, Lord Coleraine, looked back to an early stage in his career when there had been a moment of division, of national disunity and crisis. I feel impotent in making positive suggestions as to how we should resolve this particular testing time. I feel that if we allow the "juggernaut process" that we now seem to be embarked on to continue at the destructive rate at which it seems to be proceeding, then we are beginning to put an end to the democratic process as we have known it here for a long time; not because of "Reds under the beds", not because of "Reds" on the television screen, but because the underlying consent of the people to the democratic system will surely be put under very great strain. We cannot continue our democratic process unless we have the consent of the people of this country that it should be continued.
My Lords, I am sure that my contribution will have added little to the particular outcome of this particular struggle, but I feel that at this moment of crisis we should not ignore the longer-term threats that we may be imposing upon our democratic system, because I believe we should always look upon this as one of the finest examples that Britain has had to offer. If I may quote from the Encyclopædia Britannica, describing Venice at the moment of its decay:
"Venetian life had crystallized into a system from which escape was not possible."
My Lords, escape is possible. There is great resiliance and toleration in the British people, and I am sure that the Leaders of all Parties could still tap that to make a way forward possible, even now.
7.51 p.m.
BARONESS BURTON OF COVENTRY: My Lords, I do not think that the noble Lord, Lord O'Hagan, need feel that his contribution was a little one to our debate today, and I, for one, am very glad to follow him in what he said about our Parliamentary democracy. It seems to me that we are coming towards the end now, except for the final speakers, of what has been an excellent debate, and I think the House can be

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very relieved that I intend to be brief. There is very little I wish to say, but I wanted to make one small contribution. It seemed to me over the last few weeks, and particularly the last few days, that really and truly most of us must have been in despair—the public, the N.U.M., the T.U.C., the C.B.I. and the Government It seems as though everyone has felt helpless in this slide towards disaster. For none of us here, I think—and this has been very evident today—is in any doubt that it is disaster that we face.
Those of us not privileged (if "privileged" be the right word) to attend discussions in "No. 10" between the conflicting parties can deal only with appearances, with what it looks like from the outside. Starting with the general public, quite honestly I do not think that they know where they stand. What do they see from the outside looking in? They see two contestants, two antagonists, entrenched in opposite corners. They see short-time working; they experience inflation, and they hear of ruination for industry. Concerning inflation, I do not believe that the general public has any conception of the type of inflation that will follow a breach of the system under which some 6 million workers have settled. I think I am right in saying that this 6 million includes every large group of workers except three: the three exceptions being the miners, the railwaymen and the engineers.
I believe the electorate (and I use the term advisedly at the present moment for all of us, though less for us in this House than in another place) varies from day to day as to whether the Government are firm or obstinate; as to whether the miners should settle now with a firm, definite and publicly stated money guarantee on a date to be agreed. In short, my Lords, I think that neither political Party can be sure of victory. Everyone wants a settlement, and very few, I hope, want a bitter General Election.
How does it look to the miners? They believe that they are underpaid, unappreciated and that if they do not take a stand now, and a firm stand, they will get only promises and no extra cash. They have had a ballot, unfairly worded and at a
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time when bitterness had increased sufficiently, which has given their executive a mandate of 81 per cent. for whatever action that executive shall consider necessary. Now, the Government: how does it look to them? Obviously, it is not for me to say what the Government see, but outsiders think that the Government feel that an offer has been made to the miners which is as much as can be offered at the moment; that Ministers Feel that they have stated publicly that the miners are a special and unique case, and that therefore more money must come their way; that they cannot go any further after that guarantee, and that if they do go further then the floodgates of inflation will open.
Of course, what we outsiders do not know is the detailed nature of any such guarantee, and whether the N.U.M. believe it to be worth so little that they have no option but to bring catastrophe on their own industry and the country. I hope that the N.U.M. realise that public opinion believes that miners are underpaid and is quite definite that this must be remedied. Disaster will not bring the miners more money than that good will from the public. A delay of their strike action for consideration could bring untold benefit to the miners as well as to the country.
My Lords, I started with the people and I want to end with the people. I think the public is coming to realise that if we have these continual confrontations we are going to bring ruin on the country. I believe that people have become cynical as to the efficacy of Parliament. They think it is a talking shop, and not a very good one at that. They are tired of abuse and obstinacy. I believe that the only way to victory in all this is by co-operation. In that way, by co-operation, the price that we pay can buy peace. Any other way will buy only time—time to the next confrontation. I have said before on more than one occasion, in November last and January last, that I think this co-operation has to start in Parliament. I just do not believe, if the will is there, that the Leaders of our Parties cannot find an acceptable solution. Equally, if discussions such as these were to take place, privately, with the T.U.C. and the C.B.I., I believe that an acceptable solution could be offered to the N.U.M.

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Utopia? Well, my Lords, it is Utopia or disaster. We have that choice. And although he is not here, I was very pleased to hear my noble friend Lord Shinwell say that he had said, I think in December, that he would favour any such coming together as this but that he thought it was now too late. I have never known my noble friend Lord Shinwell give up hope; and I would hope, if he were here now at this moment, that he might feel it was not too late. My Lords, it is not too late until midnight on Saturday in so far as this particular matter is concerned, and I believe that the public has a right to expect that the political Leaders shall co-operate on this issue. I think to do so would mean responsibility and not coalition. I am sure that it is only by the strengthening of Parliament that we shall really move forward; and this, I think, is what the noble Lord, Lord O'Hagan, really was getting at. I think that each one of us here to-day, wherever we may sit in this House, and whatever views we hold, must realise in our heart of hearts that government cannot be broken by industrial action, however justified one may feel the cause to be. Where would such action end? It would end in disaster and in the collapse of democratic government.
My Lords, I have been so cheered in this House to-day. I came feeling very despondent, as I am sure we all did, and I have been cheered by the number of people who, in varied words, have spoken of the possibility of co-operation between the parties. I could be wrong, but I have not known so many speak of this before in one debate and I feel that if only that message and that desire could go out from this House it might even reach another place. Let us in this House to-day ask our leaders to come to the rescue of the country. Nothing less will do.
8.1 p.m.
THE EARL OF LYTTON: My Lords, it it a great honour for me to follow the noble Baroness, Lady Burton of Coventry. She is one of a substantial group of brilliant Parliamentary women who day after day show how worthwhile were the sufferings of my suffragette aunt, Lady Constance Lytton. I would like further to record my humble enthusiam for what the noble Baroness, Lady Burton, has just been saying, and her substantial courage
868
in saying it. We are at war with inflation, an enemy whose sinister victories nobody has outlined more cogently than the noble Lord, Lord Robbins, from these Benches. I was sorry to-day that his speech was denounced as a Reith Lecture. There was an element of truth in it; but equally one could have denounced the speech of the noble Lord, Lord George-Brown, as "Hyde Park oratory". Yet there were very good bits in it—more than there were in" the curate's egg".
The points raised by the noble Lord, Lord Robbins, today, were of value to us all. If our domestic inflation surpasses the international rate, all that we stand for as a stable nation is at risk; and at this moment it is at grave risk. Moreover, as a great trading nation we are exposed more than any others to international inflation over which we have no control. Therefore it follows that an attempt to control inflation by attacking the incomes end is the one that seems the most probable, and at the prices end the most difficult and unlikely to succeed. And in this matter both Party Leaders in turn have pointed to the same cause of inflation as a major one: "One man's wage rise is another man's price rise "Mr. Wilson. "One man's pay rise is another man's redundancy "—Mr. Heath. This is the simple language of wage-push inflation and whether the economists believe it or not, whether politicians believe it or not, that is what the two Party Leaders in turn have said is one of the major troubles. One way to attack inflation is to control incomes, as the noble Lord, Lord Robbins, said. But there is another way—the way that he preferred. That is control by finance and the restriction of credit; and the noble Lord enlarged on the dangers that have been caused by the disregard of this method by the Government in power.
It seems to me that one can easily find an excuse for a failure after the failure has become clear, but all Governments have before them the nightmare which persisted under the Prime Ministership of Baldwin—and I was surpised and a little shocked to be asked by the noble Lord, Lord Beswick, to accept Baldwin as a model Prime Minister or Leader of the Conservative Party in any matter, for the tolerated mass unemployment as one of

