Sitting of 16 July 1974

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    OLD LONDON ROAD, HYTHE, BURIAL GROUND BILL
    Lords Amendments agreed to.
    BRITISH AIRPORTS AUTHORITY (LONG- FORD RIVER) BILL [Lords]
    Read the Third time and passed, with amendments.
ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    Pensions
    Mr. McCrindleasked the Secretary of State for Social Services when she will announce her new pension proposals.
    Mr. Crouchasked the Secretary of State for Social Services what consultation she is having with the insurance industry over her new pension proposals.
    Mr. Boscawenasked the Secretary of State for Social Services whether it is the Government's intention to abolish the married women's option.
    Mr. Norman Lamontasked the Secretary of State for Social Services whether she will seek a meeting with the National Association of Pension Funds.
    The Minister of State, Department of Health and Social Security (Mr. Brian O'Malley): We shall publish a White Paper setting out the Government's pension proposals as soon as possible, and those proposals will form the basis for consultation and discussion. As far as the details of our plans are concerned, I
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    must ask the House to await the White Paper.
    Mr. McCrindle: I thank the Minister for that reply. Can he confirm that the broad basis upon which these proposals will come forward will be that of a second pension, as suggested in the Social Security Act 1973? Can he further confirm reports that the proposals will include a better deal for women and a faster accrual rate for older people? If those assumptions are correct, can he confirm that this can be achieved only by a substantially increased rate of contribution and a degree of cross-subsidisation to those already retired?
    Mr. O'Malley: I can only ask the hon. Gentleman to await the publication of the White Paper.
    Mr. Marks: Before bringing in any new scheme, will the Secretary of State consult the Chancellor of the Exchequer with a view to giving tax relief on contributions to the national scheme or tax exemption for the pensions paid?
    Mr. O'Malley: I am aware of these matters, which will be receiving, as they are already receiving, along with all other matters, the closest consideration.
    Mr. BoscawenWhile one understands why the investigation into the Government's pension scheme is taking such a long time and that it is harming many people who would otherwise, from next April, be in the second pension scheme, may I ask the Minister to confirm that he will continue with the married woman's option, from which 3 million women benefit? Does he propose to bring forward during this Parliament the Bill to increase considerably the contributions for the married woman's option without giving her any better benefits?
    Mr. O'Malley: On the last question relating to Bills this Session, the House will be aware that there is already a Bill which deals with the matter the hon. Gentleman has raised. On the question of the married woman's option and our intentions in the long-term pension proposals, I must ask the hon. Gentleman also to await publication of the White Paper. When he complains that we are taking a long time to bring forward proposals, I would point out that after his Government scrapped the Crossman

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    proposals it took them over two years to bring forward their proposals. We shall do it much more quickly than that.
    Mr. Gwilym Roberts: Does my hon. Friend accept that some of us on this side are far more anxious that the Government should not rush this matter but should produce a progressive pension scheme which will stand the test of time? Will he accept that in producing this sort of scheme he must think in terms of making proposals, which necessarily must become law, for the next 20 years and that the pension scheme should be designed to stand that sort of test?
    Mr. O'Malley: This Government are moving with a speedy efficiency on pension proposals which was not characteristic of the last Government. On my hon. Friend's second question, I hope that the proposals we bring forward for consideration and consultation in the White Paper will lead to the setting up of a structure which will stand for a long time.
    Mr. Kenneth Clarke: But is the Minister aware that he has already dropped enough hints, in the House, in the Press and to the pensions world, for us to know that he is contemplating the introduction of a Crossman-type scheme of big earnings-related contributions to pay for grandiose promises of earnings-related benefits in future? Is he also aware that as his party has had so much practice in preparing pension schemes over the past few years we suspect that he is toying with the idea of holding the scheme back until after an election because of the unpopularity of any such proposal with the occupational pensions industry and with all those whose savings and deferred pay are in schemes which will be threatened by what he has in mind?
    Mr. O'Malley: I have not dropped hints; I have thrown bricks at the proposals of the last Government. They put forward a pension scheme which not even their friends are prepared to defend. From his attendance at meetings of his own back-bench committee on this subject, the hon. Gentleman must know the views of some of his hon. Friends on the proposals that his Government brought forward. If he likes, I can expand on that.
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    I have made no comments either inside or outside the House about the detailed shape of the pension proposals that we intend to bring forward. What I have said is that the levels of pensions which the hon. Gentleman's Government were bringing forward are rejected by us as utterly inadequate. We intend to bring forward proposals which will be acceptable to any fair-minded citizens of this country who want to see men and women live decently in retirement.

    Foster-parents (Allowances)
    Mr. Andrew Bennettasked the Secretary of State for Social Services, in view of the wide variations in boarding-out allowances paid by local authorities to foster-parents in respect of children boarded out with them, whether she will consider compiling a set of national advisory scales.
    The Under-Secretary of State for Health (Dr. David Owen): The Working Party on Fostering Practice is looking into the factors which are taken into account in determining rates of boarding-out allowance, which vary considerably. I should have its guidance by the spring and will consider its findings.
    Mr. Bennett: May I first declare a minor interest as a foster-parent? Does my hon. Friend agree that there are still many children in the care of local authorities who would benefit from being boarded out with good foster-parents and that if all local authorities adopted realistic scales this would encourage many more people to become foster-parents? It is not realistic for local authority scales to range from as much as £10 per five-year-old in the North-East of England to as little as £4·70 in the North-West.
    Dr. Owen: I agree that there are many children presently receiving institutional care who could go into families if there were more foster-parents. I shall do everything possible to encourage that. Inasmuch as rates of boarding-out allowances have a bearing on this matter, I shall be prepared to look at them.
    Mr. R. C. Mitchell: Is my hon. Friend aware of the very wide variation among local authorities in the percentage of

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    children who are boarded with foster-parents and that there is some correlation between those wide variations and the variations in the boarding-out allowances paid by local authorities?
    Dr. Owen: I agree that this is a factor. Rates vary, sometimes for understandable reasons such as paying a higher amount for a handicapped or disturbed child. These are factors that the House understands. Despite that, however, there is considerable variation between local authorities.

    Poverty
    Mr. David Steelasked the Secretary of State for Social Services if she will now recommend setting up a Royal Commission on poverty.
    Mr. O'Malley: For the reasons I gave to the hon. Member in replying to his Question of 7th May, I do not consider that any new general inquiry into poverty is required at the present time.—[Vol. 873, c. 192–3.]
    Mr. Steel: Since that Question the hon. Gentleman has been kind enough to give me a Written Answer setting out some of the excellent research that is being undertaken in his Department. Does he not accept, however, that research into individual aspects of poverty is not the answer to my Question and that as a society we have still failed to tackle poverty? Is there not a case for an inquiry of an all-embracing and powerful kind?
    Mr. O'Malley: I consider the hon. Gentleman's Question very sympathetically and without prejudice. But I believe that we know enough of the scope and the extent of poverty in the country at present to know that what is most important is to bring forward financial measures to relieve that poverty. That is what the Government will be doing in the coming months.
    As to a detailed examination by a Royal Commission which the hon. Gentleman has suggested, the situation could arise that Governments again could have to wait for the report of a Royal Commission before legislating, and there is need for urgent legislation on pensions and child poverty for example. I think that it is more useful to do that in the near future rather than to be embarking on another detailed survey.
    Mr. William Hamilton: Does not my hon. Friend agree that an immediate short-term solution to this problem would be an increase in the family allowance, and particularly the introduction of an allowance for the first child?
    Mr. O'Malley: I understand very well the point raised by my hon. Friend. These are matters which the Government will examine as resources become available. On the part of the question relating to the first child, my hon. Friend will know that we have a manifesto commitment to introduce a family endowment system, including payment for the first child. This matter, with all our other manifesto commitments, is at present being considered by the Government. The present Government, as my hon. Friend will know, keep their manifesto promises.
    Sir G. Howe: Will the Minister give the House an assurance that the Government have now repented of their dilatoriness about the tax credit scheme and will proceed to implement a scheme based upon the tax credit idea, which would be the most effective way of relieving poverty and has already been devised and considered by the House?
    Mr. O'Malley: I have already explained to the right hon. and learned Gentleman at previous Question Times that we have rejected the tax credit scheme put forward by the previous administration. I ask him to await the policy proposals which will be put forward by the Government. He can then judge, as the nation will judge, how effective our total antipoverty strategy is.

    Battered Babies
    Mrs. Knightasked the Secretary of State for Social Services what further action she is taking to deal with the battered baby problem.
    The Secretary of State for Social Services (Mrs. Barbara Castle): Following a multi-disciplinary conference which we held last month to discuss problems of early diagnosis and of management, we are studying further ways of increasing awareness of the problem, helping professional workers concerned with it and promoting co-operation between them. We are paying particular attention to methods of obtaining and recording information, and its use. I very much

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    welcome the inter-disciplinary seminars and conferences that are being held throughout the country, in a number of which professional advisers from my Department have participated. A grant has been made of £112,000 over three years to the NSPCC for development of special units and for research, and discussions are at an advanced stage on a number of other research proposals in this field. I have asked directors of social services to report to me by the end of the year progress made on the setting up of inter-disciplinary area review teams and on the handling of the programme in the areas.
    Mrs. Knight: Will the right hon. Lady bear in mind that action by the end of the year is not quick enough for many people in the House? Will she consider the possibility of doing something to enable doctors to safeguard their very young patients instead of, as at present, sending them back to their homes, where they may be battered, because doctors do not have sufficient powers to ensure always that they go to a place of safety?
    Mrs. Castle: I am sure that the hon. Lady has misunderstood the very detailed reply I gave her on what I agree with her is a very important and urgent matter. I was not talking about waiting for action until the end of the year. I said that I have asked the authorities to let me have by the end of the year a report of the action which they had already taken to set up these area review teams. It is the purpose of these teams to make absolutely sure that a child does not fall between the net because it passes from the doctor to no particular area of responsibility. I think that the answer to the hon. Lady's point is that the doctor should be part of this multidisciplinary teamwork.
    Mr. Moonman: We on the Government side of the House understand my right hon. Friend's statement. It is very warm and compassionate and we welcome it. I have two questions for my right hon. Friend. First, in relation to the Select Committee proposed on the subject of battered wives, will there be a special sector dealing with battered babies? Second, in view of the Max Piazzani case, with which my right hon. Friend is acquainted, could not a model emerge from this which would show the
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    nature of the way in which the Department acts immediately following an indication that there has been a serious case?
    Mrs. Castle: I do not immediately see the desirability of extending the Select Committee on battered wives to this area, although if links were established between the two issues it would be possible to consider doing that. We must see how this Select Committee progresses. I shall certainly bear in mind the point made by my hon. Friend about the Piazzani case.

    Public Expenditure
    Mrs. Renée Shortasked the Secretary of State for Social Services what plans she has in relation to restoring the cuts on her Department's expenditure imposed by the previous Government.
    Mrs. Castle: As the House will know, the Government have given priority to increased expenditure on pensions, food subsidies and housing. We have been unable at the same time to restore the reductions made by the previous Government in the expenditure planned in 1974–75. However, I announced last week that I shall be seeking Supplementary Estimates in order to make an additional £40 million of current expenditure available to health authorities in England to meet price rises and to cover a more up-to-date assessment of the level of spending on former local authority health services. Supplementary Estimates totalling £50 million in respect of pay awards have already been presented.
    Mrs. Short: I thank my right hon. Friend for that reply. May I assure her that on these benches at least we were delighted to hear that she was able to find £40 million to replace some of the savage cuts inflicted on her Department by the former Chancellor of the Exchequer? The sum of £111 million was cut from her Department. Is my right hon. Friend aware that the Expenditure Committee is now investigating the effect of those cuts on hospital services and on local authority services and that we are quite appalled by the evidence of the damage done by the previous administration? Is my right hon. Friend further aware—
    Mr. Speaker: Order. That is enough.
    Mrs. Castle: I am grateful to my hon. Friend for what she has already managed to say.
    Mrs. Short: I have not said it all yet.
    Mrs. Castle: I agree with my hon. Friend that it is of great importance to the National Health Service that the Government have been able to prove by the allocation of the £40 million that they have no intention of allowing any reduction in the services due to the process of inflation and other difficulties that have been causing such anxiety. I share my hon. Friend's desire to be able to restore the expenditure cuts which I inherited from the previous administration, and the Government as a whole are anxious to do that.
    Sir G. Howe: Will the right hon. Lady confirm that, contrary to what her hon. Friend the Member for Wolverhampton, North-East (Mrs. Short) appears to understand, the full £40 million made available last week is directed solely to compensating health authorities for the effect of rising prices? Will she also accept that, far from her Government having inherited savage cuts at the hands of the last administration, during the period of the last administration capital expenditure on the National Health Service was running in each year 30 per cent. in real terms above what it was at the time of the previous Labour Government, that revenue expenditure in each year during the time of the last administration was running at 15 per cent. in real terms above the level during the previous Labour Government and that she inherited a substantially improved health service with higher general spending programmes?
    Mrs. Castle: The right hon. and learned Gentleman is perfectly aware that there has been upward progression over the years and that in December last that upward progression was levelled off by the cuts that were then made. He must be aware that those cuts have caused widespread anxiety among those who are having to run not only hospital services but personal social services also affected by the cuts. Case after case is coming to me from both sides of the House on this matter. That is why I consider that it is urgent for us to restore the cuts as soon as possible.

    Medical Profession (Meeting)
    Mr. Ancramasked the Secretary of State for Social Services what further plans she has, if any, for meeting representatives from branches of the medical profession.
    Mrs. Castle: My Department is constantly in touch with the medical profession on a wide range of matters. and I am myself available when necessary. The Prime Minister has told the British Medical Association that I will be glad to resume discussions with it about the future development of pay arrangements after the ending of statutory controls.
    Mr. Ancram: I thank the right hon. Lady for that reply. Will she withdraw the unconstructive remark she made recently about consultants playing politics. and will she realise that protest is not the prerogative of the Left and that consultants are seriously concerned with their own position within the National Health Service, which she would do well to take seriously herself?
    Mrs. Castle: No, Sir, I will not withdraw that remark. Of course I am aware of consultants' concern. That is why within weeks I responded constructively to their request for a joint working party to be set up under the chairmanship of my hon. Friend to examine consultants' contracts and their difficulties.
    My remark was made in the context of the fact that I was aware that health authorities and the health service had been plagued by four things. The first was the lowerst-ever morale, due to the pay policy of the previous Government which kept pay down. The second was the December cuts. The third was reorganisation and the fourth was the effect of price increases. When the previous Government did this damage to the National Health Service, however, there was not a word of protest. As soon as we came into office and tried—slowly, I admit, and we have by no means yet succeeded entirely—to rectify the situation by a pay review, an inquiry and a promise to pay increases, as well as the £40 million which is to be made available to health authorities, all that the BMA could do was jeer. I call that playing politics.
    Mr. Carter-Jones: May I be assured that the first question which my right hon. Friend puts to the medical authorities will be why they laughed at her extra £40 million when they did nothing about the £111 million cut?
    Mrs. Castle: That has been puzzling me as well.
    Mr. Raison: Is the right hon. Lady aware that since she took office there has been a tragic deterioration in relations in the health service? Will she once more repeat that the £40 million has absolutely nothing to do with restoring cuts made last December? Will she acknowledge that the tone of her answer to my hon. Friend the Member for Berwick and East Lothian (Mr. Ancram) just now indicates why relations are becoming so bad?
    Mrs. Castle: No, Sir. I do not accept a single word of what the hon. Gentleman says. As soon as I took over this job I was told by all concerned that the morale of the National Health Service had never been at such a low ebb. There have been years of pent-up frustration and bitterness among nurses, radiographers, medical laboratory technicians. physical measurement technicians and a whole range of workers who have since been showing such disquiet and unrest. This arises completely and directly from the pay policy of the previous Government. The first step we took was to reverse that policy not only generally but also in its effect on the groups I have mentioned.
    Therefore, surely the most important point is that while some people try to talk about the collapse of the National Health Service the Government have stepped in without delay to produce £40 million for England alone to alleviate the effects of price increases—[Interruption.] I have made it perfectly clear what this move is all about. I am glad that the Opposition are so ashamed of their own December cuts—
    Mr. Speaker: Order. I remind the House that this is not debating time; it is Question Time.
    Mrs. Castle: It is also—
    Mr. Speaker: What I said applies to both sides of the House.
    Mrs. Castle: It is also important for the House and all those who want to restore morale in the National Health Service to realise that when the pay increases are delivered to the nurses and others the extra money will be found to meet those increases. The Government have made this clear.

    Disabled Persons (Sharp Report)
    Mr. Martenasked the Secretary of State for Social Services if she is now in a position to make a statement on her proposals on the Sharp Report.
    The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): As the hon. Member knows, the Government are now considering the views of a wide range of interested organisations on the recommendations in the report. I recognise the concern over this matter and will make an announcement as soon as possible.
    Mr. Marten: Can the Minister say when the consultations with the outside bodies will be concluded and when he estimates that he is likely to make a statement? Will it be before we rise for the recess, and shall we get a chance to debate the Government's findings before they arrive at a conclusion?
    Mr. Morris: I am most grateful to the hon. Member for conveying his personal views on the recommendations in the report. It is difficult to say exactly when we shall be in a position to announce conclusions on our consultations with a wide range of organisations. I shall do so at the earliest possible date with the point made by the hon. Member very much in mind.
    Mr. Ioan Evans: Does my hon. Friend recognise that the needs of the disabled passenger as well as those of the disabled driver should be borne in mind? They should be dealt with identically in the review, because these people are having difficulty getting about since they cannot use public transport.
    Mr. Morris: I am grateful to my hon. Friend for his observations. There are problems not only of methods and aims but of priority as between the disabled driver and the disabled passenger. I shall certainly bear very much in mind the point made by my hon. Friend.

    Community Health Councils
    Mr. Beithasked the Secretary of State for Social Services whether she will make provision for the funds of community health councils to be allocated directly to them and not drawn from the allocations of regional health authorities.
    Dr. Owen: No, Sir. The National Health Service (Community Health Councils) Regulations 1973 lay this responsibility, on the "establishing authority" which in England is the regional health authority. I will of course consider carefully the views of community health councils in the light of experience.
    Mr. Beith: In doing so will the Minister recognise that the community health councils are about the only voice patients have in the bureaucratic system which was bequeathed to him—without our support—and that if they have to compete for their finances with the clinical requirements for which regional health authorities are trying to cater they will be in an even weaker position?
    Dr. Owen: I agree with the hon. Member, and we share the belief that the community health councils play an important part in the health service. That is why we published proposals for consultation on democracy in the health service to strengthen these councils and why I shall be listening carefully to the views of the councils as they develop.