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those things which are inevitable, however horrible.
Also, as I knew when, before the war, I was Secretary of Committees for Mobilisation, Air Defence and Defence of Ports abroad, he landed us in a brooding storm which was unmistakable, without sufficient arms to cope with it—I refer to Hitler's war. Therefore I do not like to be asked to follow in the footsteps of Baldwin.
I rather think that those who have spent money have tried to do it because restriction of credit in the past has produced this mass unemployment; and if they have failed it has been in the interest of keeping the working man at work, even if he did not get the maximum "jam to-day", I think that even this ingenious three-day week is a resourceful device which is better than the unpredicted cutting off all over the place that occurred previously. Its purpose is to keep men employed. There is nothing quite so horrible as mass eunemployment for years and years. We knew of men who grew to the age of 30 and who had never had a job. That is the nightmare the Government have been trying to avoid, and if they have failed there is something to be said for them, because it is a very difficult problem.
It seems to me that the trade union movement refused to accept a voluntary limit on wages. Mr. Wilson's Administration capitulated but, in the words used by Mrs. Castle, I do not reproach them; I do not think they could have avoided it. There are circumstances which I will not enlarge upon now.
Mr. Heath's Government, on the other hand, have determined to control it by means of legislation. That is an unpleasant thing for a Conservative Party to have to do—it is contrary to all their principles. But for myself I thought it was the proper thing to do; and they have very nearly succeeded. A large number of people have accepted a legal limit to their wage rises, and that gives rise to the extreme difficulty at the eleventh hour of giving way to people who put a pistol at your head and demand that their terms must be met when others have not used the pistol and have capitulated, have conceded the point for the time being.
In this connection, I enjoyed the reference made by the noble Lord, Lord Beswick, to my ancestor, Lord Byron, in
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his maiden speech. It was the only part of his speech in which he drew attention to the labourers in the fields—in other words—the people who produce food. Very few other Peers (the noble Lord, Lord George-Brown, was an exception) have referred to-day to the producers of food. I am a producer of food. What would your Lordships say if I came along with a pistol, and said: "Jam to-day, or you won't get food to-morrow."? One of these days we may be able to say that if we organise ourselves sufficiently. How great will be our power! I do not think that the workers on the land want that power, and they are at the bottom of the wage league. They produce what is more necessary three times a day than anything else. You can live a little time, for eight weeks wittout coal, but you have difficulty living for seven days without food.
Therefore, my Lords, I support the Government stand, but I have felt for a long time that the method of handling their affairs has been wanting. And my only real contribution to the solution of this problem is to say, first, that the Government must not give way. Secondly, they have been defeated, just as Mr. Wilson was defeated. They have resisted and come into a head-on collision. Mr. Wilson disappeared, but was none the less equally defeated. My suggestion follows that made by many another in this House to-day, ending, more eloquently than all the rest, with the noble Baroness, Lady Burton of Coventry—namely, that both sides should get together. As to Leaders, I give the illustration of commanders in the field: however good they are—Lord Wavell is an example—when defeated in battle they are replaced. With that, I think I have said enough.
8.11 p.m.
LORD DAVIES OF LEEK: My Lords, it is a pleasure to follow the noble Earl. His last phrase was rather enigmatic; I was not quite sure who he wanted to remove, but I am glad he told your Lordships that we were at war with inflation. Most of the speeches I have heard from the other side of the House have implied that we were at war with the miners, and it is about time we realised that the 64,000 dollar problem is inflation. I agree with the speech made by the noble Baroness. She always makes an eloquent

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and thoughtful speech, whether or not I agree with it. I agreed with her when she referred to some of the television personalities. The superciliousness and the dandy intellectualism of some of the raconteurs and, I would say, people who were illiterate so far as the mining areas are concerned, who have appeared on television, on all sides, in the main has been a disgrace to a country trying to understand in depth the problem confronting us. I have said before that Parliament has to watch the trivialisation of problems on television, which is a much greater danger than Reds under the bed" in Britain.
Let us get rid of that bunkum. Here are the details of the Communist Party's fights since 1918. I am not going to bore your Lordships with the figures, but you will see the utter rubbish that has been spoken; and the same people who ululate about the Communists in Britain are quite willing to go into the Common Market where they do not have "Reds in the bed" or under the bed in Cabinet chairs. In France and in Italy millions of votes are cast for the Communists. Have these people in Britain not travelled? Do they not know the politics of the Common Market?
Now let us see about little old Britain, with its own inimitable, difficult, democratic system. The first Communists stood for Parliament in 1922 and they got 33,600 votes out of a 3·6 million electorate. The last stood in 1970 and they got 37,970 votes representing 0·1 per cent. of the electorate of 29 million. Are people arguing that the Communist Party is stronger than the 37,000 people who voted Communist at the last Election? Of course there is silence in your Lordships' House, because that is the truth. Their influence in this country is as nothing compared with their influence in the Common Market, to which masses of the people want to fly.
As I have said before, I would assure the noble Earl, Lord Lytton, who has just spoken with such sincerity and common sense, that our going into the Common Market is partly responsible for the inflation we are now in. Last month we reduced the tariffs another 20 per cent.; prices are due to be increased on March 1, and the miners' wives have to meet this increase. I do not think there are
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twenty people in this Chamber who could tell me what a collier's wages are.
Now we come to the leadership of the miners and the Communist influence there. In Britain, we have 335 trade union leaders of all types of unions—that includes Britain's 12 largest unions—and among the entire leadership there are 41 Communists. Some of them have been very wise, particularly Arthur Horner in September, 1949 (I knew Arthur very well), when he wrote:
"As the oil supplying countries raise their living standards they will demand a higher price for their oil. Any Government would be advised to give priority to the only indigenous fuel we have got."
Lawrence Daly in 1970, before this trouble, spoke of the danger to the supplies of oil and of the Middle East probably cashing in on their monopoly. But what did we do? We closed the pits, one after the other. I used to subscribe to the Hobart Institute Economic Papers. They were loaded with intellectual dandyism and economics, urging that we should switch to oil as quickly as possible. We had local councils building council houses, refusing to put in coal-burning boilers for the central heating but even in mining areas insisting on putting in oil-burning boilers. How stupid can a nation become! They did that because they thought coal was finished. Even the bonanza of 1980, which is in the dim and distant future, when we get the oil from the North Sea, the Government are not sure how we shall stand with the Common Market about oil. Even so, we shall need all the coal that we can get.
What are the miners asking for? The National Union of Mineworkers are asking for £35 a week for a surface worker, £40 for an underground worker and £45 for a man at the coal face. Has any Member of your Lordships' House been right up to the coal face, stark naked, cutting coal? That is how many of them work. Or has any Member sunk a pit, like my brother, working up to his shoulders in water? I have seen this in my student days. We did not have grants when I was a student; we went to work side by side with uncles or somebody we knew, underground, to make money to keep us at our colleges and universities. And let the women who talk so much about this matter not forget that their own kith and kin in the last century worked down those pits and were treated like