    Dorset Area Health Authority
    Mr. Evelyn Kingasked the Secretary of State for Social Services if she will undertake to make available in the autumn more money to cover the shortfall in health expenditure in the Dorset Area Health Authority amounting to £750,000 or if, in the alternative, she will make a recommendation as to which of the services should be withdrawn.
    Dr. Owen: This is a matter for the Wessex Regional Health Authority in the light of the funds available to it.
    Mr. King: Does the Minister accept that all possible economies, including even the stopping of maintenance of hospitals, have already been effected and that no further economies are possible? What share of the global sum will come
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    to Dorset, and will the Minister have some part in taking what must be a very difficult decision?
    Dr. Owen: The announcement by my right hon. Friend about the extra £40 million was made to the regional health authority chairmen. I can assure the House that the chairmen considered it to be a major step towards restoring the shortfall, and of course the Wessex Regional Health Authority chairman was at the meeting.

    Kingswood (Departmental Facilities)
    Mr. Terry Walkerasked the Secretary of State for Social Services if she will consider resiting an office of the Department of Health and Social Security in the Kingswood constituency, a service which was withdrawn by the previous Government.
    The Under-Secretary of State for Health and Social Security (Mr. Robert C. Brown): An adequate service over the full range of social security benefits for people in the Kingswood area is provided from the office at Fishponds Road, Bristol.
    Mr. Walker: To get to the office in Bristol involves people in making two and sometimes three changes of buses, and since many of those who have to go there are sick or elderly they are presented with a considerable problem. Will my hon. Friend look at the position again? If the office in Kingswood could be opened for even a couple of half-days a week, this would help many of my constituents.
    Mr. Brown: Since the Fishponds Road office was established the Department has received no reports of particular difficulties being experienced by those who live within the area it serves. Part-time offices are extremely costly in terms of manpower and overheads, and they are established only in areas remote from a parent office where there is clear evidence of need for such a service. That is not the case at Kingswood. However, the Department maintains a close watch on the needs of an area served by a local office and if it becomes evident that the service at Kingswood should be reviewed this will be given due consideration.

    Nurses and Ancillary Staff (Recruitment)
    Mr. Molloyasked the Secretary of State for Social Services if she will make a statement about recruitment of nurses and ancillary staff in the National Health Service.
    Dr. Owen: The total number, in whole-time equivalent terms, of nursing and midwifery staff in the National Health Service in England rose from 286,000 to 291,000 in the year ended 30th September 1973, the latest date for which figures are available. In the same period there was a small reduction in the numbers of ancillary staff from 164,000 to 163,000.
    Mr. Molloy: Notwithstanding the existing low state of morale, especially in this vital element of the health service, and notwithstanding the inquiries which Lord Halsbury is conducting, it is vital that nurses and ancillary staff should be given fresh hope after the damage caused to their aspirations by the previous administration. Will my hon. Friend consider in consultation with the Secretary of State, meeting representatives of all the staff associations to see whether the general form of negotiation can be considerably streamlined to avoid the cumbersome methods which already exist?
    Dr. Owen: We have already expressed our readiness to look at the whole Whitley negotiating machinery, but the approach here must essentially be one of agreement between staff and management sides. I share my hon. Friend's concern that there is room for improvement. On the question of the morale of staff, particularly in the case of the nurses, the Government on taking office talked to staff representatives and it was in response to their request that we established an independent inquiry. I hope that the result of that inquiry will be not only improved recruiting but improved morale.
    Mrs. Knight: Does the Minister take as lightly as it would seem the reduction in ancillary staff numbers in some hospitals? In the Birmingham area in particular, radiographers are in such short supply that three are having to do the work of eight or nine. This is not a matter which can be regarded lightly.
    Dr. Owen: Radiographers are a profession supplementary to medicine. One of the reasons for the fall in the numbers of ancillary workers in recent years has been the installation of incentive bonus schemes which involve to some extent the reduction of staff numbers.
    Mr. Raphael Tuck: Is my hon. Friend aware that unless something is done about phasing local weighting allowances for nurses, we shall be losing nurses and not recruiting them? In the Peace Memorial Hospital at Watford nurses do not get a local weighting allowance whereas staff in the town hall 50 yards away get an allowance. Will my hon. Friend do his best to redress these anomalies?
    Dr. Owen: As my hon. Friend knows, the report on London weighting has been published—
    Mr. Tuck: There is nothing in it about a local weighting for Watford.
    Dr. Owen: I regret that my hon. Friend's constituency does not seem to derive any benefit, but this is a difficult subject and is a matter of close relationship between the negotiations on London weighting for local government and the National Health Service.

    Disregards
    Mr. Dempseyasked the Secretary of State for Social Services if she will take steps to increase the Supplementary Benefits Commission's disregard of £2 from weekly earned income; and if she will make a statement.
    Mr. Robert C. Brown: It is our intention to review the disregard of earnings, together with the other disregards in the supplementary benefit scheme, as soon as financial and manpower considerations allow.
    Mr. Dempsey: Is my hon. Friend aware that a housewife reported to me that she had accepted a job at £18 a week but was shocked to discover that her husband's supplementary benefit was reduced by £16? She was therefore working for only £2 a week. Since this matter is urgent and we are anxious to encourage eligible housewives to accept employment, will not my hon. Friend give a date when this miserable disregard will be increased to a more reasonable level?
    Mr. Brown: I can assure my hon. Friend that we are well aware of the need for increasing the disregard, but the most important thing in the prevailing economic circumstances when we took office was to assist pensioners and others on supplementary benefit, and I am pleased that from next Monday pensioners and others in receipt of benefit will be getting the biggest-ever increase in the history of the pension scheme.
    Mr. Marten: Could there be an interim increase fairly quickly in the disregards for one-parent families?
    Mr. Brown: We are considering that.
    Mr. Hooley: The figure of £2 was fixed years ago and is totally ridiculous in present circumstances. Does my hon. Friend accept that the whole system of disregards within the supplementary benefit arrangements are a savage disincentive to anybody to help themselves in any way?
    Mr. Brown: I do not deny for one moment that the value of disregards has fallen by approximately 43 per cent. since they were introduced by a Labour Government in 1966. Within the financial constraints that are upon us we are anxious to improve them.

    Strikers' Families (Benefit)
    Mr. Dixonasked the Secretary of State for Social Services how much has been paid in supplementary benefits to strikers' families in each of the last three years.
    Mr. O'Malley: The approximate figures are £4·3 million in 1971, £8·4 million in 1972 and £0·7 million in 1973.
    Mr. Dixon: Now that the hon. Gentleman is in government himself, will he take us into his confidence and give us some indication of the difficulties which he and his colleagues anticipate having in governing the country during the next six months, bearing in mind that taxpayers are potentially subsidising large numbers of their fellow citizens who are holding the country to ransom?
    Mr. O'Malley: To the extent that the country became ungovernable, that took place during the last months of the last Tory Government. To the extent that there has been an improvement, that
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    has been the result of the policies of the present administration. If the hon. Gentleman has any complaints to make about the level of the figures which I have given, he should remember that the figures are the direct result of Tory industrial relations policies. The figures are nearly 14 times higher for the three years that I have mentioned than those for the three full years of a Labour administration between 1967 and 1969. In that period the total cost under Labour was about £1·4 million. For the three full years of a Tory Government it was about £14 million. That figure reflects the success of Tory policies.
    Mr. Molloy: Does my hon. Friend agree that instead of dealing with the spiteful trivia raised by the hon. Member for Truro (Mr. Dixon) it is much better to consider what any successful Government should do, and what the present Government are doing—namely, keeping the work-force healthy and creating industrial harmony so that we do not have the sort of strikes which ultimately led to the three-day week, which nearly paralysed the nation? To raise social questions of this nature on the Floor of the House is reprehensible in the context of the manner in which the previous Government administered.
    Mr. O'Malley: Of course my hon. Friend is right. Conservative Members who persist in following this subject at Question Time should remember that what they are criticising is not Labour Government legislation but the Social Security Act 1971, which was introduced by the last Conservative Government. As these criticisms are being made of the activities of the previous Government, it will be interesting to know whether the present Conservative Front Bench is disavowing the policies followed by the previous Tory administration in 1971 and whether it is now prepared to assume even more vicious policies towards men on strike.
    Mr. Bruce-Gardyne: Will the Minister explain how it came about that he told the House about a month ago that the total cost of the strike subsidy this year had run to £4 million when the cost of the strike subsidy in the Ulster situation alone amounted to £5 million? Further, will he explain what legislative authority there was from this House for the payment of £5 million in Northern Ireland

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    in what I believe even the Labour Party regards as a political strike?
    Mr. O'Malley: I think it is right that the hon. Gentleman should spotlight the expenditure of £4·4 million so far this year. That spotlights the miners' strike which was caused by the policies of the previous administration. The Northern Ireland situation is a question for my right hon. Friend the Secretary of State for Northern Ireland.

    Breast Cancer Screening
    Mr. Joyce Butlerasked the Secretary of State for Social Services how many well-woman and other clinics are now screening women for breast cancer; and what progress is being made in research to provide an adequate breast-cancer screening programme for all women at risk.
    Dr. Owen: Examination of women for breast cancer is widely available from general practitioners and in hospitals and clinics run by area health authorities.
    On the advice of the Joint Working Group on Breast Cancer Screening, the Health Departments for England, Scotland and Wales are financing four research projects on breast cancer screening, but they will take some time to complete.
    Mrs. Butler: As so many women still die of this disease and as many others live in dread of it, whereas a dramatic decrease of 33 per cent. in the mortality rate of the over-50s has been shown by a recent study in America, will my hon. Friend keep up the pressure on his Department to ensure that it gives adequate priority to the helpful advances in early detection and early treatment?
    Dr. Owen: We are aware of the work that has been done in America, and particularly in New York. My hon. Friend is right; 17,759 new cases of breast cancer were identified in 1969. This is a major public health problem. This Government will put resources into preventive medicine.

  PUBLIC OWNERSHIP AND INFLATION (MINISTER'S SPEECH)
  Mr. Bruce-Gardyneasked the Prime Minister whether the public speech by the Chancellor of the Duchy of Lan-
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  caster at a conference organised in London by the Financial Times on 27th June on Government policy towards ownership and inflation, represented the views of Her Majesty's Government.
  The Prime Minister (Mr. Harold Wilson): Yes, Sir.
  Mr. Bruce-Gardyne: The Chancellor of the Duchy of Lancaster told us in the course of his speech that the Government are determined to avoid the alternatives of a state of slump and hyperinflation and that they will pursue what was described as a "more constructive alternative". However, as The Financial Times pointed out, the right hon. Gentleman did not describe the nature of that constructive alternative. Will the Prime Minister enlighten us?
  The Prime Minister: I think that it would have been wrong of my right hon. Friend, as it would be wrong of me today, to anticipate the statement of my right hon. Friend the Chancellor of the Exchequer next week.
  Mr. Jeffrey Archer: Will the right hon. Gentleman confirm that his right hon. Friend the Chancellor of the Duchy of Lancaster was actually there to make the speech and that it was not read for him by the Government Chief Whip?

  PORTUGAL
  Mr. Ioan Evansasked the Prime Minister whether he will make a statement on his recent meeting with the Prime Minister and Foreign Secretary of Portugal.
  The Prime Minister: My right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs and I met the then Prime Minister and the Foreign Secretary of Portugal at Brussels on 25th June. We discussed the problems which the Portuguese Government faced at that time and other topics of common interest.
  Mr. Evans: After over 40 years of Fascism there are bound to be difficulties in re-establishing democracy in Portugal. What will our Government do to erase the fact that recently the previous Government entertained a Fascist leader in London? In his discussions with Dr. Mario Soares, the Socialist leader, did

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  my right hon. Friend discuss what we can do as a nation to help Portugal solve its problems, and particularly to ensure that the new-won freedom of the people of Portugal is extended to the people of the African territories of Mozambique, Angola and Guinea-Bissau?
  The Prime Minister: We discussed these matters at some length. They are of great importance to this country. With regard to the earlier part of my hon. Friend's question, there was a debate in the last Parliament when we opposed a visit by Dr. Caetano to the United Kingdom. What we then said was 100 per cent. justified by the evidence in Wiriyamu, despite the attitude of the then Conservative Government. Since that time Dr. Caetano has, happily, disappeared.
  Mr. Hurd: Did the right hon. Gentleman discuss with the Portuguese leaders the winding-up of the Beira patrol?
  The Prime Minister: No, there is no question of the winding-up of the Beira patrol. What we discussed with them, as they are matters of which this country has had great experience over a succession of Governments, were some of the problems that arise when an imperial Power begins to concede self-government to territories which it previously administered. We stressed on the Portuguese Government the very great importance which has been accorded by successive Governments in this country not only to having a vote on self-determination but to leaving behind something constructive for the protection of minorities.
  Mr. David Steel: Have the Government discussed with the Portuguese authorities any possibility of giving aid to the economy of Lourenco Marques if sanctions against Rhodesia were to be made more effective by a new regime in Mozambique?
  The Prime Minister: The discussions which we had with the then Prime Minister and with Dr. Soares related to the present situation. They told us that they are trying to set up a fully democratic situation in Portugal and in the African territories. It is too early for us to start to speculate about the effect that that might have on sanctions in relation to Rhodesia.

  NORTH ATLANTIC ALLIANCE
  Mr. Blakerasked the Prime Minister if he will make a statement about the results of the recent meeting of Heads of State of the member countries of the North Atlantic Alliance.
  The Prime Minister: I would refer the hon. Member to the reply which I gave to my hon. Friend the Member for Salford, East (Mr. Allaun) on 27th June.—[Vol. 875, c. 515.]
  Mr. Blaker: Will the Prime Minister find some means of giving greater publicity to the Atlantic Declaration which he and his colleagues signed on that occasion and which paid tribute to the effectiveness of our own nuclear deterrent, describing it as capable of playing a deterrent rôle of its own, and which also said that the determination of the member countries of the EEC to proceed towards greater unity would contribute to the common defence?
  The Prime Minister: On the nuclear question, we are neither overstating nor understating the true position, which has been frequently debated in the House. There was some discussion on the drafting of the declaration in Ottawa, and on the question of Europe it was made clear that the declaration did not mean that Her Majesty's Government were accepting the humiliating terms that right hon. and hon. Gentlemen on the Opposition benches had accepted.
  Mr. Stonehouse: In view of the deterioration of the situation in Cyprus, what action does the Prime Minister intend to take within NATO—or elsewhere—to avoid the outbreak of hostilities between two member States of NATO, namely Greece and Turkey?
  The Prime Minister: My right hon. Friend has draw attention to the anxious aspect of what has happened in Cyprus in the last 24 hours. I am not sure that the right forum for dealing with these matters—including our own duties as one of the guarantors of the 1960 treaty establishing Cyprus—is NATO, but my right hon. Friend the Foreign and Commonwealth Secretary hopes, with permission, to make a statement after Question Time.

  ECONOMIC AFFAIRS (PRIME MINISTER'S SPEECH)
  Mr. William Hamiltonasked the Prime Minister if he will place in the Library a copy of the Press release of his speech on economic matters he made to international Socialist leaders on Sunday 30th June.
  Mr. George Gardinerasked the Prime Minister if he will place in the Library a copy of the Press release of his speech on economic affairs to the Socialist International Conference at Chequers on 30th June.
  Mr. Nigel Lawsonasked the Prime Minister if he will place in the Library a copy of the Press release of his speech on the economic situation to the Socialist International at Chequers on 30th June.
  The Prime Minister: I did so on the following day, Sir.
  Mr. Hamilton: Will my right hon. Friend take this opportunity of reaffirming his firm belief in the need for the maximum amount of co-operation among Socialist leaders internationally and especially in Western Europe? That being so, will he use every endeavour to maintain our membership of the Common Market? In particular, will he say what are the prospects for international cooperation in the purchase of oil from the Middle East?
  The Prime Minister: My speech, which is the subject of the Questions, rated substantially to the effect of the oil problems on all countries, including developing as well as developed countries, and also to the problem of oil money circulating round the world. Some of the warnings I gave have since been emphasised.
  This was not in my speech, but one of the five items which we spent the day discussing related to Europe, and various statements were made on the European situation and positions were stated. I have nothing to add to what my right hon. Friend the Foreign and Commonwealth Secretary said in a recent debate in the House on the European question.
  With regard to co-operation in the matter of oil purchase prices and finance, this is, rightly, being done partly by
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  countries bilaterally with the oil producers and partly on a world-wide scale. I set out on behalf of the Government some considerations which we should like to see followed in the world handling of oil and the oil monetary situation.
  Mr. Gardiner: As in that speech the Prime Minister said that confidence demanded that a clear frontier be defined between what is public industry and what is private industry, will he say whether he intends to define that frontier clearly in the coming White Paper, and. if so, when?
  The Prime Minister: That, of course, is what the White Paper is about. We shall have a definitive statement. I cannot forecast exactly when it will be ready. We are working hard on it.
  Mr. Skinner: In his talks with the Socialist leaders, did my right hon. Friend indicate to them that one reason why the British people are very much against Britain's continued membership of the Common Market is that the so-called economies of scale, about which we heard so much during the term of the previous Government, in the first few months have resulted in a £2,000 million trading deficit with the rest of the Common Market countries? If my right hon. Friend has not already done so, will he tell the Socialist leaders that within the Labour Party there will be a massive campaign to urge the British people to vote "No" when they get the chance to do so in a referendum?
  The Prime Minister: I have nothing to add to or to subtract from the figures which were given in the House yesterday by my right hon. Friend the Secretary of State for Trade. The argument about economies of scale has validity provided that the nation is not crippled by the acceptance of some of the other terms. It was always recognised that economies of scale would take some little time to develop. We have made clear that when the negotiations are complete we shall put them to the British people for a decision by the ballot box.
  Mr. Lawson: As the Prime Minister is afraid to allow the House an opportunity this Session to debate the White Paper to which my hon. Friend the Member for Reigate (Mr. Gardiner) referred, will he at least assure the House that the

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  frontier he has in mind is neither like that of the Third Reich, namely constantly expanding, nor like that between Soviet Russia and the satellite States in which it makes very little difference which side of the frontier one happens to be?
  The Prime Minister: I am certainly not afraid of having the White Paper debated in the House.
  Mr. Tebbit: In this Session?
  The Prime Minister: One advantage will be to show how utterly ridiculous have been the campaigns of Opposition Front Benchers and Opposition back benchers in the feverish and fevered remarks they have made. I admire the ingenuity—
  Mr. Tebbit: In this Session?
  The Prime Minister: I admire the ingenuity—in this Session—of the last part of the supplementary question. I will study what the hon. Gentleman has in mind. I found it more inscrutable than I found his rather distinguished contributions when he was a City editor.
  Mr. Faulds: Did the Prime Minister regale the Socialist leaders with the relevance of the Palestinian problem and the contribution that the Arab Socialist leaders might make to world economic problems?
  The Prime Minister: The point of view of the Palestinians and Middle Eastern questions were discussed. The Prime Minister of Israel was there. The Chancellor of Austria reported on his tour of the Middle East and particularly on the views expressed by Syria and Egypt. The Prime Minister of Malta was there. My hon. Friend may therefore be satisfied that all possible angles of Middle Eastern questions, including the vitally important question of the Palestinians, were discussed.
  Mr. Faulds: Were any Arab Socialist leaders there?
  Mr. Thorpe: Was the Prime Minister able to discover how many other Socialist Foreign Secretaries have monitoring committees to supervise their activities?
  The Prime Minister: Ours has not.