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animals. We had to fight hard to get women and children out of these ghastly places. Anybody who says that we must be so adamant about Phase 3 that we cannot give a collier £36 a week and we cannot give a man on the surface £35 a week, or £40 for underground work and £45 for shovelling on to the conveyor at the coal face, when he is prepared to defend a wage of £2,000 for a girl who did six months at a commercial college, needs his head examined.
With regard to the farmers, I come from farmers and I know their value to society; and, God help us! if the farmers were to cut all the coal and the colliers were to dig all the ground we would freeze to death and starve to death. The farmers are a strong body. I knew their influence on the Cabinet; I knew their influence when I was a Minister in the Social Security Department, when we spoke about reducing school milk. They have a strong Lobby. The noble Lord, Lord Brown, had an interesting thesis, and he knows a lot about it, but we are moving too gradually, as he knows. Just after the war, Arthur Deakin and Ernie Bevin said that constitutionally more and more were the T.U.C. and the C.B.I. (as they now call it) part of the nation. The noble Lady's husband knew this as well when he was a leader of our Party. I have seen them come to No. 10 when the trade unionists and the C.B.I. have had discussions; and we are moving to that.
There may be quite a sound and constructive approach in the points the noble Lord was making, but, as is usual, in the old-fashioned British way we are working this policy out empirically. It is a pragmatic thing. It will come, and there is a place for it. This was the trouble. Some of us have spoken before about the impossibility of applying law when men think their wages are wrong. I give as an example par excellence Betteshangar Colliery during the war, when the nation was at war and the miners were treated unfairly. The miners were adamant about getting the right wages, and when they went to gaol the Government had to negotiate with the miners' leaders in gaol and get them out. From that day to this they have never been fined.
During World War I we had to bring back the colliers from the valleys of Scotland,
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Durham and Wales. They were leaving the pits because they were patriotic, and we had to say to them, "It is more important to get coal than to use you in the trenches", even though they were the finest sappers you could find. I can think of the feeling in Senghenydd where there is a memorial to the 416 men who died in the explosion on October 13. I lived on the farm at the top of the hill, 200 yards from the shaft. There is also a memorial to the men we had to call back, who were patriotic. Thus they lived. Now they are being called unpatriotic. When it comes to patriotism, after the last Tory candidate had fought me and lost the fight, he skivelled off to Malta so that he could not be taxed.
My Lords, what could be more authoritative than the Banker, produced by the dignity of the Financial Times? In the Banker there is an article on the great art of these patriots of overcoming tax. I will read something from the issue of the Banker of May, 1973:
"The Cayman Islands has reached the front rank of offshore tax havens. There are 95 active banks and trust companies … 5,000 companies have been established in the Islands and probably another 500 trusts."
The Banker concluded:
"The future of offshore financial centres looks very bright indeed."
Do not talk to me about patriotism! No wonder one of my local friends who has been a woollen manufacturer has said to me, "I can put money into my factory and only get about 5 per cent. or 8 per cent." Who was the Minister who sold 154 acres of land for £10 million? He would have to pay a lot of tax on that. That £10 million could have gone into our factories and industries. Or the land need not have been sold. Is not that speculation? The noble Lord who opened the debate to-day, speaking as the Minister for Energy, is a gentleman of culture, a gentleman who is able, quiet and sophisticated. But do not let him ever dare tell me about the miners not having thought for this country in their hearts. Let us get rid of this sophisticated, absolute insincerity.
My Lords, the basic thing we are fighting to-day is inflation. It is no good playing the game of the Cayman Islands, the Isle of Man, the Bahamas, Hong Kong, Panama, Liberia, New Hebrides,

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Nassau. Noble Lords who know the history of Nassau will know about the phosphate that comes from there. We shall have no trouble there. In 1973 the Daily Mail said that it is no good anybody earning less than £25,000 trying to find these tax havens. As the noble Lord said in opening the debate—and he is Chairman of the Conservative Party—we have struggled for growth. It was the apotheosis of growth at the expense of the quality of life, the materialistic approach completely. We encouraged investment; we encouraged productivity; we encouraged exports to contain inflation. But the Government do not understand what inflation is.
We ask the question: why has British investment lagged behind everyone else? What is inflation? At what point do price changes, which are always going on in a market economy, cease to be price changes and become inflationary? When do wage increases cease to be healthy improvements in people's living standards? Is the miners' increase a healthy increase in their standard of living, or is it inflationary? When does a piece of land sold for £10 million become a healthy economic action, and when does it become inflation? Inflation is a complex phenomenon. Its essence is a system of real activities to produce goods and services, and a stream of money claims. We have economic and monetary systems.
What does the Governor of the Bank of England say about that? When he was speaking at the Lord Mayor's dinner on October 18, 1973, he spoke in a steady, calm, constructive Bank of England Governor's way, but let us read between the lines. Said he at the end of his sumptuous feast and didactic speech:
"But despite all the doubts and uncertainties that abound, one has to make a judgment about the pace of monetary expansion, and looking at all the monetary statistics, and perhaps in particular at the pace and direction of the bank lending to the private sector, it appears to have been over-rapid."
There is the expansion of the M3 motorway which I asked questions about and the Minister, or some official or other, gave tinpot silly answers. That was an understatement, but the truth is there. There are men who know.
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The Governor of the Bank of England then said:
"The Government said that relations between industry and the City could be improved."
This is the point. The Government have put their money first on the City. The result is that investment at home has lagged, and despite the availability of finance and the money that was printed, the appetite of British capitalism for foreign investment became gargantuan. In March, 1973, the Bank of England bulletin gave remarkable figures that proved that in 1972 overseas investment was double that of 1971 and nearly as large as the total in England. At the same time, half of these funds were borrowed from foreigners. That is why I said in my supplementary question, after reading the Bank of England bulletin and the Digest of Statistics, that the tables contain the classic problems of the 1931 crisis, funds borrowed short, lending long; that was the core of the 1931 crisis.
So may I now say, before I sit down, why do we shut down industry and do nothing about the City? We are pushing the industrialist and the farmer on to the three-day and other weeks—yes; of course it affects the farmers in my own area—but the City can go on with its speculation, with its intellectual dandyism in leading articles in the financial papers about the markets and sending money overseas. When, therefore, we ask the people to be patriotic, why do the present Government not take some real powers in the crisis? When we are asked for an incomes policy, why is it that we have not a prices policy? Why is it that whatever mistakes were made, the British farmer had subsidies? In fact it was not he who had the subsidies but the public for whom he produced the food. Because they could not pay the prices there was the cushion for the mass of the ordinary people. Had there been some cushion on food prices, wage demands would not have been as they were.
This has not been a policy; it has been a ramshackle rag-bag of semi-economic policies, followed blindly by the gentleman who, when he got into power, said quite frankly:
"To govern is to serve. This Government will be at the service of all the people the