  MENTALLY HANDICAPPED PERSONS
  Mr. Moonmanasked the Prime Minister if he will give consideration to recommending a Royal Commission on community care for the mentally sick and handicapped.
  The Prime Minister: No, Sir. The need now is for effective action in this field rather than a further inquiry. My right hon. Friend the Secretary of State for Social Services has already announced that she will be making a statement as soon as possible on the Government's policy for the mentally handicapped and also that we intend to publish a White Paper setting out our overall strategy for the development of a comprehensive pattern of health and social services for the mentally ill.
  Mr. Moonman: I thank my right hon. Friend for that statement and for the remarks of his right hon. Friend. Will he reconsider the need for a Royal Commission which would take into account the variations in services which exist between one part of the country and another, evidence of which was given in the Questions which 30 hon. Members put on the Order Paper?
  The Prime Minister: My hon. Friend has an important point here, but I do not think that a Royal Commission would help as so many of the facts are known. The problems between one part of the country and another, and indeed over the country as a whole, are related to money and priorities. We are still operating against the background of the severe cut made on 17th December by the Conservative Chancellor of the Exchequer. Many local authorities to my knowledge—and others will agree from their constituency experience—want to do more in many aspects of health and welfare services and are prevented from doing so by lack of money. I do not think that a Royal Commission would help.
  Mr. Burden: Will the right hon. Gentleman ask his right hon. Friend the Secretary of State for Social Services to pay particular attention to the situation of mentally handicapped children and their schooling? In addition—and I am sure

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  that the right hon. Lady will agree—is it not essential to consider the provision of custom-built schools for these children, who at present are inadequately served?
  The Prime Minister: My right hon. Friend the Secretary of State for Social Services notes what the hon. Gentleman said, although it has been the practice under successive Governments for this subject in the main to be dealt with by my right hon. Friend the Secretary of State for Education and Science. Many right hon. and hon. Members in all parts of the House, including myself, have taken an interest in the subject of mentally handicapped children both in our constituencies and elsewhere. We all know that the problems are extremely difficult. It is a question of priorities. I agree that purpose-built and equipped schools, and also establishments for those who have just left school, are vitally important in this respect.

CYPRUS
The Secretary of State for Foreign and Commonwealth Affairs (Mr. James Callaghan): With your permission, Mr. Speaker, and that of the House, I will make a further statement about the situation in Cyprus.
The House will be greatly relieved to learn that President Makarios is alive. [HON. MEMBERS: "Hear. hear."] He has requested that he should be allowed to enter the sovereign base areas, and Her Majesty's Government have agreed to this request. It appears that the National Guard is at present in control of parts of the island and that fighting continues among the Greek Cypriot population, although the Turkish population is not at present involved. The situation clearly contains grave risks and it is of great importance that peace be restored as soon as possible.
In Athens our Ambassador has conveyed to the Greek authorities my view that Greece should state unambiguously her intention to observe her international obligations in regard to Cyprus. I am glad to say that in a written statement this morning the Acting Foreign Minister is reported to have said that the policy of the Greek Government is to observe and safeguard the independence and
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territorial integrity of the Cyprus Republic. He has added that the Greek Government attach major importance to the inter-communal talks between Greek and Turkish Cypriots.
Her Majesty's Ambassador is also informing the Greek Government that, in the view of Her Majesty's Government, it would do much to reduce tension in the area if the Greek officers of the Cypriot National Guard were to be replaced at the earliest possible moment.
I continue to remain in contact with the Turkish and other Governments and with the Secretary General of the United Nations.
As regards the many British holidaymakers at present in Cyprus, the Foreign and Commonwealth Office is keeping in close touch with the various travel organisations concerned in Cyprus. The travel organisations have plans for flying the tourists out of Cyprus as soon as the airport at Nicosia is open again. Alternative arrangements will be made if it remains closed.
Sir Alec Douglas-Home: The House is grateful to the right hon. Gentleman for his statement. We share his great relief that the Archbishop escaped the assassin's gun and is safe.
I have two short questions to ask about the Archbishop. Has he asked for political asylum—indeed, does the present situation amount to political asylum since he is now on British soil? Does not the Foreign Secretary agree that probably from every point of view it would be a good thing if the Archbishop were not to stay on British soil for long, although there is an obligation upon us to see that he is safe. The right hon. Gentleman might like to comment on the situation, for, as he said, it is full of risks.
There are perhaps two hopeful signs in the statement. One is that the Greek Cypriots and Turkish Cypriots are not apparently fighting each other, since apparently it is an inter-Greek quarrel. The second hopeful sign is the statement by the right hon. Gentleman that he attaches importance to inter-communal talks. One cannot be optimistic about the situation in Cyprus, but nevertheless there are hopeful signs that the situation there may shortly return to something like normality.
Mr. Callaghan: I am obliged to the right hon. Gentleman. It is not clear whether President Makarios has asked for political asylum. Messages are passing very quickly at the moment, but the fact that he has requested permission to enter the sovereign base area and that we are facilitating that request undoubtedly points in the direction of his seeking political asylum. It is right, as the right hon. Gentleman has suggested, that the Archbishop should not stay in the area, but our primary concern at present is with his safety and we shall make appropriate arrangements in conjunction with him.
With regard to the position of the Greek Government, I can only re-emphasise that we attach the utmost importance to that Government's carrying out and making tangible the statements which they have made on their attitude to Cyprus. If they do so, the cause of tension will be very much less than it appears to be at present.
Mr. Russell Johnston: I associate myself with the pleasure expressed on all sides of the House at the escape of President Makarios. Obviously, the situation is confused, but can the Foreign Secretary add anything to his statement and comment on whether the supporters of the Archbishop are in a position to fight back at present? Secondly, what is the present dispersal of forces? Can he reassure relatives and friends of people who are on holiday in Cyprus? So far there is no news of any British citizen having been harmed in the uprising.
Mr. Callaghan: No information has reached me about British holidaymakers but, as the hon. Gentleman said, the position is confused, and communications are not at their best at the moment. As for the future of the Archbishop's followers, our latest reports say that fighting is going on, but I cannot expand on that.
Mr. Wellbeloved: Will the Foreign Secretary take note of the fact that it appears that the leaders of the military coup are officers who owe their prime allegiance to Greece, a country which has seen democracy destroyed by a military dictatorship? Secondly, will he note that the so-called president of the military coup is a man who openly boasts that he took part in the murder of British Service
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men in the 1960s? Will he also note that the overwhelming majority of Labour Members and the people of this country will expect the United Kingdom Government to give support and aid to the legally elected Government of the Republic of Cyprus?
Mr. Callaghan: I am sure what my hon. Friend said expresses the views of a great many people, and certainly they are not out of harmony with the direction in which my own statements and actions have pointed so far.
Mr. Churchill: Since the maintenance of the independence of the Republic of Cyprus is of great importance to this country, and as there would be grave dangers in any outside intervention, particularly by other NATO Powers, what consultations has the right hon. Gentleman had—or what discussions is he about to have—with other allies in NATO to dissuade the Greek Government or any other Government from direct military intervention in the event of hostilities in the island continuing for a prolonged period?
Mr. Callaghan: The hon. Gentleman may be assured that we are in full communication with our allies in NATO, as well as with the Governments immediately concerned.
Mr. Stonehouse: Do the Government recognise that Archbishop Makarios is the legitimate Head of State? Secondly, what reply has been given to the request from the Turkish Prime Minister for Britain to intervene with Turkey to protect the treaty of guarantee?
Mr. Callaghan: On the first part of the supplementary question, President Makarios was elected, and is now the elected, leader of the people of Cyprus. So far as I know, he has not yet laid down his office. On the second part of my right hon. Friend's remarks, I am afraid I have not been informed of any direct request by the Turkish Prime Minister. My right hon. Friend seems to be better informed than I am, but I repeat that I have not yet seen such a request. We are both in consultation through our ambassadors, and action is being taken in parallel with each other.
Major-General d'Avigdor-Goldsmid: Does the Foreign Secretary agree that

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the tragic events of the last 48 hours underline the importance of the presence of British forces in the island? I hope that this matter will be taken into consideration in the forthcoming Defence White Paper.
Mr. Callaghan: I think that is a bit of a non sequitur since the forces which at the moment stand between the two communities are the United Nations forces.
Mr. Hooley: Will my right hon. Friend promise to use his best endeavours in the Security Council to ensure that there is no reduction in the effectiveness of the United Nations peacekeeping force in Cyprus during these events?
Mr. Callaghan: Yes, Sir, they have performed, and are performing, a very valuable role. Mr. Ivor Richard is in constant contact with Dr. Waldheim and other permanent members of the Security Council.
Mr. Evelyn King: Have the leaders of the Cypriot-Turkish community as opposed to the Turkish Government issued any statement on this situation?
Mr. Callaghan: I have not seen one.
Mr. Lee: On the point made by my hon. Friend the Member for Erith and Crayford (Mr. Wellbeloved), may we take it from my right hon. Friend's reply that in no circumstances will we recognise this odious man, Nicos Sampson, as President of Cyprus?
Secondly, if, unhappily, conflict should break out between Greece and Turkey, which of our NATO co-signatories shall we support, or shall we impartially supply British troops to both?
Mr. Callaghan: That seems a cross-examination that I would expect in the courts, but I do not think it would be helpful if I were to reply to all of it this afternoon.
Sir George Sinclair: Does the Secretary of State accept the claim of the Greek Government that this attempted coup was entirely local in origin in Cyprus, especially in view of the warnings given within the last fortnight by Archbishop Makarios of an attempted coup and attempt on his life and the visit last Friday of the commander of the Greek-officered National Guard?
Mr. Callaghan: It is clear that the Archbishop was in great apprehension about the action of these officers. That is why he asked, but without success, for their withdrawal from his National Guard. It seems as though he was correct in his fears.
Mr. Dalyell: What is being done about the problem of supplies for Service personnel in the sovereign base?
Mr. Callaghan: I think that my hon. Friend should put that question down to my right hon. Friend the Secretary of State for Defence.

TRADE UNION AND LABOUR RELATIONS BILL (DIVISIONS)
Mr. Prior: On a point of order, Mr. Speaker. In view of the exchanges yesterday, may I ask whether you are now aware that irregularities occurred in voting during the proceedings on the Trade Union and Labour Relations Bill on Thursday 11th July, including the Divisions on Amendments Nos. 101 and 66 which resulted in tied votes?
Mr. Speaker: I do not make any complaint, but I have not had very long notice of this point of order. I have heard of the allegations made and I heard what was said in the House of Commons yesterday, but nothing has been formally reported to me by the Tellers in the Lobby in which the irregularity is said to have taken place or by any other hon. Members involved in the irregularity. What I have to consider and decide is whether I should take it upon myself to make inquiries into the matter and report back to the House. That is a matter for me to consider and decide. However, if any right hon. or hon. Member has views on the matter I shall be happy to hear them.
Mr. Prior: Further to that point of order, Mr. Speaker. May I, through you, ask whether the Leader of the House will inform us what measures he proposes to take about an irregularity that has been reported?
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): Further to that point of order, Mr. Speaker. I have looked into this matter since our exchanges yesterday

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and my right hon. Friend the Chief Whip has discussed the matter with the Opposition Chief Whip. I understand that my right hon. Friend the Prime Minister has also exchanged letters with the Leader of the Opposition. I am quite sure that a number of clear points emerge from all this.
The first is that my right hon. Friend the Chief Whip acted in perfectly good faith.
The second is that my right hon. Friend the Chancellor of the Duchy of Lancaster was not on the premises. He should have been here, but he did not know it. [HON. MEMBERS: "Oh."]
The third point is that the Opposition Whips knew that my right hon. Friend was not on the premises four hours and 20 minutes before Third Reading of the Bill—[HON. MEMBERS: "Oh"]—after inquiries, including one under an assumed name. It was four hours and 20 minutes before the matter was reported to my right hon. Friend the Chief Whip.
Therefore, a number of matters concerning these events are still shrouded in mystery. I think that by far the best way out of the immediate problem is the suggestion that I made yesterday; namely, that the Opposition parties put down identical amendments in another place, which they would have done anyhow, that these are brought back here and that we then have votes on them. I am sure that that is the best way out of the immediate problem.
For the future, I think there is a case for referring our custom on this matter—[HON. MEMBERS: "Cheating."]—to the Select Committee on Procedure. If that has the general agreement of the House, I shall be happy to see that it is done.
Mr. Prior: It is clear from what the Leader of the House said that there was an irregularity in that the Chancellor of the Duchy of Lancaster was not on the premises and that he should have been if he was to be nodded through. Those are the facts. That being so, would it not be right for the House to follow the precedent that it has followed on previous occasions of asking the other place to return the Bill to the House of Commons so that the irregularities can be put right before it is delivered to that other place?
Mr. David Steel: In your reply to the original point of order, Mr. Speaker, in passing you said that you had not been informed by the Tellers of any irregularity. Since I was the Teller on Amendment No. 66 in the "No" Lobby and the Chancellor of the Duchy of Lancaster was nodded through, may I inform you now that I have read a Press statement that he was not present in the House on that occasion?
Mr. Speaker: I think that my reference was to all the Tellers.
Mr. John Ellis: Further to that point of order, Mr. Speaker. You may like to know that some of us appreciate your position in this matter. When a vote is declared it is impossible for anyone in that Chair to know the rightness or wrongness of the result. Some of us would support you in the view that, whatever has happened, it is not for us to come creeping to you at this stage expecting you to get us out of the mess. The solution lies with us and we should take it on board, however unsatisfactory it is.
Mr. Speaker: I have considerable sympathy with that point of view.
Mr. Onslow: Further to that point of order, Mr. Speaker. The Opposition likewise have considerable sympathy with you because you were put in the difficult position of having to exercise your casting vote and were therefore involved. The practice of the Speakership therefore becomes a matter to be considered in this regard. May I put it to you that, great though your powers may be, it is not within them to allow to be recorded in HANSARD on a Division that a right hon. Member was present for voting when by his own admission and general agreement he was not, and could not, have been present. Therefore, there can be no question of the record standing in the form where presumably it will stand when we get a HANSARD to record the Division and there can be no justification for you having been called upon to exercise a casting vote. This is a most irregular position. It is intolerable that the Bill should have gone forward from this House to another place as if it had gone forward regularly.
Mr. Wellbeloved: Further to that point of order, Mr. Speaker. While joining in the general condemnation of the Chancellor of the Duchy of Lancaster for absenting himself from this House, may I ask you to take into account in your consideration of the matter that an Opposition Whip—namely, the hon. Member for Reading, South (Dr. Vaughan), I understand—telephoned the home of my right hon. Friend the Chancellor of the Duchy at about 7 o'clock in the evening, ascertained that he was not in the House, informed his superiors in the Opposition Whips Office, and yet they failed to bring that absence to the attention of the Government Chief Whip? Will you take into consideration in any inquiry that you may set up that the Government Whips Office acted with honour and integrity in this matter? If blame is to be apportioned, it must fairly fall upon the head of the Chancellor of the Duchy of Lancaster, who ought to have been in the House, and upon the Opposition Whips, who failed to have the integrity and courtesy to inform my right hon. Friend the Government Chief Whip.
Mr. Thorpe: Can you help the House on this point, Mr. Speaker, leaving aside the peripheral point? My colleagues and I had no idea where the Chancellor of the Duchy of Lancaster was, but assumed that he was probably in the House, as otherwise he would not have been nodded through the Lobby. The Leader of the House, having accepted that an inaccuracy occurred in this House, said that the only forum in which it could be put right was another place. [Interruption.] Indeed. Some of us feel that that is a most extraordinary procedure. On the advice that you have taken and sought, Mr. Speaker, can you tell us whether there is a procedure whereby this House can put right its own inaccuracies and does not have to rely on another place?
Mr. Faulds: It must go out from the Government side of the House that, however inadvertently, a parliamentary impropriety has occurred. The matter of that evening's debate must be decided by this House, and a recount taken before it is considered by another place.
Mr. Strauss: Further to that point of order, Mr. Speaker. Is there not general agreement that the vote taken the other night must be reviewed and that it cannot
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stand? Two propositions are put forward, as I understand it. One is that the matter should be put right by recalling the Bill, as the right hon. Member for Lowestoft (Mr. Prior) suggested. That is bound to be a highly dilatory and very cumbersome way of dealing with the matter. [HON. MEMBERS: "No."] From the point of view of simplicity of action and effective action, is it not much better that the proposal of my right hon. Friend the Leader of the House should be adopted? We should have exactly the same effect more quickly.
Mr. Maxwell-Hyslop: Nobody has yet mentioned the Journal of the House, which is supposed to be the official accurate record for all time of events in the House. It is not the case that the Chancellor of the Duchy of Lancaster voted against the two amendments. I do not believe that any hon. Member disputes that. As the right hon. Gentleman did not vote against the amendments, it must lie within your authority, Mr. Speaker, to see that the Journal of the House records the fact that he did not vote against them. Otherwise, the Journal ceases to be an authoritative record of what does and does not happen in the House. Therefore, the correct means of establishing the truth has nothing to do with HANSARD, which has no locus standi in the matter, but has to do with the Journal of the House. I believe, Mr. Speaker, that you should instruct that the Journal records the real vote, which will show that one more vote was cast for the two amendments than was cast against them. That surely lies within your authority. I put it to you that it is your duty to the House so to do.
Mr. Heath: Is not the position that it is now agreed by the Leader of the House and, I think, by everyone that irregularities took place?
The right hon. Gentleman mentioned an accusation against my hon. Friend the Member for Reading, South (Dr. Vaughan), one of the Opposition Whips. In reply to the Prime Minister's letter, which I received just before I came on to the Opposition Front Bench, I shall say that after examination I find no truth whatever in the allegations.
As for the constitutional procedure, may I refer to the point made by the

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right hon. Member for Vauxhall (Mr. Strauss). I think that the constitutional question is this: is it right—perhaps this is where we differ from the Leader of the House—that an acknowledged irregularity in this House, which is the responsibility of this House, should be left to the other place to put right? Is it constitutionally proper to ask the other place to take responsibility for putting right an irregularity in this House? I suggest that many hon. Members on both sides of the House feel that that is not constitutionally right, and that if we are responsible for an irregularity we should take responsibility for putting it right.
With regard to the right hon. Gentleman's second point about a dilatory procedure, I understand that it would be possible for you, Mr. Speaker, to ask the Lords—as was done in 1972 for another reason—to return the Bill to this House. As the Second Reading is going on there now, it would be necessary for you to request this of the Lords during the debate on Second Reading, in which case the Lords, having reached their decision whether to do so, would be able to do it before the end of business tonight. Therefore, it would not be a dilatory procedure.
May I suggest, Mr. Speaker, that what follows would be what has already been suggested by the Liberal Whip, that you could ask the Tellers to report the incident, and as a result of their report the correction could be made.
The Chancellor of the Duchy of Lancaster (Mr. Harold Lever): As this is the first word I have to say to the House on the matter, it is right that I should begin by apologising to right hon. and hon. Members for having put them to this inconvenience.
It is also right, however, that I should tell the House, difficult as it may be for some on either side of the House to accept, that when I stayed away I did so in the belief—wholly wrong, and I am not entitled to rely upon it—that I was the object of some chivalrous indulgence by the Tory Whips. But I have to inform the House that, beyond any doubt whatever, there was a telephone call from the hon. Member for Reading, South (Dr. Vaughan) at around 7 o'clock, when my secretary informed the hon. Gentleman that I was in another room but not available, for reasons that I will not go into
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now, and offered to ring him back. The hon. Gentleman, who had originally announced himself as Mr. John Smith, then announced that he was the hon. Member for Reading, South, the Tory Whip. In my childish innocence, I thought that the John Smith was the former Conservative Member of the House when I heard my secretary tell me that the man who had said that he was Mr. John Smith then said that he was the hon. Member for Reading, South.
That does not excuse my fault, but perhaps explains to some hon. Members why I felt that the nodding through that was to take place in my absence would take place in the full knowledge of, and with the acceptance of, the Opposition Whips.
Rightly or wrongly—I do not know even at this moment—I regarded the nodding through process as a matter between the Whips. I thought that if the Whips were content that I registered at the beginning of a Committee stage and then went out, that was all right. If the Whips were not so content, I would of course have come back. I was at home at 7 o'clock when the hon. Gentleman telephoned. If the Opposition Whips had let me know that they resented my having left the House, I would have returned.
There is one general point on which you might help, Mr. Speaker. I have been in the House for about 30 years. I am told that I should know by now that people have been brought here in ambulances. I am not unaware of that, but I have not been aware that at any Committee stage Members have been shuttled by ambulance to and from hospital or have necessarily been in the House the whole time.
However, I should like to conclude by saying that I deeply regret the inconvenience and disturbance I have caused to the House and its business, because it was wrong of me, even in those circumstances, to act on the assumption that the Tory Whips had assented and that that permitted me to be absent. I was wrong, and I apologise to the House for it.
Mr. Grimond: On a point of order, Mr. Speaker. I personally have great sympathy with the Chancellor of the Duchy of Lancaster, and I am sure that,

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as usual, the House will accept with great good will his explanation of what happened. But this has nothing to do with the substance of the matters that we are discussing. This House has passed a very important piece of legislation, and the country will think it totally irresponsible if we allow it to go to the House of Lords in a form which it is agreed is wrong. To my mind, it cannot be beyond the powers of this House to recall the Bill and get the matter put right so that it may be examined in a proper form.
Several Hon. Members rose—
Mr. Speaker: Order. Perhaps I may be allowed to say a word. It has now come to my knowledge officially that there was an irregularity in this Division. It has been said on the Floor of the House, and it has been confirmed. The question is where do we go from there? The Leader of the Opposition referred to a case when the House of Lords was asked to return a Bill to this House. However, that cannot be done on my request. It requires a motion of the House.
There is the additional difficulty that I would have reserved my opinion on these matters until tomorrow but for the fact that the House of Lords is at the moment engaged in the Second Reading discussion of the Bill, which has to finish by 10 o'clock this evening. But there was an irregularity, and the vote was not the right vote. However, the House must decide what to do about it.
Mr. George Cunningham: On a point of order, Mr. Speaker. May I suggest to you and the other right hon. and hon. Members concerned that there is a simple method of disposing of this matter which is not open to the objection that it is leaving it to the House of Lords to do our business for us. We sometimes make procedural mistakes in this House, and the House exonerates itself from the consequences of them. If a motion were taken on a vote that, notwithstanding the irregularity which took place last Thursday, the House none the less asks the Lords to proceed with their consideration of the Bill—we all understand that a further vote will be taken when it comes back here—I suggest that we should have corrected the situation within this House and that that would be both the easiest and
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most procedurally correct and foolproof way of dealing with the matter.
Dr. Vaughan: On a point of order. Mr. Speaker—
Hon. Members: John Smith.
Mr. Speaker: Order. Before the hon. Member for Reading, South (Dr. Vaughan) puts his point of order, may I remind the House that from the point of view of this discussion these various charges and counter-charges are not relevant.
Dr. Vaughan: Although I agree entirely with you, Mr. Speaker, that charges and counter-charges serve no useful purpose and are side issues to the main problems facing the House today, since my name has been mentioned—[HON. MEMBERS: "John Smith."]—may I tell the House that at no time was there any attempt to conceal who it was who was telephoning—
Dr. M. S. Miller: But you did telephone.
Dr. Vaughan: Certainly I telephoned—[Interruption.] May I continue by saying that it seemed to me an essential part of my duty to inquire, since I was seeking the right hon. Gentleman in the House, whether he was in fact at home. As I say, at no time did I give any assumed name.
It has been suggested that there was then an undue delay. This was merely in order to try to ascertain for certain whether the right hon. Gentleman was away from the House, rather than making an accusation which we felt to be extremely serious.
Mr. Short: Quite honestly, the hon. Member for Reading (Dr. Vaughan) has confirmed that he telephoned some hours before, and so it is now established that the Conservative Party knew that there was an irregularity but that the Government side of the House did not know. It is a sorry business. The right hon. Member for Lowestoft (Mr. Prior) knew that there was an irregularity four hours before the vote. My right hon. Friend did not know that there was an irregularity. In view of this, would not the simplest way out of the difficulty be to adopt

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my proposal allowing this House—not the other House—to vote on these amendments again?
Mr. Prior: We have now heard the views of the Leader of the House again. He accepts that there was an irregularity. That there has been an irregularity is not in doubt, and, Mr. Speaker, you yourself have said that there was an irregularity. Therefore, may I suggest to the Leader of the House that the right way to proceed now is for a message to be sent to the Lords to request that they will be pleased to return to this House the Trade Union and Labour Relations Bill because of the irregularities in voting on Amendments Nos. 101 and 66? If necessary, would it be in order for me to move such a motion?
Mr. Speaker: I think that it would be in order for such a motion to be moved.
Mr. Prior rose—
Mr. Short rose—
Hon. Members: No.
Mr. Speaker: Order. This is an important and serious House of Commons matter. I hope that hon. Members will listen in silence to what is said.
Mr. Short: Can you, Mr. Speaker, accept a motion of this kind?
Mr. Speaker: I am advised that I am within my powers to do so.
Mr. Prior rose—
Mr. Ioan Evans: On a point of order, Mr. Speaker. It has been said that the hon. Member for Reading, South (Dr. Vaughan) knew what was happening. May we be informed, before the motion it put to the House, how many other members of the Opposition Front Bench knew about it?
Mr. Prior: On a point of order, Mr. Speaker—
Mr. Moonman: On a point of order—
Mr. Speaker: Order. The right hon. Member for Lowestoft (Mr. Prior) has risen on a point of order.
Mr. Prior: I think that the House would be better served at the moment if it accepted that there has been an irregularity and that, in view of that and because it must he right that the House
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of Commons should correct any irregularities for which it is responsible, I am certain that, whatever the side issues, we should do well as a House of Commons to ask for this procedure to be adopted and for the Leader of the House to move this motion now so that the Bill may be returned for the House of Commons to take the necessary decisions.
I do not want to cause the right hon Gentleman any further embarrassment. I understand the position. I know how difficult it is. But I believe that, in the interests of the House of Commons and the future of the House of Commons, this is a matter that we should put right in the House of Commons now.
Mr. Skinner rose—
Mr. Speaker: A point of order?
Mr. Skinner rose—[Interruption.]
Hon. Members: Get on with it.
Mr. Skinner: I have plenty of time. [Interruption.] Mr. Speaker is not listening yet. Is it not worth recording what no one has as yet mentioned and what ought perhaps to be borne in mind—that these so-called irregularities were to do with the Industrial Relations Act which, when is was a Bill was brought into this House by another form of irregularity—[Interruption.]—known as the guillotine, restricting the number of days for debate. It seems to me that as a result of this technique and what took place the Opposition are trying to inject a breath of life into that discredited Act as long as they possibly can.
Mr. Speaker: That is not a point of order.
Mr. Skinner: I have not reached my point of order yet.
Mr. Speaker: I have had quite enough. The House ought to consider this matter seriously. I will suspend the Sitting for 20 minutes.
4.11 p.m.
Sitting suspended—
4.31 p.m.
On resuming—
Mr. Speaker: The position, as I see it, is this. On the statement of the right hon. Gentleman the Chancellor of the Duchy, there was an irregularity in the

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vote. It follows, therefore, that the Journal must be altered. The copy of the Bill sent to the other place was incorrect. Therefore, this becomes a matter of privilege and I would give precedence to a motion relating to it.
Mr. Prior: Further to that point of order, and in view of your ruling, Mr. Speaker, may I ask whether the Leader of the House will now move the necessary motion "That the Bill be returned to the House of Commons"?
Mr. Short: In view of the behaviour of the Opposition in this matter, I am not prepared to do so. [Interruption.]
Mr. Speaker: Order. The right hon. Gentleman's answer was "No".
Mr. Stonehouse rose—
Mr. Heath: There has been a period for reflection. One realises that on these occasions the House naturally has very strong feelings. We can understand that the Leader of the House himself feels very strongly about it. He put forward a solution which I think most hon. Members would feel did not on the whole commend itself to the House. An alternative solution has been put forward which I think most hon. and right hon. Members would like to see accepted. I ask the Leader of the House in these circumstances to reconsider the answer which he has just given, and carry out his responsibilities—which I know he wants to do, to the House as a whole—recognise the feelings of the House, which it is customary for any Leader of the House to do in these circumstances, and give the House now the opportunity of passing this motion in order to get the Bill back from the other place. I ask the Leader of the House to carry out his responsibilities to the whole House, and to move that motion himself.
Mr. Stonehouse rose—
Mr. Speaker: Is this a point of order?
Mr. Stonehouse: On a point of order, Mr. Speaker. The House of Commons is facing a very grave situation. I think it extremely important that voices from both sides of the House should be heard on this question. In view of your statement, Mr. Speaker, following the suspension of the Sitting, there is a body of
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opinion on the back benches on this side which finds itself in agreement with the proposal that the Leader of the House should move the motion, and move it formally. I therefore beseech him to bear that in mind.
Mr. Tebbit: May I draw the attention of yourself, Mr. Speaker, and of the House to the fact that, regardless of what arrangements are made between the Front Bench leaderships, across the Floor, through the usual channels, or behind the Chair, there are many back-bench Members who do not have knowledge of these matters? When we vote in the Lobby we are under the impression that we are abiding by the rules of the game. I ask you, Mr. Speaker, to protect us by making sure that when arrangements are made they are honoured. Therefore, I appeal to the Leader of the House to do as requested by his right hon. Friend.
Mr. George Lawson: On a point of order, Mr. Speaker. Is it not the case that when Whips of whatever side nod a Member through the Lobby, those Whips are guaranteeing the presence of that Member within the precincts of the Palace of Westminster? It is not the fault of my right hon. Friend the Chan-cello of the Duchy. Such a fault might easily arise. The fault lies with the Whips of whatever side who nod a Member through.
I should like to put this to my right hon. Friend. Since a mistake has clearly been made, in that those who are responsible for guaranteeing a Member's presence within the precincts of this Palace have guaranteed that the Member was here, it seems to me—I am speaking for many hon. Member on this side of the House, too—that the right thing to be done is this, and the House cannot function unless we do things in this way. A declaration should be made that a mistake has been made, and whatever is necessary should be done to rectify that procedure.
Mr. Short: In view of the reasonable way the right hon. Gentleman put his point, if you, Mr. Speaker, can assure the House that we shall have an opportunity under this procedure to vote again on these amendments, I will move the motion.
Mr. Speaker: I am afraid that, how ever much I might want to do so, that will not be within my power. I can order the figures to be changed to what they should have been.
Mr. Short: This means that if I accept what the right hon. Gentleman has suggested, the House is not given an opportunity to vote on these amendments again. If my solution were adopted the House would have an opportunity to vote.
Mr. Onslow: May I put it to the right hon. Gentleman the Leader of the House that there is an important reason why the House should reject the opportunity that he is offering, because we are by tradition and rule—this is surely what we are seeking to achieve now—allowed to vote once on an amendment at each stage that it comes before the House. We have here a situation where we have voted on the amendments which have been before the House. The vote was a wrongly recorded vote, for reasons with which we are now familiar and which it will not help us to go over again because they are incidental and irrelevant in many cases.
I put it to the right hon. Gentleman that what he as Leader of the House is seeking to achieve is that the House should take two bites of the cherry which it has already swallowed. There is no way in which the House can do that. The House has voted. The vote was a regular vote so far as everyone who took part in it was concerned. But the result is irregular because one Member was recorded as having taken part in it when, in fact, he did not do so.
What the Leader of the House is seeking to achieve is that the Bill should go to another place and be amended there, which would open the way for this House to vote again on a Lords amendment. But that is not the matter which is before us. The matter before us is that the vote on the amendment which has already been taken should be accurately recorded, acted upon and not taken again.
Mr. Short: It may be within the recollection of the House that whenever an irregularity in a Division is reported to you, Mr. Speaker, you call another Division. The procedure now proposed would deny that opportunity.
Mr. Wellbeloved: It will be within your recollection, Mr. Speaker, and that of the House that during the proceedings of the Bill an irregularity was reported to Mr. Deputy Speaker and he ordered another Division. In view of the serious situation which confronts Parliament, will you consider that precedent?
We now know that had both the Government teller and the Opposition teller jointly been in possession of the knowledge that the Chancellor of the Duchy of Lancaster was not present within the precincts, there would no doubt have been a dispute when my right hon. Friend the Member for Bermondsey (Mr. Mellish) "nodded through", and that would have been reported to you. The fact that the Government teller on the door was not informed by the Opposition teller is in itself, in my view, an irregularity of almost equal importance to that of the absence of the Chancellor of the Duchy of Lancaster.
Even if it meant a further short suspension of the sitting, would you take this situation into consideration, because it would be intolerable if on one occasion during the passage of the Bill an irregularity was immediately reported and caused a further vote to be held, whereas a similar irregularity reported at a later stage did not carry the same opportunity for a further vote to be taken.
Mr. Speaker: It would be an easy way out for me but I do not think that it would be right. The figures are precise. There has been an admission as to one vote being counted which should not have been counted. My impression is that another vote is allowed when there is a dispute about what actually happened. In this case there is no dispute.
Mr. Bidwell: Before the suspension, Mr. Speaker, you confessed that you were in somewhat of a dilemma because the Bill is now before the other place. Since resuming its sitting, the House still seems to be in a dilemma. Is not the practice of "nodding through" a convention and not a rule? Therefore, would you now accept a motion, in order to relieve the difficulty, to the effect that the Third Reading of the Bill, as amended, be upheld?
Mr. Hugh Fraser: Could the House revert for a moment to your original

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statement, Mr. Speaker, wherein you said that this was a matter of privilege and that an incorrect record of the House should be put right? Surely it is the duty of the Leader of the House to move such a motion, whatever the local politics involved, because this affects the whole rectitude of the House of Commons.
Several hon. Members rose—
Mr. Prior: May I suggest that I should now move the motion? I think that that would be for the convenience of the whole House.
Several hon. Members rose—
Mr. Speaker: I will take two more points of order beforehand.
Mr. George Cunningham: The original factor which has arisen this afternoon, and which is new today as against yesterday in the knowledge of most of us, is that one of the four tellers who appeared at the Table last Thursday knew at the time that one of the votes recorded on the piece of paper for which he was taking responsibility was an improper vote.
Some of us on this side of the House have freely accepted, yesterday as well as today, that there was a mistake or a blameworthy action by this side of the House. But it is now clear that there was also a blameworthy act on the part of the teller of the Opposition. If that is right—and I think that most of us know that it is near enough right—then the right way out would be for my right hon. Friend the Leader of the House to move a motion that the House acknowledges the irregularities of last Thursday but invites the House of Lords to proceed with its consideration of the text which it now has, on the understanding that when the matter comes back to this House there will be a Division.
No side comes out of this affair very creditably, and if we are not careful the whole House will come out of it with no credit at all. I invite you, Mr. Speaker, at least to confirm that that is a motion which you would be prepared to accept if the Leader of the House were prepared to move it.
Mr. Dunn: I was one of the Government tellers on both of these occasions
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and I ought to remind the House that earlier that evening there was a disputed vote which I reported faithfully and with integrity, and that a second Division was called. Had I known that there were further disputes in the other two Divisions in which I participated—[Interruption.]—I would have thought that in courtesy hon. Members would listen to those whose integrity has been challenged. Had I been informed by any of my colleagues who were telling on those occasions that there was a dispute. I would have brought the matter to the notice of the Chair, and as far as I am concerned a second Division would have been required. I hope that the House will accept that explanation. I have already indicated that earlier in the evening that was the way in which we behaved.
Mr. Short: We cannot go on like this. We must resolve the matter. I have tried to help the House on two occasions, Let me try once more. [HON. MEMBERS: "Do your duty"] A great many other people want to do their duty. If this procedure is adopted, Mr. Speaker, I understand that you will, without calling the Whips, make a declaration about the results of the Divisions on these two amendments and declare them carried. May I ask whether you will agree, immediately following that, to allow the vote on Third Reading to be taken without further debate? One consideration in this matter is that if the Third Reading is delayed to another day, the House must sit into the second week in August, and I want to avoid that.—[Interruption.] This is an important matter for hon. Members who have children, if not for all hon. Members. Could I ask whether you would allow that, Mr. Speaker? If you would agree to that, I should be prepared to move the motion to expedite the matter.
Mr. Heath: Perhaps I can be helpful to the Leader of the House on this matter. I can obviously speak only for my right hon. Friends and myself, not for anyone else, but I understand the right hon. Gentleman's point on this matter. We do not wish to delay this Bill. That is not the purpose of the point that we have raised. We accept that it is the Government's Bill—it has had a Third Reading and will receive another Third Reading. As I have said, we have no desire to delay the proceedings in the other House.