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whole of the time. Our purpose is not to divide but to unite, and where there are differences to bring reconciliation and to create one nation".
That is sad. That statement was made on the eve of the General Election of 1970. It was the appeal of the Prime Minister to vote, and the women of England rushed, thousands of them, to vote on that belief.
Now the Prime Minister has the opportunity this week to try not to divide. Many constructive ideas have been given, and I think the best from both sides of the House could be followed. I sincerely hope that this Government will try to get some answer, and some cash on the table for the miners, because it is not only the miners who have voted 90 per cent. That vote has nothing to do with Communism; it is the miners' wives who are finding difficulty in living on the money their men bring home, after stoppages and insurance. Always remember, my Lords, that 69,000 was roughly last year's figure of miners who had accidents which kept them out of work three days or more; and when they have those accidents their money drops. So never count just the blatant weekly pay of the miner; remember also the disease and the injury that he faces.
8.34 p.m.
THE EARL OF GOWRIE: My Lords, although I have stomach for the fight, and I am, of course, referring to nothing more sinister than the conventions of debate, I am a little short of voice to-day as a result of a cold and I must ask your Lordships' indulgence towards some rather cracked sounds which will be forthcoming from this Box, though of course I promise to try to see that the sentiments will be rather more firmly based. This is, at least, an added incentive for me to be brief, for the hour is late, and your Lordships will be anxious, having heard the crystally clear opening speech from these Benches of my noble friend the Secretary of State for Energy, to hear the response of the noble Lord the Leader of the Opposition.
But before I deal with as many as time allows of the points put to the Government in this debate, may I make a very brief point of my own. In our present crisis, in the days ahead, one thing seems to me to be certain. The voice and the claims and the determination of moderate
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men, men of reason and goodwill and courage, will more than ever be sought in the land, and I believe that we have heard this voice in this House this afternoon. May I give quickly just four examples of what I mean. The noble Lord, Lord George-Brown, said the Government's business is the nation's prosperity. The noble Baroness, Lady Burton of Coventry, said the general public has no conception of the kind of inflation which could follow a breach of a formula under which nearly 6 million people have settled. The noble Baroness, Lady Seear, said the rule of law and the control of inflation are even more important than the immediate crisis. And my noble friend Lord Amory said relativities and differentials are always at the crux of wage disputes. Those are the sort of instances I mean of moderation, determination, goodwill and courage, and I would say that in a debate where we can hear them we are not at the end of the road: we are simply making a beginning. The Government will study your Lordships' contributions with particular care, and this is not, in a crisis of these dimensions, by any manner of means a form of words.
To come now to the debate, the noble Lord, Lord Beswick, Who has been a consistent, very coherent and clear critic of the Government, asked me two specific questions. He seemed to be suggesting that under the Stage 3 settlement the miners would in fact be worse off. I would suggest to the noble Lord and to the House that his figures are based only on the 7 per cent. increase in basic rate. The offer to the miners is an average of 13 per cent., with an offer to conclude a productivity agreement worth a further 3½ per cent. It is, I think, misleading—and I cite the noble Lord, Lord Robbins in this context—to use figures selectively without taking into account all other components of the wage offer. It is in fact, as most noble Lords opposite would agree, the best offer made under Stage 3, and 6 million people have already accepted settlements under Stage 3.
LORD BESWICK: My Lords, if the noble Earl has finished with that point, will he now answer the question I put: namely, are they or are they not worse off if they accept the offer as applied to the coalface worker working during the

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day, the 7 per cent, increase within the offer?
THE EARL OF GOWRIE: No, my Lords, they are not worse off, because it would be impossible for the offer to the miners to be the best under Stage 3. The logical conclusion of the noble Lord's statement is that all other workers have settled for a negative offer. I simply cannot accept that.
LORD BESWICK: My Lords, the noble Earl really must look again at what I said. Those men who work on the day shift and get only the 7 per cent., and not the 6 per cent. anti-social hours, will in fact at the end of the week be worse off if they accept the offer, with the 10 per cent. increase in the cost of living which has taken place since the last pay settlement.
THE EARL OF GOWRIE: My Lords, I am sorry, but, as I have said, I do not accept that; and I also fear that the noble Lord is leaving out many other aspects of the offer, the benefits and so forth which have been made on the social side and which also must be quantified in this respect. I acknowledge disagreement between us here.
I come now to the next specified question that the noble Lord put to me, the question of Civil Service pay. The Pay Code accepts that the miners are a special case, and the offer to the miners is greater than that available to other groups. But it was, I think, always accepted that the standstill of Stage 1 and the Stage 2 pay limit would cause anomalies which would have to be rectified, and the rectification of anomalies was in fact a precondition of the statutory policy. The important point about the incomes paid to civil servants is that, like the offer to the miners, it is within Stage 3, and Stage 3 was specifically designed to correct anomalies. Some civil servants indeed who, but for the counter-inflation policy, would have received increases on January 1 last year, will in fact have to wait for their full increase until November of the present year.
But whether or not we have arguments about the details of these figures—and I respect the noble Lord's motives—I am not going to stand at this box and say that I think that the miners are presently
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working for sufficient wages. They are not, and that is why it is, as my noble friend Lord Carrington said, an open secret that Stage 3 was drawn up with the miners, and their conditions of work, very much in mind. Nor am I going to stand here at this Box and say that Stage 3 is simply the end of the story, the end of the road so far as the miners are concerned. It is not, and it never has been. Stage 3 is time-bound; it is the product of certain circumstances, of things that have happened in this country and in the world.
A Stage 3 settlement is about basic wage rates, about the possibility of a productivity deal, about substantial side benefits—which I do not think have been made very much of by noble Lords opposite this evening. I emphasise that on top of a Stage 3 settlement there has been the offer of getting a cash-assessing relativities board under way at once, or the immediate launching of talks about the future needs of the industry and its revised position as a result of what has happened over oil, or both. In fact all these are concerned with cash. All the Government are asking, all that we are working for so hard, is that the miners will settle now for a generous offer—an offer relatively generous, as many noble Lords have said, compared with offers accepted, or about to be accepted, by nigh on 6 million of their fellow workers. Their fellow workers are also of course their fellow sufferers from inflation.
The miners' circumstances are special. The miners' position has changed. This has been acknowledged in cash terms, and in my judgment it will have to continue to be acknowledged in cash terms. But the circumstances of a Governmental, Parliamentary and a national war, not against the miners but against inflation, also has to be taken into account. These circumstances have not changed. We are asking the miners to hold the line against this enemy. We acknowledge that their place in the line is a crucial one, and we have backed this acknowledgement by seeing that it is possible for the miners to be specially treated. We are anxious to break out of the circle, and to this end we ask the miners and the nation to help.
I come now to the formidable analysis made, as we would expect of him, by the noble Lord, Lord Robbins. As is

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perhaps proper for an eminent Cross-Bencher, he gave both sides of your Lord-ships' House something of a wigging. Under my estimate the Government got gamma mark plus, but the Opposition gamma minus. They might decide that the figures were reversed. The noble Lord said that we had inherited £1,000 million surplus on the balance of payments, but I would also say to him that we inherited rising unemployment, a press of wage claims, and a 1½ per cent. growth rate—the same rate which had put paid to so many of the admirable social hopes of the last Government. That is the sort of situation we also had to try to change. He acknowledged on our side that the current offer was not, by current standards, ungenerous. He made the point that one could argue indefinitely about details, but it would be better to get on with the job and to settle.
We heard a formidable speech from the noble Lord, Lord George-Brown, who told me that he would have to be absent from the House in order to visit someone in hospital, but would try to get back. Therefore I shall do my best to answer some of his points. He started with a fairly startling statement. He said that the Government destroyed the name and the national image of Rolls-Royce. I was nothing to do with the Government at the time, but it seemed to me from a humble onlooking position that the Government were trying to rescue and restore the national image of Rolls-Royce, and that they did so very effectively under the aegis of my noble friend. Although it might be said that the noble Lord made many telling points against the Government, I think that he was very unfair in his criticism of the Government in the social field. Perhaps it is the Government's own fault for not blowing their own trumpet clearly enough here. I just point on a quick à la carte basis to the annual uprating of pensions; the attendance allowance for the disabled; invalidity allowances for the handicapped; family incomes supplement; increased resources for the National Health Service, and the services with which, until recently, my noble friend Lord Aberdare was connected; getting the tax credit system (so dear to the heart of the noble Baroness, Lady Seear), under way; greatly increased resources for local authority health and social services, housing improvement policies, nursery schools, new pensions
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schemes for 1975, and the like. I do not think that this is a tariff to be ashamed of. This is not the kind of legislation that comes out of a Government bent on confrontation.
The "still small voice", as he described it (but we know that that still small voice has an excellent precedent), came after the noble Lord, Lord George-Brown, from my noble friend Lord Amory. He said uncompromisingly, however modestly he decided to phrase his speech, that if Stage 3 collapsed now no incomes policy could be brought easily into existence, and the alternative would be massive deflation. I think that that point too must be made to my noble friend Lord Coleraine.
The noble Lord, Lord Rhodes, remarked that cynicism prevailed. Certainly I agree with him that public cynicism is a consequence of inflation, and we have heard some of the justifiable cynicism about inflationary property values, or whatever. Nevertheless, I would say to the noble Lord, and I hope that he reads this, that the defeat of the democratic process by industrial power would surely generate a far greater dose of cynicism than anything we have had to encounter so far.
My noble friend Lord Balfour of Inchrye pointed out that he was effectively making a maiden speech so far as the economy was concerned. Therefore I should like to use this opportunity to congratulate him. He said, rather gloomily, that the speech might be his last. I am sure that that is not true, and I certainly hope that my noble friend will make many other contributions. He too pointed out that nearly 6 million people had settled under Stage 3, and I would echo him and say that these people see that inflation does not affect simply the Government; it is not simply about the Government. As the noble Lord, Lord George-Brown, said, Governments come and go, but inflation affects the people themselves.
My noble friend raised the point that in view of rising costs of food and world commodity prices, and the like, we should be extra attentive to the problems and needs of the lower paid. My à la carte on the social front may go some way to reassure him, but I should like briefly to go a little further. Stage 3 allows larger relative pay increases to the lower

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paid by allowing distribution of an increase to the lower paid of £2·25 where this is more advantageous than 7 per cent.; by allowing the gap between men's and women's rates of pay to be closed by up to one-half; by allowing the reduction in working hours to 40, and an increase in annual holidays up to three weeks, as well as seven public holidays; and by allowing threshold agreements, which would allow an increase of 40p per week for any 1 per cent. by which the cost of living index rises above 7 per cent. That provision is very relevant to the miners.
I come now to a swingeing speech—I think that is the word—by the noble Lord. Lord Shinwell. He asked a direct question, though I thought it was a rhetorical one, which he wanted me to answer specifically, and I shall try so to do. He asked what do the Government suggest as an alternative? It is in no sense my business, or I think the business of the House, to talk about political options; but I would say, echoing my noble friend Lord Carrington's remarks in his opening speech, that the Relativities Report can still, at this late stage, provide us with a solution.
We had another notable speech from the noble Lord, Lord Chalfont. He told me that he could not be here at this stage, but I should like to deal with a couple of points he made. I think that his error was in mistaking the amount of money due to the miners (which I agree, in relative terms, is not very considerable), for the unleashing of the floodgates of inflation through other wage claims in the future. Even though the noble Lord, Lord Chalfont, has not been able to stay for my remarks, I hope he will read the report of the remarks of his noble friend Lady Burton of Coventry in this context. He quoted George Orwell and I, too, have read with great admiration The Road to Wigan Pier. I know perfectly well that, at the relative comfort of this Dispatch Box, I am kept comfortable by the work of miners, but I think my noble friend Lord Coleraine answered the point by saying that I am kept comfortable by the work of other groups in the community as well.
The noble Lord, Lord Kahn, made an interesting suggestion and cited the
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Counter-Inflation Act provisions, particularly the passage which states:
"The Treasury shall from time to time make such changes in the code as appear to them to be required."
I totally agree with the noble Lord. The means to make an immediate concession are not lacking; but those who advocate the use of this provision, those who advocate immediate concessions to the threat of the use of industrial power, must ask themselves where this process will stop. I do not say that they need reject such a provision, but they must ask themselves where this process will stop. A solution must surely be found by a process of reason and conciliation. This the Government have repeatedly tried to do, and will continue to do.
The noble Lord, Lord Brown, talked of the importance of changing the psychological climate of industry, and I do not think any of us would quarrel with him on that. I particularly agreed with one of his remarks. He put his finger on the fact that this is not simply a problem of a conflict between Government and organised labour. The differentials and relativities between one occupation and another are, as my noble friend Lord Amory said, really at the heart of the matter. The noble Lord made a proposal for a national council for the regulation of differential wages. Far be it from me to suggest that the noble Lord's proposals do not represent an imaginative approach to the relativities problem, but I do not think—and I do not think he thinks—that they would provide an immediate solution.
I come at something of a gallop to the speech of the noble Baroness, Lady Gaitskell. She talked about how bitterly divided society is. I must ask her how our society is so bitterly divided when nearly 6 million workers have accepted settlements, or are due to accept settlements, under Stage 3? She said that the Government are lemmings. I can see no resemblance between my right honourable and honourable friends and those furry rodents. I assure her that we will do everything in our power to prevent a strike, but if there is a strike we will do everything in our power to settle so long as we can contain the fight not against the miners, but against inflation.
I come to the speech of the noble Lord, Lord O'Hagan, who quoted