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I believe that this procedure will allow the Bill to come back when the Lords have had their Second Reading debate but before it has been formally given a Third Reading. So, from the point of view of time, I am prepared to ask my right hon. and hon. Friends—I hope that the Leader of the Liberal Party will do the same—to enable the Leader of the House to get his Third Reading, I hope without further delay, after this irregularity has been put right. I would give him that assurance from this Bench.
Mr. Short: In view of that—I would remind my hon. Friends that we are denied the right to vote again on this—to expedite the business of the House. I beg to move,
"That the proceedings of 11th July in relation to the Third Reading of the Trade Union and Labour Relations Bill be null and void; that a message be sent to the Lords to request that they will be pleased to return to this House the said Bill because Clause 27 and Schedule 1 are incorrect; and that when the Bill has been returned by the Lords and corrected it shall be read the Third time."
Question put and agreed to.
Mr. Faulds: On a new point of order, Mr. Speaker. Since it has been a long-established tradition in the House that hon. Members treat each other and regard each other as "honourable" Members, what sanction does the House have against a Member who passes himself off as somebody else—Dr. Gerard Vaughan as Mr. John Smith? Are we entitled to suspend him, or what action can we take against a man who behaves in such a dishonourable way?
Mr. Speaker: That is not a matter for the Chair. I think that the general rule is that allegations of that sort by one hon. Member against another can be made only on a substantive motion.

STATUTORY INSTRUMENTS
Mr. Speaker: Unless there is any objection, I propose to put together the Questions relating to the following three Statutory Instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments),
That the draft Coal Industry (Borrowing Powers) Order 1974 be referred to a Standing Committee on Statutory Instruments.
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That the Legal Aid (Financial Conditions) Regulations 1974 be referred to a Standing Committee on Statutory Instruments.
That the Legal Advice and Assistance (Financial Conditions) Regulations 1974 be referred to a Standing Committee on Statutory Instruments.—[Mr. Edward Short.]
Question agreed to.

PROTECTION OF PASSENGERS (FARES) BILL
4.53 p.m.
Mr. George Lawson: I beg to move,
That leave be given to bring in a Bill to limit the extent to which forfeiture of fares, including deposits paid, may be included in contracts for the carriage of passengers.
I have been provoked into asking for permission to bring in the Bill because of the experiences of two of my constituents—[Interruption]—
Mr. Speaker: Order. Will hon. Members conduct their conversations outside?
Mr. Lawson: I was saying that I was provoked to ask for permission to bring in the Bill by the experiences of an old couple in my constituency who had arranged to go on holiday to Australia, a holiday which would cost them virtually all their life savings. The return fare to Australia would cost them over £1,000. They arranged the trip having been required by the conditions of their contract of passage to pay the full fare there and back before hand.
The company concerned, Chandris Shipping Lines Ltd. is a private company. Its chairman is a Greek, by name Chandris, and I understand that one of the other directors is his brother. This is a private shipping company with £500,000 £1 shares, of which 400,000 have been issued. All of those 400,000, with the exception of two, are owned by another company, a private company called Fountain Company Ltd., registered in the Isle of Guernsey. So the chairman, Mr. A. Chandris, and his brother, who is also a director, have one share each. The company operates mainly through travel agencies by taking passengers to Australia. It insists as one of the terms of contract that the full payment be made a substantial time before hand.
What happened in the case of my constituents is that Mr. McMillan of Wishaw fell ill—there was no question about his becoming ill; he is 75 years old—and they

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were obliged to cancel the trip. They were able to give only 21 days' notice of the cancellation. The company, which had already received the money, insisted on retaining the full fare from this country to Australia, returning only the fare from Australia back to this country. That part of the fare that they retained amounted to £599·50, that is, £600. The company insisted that the terms of the contract entitled it, unless it had been given 28 days' notice, to retain the full fare out.
Various appeals have been made to the company. I have written to it, as have the solicitors for my constituents. The company turned down the appeals on the grounds that the old couple had not properly insured themselves. I phoned the company and spoke to someone describing himself as the public relations officer. I said I would like to come and discuss the matter with the Chairman of the company, Mr. A. Chandris, and he said that he would get in touch with me after seeing whether it would be worth my while meeting Mr. Chandris.
I was subsequently told that Mr. Chandris was not prepared to meet me. I phoned later and asked whether it would be possible to discuss the matter with Mr. Chandris over the telephone. After another delay, I was told that Mr. Chandris was not prepared to discuss the matter with me, even over the telephone. We have, therefore, a situation in which an old couple's life savings have been—perhaps I should not use the word "confiscated"—forfeited to this company. No appeal that can be made to the company makes any difference. The company is simply insisting that because the old couple failed to insure against cancellation nothing can be done. In going into this matter I have formed grave doubts whether the couple were properly advised about cancellation and how important it was that they should insure against cancellation. But I leave that matter aside.
I am emphasising that we have circumstances in this country in which companies can apparently draw up terms and conditions of contract and that someone accepting those terms may have virtually no knowledge of what they are. A clerk in a travel agency, perhaps, or a bank selling
268
an insurance policy, may go over part of these terms and conditions of contract and may himself sign to say that he is authorised to say that people understand the terms. Perhaps I have put that wrongly. He may get them to agree that they understand the terms and conditions of contract although he himself may not be clear as to what they are. This having been done, it means that nothing else can happen and that the law is wholly on the side of the person or firm who impose the conditions.
I have with me the document which carries these terms and conditions of contract. The terms and conditions are contained on a single sheet of paper which carries more than 3,000 words. It will be seen that it is not a question of reading the small print but of reading the microscopic print. On that basis, this firm is enabled apparently, according to the law, to hold on to this sum, which is virtually £600, and say, "Come what may and do what you may, no matter what appeal you make or what the moral case is, or how hard up you are, we have got this money and we shall hold on to it." Unfortunately, the law as it stands will do nothing about it.
The Bill would seek, first, to ensure that terms and conditions of contract are laid out in such a fashion that there can be no dubiety as to what is meant. On important matters such as this, we should be perfectly clear about the terms and conditions. Secondly, we must have a law which imposes a limit on what can be charged. It should not be 100 per cent. confiscation—I use that word—but a definite although naturally relatively small and fair limit as to how much can be charged. We should also insist that there should be some means whereby there can be proper arbitration in disputes of this kind. This firm does not belong to any organisation. It goes on its own way. Clearly, we should not be prepared to permit this kind of thing. The Bill would ensure proper means of arbitration in these matters. That is the purpose of the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. George Lawson, Mr. William Hamilton, Mr. John Smith, Mr. William Small, Mr. Robin F. Cook, Mr. Harry Ewing, Mr. John Ellis.

PROTECTION OF PASSENGERS (FARES) BILL
  PROTECTION OF PASSENGERS (FARES)
  Mr. George Lawsonaccordingly presented a Bill to limit the extent to which forfeiture of fares, including deposits paid, may be included in contracts for the carriage of passengers: and the same was read the First time; and ordered to be read a Second time upon Friday, 19th July, and to be printed. [Bill 94.]
  WAYS AND MEANS

    DISALLOWANCE OF INTEREST (CONSEQUENTIAL AMENDMENTS)
    Resolved,
    That charges to income tax and corporation tax (including charges for past years of assess
    270
    ment or accounting periods) may be imposed by provisions corresponding with or consequential on provisions restricting the circumstances in which interest may be deducted from or set off against income for the purposes of income tax.—[Mr. Joel Barnett.]

PROCEDURE (FUTURE TAXATION) (No. 3)
Resolved,
That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, any Finance Bill of the present Session may contain provision taking effect in a future year for substituting a large amount for the £2,000 referred to in section 198(3) of the Income and Corporation Taxes Act 1970.—[Dr. Gilbert.]

ORDERS OF THE DAY

  FINANCE BILL
  As amended (in the Committee and in the Standing Committee), considered.
  Ordered,
  That on consideration of the Finance Bill any Amendments relating to the Clauses and Schedules be considered in the following order

  '(1)If a person carrying on a trade has on or after 1st June 1972 incurred expenditure in taking steps specified in a notice served on him by the fire authority under section 5(4) of the Fire Precautions Act 1971, and—

  5

  (a) the notice was issued on an application for a fire certificate in respect of premises used by him for the purposes of the trade; and

  (b) an allowance or deduction in respect of the expenditure could not, apart from this section, be made in taxing the trade or computing the profits or gains arising from it;

  10

  Chapter I of Part III of the Finance Act 1971 shall apply as if the expenditure were capital expenditure incurred on the provision of machinery or plant for the purposes of the trade, and as if the machinery or plant had, in consequence of his 15

  15

  incurring the expenditure, belonged to him and had been in use for the purposes of the trade; and as if the disposal value of the machinery or plant were nil.

  (2)

  This section shall be construed as if contained in Chapter I of Part III of the Finance Act 1971 '.—[Dr. Gilbert.]

  Brought up, and read the First time.
  5.5 p.m.
  The Financial Secretary to the Treasury (Dr. John Gilbert): I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. George Thomas): With this new clause we may discuss new Clause 7—(Fire precautions work in hotels and boarding-houses to qualify for tax relief—and new Clause 31—(Relief for expenditure on fire precautions in hotels and boarding-houses)
  Dr. Gilbert: I thank you, Mr. Deputy Speaker, for guiding us once again through the intricacies of procedure.
  The effect of new Clause 10 is to provide tax relief in respect of expenditure incurred as a result of a notice served by a fire authority under Section 5(4) of the Fire Precautions Act 1971 to the extent that the expenditure does not already rank for tax relief under the existing law. It does so by treating the expenditure not already entitled to relief as if it were expenditure incurred in the provision of machinery and plant. In effect, this extends the 100 per cent. first year allowance to such expenditure. The House will be glad to learn that the relief we propose shall apply to expenditure incurred on or after 1st June 1972. This
  of Clauses and Schedules, namely: Clauses 1 to 15; Schedule 1; Clauses 16 and 17; Schedule 2; Clauses 18 to 33; Schedules 3 and 4; Clause 34; Schedule 5; Clause 35; Schedule 6; Clauses 36 to 39; Schedules 7 and 8; Clause 40; Schedule 9; Clauses 41 and 42; Schedule 10; Clauses 43 and 44; Schedule 11; Clauses 45 and 46; Schedule 12; Clause 47; Schedule 13; Clauses 48 to 51; Schedule 14.—[Dr. John Gilbert.]

  FINANCE BILL
    New Clause 10

      EXPENDITURE ON FIRE SAFETY
      element of retrospectiveness, at any rate, I hope will commend itself to hon. Members in all parts of the House.
      At this stage it would not be appropriate for me to speak for long on the subject of the new clause. I am sure that the sense of it is clear to all hon. Members. It arose out of a very valuable debate initiated in Committee by the hon. Member for Cornwall, North (Mr. Pardoe), following on suggestions made also by the hon. and learned Member for Dover and Deal (Mr. Rees), to which I undertook to respond at this stage of the proceedings on the Bill.
      I want to make one or two comments on the other new clauses. Concerning new Clause 7, in the name of the hon. Member for Christchurch and Lymington (Mr. Adley) and new Clause 31, standing in the name of the hon. Member for Blackpool, South (Mr. Blaker) and his hon. Friends, our proposals are somewhat more generous than the proposals of the hon. Gentleman's new clause, in that that would apply only the industrial buildings allowance to expenditure of this sort, and this would afford relief of only 44 per cent. in the first year and 4 per cent. in each of the following years. Our proposal would give 100 per cent. relief for the first year and would allow that

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      relief to be carried forward if all of it could not be used in the first year.
      Regarding the amendment to new Clause 10 in the name of the right hon. Member for Devon, North (Mr. Thorpe) and his hon. Friends, on page 108, this would widen the scope of relief very considerably to cover expenditures on extensions to existing buildings. It is our view that this is a relief of an entirely different type. I recognise the arguments that lie behind it, but it would be our view that where a hotel owner or restaurant owner was contemplating a wholly new extension to his premises he would naturally take into account the proper cost of incorporating adequate fire precautions in those premises. What we are trying to do in new Clause 10 is to address ourselves to the situation in which premises are in existence and an owner suddenly finds that he has to expend money—and probably a disproportionate amount, because conversions cost more than would these provisions in new properties—in order to bring his premises in line with adequate safety requirements.
      I hope, therefore, that the hon. Member for Cornwall, North will accept that the Government have met him in a reasonably generous way and that the relief that we propose in new Clause 10 will meet the requirements of his constituents and the industry generally.
      Mr. Robert Adley: I declare an interest in the hotel industry. Many of my hon. Friends and many members on the Government side will be aware that the subject with which we are now involved has been of great and indeed grave concern, particularly to keepers of small hotels for well over two years. I congratulate the Government without reservation on the way they have accepted the proposal which has been put to them for a long time. It is a matter of considerable pleasure to see how the Government have now dealt with this question.
      I would like confirmation that the words "carrying on a trade" in new Clause 10 includes hotels and boarding-houses. Such confirmation need hardly be necessary. I am merely seeking to get the point on the record, and I am grateful to the Financial Secretary for now indicating assent.
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      In moving the Government's new clause the Financial Secretary raid that it was more generous than new Clause 31. It leaves me almost speechless to recognise that this is so, and we are extremely grateful to the Financial Secretary.
      It would be ungenerous of the Financial Secretary and myself, as Secretary of the Parliamentary Committee which deals with tourism, not to record our thanks to the Under-Secretary of State for the Home Department, who has carried our views to the Treasury, clearly to great effect. I am sure that the Financial Secretary will not mind my making the point that this issue was not first raised in Committee during our consideration of this year's Finance Bill. It has been of concern to many of us for a long time. On 25th April 1972 I suggested to the then Chief Secretary that what is now being done should be done. I received the reply:
      "I do not think I should be justified in singling out this particular form of expenditure for special treatment."—[OFFICIAL REPORT, 25th April 1972; Vol. 835, c. 1264.]
      I do not wish to labour the point. At that time the then Government said that they needed proof of evidence that the Fire Precautions Act would impose severe hardship on small hotels. I think that that proof has been more than adequately provided and I hope that in future, whatever Government are in office, the views of a much neglected section of society—the small hotels and boardinghouse keepers—will be heard. I am sure that the Financial Secretary and many of my hon. Friends will not mind my paying tribute to a former member of the House—Dame Irene Ward—who took a tremendously active part in pursuing this question. She was one of the most outspoken members of the group of 20 Conservative Members who went to the Treasury two years ago and raised the point with the then Government.
      I hope that the Government's new clause will provide the relief required, but I fear that there will still be many small hotel keepers, who are not making a profit, for whom the clause will not do as much as we would wish. We all support the Fire Precautions Act and we want to see as many hotels and boardinghouses as possible undertaking the work required under that Act at the earliest opportunity

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      The Government's proposal means in effect that a tax on safety is now to be removed. However, if it is proved that the proposal is not as effective as we all hope, I trust that the Government will keep their minds open towards providing grants for small hotels and boarding-houses, to ensure that the work required to be done under the Fire Precautions Act is carried out at the earliest opportunity.
      I am also concerned with the way successive Governments and the House have dealt with the tourist industry. The question arises whether the Department of Trade is the best Department to he made responsible for the tourist industry, or whether the Department of the Environment might become more involved, as well as, certainly, the Home Office, with the tourist industry and the representations it makes.
      5.15 p.m.
      Mr. John Pardoe: I notice that in your wisdom, Mr. Deputy Speaker, you have selected an amendment in my name and the names of my right hon. and hon. Friends to the proposed new clause in line 5, after "notice", insert "or written recommendation", to be debated separately from this new clause. I wonder whether it would be helpful if I may refer to that amendment now. I am in your hands, and in the hands of the House in this point.
      Mr. Deputy Speaker: Anything that will save time will find approval, but in this case it depends on whether the Government Front Bench, the Opposition Front Bench and the House agree. It seems that there is agreement.
      Mr. Pardoe: I do not wish at this stage to move the amendment to which I refer. I first wish to thank the Government for what they are proposing. They have gone further than I expected and, I suspect, than the Opposition expected. The matter with which we are all concerned has been considered in the Finance Bill in Committee and in the House on several occasions.
      In 1972 the present Chief Secretary and I both had separate amendments down when the Finance Bill was being considered and the matter was debated extensively. The arguments were knocked
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      down by the then Chief Secretary on behalf of the Conservative Government, and I am glad that amends have at last been made. I congratulate the Government on defeating the Treasury brief and winning through.
      I do not propose to go into the basic problems of this matter, but I shall summarise the background. There was a great deal of support on both sides of the House when the Fire Precautions Act was passed but, as I have indicated in Committee, this Act has been a partial failure up until now. I do not say it has been a total failure. It became operative on 1st June 1972 and its aim was to bring existing buildings up to a satisfactory standard in regard to fire safety. All hotels and guest houses with accommodation for six people or more, including residential staff, have to be registered with the local fire authority. The Act requires not only that the premises be registered but that applications be made for fire certificates for the premises, as well as inspection by the fire authorities. Unfortunately, remarkably little progress has been made, for a variety of reasons.
      First, the building industry has been extraordinarily drawn out, in the sense that an immense amount of work has been available for it in the period since the Act came into force. Many hotel keepers, with the best will in the world, have wanted to get the work done but have simply been unable to get it done. Secondly, there has been a drastic shortage of inspectors in the fire service. Perhaps all of us in the House were to blame, when we passed the Act in 1972, for not recognising how much administrative work was involved in the full implementation of it. That is still a problem.
      The new clause will mean a fairly handsome financial incentive, but there will still be a shortage of inspectors. Unfortunately, because of the reasons I have mentioned, and other factors, only 1 per cent. of all hotels and boarding-houses in this country have fire certificates. That is a terrible situation, which no hon. Member would wish to continue. Since I moved an amendment in Committee on which the Government gave an undertaking that they accepted the principle, and as a result of which they have brought forward the new clause, a hotel has been closed in my constituency because it failed to measure up to the

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      requirements of the Act. It was unable to get the work done in time for this summer season, but I hope that the job will be completed in time for the season after, and I am sure that the measure, in the clause will provide an incentive and an encouragement for it in that task.
      We do not know exactly how much money is needed to bring hotels up to the required standard. The industry's economic development council has conducted a survey of 1,200 of its members to find out the expenditure involved and to discover the problems. Although the survey is not complete, the council estimates that it could cost as much as £10,000 for a small hotel and substantially more for a larger one.
      I hope that we shall be able to get through these problems without Government grants. It may be that we shall all have to reconsider the situation in a year's time, but at present it is best to leave everything to the workings of the clause and hope that we shall pull through.
      The two amendments which stand in my name are not offered in any sense of dissatisfaction with the Government's gesture. They fill a not expensive hole, but a hole that needs filling. Only those hotels which have been inspected and certified will be eligible retrospectively to claim the tax. What is to happen to the hotels that were efficient and enterprising enough to carry out their structural alterations without officially approaching the authorities? The Hotels Restaurants and Caterers Association has evidence of hoteliers who have unofficially approached fire officers, avoiding the formal procedure of obtaining a certificate and thus avoiding the complications which arise for the hotels and the fire authorities.
      The fire authorities do not have sufficient manpower to inspect all the hotels. Many of the hotels have gone ahead with alterations without contacting the authorities because the inspectors are not available. It would be wrong to limit the retrospective element to hotels that have done these things formally and it would be equally wrong to adopt that approach in the future. Any hotel which wishes to do the work without going through the whole panoply of inspection should be encouraged to do so, but the clause
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      would deny it the tax relief that it gives to others.
      I thank the Government for the clause, therefore, which I hope will work substantially to improve fire precautions in hotels, but ask them to think again about my fairly minor amendment.
      Mr. Peter Rees: Since the Financial Secretary was graceful enough to acknowledge that I played some small part in the debate on these matters in Committee I propose to intervene only briefly. The clause had a mixed parentage—the Financial Secretary, the hon. Member for Cornwall, North (Mr. Pardoe) and I all stand in something of a parental relationship to it, and I suppose that makes it an odd clause. Nevertheless, I hope that it will be welcomed by the hotel and boarding house keepers in my constituency. I hope that those who have been perhaps a little laggardly in meeting the fire precaution requirements will be encouraged by the clause.
      Will the Financial Secretary say over what period depreciation will be allowed, and how long it will take to write down the cost of these improvements? I say that not in any grudging spirit, and in spite of anything I may say subsequently on Clause 5 I welcome unreservedly the retrospective element in the clause.
      I support the amendment standing in the name of the hon. Member for Cornwall, North, which seems to have a great deal of good sense to commend it. I hope that the Financial Secretary will not stand too formally on the lines drawn up in the clause but will accept the amendment, which will provide an added stimulus for hotel and boarding house keepers to anticipate rather than to wait for the requirements of the Fire Precautions Act.
      Mr. A. G. F. Hall-Davis: I first declare an interest as a director of a company which owns hotels, although perhaps not those which face the gravest problems from this legislation. I did not serve on the Standing Committee but I express my appreciation of the clause. The hotel industry, however, will still consider that it is less than it deserves. The background to the industry's complaints is that the Fire Precautions Act was introduced between legislation which gave comparatively generous grants for the extension of hotels

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      and legislation providing comparatively generous grants for the improvement of housing. The industry has always taken the view that expenditure to ensure safety of guests in hotels was as worthy of Exchequer support as expenditure to add to hotel accommodation or to improve domestic accommodation.
      The scale of the burden has not been widely appreciated. Expenditure required from some small establishments under the requirements of the Fire Precautions Act is the equivalent of a year's gross receipts in those establishments. I have substantiated this, and to put the matter into perspective one has only to consider what would be the reaction to legislation which required the top 20 companies in Britain to incur within one or two years expenditure of hundreds of millions of pounds.
      The small hotel keeper still faces the problem of finding the finance to undertake the work. I have no doubt that my hon. Friends raised this issue in Committee, but there is an unanswerable case for the Chancellor of the Exchequer discussing with the Governor of the Bank of England whether he could not indicate to the joint stock banks that expenditure to meet fire precaution requirements should come within a priority category of expenditure. We all know that the banks pay great attention to the Governor's indications on these matters. Judging from other categories which enjoy priority there seems to be an unanswerable case for extending that facility to expenditure on fire prevention.
      Sir Anthony Meyer: In these days when written records are so very hard to come by and when it has been difficult for those of us not serving on a Standing Committee to know what is happening there, one of the functions of a debate like this is to bring home to our constituents and those interested in these matters the wholly welcome decision of the Government. The only point I make, and in it I support my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) and my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis), is that, expenditure incurred on fire precaution will, in many instances, be considerably greater than total profits and often higher than total turnover. Therefore, I support the plea
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      which is made by my hon. and learned Friend the Member for Dover and Deal for a clear indication from the Government as to exactly how many years forward this expenditure may be rolled so as to be set off against future profits.
      5.30 p.m.
      Mr. Julian Ridsdale: I urged my own Government to do something more for the small hotel keeper and welcome the fact that in Opposition we have been able to press this amendment on the Government. I welcome the Government's action in helping small hotel keepers and guest house keepers.
      First, I support what was asked by the lion. Member for Cornwall, North (Mr. Pardoe)—what about the hoteliers who have already done the job? Is anything going to be done for those people? Secondly, I echo what was said by my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis)—namely that the banks should look favourably towards helping with the financing of this operation. I have no doubt that some of the small hotel keepers and guest house keepers are having difficulties in meeting the necessary finance.
      It was a pleasure to walk into the Chamber and to find that the House had been converted to being prepared to give help to hotels and guest houses. It was more of a pleasure as we have not been able to read the records of what has been happening in Standing Committee.
      Mr. Wyn Roberts: As a signatory to new Clause 7 and new Clause 31, and as I represent a predominantly tourist constituency, I greatly welcome the Government's new clause. It incorporates most of what I had in mind. It will be welcomed by hoteliers and boarding house keepers who are at the moment reeling from the effect of the high increases in their commercial rates. I had a letter only this morning from some hoteliers in my constituency strongly protesting against the increased rate. I am sure that the news of the contents of the new clause will help to alleviate their problem to some extent. It should also give new heart to hoteliers who were seriously wondering how they could survive and who were even considering giving up the business.
      I am concerned about those hoteliers who anticipated the Act and who did a

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      great deal of work in that anticipation. should be grateful for consideration of that point from the Government Front Bench. I hope that just because of the new clause the fire authorities will not exert undue pressure on hoteliers to carry out their fire precaution works under the Act. Despite the clause, which is extremely favourable to them, there is, as my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis) said, the general difficulty in the small hotel and boarding house business of obtaining finance for such works.
      Mr. John Nott: I represent a tourist constituency and I was naturally delighted that my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) and not myself opposed amendments of this nature which were tabled by my colleagues when we were in office. I naturally welcome this significant measure of tax relief which will alleviate the financial burden on hoteliers and guest house keepers in meeting expenditure under the Fire Precautions (Loans) Act. It seems to be a novel concept which runs contrary to the broader rules that we have so far adopted on the industrial buildings allowance. This seems to be the first industrial buildings allowance for which 100 per cent. first-year write off is available.
      I am also interested that we are financing for the first time, as far as I am aware, a 100 per cent. first-year write off to a particular statute. That may be a novel concept. I imagine that the Government will now wish to go ahead and grant a similar first-year write off for expenditure on safety at sports grounds and similar forms of expenditure. That would be a logical follow-up.
      I have never been a purist. I consider that this measure is a rather ingenious way of getting round a difficult problem regarding the setting of new precedents. In retrospect, that which the previous administration offered to hoteliers proved inadequate and too narrowly based, and small guest house keepers and hoteliers are having a difficult time. That is particularly so this year. Many of them fixed their tariffs earlier in the year, not anticipating the high rate of inflation which has come about. This measure will be a significant help to them.
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      It is also true that the scale of expenditure involved in fire precautions is very large in relation to the amount of cash which a hotelier or guest house keeper generates. This is a novel, ingenious and interesting new tax measure which I do not think has any precedent. I welcome it and I am glad to see that the Government, in this sense, have been consistent in office in relation to what they said in Opposition. With this excellent precedent behind it I have no doubt that the Treasury Bench will go forward to introduce further measures which were advocated in Opposition.
      Mr. Edward Gardner: Like my hon. Friend the Member for Morecambe and Lonsdale (Mr. Hall-Davis), I have a special interest in the small hotel keeper and boarding house keeper, of whom there are hundreds along the Fylde coast in my constituency. Since the passage of the Fire Precaution [Loans] Act I have had a continual stream of letters from people who have found themselves unable to undertake the necessary capital expenditure to introduce the fire precautions that they were called upon to provide. They will welcome, as I do, the provisions in the new clause which give them tax relief.
      I ask, in common with the hon. Member for Cornwall, North (Mr. Pardoe), that these allowances should be extended to hotels and other properties which adopted fire precautions before the operative date which is referred to in the clause. I further urge the Government to consider making as sure as can be that small hotel keepers and boarding house keepers who wish to raise loans and who have to do so if they are to pay for these works are given priority. This kind of work is essential, and the scale of expenditure involved for a small hotel is about £10,000, which could be more than the gross takings for a whole year.
      I hope that it will not be necessary, but we may have to consider making grants to enable these small business people to carry out this expensive work. In the meantime, I hope that the tax relief that they will receive from the new clause will go some way towards encouraging them and making possible this essential work.
      Mr. Richard Wainwright: I wish to speak briefly and solely to the amendment to the proposed new clause in the name of my right hon. and hon. Friends and myself which is set out on one of the dreadful pieces of paper which we are obliged to use—the insertion of "or written recommendation".
      I endorse entirely the cogent argument of my hon. Friend the Member for Cornwall, North (Mr. Pardoe). My hon. Friend was responsible for the origin of the new clause which is the substance of the debate. I endorse all the arguments that he put forward in favour of the amendment relating to the hotel, boarding house and guest house industry. However, I shall try to take the House a little wider than that. I hope that before the House passes another full-scale Finance Bill we may extend the scope of the Fire Precautions [Loans] Act as it relates to other kinds of non-industrial buildings.
      I am anxious that there should be no inadvertently disincentive effect to cause traders who use non-industrial buildings for their trade to defer fire precautions because they are awaiting a certificate under the clause. There is an urgent need in the older industrial parts of the country for ancient mills which are now used for non-industrial trading purposes to be properly adapted in the interests of safety. If firms who are operating in these buildings are advised by their accountants that they would be wise to defer precautions until orders are laid before the House to extend the Fire Precautions Act and until certificates are issued, there will be a positive and serious disincentive to take early fire precautions action.
      There are two amendments proposed by my hon. Friends and they would go some way towards shortening the period of possible disincentive effect by cutting out the waiting period for a formal certificate and enabling the Inland Revenue to accept a written recommendation. I hope that the House will bear in mind that the clause has a potential scope far exceeding the hotel industry.
      Mr. Robert Carr: In considering the amendments of which he is speaking, has the hon. Gentleman contemplated what happens in the case of a new building? Someone planning a new building could claim for a large amount of money and that would enable him to
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      spend much more on the building than he would have done otherwise. I cannot believe that that is the purpose of the amendment.
      Mr. Wainwright: My hon. Friend the Member for Cornwall, North (Mr. Pardoe), who devised the first amendment, may wish to say something about that if he has an opportunity to do so.
      I have a little experience in negotiating industrial building allowances with the Inland Revenue. An architect's certificate which certifies that designing a new building to comply with the Fire Precautions Act 1971 has cost a certain additional sum should be acceptable to the Inland Revenue in these enlightened and more permissive days if it is the serious purpose of the House to advance the cause of safety. I see no difficulty here, either for Ministers or for prospective Ministers of any Opposition party.
      I do not think that the Financial Secretary will attempt to deny that there is an inadverent disincentive effect in insisting that only by waiting for bureaucracy to produce an official certificate shall a potentially enormous tax benefit be conferred. I hope that the Financial Secretary will consider the serious consequences to fire precautions in warehouses and other non-industrial buildings if he insists on taking a literal view.
      5.45 p.m.
      Dr. Gilbert: With the leave of the House, I will attempt to answer the questions which have been asked. The compliments which have been paid to the Treasury Bench almost cause us to blush. It is a pleasant change from the atmosphere which prevailed in the Chamber not long ago. I just shows how sensibly we conduct our affairs when we consider Finance Bills in the House. I wonder, however, whether we should be quite so forthcoming. The making of a concession has been followed by a dozen speeches from the Opposition benches—but I do recognise, of course, that all who have spoken have a serious constituency interest and also the wider national interest in mind.
      I understand the point put by the hon. Member for Morecambe and Lonsdale (Mr. Hall-Davies) and several of his hon. Friends about finance, and I will convey his constructive suggestion to my right

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      hon. Friend the Chancellor of the Exchequer.
      The hon. and learned Member for Dover and Deal (Mr. Rees) asked for how long the relief would be available. I am advised that it can be rolled forward indefinitely to be set against future profits.
      Mr. Peter Rees: I could not have made myself clear. I know that if a trader cannot absorb the capital allowance in a year he can carry it forward to the next year, but over what period are the improvements to be depreciated for capital allowance purposes?
      Dr. Gilbert: I am informed that they can be rolled forward indefinitely until they have been exhausted.
      Mr. William Clark: With plant and machinery it is possible to have full depreciation in the first year. If the company does not take advantage of that and writes off only 50 per cent., whatever is left is subjected to the normal rate of depreciation, wear and tear allowance or capital allowance for that particular type of machinery. Is the Financial Secretary saying that the concession on fire precautions is true free depreciation, in that it is up to the hotelier to write off so much in the first year, so much in the second and so on, or is he saying that if the fire precautions cost £10,000 and the hotelier makes a profit of £4,000 he writes of £4,000 in the first year, £3,000 in the next year, and so on, depending on his profitability?
      Dr. Gilbert: If I understand him correctly, the hon. Member for Croydon, South (Mr. Clark) was right the first time. The 100 per cent. allowance is available in the first year. If it is not used in the first year the normal rules apply and it may be carried forward indefinitely.
      Mr. Clark: At what rate of relief can the hotelier write off the balance of 10 per cent., 20 per cent. or whatever it is?
      Dr. Gilbert: He can take 100 per cent. in the first year. If he does not take 100 per cent. in the first year, the balance can be written down at 25 per cent. per annum on a reducing basis. It is available indefinitely until the full amount is exhausted.
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      The hon. Member for Christchurch and Lymington (Mr. Adley) asked whether the words were intended to cover hotels and boarding houses, and I give him that assurance.
      The hon. Member for St. Ives (Mr. Nott) was good enough to compliment Treasury officials on their ingenuity in devising the clause. In parenthesis he raised the relevance of these matters to sports grounds. I am happy to tell him that if and when the Safety of Sports Grounds Bill is enacted, we intend to apply provisions of this sort to sports grounds in precisely the same way as to hotels and boarding houses.
      The hon. Member for Colne Valley (Mr. Wainwright) made an extremely significant point in connection with the Liberal amendment. I am sure he recognises that the amendment goes wider than is the Government's intention. His hon. Friend the Member for Cornwall, North (Mr.Pardoe) recognised that the clause was the right way in which to proceed at this stage. I understand the suggestion of the hon. Member for Colne Valley that there might be an unintentional disincentive effect in the clause and I should like to look at it again. If there is no dramatic political change in the next few months, another Finance Bill may be presented before the year is out, and that might be the appropriate time at which to consider the point.
      The Liberal amendment bypasses the provisions of the Fire Precautions Act and we should be reluctant that that should happen. The amendment, as drafted, has the effect, though possibly not intentionally, of widening relief to cover extensions rather than alterations, which is the purpose of new Clause 10.
      I hope that the hon. Member for Cornwall, North will accept that new Clause 10 is a considerable step forward. It gives retrospective relief to everybody who has been served with an order by a fire authority. Therefore, it is a considerable benefit. If we find that further progress is needed at a later stage, our minds are not closed to any such suggestion. I hope that the clause will commend itself to the House since it takes the matter as far as we can reasonably go. As for the substance of the Liberal amendment

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      which has technical defects, questions arising from it might be considered at a later stage.
      Mr. Pardoe: Before the Minister completes his remarks, can he say what he intends to do'? He said that he will look at the matter at a later stage or in some months' time. I accept that amendment would cover new hotels, and there may be reasons why the Treasury do not wish to go along with the proposal. Will the hon. Gentleman undertake to bring in in another place an amendment which limits the provision to existing hotels? There is no need to stand by the bureaucracy in respect of the Fire Precautions Act since it is possible to take action on the basis of a written recommendation. I am not saying that I do not take the amendment seriously or that I would not press it to a vote.
      Mr. R. Carr: I thought the hon. Member for Cornwall, North (Mr. Pardoe) was proposing another fundamental amendment—namely, that another place was suddenly to be given power to amend the Finance Bill. No doubt if we sought to proceed on those lines it would occupy the House of Commons for many hours.
      I should like to say how much we welcome the new clause and, as an ex-Horne Secretary, I feel deeply about the need to do everything we can to speed up the implementation of the Fire Precautions Act. We took legislative power to enable hotels to be given loans. We knew that we would have to watch how the situation went and, having seen what has happened, I believe that some other fillip is needed to assist hotels and boarding houses to implement the Act. Therefore we welcome the new Clause. I am glad that, with the help of hon. Members on both sides of the House, our efforts have been rewarded in this way.
      I cannot advise my hon. Friends to vote for the amendment. I see its point and I have considerable sympathy with it but, as drafted, it goes very wide. Surely the right course is that proposed by the Financial Secretary. The hon. Gentleman said that he, too, saw the point of the amendment. Therefore, I believe that we should accept the new clause with gratitude and watch how the situation goes between now and the next Finance Bill. I
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      assure the House that when we introduce that Bill, we shall have given the matter a great deal of thought.
      Dr. Gilbert: I thank the right hon. Gentleman for his constructive remarks. I did not mean to suggest that the hon. Member for Cornwall, North (Mr. Pardoe) was not taking the amendment seriously. There are implications for all sorts of new buildings as the ramifications of the Fire Precautions Act are extended in future years. We feel that the need for relief is greatest in regard to hotels and boarding houses. I assure the hon. Gentleman that we do not look at this matter with closed minds. We recognise a need, and that is why the new clause was introduced. I hope he will accept that it is a reasonable way in which to proceed.
      Mr. Pardoe rose—
      Mr. Deputy Speaker: (Mr. George Thomas): The hon. Member for Cornwall, North, has exhausted his right to speak. I understand that he does not wish to move Amendment No. 108.
      Mr. Pardoe: That is correct, Mr. Deputy Speaker.
      Question put and agreed to.
      Clause accordingly read a Second time and added to the Bill.