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Wordsworth against me—rather unfairly, I thought, because I did not have time to get to the Library in order to quote Wordsworth back at him. I do not want to be too "bullish" at this point, but I agree with my noble friend Lord Balfour of Inchrye that we will recover in this country if we have the will. I would say to the noble Lord, Lord O'Hagan, that in energy terms this country is in an admirable position to recover from what are, in part—and I stress "in part"—self-inflicted wounds. Finally, I would say to him that no one is suggesting that coal could be mined by anyone other than miners, who are of course very important persons and are, and will be, treated accordingly.
I have already mentioned the noble Baroness, Lady Burton. I thought her speech an admirable enunciation of the practical politics of hope. My noble friend Lord Lytton pointed to the demands which agricultural workers, also, could reasonably throw at us at this time. I would just say to the noble Lord, Lord Davies of Leek, who took up the "Reds under the bed" theme, that very wise words were said in this context by my noble and learned friend the Lord Chancellor, wearing his Mr. Quintin Hogg hat in another place on another occasion. He said, when the right honourable gentleman the present Leader of the Opposition named the Communists during the seamen's strike:
"In every muddy pool of industrial dispute to-day, the Communists and Trotskyists will be sitting on the bank with their rod and line fishing in the dirty water. But that does not mean that they have created the pool or put the fish in it or that there are no other fishermen."
I do not think the Communist theme could be better dealt with than by those words.
I must now make an end. All of your Lordships are, I believe, agreed that the events which brought our debate about have the makings of a tragedy. The events are well-known and they have been very clearly outlined by my noble friend so are the personalities involved. The Coal Board, the Government, the T.U.C., Members of Her Majesty's Opposition, many public figures, many of your Lordships wherever you sit in this House, the information media, ordinary men and women, through the lines of communication open to them, have made
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repeated, and determined and ingenious attempts to find a way out of this dispute, but a way out which does not destroy the counter-inflation policy approved by this Parliament as necessary both to the survival and to the development of our national life.
There has been no lack of sympathy on all sides for the miners, for their special position and for their special claims. Equally, there has been no lack of awareness on all sides of the need to maintain the framework of incomes and prices restraint in the interests of fighting our old and common enemy—inflation. Here, indeed, lies the dilemma which the Government and the nation must solve. It is the classic democratic dilemma; how to find a way to reconcile our legitimate interests with the defence of the interests of the community in general. We have reached a stage in history when this problem has donned economic robes: how to reconcile our individual, or individual group, aspirations to a higher standard of life with the whole community's interest in high rates of employment, controlled inflation and economic growth.
As a Government, we have laboured long and hard to establish the means for achieving this reconciliation. Many people, inside and outside your Lordships' House and another place, have laboured with us in the task. No one can pretend that a means lies ready to hand. No one can pretend that the way forward is not difficult and dark. But, equally, we on this side of the House are convinced that we are on the only viable road with our present counter-inflation policy, that we are on the right lines in seeking to build a basis for voluntary agreement on the statutory restraint of inflationary price and wage increases. I said that we have the makings of a tragedy. With the help of everyone we will do everything in our power to see that there may also be a reconciliation scene.
LORD BALFOUR OF INCHRYE: My Lords, before my noble friend sits down, may I, through the courtesy of the noble Lord, Lord Shackleton, put the Record straight about something which my noble friend said? I did not want to interfere with his flow, but he said that it was my maiden speech on economics. I said

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that I have kept my trap shut since July last; but it is not my first speech in 30 years in this House. Secondly, I did not say that it was my last speech: I said that at my advanced age one never knows when one's last speech will come. I hope that it was not my last speech, but if it was I wish to finish on a note of complete belief in the future of this country.
8.58 p.m.
LORD SHACKLETON: My Lords, in the light of the vigour of the intervention which we have just heard, may I say that I think the noble Lord, Lord Balfour of Inchrye, will go on correcting the Government for many years to come. I have never heard so many quick corrections delivered by a noble Lord. I can only say that it is characteristic that he should have said what he did, in view of the many other errors that have been committed by the Government.
I am bound to say, first of all, that in this case the "ranks of Tuscany" cannot refrain from cheering the noble Earl's speech. I know that that is not a direct quotation, but it was a most able speech, and moderately delivered. The fact that I shall have occasion to disagree both with him and with his noble friend Lord Carrington does not diminish my admiration of his skill. I have always said that the noble Earl is a strength of the Opposition Front Bench—
SEVERAL NOBLE LORDS: Government Front Bench.
LORD SHACKLETON: I should have said, "Government Front Bench". But he will be a strength of the Opposition Front Bench. I can foresee the noble Earl usefully replacing some members of the present Cabinet.
We have not chosen to divide the House on this Motion. I am quite sure that your Lordships produce a debate of reason, in accordance with our Writ of Summons, on the principle that we are called upon to give our counsel. I think that this has been done to-day, with a great deal of ability, by a number of noble Lords. In view of the late hour, I shall certainly not go over all the ground again, nor recapitulate the extraordinary series of blunders perpetrated by
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the present Government. However, I must refer to some of the remarks which have been made by Members of the Government Front Bench. The noble Earl who has just spoken referred to certain speeches made by noble Lords which he thought were typical of the moderation, determination and good courage that they and the Government have shown. It is notable that the test of moderation, determination and good courage is that one should agree with the Government. I am bound to say to the noble Earl that his simple astonishment with regard to Rolls-Royce took away the breath of all of us. It was, as my noble friend made clear, part of that unfortunate "lame duck" episode. The noble Lord, Lord Carrington, had to rush in and nationalise Rolls-Royce on the spot, without compensation to shareholders. Just think what would have happened if a Labour Government had done that! It really was one of the most unfortunate stages of the early phase of this Government.
But, my Lords, there were other things that worried me in the remarks of noble Lords—and I want to get back to the central point. The noble Lord, Lord Carrington, we all acknowledge, is at the moment carrying a very heavy strain, and we know that he feels his responsibilities very strongly and very seriously; but I am bound to say that I think it really was disingenuous of him, in the face of the remarks of my noble friend Lord Beswick, first of all to call for moderation, my noble friend Lord Beswick having made a brilliant and notably moderate speech which, I may say, the noble Lord, Lord Carrington, entirely ignored. The noble Lord no doubt wished to be very careful not to say anything that his officials or the Conservative Central Office had not approved. But when he talked in terms of the effect of the enormous increase in oil prices which is threatening not only us but the whole world—and the real tragedy of the increase in oil prices will be in the undeveloped world—and used that as an explanation of the really desperate balance of payments situation, not to refer to the other factors (and the noble Lord, Lord Robbins, set the record very straight) was, I can only say, disingenuous; and when my noble friend Lord Beswick sought to correct him I think the noble Lord, Lord Carrington, might