    New Clause 8

      PARTNERSHIP RETIREMENT ANNUITIES
      (1) Where a person (in this section referred to as the former partner) has ceased to be a member of a partnership on retirement, because of age or ill-health or on death and, under—

      (a) the partnership agreement; or

      (b) an agreement replacing the partnership agreement or supplementing it or supplementing an agreement replacing it; or

      (c) an agreement made with an individual who acquires the whole or part of the business carried on by the partnership;

      annual payments are made for the benefit of the former partner or his widow or a dependent of his and are for the purposes of income tax income of the person for whose benefit they are made, the payments shall be treated as earned income of that person, except to the extent that they exceed the limit specified in subsection (2) below, and shall not reduce the income which is chargeable as investment income of any other person.
      (2) The limit mentioned in subsection (1) above is 50 per cent. of the average of the amounts which, in the best three of the relevant years of assessment, were the former

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      partner's shares of the relevant profits or gains; and for this purpose—

      (a) the former partner's share in any year of the relevant profits or gains is so much of the relevant profits or gains as fell to be included in a return of his income for that year; and

      (b) the relevant profits or gains are the profits or gains of any trade, profession or vocation on which the partnership or any other partnership of which the former partner was a member was assessed to income tax; and

      (c) the relevant years of assessment are the last seven years of assessment in which he was required to devote substantially the whole of his time to acting as a partner in the partnership or those partnerships; and

      (d) the best three of the relevant years of assessment are those three of them in which the amounts of his shares of the relevant profits were highest;

      but where, in any of the relevant years, the circumstances were such that any of the profits or gains of a partnership were not assessable to income tax, paragraphs (a), (b) and (d) above shall apply as they would apply had those profits or gains been so assessable.—[Dr. Gilbert.]
      Brought up, and read the First time.
      Dr. Gilbert: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: It will be convenient to take also new Clause No. 28.—(Earned income).
      Dr. Gilbert: The effect of the clause is to provide that annual payments made by the continuing members of a partnership to a former partner who has retired because of age or ill-health shall be treated as earned income in the hands of that retired partner. Similarly the House will be glad to learn that the effect of the clause is that annual payments to the widow or dependants of a former partner will also be treated as earned income.
      The clause gives effect to an undertaking which I gave in Standing Committee. I shall not seek to detain the House for long in discussing its effect. However, I should point out that it is somewhat more restrictive than is new Clause 28 which we are debating at the same time and which is in the name of the hon. Member for Croydon, South (Mr. Clark). First, there is a limit on the amount of annuity which will qualify as earned income of the retired partner under our proposals. The limit is related to the partner's share of the profits in the last seven years of which he acted as a full-
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      time partner, and is confined to 50 per cent. of the average of the partner's share in the best three of those seven years. This is a somewhat convoluted formula, but we thought it right to try to get a formula which would provide a picture of the average spread over a period of years, taking good years and bad years. The option is available to partners to select the best years, taking the mean figure.
      I recognise that it could be said that the relief is self-policing since any annuity paid by a continuing partner is paid out of his own pocket rather than as compensation paid from corporate funds. On the other hand, we thought it right to have a limit in the clause. I do not think it is likely to bite very hard on the situation and the House will agree that it is a moderate proposal.
      The second difference is that the retirement annuity, although ranking as a deduction from the continuing partner's earned income up to the highest rate of earned income, will not rank for investment income surcharge. This is to preserve a certain symmetry because if the annuity to the retired partner is to be regarded as earned income in his hands, we consider it appropriate that the relief should relate only to the earned income of the continuing partners. I hope the House will regard those two minor constraints as reasonable and will accept the clause in the spirit in which it is moved.
      6.0 p.m.
      Mr. William Clark: I am grateful to the Financial Secretary for fulfilling the undertaking that he gave in Committee on a similar new clause.
      I accept the constraints that the hon. Gentleman has put on partnership annuity. I think that this course will be welcomed by ex-partners and by widows of ex-partners of professional firms. Even with the constraints, I think that the new clause will remove an injustice and anomaly in our tax system.
      It always struck me as odd that a self-employed person may not take advantage of the 1956 Act to pay for a self-employed pension. Many partners retire not having been able to build up a pension fund for themselves. To a certain extent the clause has removed the anomaly. I welcome it and am grateful to the Financial Secretary for bringing it

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      forward. I hope that the other new clauses will show the same generosity.
      I am sure that the Financial Secretary will agree that in Committee upstairs the Opposition put forward constructive suggestions to a hastily produced Finance Bill. I am delighted that the Chancellor of the Exchequer and his colleagues have seen fit to accept many of our representations and to admit, as they have, that the Opposition as a team did very constructive work on a hastily prepared Finance Bill.
      Mr. Nott: I am sure that, without having read the proceedings in Committee upstairs, what my hon. Friend the Member for Croydon, South (Mr. Clark) said does not need any proof. I believe that the Opposition put up an admirable show in Committee.
      I welcome the clause. It is helpful. I want to make only one minor point, and I do not mind if the Financial Secretary does not reply to it.
      I am in favour of a limit. The Financial Secretary said that this could be a self-policing matter, because the existing partners would not wish to pay out exaggerated sums to a retired partner. But I do not think that 50 per cent. is quite up to the norm which would be allowed in company pension schemes. Is it not below what an employee would receive as earned income under a normal company pension scheme? I realise that company tax arrangements on retirement pensions are complicated. I merely make the point that to say that 50 per cent., which is the average of the best three years, of pension or retirement income is to be taxed as investment income seems rather harsher as a limit than the limit for people who retire with company pension schemes. The limit which would be allowed by the Revenue in company pension schemes as a rough generalisation would be two-thirds of the final year's salary.
      Mr. William Clark: As I read the clause—I hope that the Financial Secretary will clear any doubts that I have in mind—I understand that the 50 per cent. pension is based on the profits of the last seven years, taking three years as an average. That will determine the amount of annuity that is paid either to an ex-partner or to his widow.
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      Perhaps I may give my hon. Friend an example. If the best three years represent £6,000, the average is £2,000 over those three years, and the Exchequer is suggesting that £1,000 of that annuity will be treated as earned income. However, it does not necessarily follow that, because a partner enjoyed his full percentage of profits, after he retires he will enjoy the same percentage of profits. I think that 50 per cent. is a step in the right direction. It is not analogous to the two-thirds pension scheme applicable to an employee.
      Mr. Nott: It may not be. I thank my hon. Friend for his guidance. It is not wholly clear to me. I was interested to know what the Financial Secretary would say about it. I should like to know whether it conforms broadly with what an employee would receive under a company pension scheme in terms of earned income. I welcome the clause. I think that my hon. Friend has done a good job in pressing the matter.
      Mr. Peter Rees: I welcome the principle underlying this long-overdue measure of reform. I gladly pay tribute to the Financial Secretary for so flexibly accepting the representations made to him by the Opposition in Committee upstairs.
      I intervene in the hope that the Financial Secretary will be able to clarify two points.
      First, the payment that qualifies for earned income relief has to be made under

      "(a) the partnership agreement; or

      (b) an agreement replacing the partnership agreement or supplementing it or supplementing an agreement replacing it; or

      (c) an agreement made with an individual who acquires the whole or part of the business carried on by the partnership."

      As the House knows, if a partnership takes in one, two, three or four new partners, strictly speaking a new partnership is constituted. Does it follow that if the partners enter into a partnership agreement, possibly supplementing that regulating the relationship between the former partners, it will be regarded as an agreement replacing the original partnership agreement under subsection (1)(b)? The only doubt in my mind is that paragraph (c) seems to be limited to to
      "an agreement made with an individual who acquires the whole or part of the business carried on by the partnership".

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      There is a slight area of doubt there which I am sure the Financial Secretary will be able to clarify. I want to make certain that if one or more new partners is or are taken into a partnership after the retirement of the partner who is claiming earned income relief, whatever agreement may regulate the relationship of that new partnership—because in law it is a new partnership—the agreement will qualify under subsection (1).
      Secondly—we have talked about symmetry, and so on—I am a little perplexed about the wording of subsection (1) which provides that the annuity
      "shall not reduce the income which is chargeable as investment income of any other person."
      I take it that it is not to count as a deduction where the partnership income for a year is not sufficient to support the annuity paid to a retired partner. Do I take it that the continuing partners cannot claim to deduct that annuity for tax purposes from their other income, or can they claim to deduct the excess from their next year's earned income, and so on? I am sure the hon. Gentleman will appreciate that there is a slight area of doubt there and it will be for the convenience of the House if he can clarify it.
      Mr. David Howell: I think that the House is agreed that the clause is a step in the right direction. We welcome it. As the Financial Secretary said, this matter arose at a very late hour in the evening or early hour in the morning when he indicated that he was prepared to make a concession in the form of a new clause. The clause sets right a longstanding anomaly.
      My hon. Friend the Member for Croydon, South (Mr. Clark) and my hon. and learned Friend the Member for Dover and Deal (Mr. Rees) have made certain points which I hope the Financial Secretary will be able to clarify. The inclusion of the clause in the Bill will mean that ex-partners, solicitors, accountants and professional people, who hitherto have been penalised, will now enjoy earned income relief and have their pensions treated to a certain extent as earned income. At a time when the professional and middle income groups are under attack by this Government, it is refreshing to see this little ray of sunshine in an otherwise dark sky of hostility towards people in such
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      professions. On that ground we welcome the clause.
      Dr. Gilbert: I am glad to recognise the tribute paid by the hon. Member for Croydon, South (Mr. Clark) when he says that when he puts forward constructive amendments and there is a reasonable Government in office those amendments are adopted, and that when there is an unreasonable Government in office he can batter his head against the wall indefinitely and make no progress. I would not describe all the amendments and new clauses put forward by him and his hon. Friends in Committee upstairs as being constructive. Some verged on the idiotic. We shall come to that matter later, no doubt. At this stage, we can agree upon the merits of the new clause.
      The hon. Member for St. Ives (Mr. Nott) asked some questions about the 50 per cent. limit. He is right to say that there are certain circumstances in which a controlling director may, under an improved superannuation scheme, receive a pension of up to two-thirds of his salary. We considered whether the same figure would be appropriate for these provisions. However, we bore in mind the fact that the rules that are operated administratively by the Superannuation Funds Office require that the amount of pension a controlling director may receive under an approved scheme is restricted to take account of any other annuity he may receive under a retirement annuity contract. There is no such restriction on retirement annuity contracts under these proposals. Therefore, we thought it reasonable to have a somewhat lower limit. I think it unlikely that it will bite frequently.
      The answer to the first question asked by the hon. and learned Member for Dover and Deal (Mr. Rees) is that where there is a replacement partnership the situation is as he understood it. The answer to the hon. and learned Gentleman's second question is that if there are insufficient profits in any one year it would not be a question of offsetting the annuity against any other income; it would constitute a loss for the partnership which could be carried forward to future years.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 1

      TRADE UNIONS
      '(1) In section 338 of the Taxes Act (exemption for trade unions)—

      (a) references to a registered trade union shall be construed as including references to a trade union entered in the list of trade unions maintained under the Trade Union and Labour Relations Act 1974; and

      (b) in subsection (2) (definition of "provident benefits" by reference to registered rules) the word "registered" shall be omitted.

      (2) Section 123(2) of the Finance Act 1972 (which restricts the exemption conferred by section 338 of the Taxes Act) shall cease to have effect.'—[Mr. Joel Barnett.]
      Brought up, and read the First time.
      The Chief Secretary to the Treasury (Mr. Joel Barnett): I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With the new clause we are to discuss Government Amendments Nos. 58A and 58B.
      Mr. Barnett: The object of the clause is to provide that trade unions entered in the list to be maintained under the Trade Union and Labour Relations Bill, which is at present passing through Parliament, will be entitled to provident benefit income relief under Section 338 of the Income and Corporation Taxes Act 1970. It has no retrospective effect, and will operate from the enactment of the Trade Union and Labour Relations Bill.
      As the law stands, "registered trade unions" are entitled to provident benefit relief under Section 338. Until 1971 the term "registered trade unions" covered unions registered under the Trade Union Acts. Those Acts were repealed for Great Britain by the Industrial Relations Act 1971. The word "registered" then denoted entry on the register maintained under that Act. That register, together with the Act, is now being repealed by the Trade Union and Labour Relations Bill. Thereafter, outside Northern Ireland, where the Trade Union Acts will still apply, there will be no meaning to the words "registered trade union", and no peg on which the relief can hang. That is why the other two amendments, No. 58A and No. 58B are required.
      The Trade Union and Labour Relations Bill provides for trade unions to be entered on a list maintained under that
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      measure. Under the clause, "listed" unions will be regarded as registered for the purposes of the tax relief. As the clause is needed merely as a matter of mechanics, I hope that it will be acceptable to the House, as I know it is to the right hon. Member for Carshalton (Mr. Carr), who never intended that such relief should be withdrawn.
      It will be well known to the House that the provident benefits include payments, under the registered rules of the union, to a member during sickness or incapacity from personal injury while out of work—this does not include strike pay or lockout pay; to a member by way of superannuation; to a member who has met with an accident; to a member who has lost his tools by fire or theft; and payment of funeral expenses on the death of a member or his wife or as provision for the children of a deceased member. I am sure that it is acceptable to the House, as it was for a very long time, that all those benefits should be eligible for tax relief.
      As we have had long debates on these matters, perhaps I may leave it at that.
      Mr. R. Carr: The Opposition have no objection to the clause. Indeed, we are happy to see it go through in this form, given the wider context in which it is introduced.
      The Government have been very sensible to resile from the original desire to make the provision retrospective, and I welcome the fact that they have bowed to the decision of the House when we discussed their original new Clause 4. I am grateful to them for taking that view.
      Question put and agreed to.
      Clause read a Second tune and added to the Bill.