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have acknowledged that there is justice in giving a fair representation of the situation.
If I may say so to the noble Lord, Lord Robbins, I am always fascinated by his speeches. I think, as my noble friend Lord George-Brown indicated, that his admirable and clear lecture, which so impressed the noble Lord, Lord Coleraine, was in fact aimed at the sixth form. There are some noble Lords who do understand some economics. We shall read his speech with interest. I suggest that he has it reprinted and offered to the Open University for those students who have not yet been selected to make the grade. The noble Lord always contributes distinction to our debate, but I must say that the position of the terms of trade and the effect on inflation in this country is something that we have reiterated. In the last debate I myself drew attention, as my noble friend Lord Beswick has on a number of occasions, simply to the effect of the change in parities on metal prices, which was quite staggering, which meant that some countries in Europe are paying less for their imports than they were a couple of years ago, whereas we are paying anything up to 50 per cent. more. I will not go through the whole range, but if the noble Lord. Lord Carrington, wishes to look at those figures—no doubt he is being instructed by his noble friend Lord Windlesham about this—he can always consult my speech on the last occasion. I doubt whether he will do so, but I then made the point that my noble friend Lord Beswick made to-day.
My Lords, I think this is about the fourth debate on this subject that we have had in a month, and on each occasion the prospects have got worse and the future more bleak. After the first shock of the introduction of the three-day week, the country settled down to live, and indeed to make the most of it. But when the noble Earl, Lord Lytton, praises the three-day week, I can only say that, whatever may be happening on the farm to which he referred, to much of industry it is a disaster. Even now a number of small businesses are in dead trouble. Incidentally, representations have been made to the Government asking them, where the Government owe money to small businesses, to pay their bills more quickly. No reply has been given, which suggests to me that the Government are
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out of touch with the situation as it affects so much of industry.
My Lords, mysteriously the fuel situation and the coal situation proved to be much better than the Government had anticipated. On the last two occasions we debated this subject it had become pretty questionable whether a three-day week was necessary at all. It would appear that the only justification for the foresight which the Government claimed to be exercising was their anticipation that they were not going to agree to a settlement, that they would confront the miners in a national strike and that they were in fact playing for time. Now, I have not got to believe that the Governments are always as Machiavellian as they are accused of being: I happen to think that in this area the present Government are singularly incompetent. But this seems to me the only explanation, unless they were in fact anticipating a strike.
My Lords, once again we are back—I must say that I find the Members of the Government Front Bench frightfully noisy to-night. They may not wish to listen to me, and I must apologise, also, that we on the Opposition Front Bench sometimes talk; but it is distracting. My Lords, once again we have had to discuss the real meaning of the miners' pay claim. As a leading industrialist—not a supporter of my Party—said to me to-day (I hesitate to use those words): "They have been dishonest in their presentation of the effects of the miners' pay claim". My Lords, the Government keep on talking about 16½ per cent. They know that 3½ per cent. of that relates to a productivity deal threatened or proposed at the time of Wilberforce, of which there is not a sign; and we know that the majority of miners, or at least a large number of them, are going to get only 6 per cent. or 7 per cent. There are a number of workers who have got a great deal more than this under Stage 3. I have to administer Stage 3 in industry, and in fact there are all sorts of provisions which enable one to pay more. This applies particularly in the staff field, if, for instance, annual increments are provided. This is the position in the Civil Service. I happen to think that it was right to pay the civil servants a particular figure, but in fact there is a wide degree of injustice; or, at any rate, inevitably the justice is so rough

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that certain people are suffering a disadvantage.
The Government have argued—I do not know whether we shall ever settle this point—that their offer would restore the miners to the post-Wilberforce position; whereas in fact in April, 1972 (these figures are from the Government's own new earnings survey), mineworkers paid hourly (we can all pick our different examples, but the hourly pay rate is the key to all the other pay rates) were eighth in the table, and by 1973 they had dropped to sixteenth. They were worse off than before the 1972 settlement. In order to restore their position they would need to have almost the whole of their full pay claim. But the miners have made clear that all they want to do is to negotiate on this. They are not demanding the full amount; they are willing to negotiate. If the strike starts, I do not know on what basis a settlement—
LORD ROBBINS: My Lords, I am sorry to interrupt the noble Lord, but do I understand him correctly? Is he arguing that a higher offer could be made to the miners under Stage 3?
LORD SHACKLETON: My Lords, if, like the noble Lord, Lord Carrington, I may be allowed to develop my remarks, I will deal with that very point. What I am dealing with at the moment is the simple proposition that comes time and again from the Government: that what is proposed is more generous than has been given to other workers—which is not true in certain respects—and that it is adequate to restore the position of the miners. We could argue for a long time about this, but I have gone into these figures very carefully and I assure noble Lords opposite that this is a view taken by many people who are not necessarily supporters of the Government or the Opposition—people who are independent. Somehow there is an impression that the miners have been offered some quite outstanding sum which, in their selfishness or greed, or at the behest of extremists, they are turning down. I am grateful to the noble Earl, Lord Gowrie for keeping off the "Reds under the bed" argument—he is too intelligent to go far on that.
My Lords, we have constantly emphasised—indeed, it has been the recurring theme in debates that we have
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initiated from this side of the House—that there is not that basic national sense of unity which could be achieved only in a society which sought more firmly for social justice for all its citizens, and which dealt with some of the disgusting extremes of self-interest practised in our community. I do not think that many noble Lords will disagree about this. It is against this background that the remarks of the noble Lord, Lord Coleraine, were interesting. We realise that he chose his words with moderation when he said—and he stood up and said it bravely—that it was difficult to achieve national unity under the present Prime Minister, though the noble Lord properly paid tribute to his great qualities.
We are continually being told about the need for national unity. We are continually confronted by this simpliste argument about who governs the country. My noble friend Lord George-Brown dealt with this very effectively in a remarkable speech. None of us wishes—and I am sure all my noble friends will agree with me in saying this—to see a British Government humiliated. It is not good for our democracy. But the present Government have followed the path of confrontation with certain sections of the community—although we see signs of repentance now and again—for too long. They have created weapons, they have fabricated weapons, like the Industrial Relations Act, only to find that they have broken in their hands and have had to be discarded.
I cannot claim, as can my noble friends Lord Beswick, Lord Davies of Leek and Lord Chalfont, and others, to speak with first-hand knowledge of the characteristics and psychology of the miners. But I think we should all recognise—and I hope that noble Lords on the other side will accept this, because we have had some very eloquent and sincere expressions of opinion during our debate about it—that in a hard world the strength of purpose of the miners, their mutual loyalty and unity as a community, have upheld them under great hardships for many generations. We should not dismiss this pride and loyalty, as there is sometimes a tendency to do in some quarters, when there are still deep divisions in our society. It

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should not be treated as of no account in comparison to appeals to national unity when that underlying unity is not present. It has not been said tonight but it has been said in the past. One can cite certain offensive leaders in newspapers—the Daily Telegraph has been referred to, for example—and one can see what an offence this is if we are to achieve national unity.
LORD COLERAINE: My Lords, I am grateful to the noble Lord, Lord Shackleton, for giving way. I expressed doubts, as he said, about the possibility of achieving national unity under the Prime Minister's leadership; but let me assure him that this was not on the grounds of social injustice. In fact I think one of the criticisms that might be made of Her Majesty's Government is that they have leaned over backwards in many respects to achieve social justice. My noble friend, in winding up for the Government, cited a long list of advances in welfare services, and so on. I myself feel that those advances in welfare services are not altogether compatible with the counter-inflation policy. I was not suggesting that the Prime Minister was unmindful of social justice, because I believe he is. The doubts in my mind occur because of his U-turns—his firmness and then his retreats, with Wilberforce 1 and Wilberforce 2 and so on—but that has nothing whatever to do with social injustice.
LORD SHACKLETON: My Lords. I naturally accept this further interesting explanation, which seems to me to be equally damaging to the Prime Minister. I do not wish to start discussing that hastily compiled list of credits produced by the noble Earl, Lord Gowrie. Nor do I propose to waste much time pointing out the Government's appalling blunders, such as housing finance, and so on—and incidentally, the noble Earl ought to be careful of talking about the tax credits scheme, because we do not yet know how that will be financed.
I should now like to come back to the application of a counter-inflation policy. The Government are standing firm on a simple proposition. I must say that I find the position of the Liberals in this matter rather equivocal: they want Stage 3, but apparently they also want the
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Government to give in. I really do not know what they want—
BARONESS SEEAR: My Lords, if I may intervene for a moment, I thought that we had made our position abundantly clear.
LORD SHACKLETON: My Lords, if the Conservatives think that the Liberals have made themselves clear, then all I can say is that their respect for the Liberals has increased beyond what it has customarily been in the past. I am sorry: I do not wish to be offensive to those who sit on those Benches.
It must be emphasised that it is wholly within the power of the Government to settle outside Stage 3. I believe the noble Earl referred to "Treasury powers". As I understand the powers, they are contained in Section 8 of the Counter-Inflation Act, to the effect that the Minister may by order direct changes to be made in the pay arrangements. They have kept this power and this initiative; and it is wholly misleading in this respect to say that the demands that are being pressed are somehow an attempt to override Parliament; in fact it is an attempt to persuade the Government to use the powers that they have taken in the Act of Parliament. We are almost in a kind of medieval argument about this: we are arguing about procedures. We know that the Government are dangling things for the future. They say, "If we get together on the relativities, we shall be able to do something for them"—the miners. They have even hinted that they can back-date it to March 1. The future of this country is hanging on a dispute over procedures, and this is causing great anxiety, not just to the trade unions and working classes of this country but also to industrialists. I see leading industrialists every day, and the language they use about the Government is much stronger than anything I would use in your Lordships' House.
The Government have been given a lifeline through the initiative of the T.U.C. As other noble Lords have done, I should like to pay tribute to Mr. Len Murray, who is potentially a very great General Secretary, on the model of Citrine. As my noble friend Lord Brown said, the Government's rejection of the T.U.C. offer, and the decision not to use the opportunity granted to them by the

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trade unions' promise not to use the miners' settlement as an argument, was, as I think he called it, the political "clanger" of the century. I am astonished at the lack of political skill that one finds in a Government to deal with situations of this kind.
It has been obvious—and my noble friend Lord Brown made this very clear—that the fundamental problem in relation to incomes and wages was that of relativities. We now have a Paper on relativities which took six months to produce. I would go so far as to say that a Select Committee of your Lordships' House could have produced this in a week. The Paper is long and rather argumentative. I took exception to what the noble Lord, Lord Carrington, said (unfortunately I cannot recollect his exact words) when talking about this. I think he said something about a sense of shame in regard to the Leader of the Opposition's attitude. It is a fact—and again I accuse the Government of being disingenuous—that they have tried to get the Opposition hooked on this. Mr. Heath wrote to Mr. Wilson to ask him, in effect, to commit himself to the principles of this. This is not right; the Government carry the responsibility. But we suggested that there was a way out. I suggest that here is another temporary bridge that could be used.
At this late hour, I would only say that, like other noble Lords, I am filled with a greater sense of despair than I have felt for many years about the future of this country. As noble Lords have pointed out, the prospects for this country are very good—indeed, sterling could get stronger. The views in the Continent of Europe are still that this is a stable country; and let us not think that other European countries are all that stable. They are astounded that a responsible Government could have got themselves into the present position. It may well be that it may bring good; it may force us, as my noble friend Lord Brown said, to look at our institutions. On past occasions we have always managed just in time to develop our institutions to take care of new situations. I suspect that all Governments have failed to face up to the real changes that we need to make in our society, and that Governments, because they are obsessed with practicalities—not that this is a very practical Government
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—have shrunk away from the more imaginative and idealistic approaches to the problems of running this country.
If this strike goes ahead, and if there is an Election, like my noble friend Lord George-Brown, and others, I have the deepest anxieties as to what will confront a future Government. I beg the Government to consider again. I repeat, we do not wish to see them humiliated. We would like them to find a solution to a problem which, if it is allowed to continue, will create a degree of disaster which on the last occasion I said was like a doctor who boasted of a successful operation but admitted, when asked how the patient was, that he was dead. My Lords, we are getting nearer and nearer to that situation. If we are to maintain our standards—and I believe that we have a great contribution to make in the world—of Western civilisation and democracy, then I beg the Government to avoid tearing ourselves apart at this moment. An Election will not solve the problem, and all noble Lords know this. It is possible to find a solution, and, I believe, a solution with honour. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

  EUROPEAN PARLIAMENT: SELECTION OF MEMBERS
  EUROPEAN PARLIAMENT: SELECTION OF MEMBERS
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  FUR SKINS IMPORT BANS