    New Clause 9

      EXPENSES ALLOWANCES TO DIRECTORS AND OTHERS
      'Section 198(3) of the Taxes Act shall have effect for the year 1975–76 and subsequent years of assessment as if for the references to £2,000 there were substituted references to £5,000'.—[Dr. Gilbert.]
      Brought up, and read the First time.
      6.15 p.m.
      Dr. Gilbert: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this new Clause we are to discuss new Clause 15—Expenses returns [P 11 D].
      Dr. Gilbert: The effect of the clause is that the special legislation relating to taxation of expenses allowances and benefits in kind will, for the tax year 1975–76 and subsequent years, apply to employees whose earnings, including expenses and benefits in kind, are at the rate of £5,000 a year or more rather than £2.000 a year as at present.
      Mr. Brian Sedgemore: On a point of order, Mr. Deputy Speaker. Can you help the House in the matter of the selection of the clause? In the Committee. of which I was a member, a similar clause was tabled by the hon. Member for Worthing (Mr. Higgins) and some of his hon. Friends. They sought leave to withdraw it, but were refused. and the clause was emphatically voted down by the Committee. In those circumstances. I wonder why the Chair has selected an amendment which hon. Members have shown they do not want.
      Mr. Deputy Speaker: Mr. Speaker has discretion in the selection of amendments. In its wisdom, the House does not require him to explain why he selects any amendment.
      Mr. Sedgemore: Further to that point of order. Are we not entitled to expect Mr. Speaker to protect back benchers from the tyranny of the two Front Benches when the matter has clearly been debated and decided in Committee?
      Mr. Deputy Speaker: There is no need for us to spend much time on this matter. There is plenty of other business before us. The position is quite clear. Mr. Speaker has discretion, and he has exercised it. The House gave him the discretion, and now we had better accept his judgment.
      Dr. Gilbert: I think that in a moment can come to some of the points that are legitimately concerning my hon. Friend the Member for Luton, West (Mr. Sedgemore). My hon. Friend the Chief Secretary and I gave assurances in Committee that we would introduce on Report a new Clause with the effect of new
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      Clause 9, and we are honouring that commitment.
      The effect is to raise the limit for employees from £2,000 a year to £5,000 a year. For directors, however, the present legislation will continue to apply, irrespective of the level of their earnings.
      I refer briefly to new Clause 15, tabled by the hon. Member for Basingstoke (Mr. Mitchell) and two of his hon. Friends. The hon. Gentleman will see that the Government's clause has the same effect as his. I hope that he will accept our's as the best way to proceed in this matter.
      The £2,000 limit was fixed as long ago as 1948. Originally, we considered whether to introduce a clause of this kind ab initio. We recognised the need to raise the limit because of the quite unnecessary administrative complications involved for companies of all kinds and the fact that it operated below the average industrial wage.
      Having said that, I hope that my hon. Friend the Member for Luton, West (Mr. Sedgemore) will accept my assurance that we are not to be taken as agreeing that the increase in the limit from £2,000 to £5,000 leaves the law in a satisfactory state. The previous Government were undertaking a review of benefits in kind. We are undertaking just such a review ourselves. If, on consideration, we think it proper that, irrespective of the level of his earnings, an employee should be taxed on certain benefits which after all are only another form of remuneration, we shall have no hesitation in introducing the necessary amendments to the law for the House to consider and, we hope, to bring into effect. It is not our intention to open the way to large-scale tax avoidance through payments in kind rather than payments in cash or by cheque.
      I hope that that makes the position clear to my hon. Friend the Member for Luton, West. We would have preferred to introduce the results of our review of benefits in kind and the substantive amendment that we make in new Clause 9 simultaneously. However, circumstances did not work out conveniently enough to enable us to do that. In any event, I do not think that any harm will come from taking this clause first, and I assure my hon. Friend that we are proceeding with our review with all dispatch.
      Mr. David Mitchell: I welcome the new clause and the fact that the Government have tabled it in the form that they have. It is very similar to new Clause 15 which I and a number of my hon. Friends who are interested in the problems of small businesses—in which I declare an interest—sought to move. The Government are to be congratulated on having brought the matter forward themselves. As I understand it, the clause makes no change in the taxable position of the persons concerned, but it removes a substantial load from the shoulders of company secretaries and others who have to sign returns annually. The clause is particularly welcome for that reason.
      Mr. Michael Latham: I wish to associate myself with my hon. Friend and cousin the Member for Basingstoke (Mr. Mitchell) regarding the P11D change which is now before the House. This new clause gives me a degree of personal pleasure.
      To my certain knowledge a proposal of this kind has been put forward every year by the National Federation of Building Trades Employers, with which I was associated before coming to this House, in its Budget representations since 1967. I have always said that on the first occasion on which a proposal is put forward it is said to be impossible, on the second occasion it is said to be difficult, on the third that it is worthy of consideration, and on the fourth or fifth it is accepted. I therefore say to organisations outside this House, "Whenever you put forward representations to successive Chancellors of the Exchequer, keep trying. One day, you may win."
      Mr. Sedgemore: I make no apology for saying that I regret that the Chancellor of the Exchequer has tabled this amendment, which flies in the face of the decision of the Committee and in the face of every single Government supporter who served on that Committee, including my hon. Friends the Chief Secretary and the Financial Secretary. It seems odd that a provision of this kind should be introduced before the results of the Government's general review are known, and it was made clear in Committee that it was the Will of the Committee that an amendment of this kind should not be moved by the Government on Report.
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      All lawyers know that design and calculation are entirely different. I accept that it may not be the Government's design that payments in kind should replace increments in salaries or wages. However, it seems to me that the clause is calculated to do that and that people who try to use it will do so easily. We know that the accountancy profession will help people to use it in that fashion.
      There are of course exceptions in the accountancy profession, some of whom sit on the Treasury Bench today, but it seems difficult to invite millions of workers to accept restraint when we are introducing such a clause. To some extent, it sums up the rank hypocrisy with which we approach different sections of our society. Apparently, even we find it difficult to take the right decisions in these matters.
      Mr. Terence Higgins: The Opposition welcome the amendment, which is in conformity with the undertaking given in Committee. We acknowledge that the Government have carried out their promise. It was in the light of that that my right hon. Friend the Member for Carshalton (Mr. Carr) and I decided that it would be inappropriate to vote on this issue, and I am sure that it is right that the Government should have taken the eminently sensible view that they have. We understand that they are carrying out a broader review, but the clause will result in considerable administrative savings, and that is a situation towards which we ought to work. It is wrong to suppose that there are not some members of trade unions who will benefit from the change. In view of that, it cannot be regarded as a partisan measure.
      Mr. Gwilym Roberts: I support the doubts expressed so ably by my hon. Friend the Member for Luton, West (Mr. Sedgemore) about the introduction of this clause on Report. I accept the Financial Secretary's remark that it may not open the door to the use of benefits in kind and to large-scale tax avoidance, but there is no doubt that the feeling amongst rank and file trade unionists will be that the door is being opened by a provision of this kind.
      If there was any need for such a provision, in my view it would have been wiser to have delayed it till after the completion of the general review of payments

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      in kind. I feel strongly that ordinary workers on the shop floor will be worried when they see a move upwards in the limit of 150 per cent., and that they will want to know who will be cashing in on it. It may not happen, but it is very unwise in industrial relations terms to put such a provision on the statute book at this stage.
      6.30 p.m.
      Dr. Gilbert: I believe I can set my hon. Friends' very legitimate concern at rest on two points. My hon. Friend the Member for Luton, West (Mr. Sedgemore) suggested that my hon. Friend the Chief Secretary and I voted against such a clause in Standing Committee and were bringing the same clause to the House now on Report. In fairness to my hon. Friend and myself, this is not precisely the case.
      In Standing Committee we were voting against a different clause. That clause in Committee—and this is a very important point—sought to make relief available with respect to the current tax year, and this was for the Revenue administratively absolutely impossible. The clause we are now putting forward is one which my hon. Friend and I then undertook to bring forward with regard to future tax years. That is the difference between the two, and we have been in no way inconsistent in what we said in Committee and now on this matter.
      My hon. Friend the Member for Cannock (Mr. Roberts) expressed fears about the growth of tax avoidance through this clause. It makes no change whatsoever under tax law to the liability for tax of any individual. It really relates to the reporting requirements of firms to the Revenue. My hon. Friend says he fears that tax avoidance may open up as a result of this new clause. I can only give him an assurance that we are prosecuting this review of benefits in kind with great diligence and thoroughness. If there should be a General Election before October and we win it there will not be any extension of tax abuse in this matter. If we do not win the election it will be beyond my hon. Friend's power and mine to do anything about it.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 14

      MITIGATION OF CORPORATION TAX LIABILITY OF SMALL COMPANIES
      "For any financial year after 1972 for references to the amount of £15,000 and £25,000 in section 95(3)(a) of the Finance Act 1972 there shall be substituted the amounts of £25,000 and £40,000 and for reference to the amounts of £15,000 and £25,000 in section 95(3)(b) of the same Act there shall be substituted the amounts of £25,000 and of £40,000".
      Brought up, and read the First time.
      Mr. David Mitchell: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this new clause we may also discuss new clauses 17 to 23, all of which are headed:
      "Mitigation of corporation tax liability of small businesses".
      Mr. Mitchell: I shall explain why so many clauses having a similar purpose appear on the Order Paper. The purpose is to raise the narrow limit of companies entitled to small business relief from corporation tax. Before going further, may I declare an interest? Before I came into the House I was engaged full-time in the work of a small business and its management. I have a continuing interest there, and this enables me to bring to the House some experience of the troubles which affect this field of the business community.
      On this occasion, however, we are not dealing with the question of very small companies; we shall be debating their problems later this evening or tomorrow. Here we are dealing with companies whose annual profits are £15,000 or more. In this context I should explain the word "profit", because so many people seem to think that this is cash left over in the kitty at the end of the company's financial year and available for dishing round to directors for Rolls-Royces, yachts in the South of France, and so on, whereas the reality is that in most companies this money will be tied up in stock, work in progress and partly manufactured goods which may be going to export. Tied up in this, too, is money owed by customers to the company. It is not what so many people imagine profit to be, cash available; it shows itself in a whole series of ways in which it is incorporated into the working capital of the business.

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      I pray in aid of the case that I am about to make to the Committee what was said by the hon. Member for Heywood and Royton (Mr. Barnett)—now Chief Secretary to the Treasury—during the course of the Committee stage of the Finance Bill in 1972, of a similar amendment which I tabled at that time. The hon. Member said:
      "I entirely endorse all that the hon. Gentleman said about the difficulties which will be created for close companies of the better type, those who seek to reinvest and plough back their profits but who will now be faced with a 25 per cent. increase in their tax bill."—[OFFICIAL REPORT, Standing Committee E, 26th June 1972; c. 1492.]
      The hon. Gentleman will know, as I unfold the argument to him this afternoon, that I am talking about those very companies which he and I agreed at that time—although I was not then successful in persuading some of my hon. Friends—should have a rather different form of tax treatment. These are companies which are big enough to make a useful contribution to production in the national economy, and, particularly, they are suppliers to other industries of parts which are required in assembly work and things of that kind. These companies are not big enough to be quoted on the Stock Exchange, or somewhere of that kind, and are therefore companies which are financed principally out of retained profits.
      The Bolton Committee, in its examination of the problems of small businesses, indicated almost as a criterion that they were businesses which financed themselves and their expansion and growth out of their own cash flow. Some people may say, "Yes, and also from bank overdrafts," but there is a severe limit on the availability of bank finance for fast growing companies, because a bank will say, "Yes, we are very ready to lend money to the small business sector, provided it is credit-worthy." That sounds very good, simple and straightforward, until one plunges into the reality of what a bank means by "credit-worthy". It means a company that will be able to repay the borrowed money in cash within about three years. The kind of credit-worthy company that a bank is interested in is the one that has to stock up with material for a busy season of the year—perhaps the Christmas or summer trade—and
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      which, when it has sold those goods, have the cash back in its pocket and be able to repay the bank overdraft.
      What a bank is not interested in is long-term risk capital—the kind of situation where, if a bank manager asks in three years' time, "I would like the money back", he has to be told, "We are sorry but it is tied up in machinery, equipment or work in progress, and there is no cash available." The irony of it is that those companies which are the fastest growing and have the greatest contribution to make to the national economy are just those which, in the eyes of the banking community, are not credit-worthy in this context.
      There is a direct link between retained profits amongst these businesses and the means of expanding their businesses, resources for export orders or business of that kind, and—I am sure that here I shall have the support of the Chief Secretary—the very important employment aspect of the problem, as the country moves towards a period in which all the forecasters say there may be a threat of rising unemployment, remembering that one-third of all persons employed outside the public sector are engaged in the small business field.
      I had an example today of the kind of case I have been trying to make. I was talking to the general manager of a company which makes advanced electronic equipment. He told me that although he has the opportunity of acquiring substantial export orders he cannot accept more orders because he cannot finance the work in progress and the stock which would be required to fulfil those orders. This manufacturer is a supplier of specialised advanced electronic equipment which goes into much bigger export orders and production units. Therefore, a much larger field than the opportunities of expansion for this business on its own are placed in jeopardy.
      Here we have a sector of the business world which is being starved of adequate expansion finance. It is not big enough to go to the market, because it would be clobbered at 52 per cent.—the rate for corporation tax. I shall have the support of the hon. Member for Heywood and Royton in this respect because it is part of the problem which arose from the introduction of the imputation

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      system of corporation tax. I do not quarrel with that system in principle, but it is designed to ensure that businesses which have surplus money distribute it, and shareholders then reinvest the money through the Stock Exchange, so that there is a reallocation from what has been described as the fat to the dynamic.
      There is a re-allocation of national resources to the companies which are growing and most need those resources. I do not dispute the logic of my right hon. Friend the Member for Altrincham and Sale (Mr. Barber), who introduced the imputation tax system. I do not disagree with the logic which I have no doubt my hon. Friend on the Front Bench will use tonight. It is right that there should be such a system for quoted companies which use the market. But it breaks down when it is used for companies which do not acquire their finance through the market. We have to ask where the cut-off should be. When my right hon. Friend was Chancellor he introduced small business relief up to £15,000, graded off to £25,000.
      That may take care of the tiddlers—the smallest of companies—but what is to happen to those in the gap between them and the company that is big enough to go to the Stock Exchange to raise its finance? This question has not been satisfactorily answered. This is where the shoe pinches. This is where the trouble is today. These are the companies which will contribute so much more if they are allowed to retain more of their profits as working capital. I have therefore tabled a series of clauses. I hope that the Chancellor will consider the logic of taking this provision right up to the size at which a company can be quoted on the Stock Exchange. That is the logical point.
      If logic cannot prevail in these matters and there are financial restrictions and restraints, there is a series of clauses from which the Government can choose. I should explain why there is a series of clauses. It is simply that, eight days ago, I tabled a Written Question to the Treasury asking for the figures showing the cost of raising small business relief to a series of levels.
      It has taken the Treasury until lunchtime today to produce the answer. The Question was down for answer on Thursday of last week. I was grateful to the
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      Treasury for its co-operation in telling me that it was not able to provide the figures by then. It is an interesting sidelight on the interest of the Government in the problems of small businesses that these figures were not immediately at hand and had not been thoroughly thumbed over by the Chancellor when he was preparing his Budget measures earlier this year.
      New Clause 14 raises the limits from £15,000 to £25,000, graded off to £40,000. It would cost £15 million in a full year. New Clause 17 would cost £40 million; new Clause 18 only £10 million; new Clause 19, £15 million; new Clause 20, £20 million taking it up to £30 million, graded off to £40,000. New Clause 21 would cost £30 million. I have no doubt that the Chancellor has the answer to the other clauses.
      I would have preferred to see a figure with an increase from £15,000 to £30,000, graded off to £50,000, which would cost £25 million. It so happens that, in putting forward this spread of alternatives, when I got the answer from the Treasury today this was almost the only figure in the spread which was not actually tabled as a separate amendment. For those reasons I hope that the Chief Secretary will accept one of these clauses, preferably the most generous one in view of the advantage which the economy would derive from giving the opportunity to expand to the smaller traders of this country who are now restricted by a lack of working capital.
      6.45 p.m.
      Mr. Robert Redmond: It will not have escaped the notice of my hon. Friends that we are debating small businesses, again with much the usual sort of attendance on the Labour benches. I have been very glad to hear my hon. Friend the Member for Basingstoke (Mr. Mitchell) feeling so confident that the Government are bound to accept one of these clauses. I agree it is obvious that they must. There are one or two additional points not made by my hon. Friend which are relevant.
      In the past month or two we have heard a great deal about the amount of money the Government are paying industry. If that is so—I do not accept the argument—it would be agreed that by and large the State aid goes to big business. It is the small businesses which

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      are finding the money. This clause goes some way towards redressing the balance. There is an additional purpose behind this clause, certainly one that I had in mind when I put my name to it. It has to do with the fact that father, if I may call him that—the proprietor of the business—is often locked into it.
      It makes it extremely difficult for future expansion to take place, because as father grows older the steam goes out of the concern. There are fewer new designs coming on to the market and there is not such an active search for new markets. Possibly the business becomes ossified. In the end the only thing left is a take-over by one of the public companies. I shall relate my bitter experience in that direction in a few moments.
      As a result of the proposals in this Bill and those which will no doubt appear in yet another Finance Bill, to be brought forward by the Government if they survive until the autumn, things are made worse instead of better. For a long time estate duty has been the death knell of the small business. Now the gifts tax makes it much worse. This tax will go on and there is no hope of getting over it by using the inter vivos rule which has been an escape route for some small businesses for a long time.
      In their proposals in this Bill, and in the threats they make about the next one, the Government are making it more difficult for the father to hand over to his son, or for the proprietor to hand over to new management. The least the Government can do if they believe in small firms is to accept one of these clauses. If they are serious about wanting to provide employment they should look after the prosperity of the small businesses who employ the majority of employed people in the country.
      In many cases the profits of small firms as expressed in terms of a percentage of turnover are much better than those of very big companies. I am glad that my hon. Friend the Member for Basingstoke told us what profits are. There is a great misconception about them. During the General Election we had a fearful hoo-hah about the obscene profits of some companies which were declaring their figures in February. I agree with the word "obscene". I come from the
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      world of small businesses. If I had turned in to my shareholders in a small company profit figures expressed as a percentage of turnover, the sort of thing ICI was doing, I would have been rather ashamed of myself. Those profits were nothing like enough to finance future investments.
      As the managing director some years ago, of a small company in the engineering industry, employing about 120 people, I moved from a loss to a profit and then proceeded, over four years, to double the profit every year. The profits went up rather more than twice as much each year. As a result of that success all that I had at the end of the day was a vastly increased overdraft. Profits are not cash in the bank. Corporation tax is an addition, but the overdraft is a severe strain on liquidity for a small company trying to survive and increase its prosperity and increase the number of jobs it is able to offer in the market.
      I hope we can get it across that profits are not cash at the bank which can be milked by the Treasury. Profits are often an important factor in the survival of a business, either because they are passed on to the people who are running the business, to enable them to make up the cash so that the transfer can take place, or merely used to finance the business. The only source of finance for the small company lies in its own profits.
      I hope my hon. Friend the Member for Basingstoke is right in his confidence that the Chief Secretary will accept at least one of these clauses.
      Mr. Peter Rost: Supporting my hon. Friend the Member for Basingstoke (Mr. Mitchell) and the hon. Member for Bolton, West (Mr. Redmond), I express a hope that the Chief Secretary will seriously take on board the points being made by hon. Members on this side. It is unfortunate that the Chief Secretary has no guidance from his own back benchers because quite clearly they are not interested in small businesses any more than they are interested in the prosperity of the economy as a whole.
      I hope the Chief Secretary will accept new Clause 14. He has a particularly onerous responsibility on the Treasury Bench of being virtually the only voice

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      left on that bench attempting to salvage what is left of confidence in the British industry.
      Having made some very acceptable and generous concessions at the Committee stage of the Finance Bill, which will assist the prosperity of the country, he will now surely accept that the responsibility on his shoulders to see reason is very heavy. Although he understands these matters, it is clear that many of his colleagues not only do not understand what makes this country tick, and what our prosperity depends upon, but are doing their very best to sabotage what is left of confidence in this country. Therefore, I hope the Chief Secretary will accept this responsibility because he understands these matters. He knows the importance of small businesses in this country. He must also know, when small companies are in their vital growth stage, and are very delicate flowers which need fertiliser and not weed-killer of the type proposed by Members opposite, of the vast advantages that can accrue to the economy as a whole from allowing that moderate and reasonable tax concession.
      My hon. Friend the Member for Bolton, West has already quoted an example of the way in which profits rise as a small business is successful. The profits of smaller companies rise at a much faster rate through growth than those of the large groups and companies. As a result, eventually, within perhaps a few years, the corporation tax and other taxes paid by that company rise astronomically from nothing to quite useful amounts. Therefore, the argument should be that by making some concessions in the early stages of a small business, and allowing it to grow faster as a result and to flourish, the eventual benefit to the community, to the economy and to the taxpayer is not only more secure but also more substantial. Without that fertiliser or encouragement given by the Treasury in the early years the final "take" would be very much less, assuming the company survived.
      Second, small companies are being squeezed by several factors not yet mentioned in this debate. Those companies are being squeezed because they are small, because they are dependent upon larger suppliers for their raw materials and their services, who can put on the squeeze by delaying payment to the small
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      companies. Small companies are also squeezed by their large customers. The problems of a small company in financing its workload are very much more substantial than those of a larger company with stronger bargaining power.
      I hope the Chief Secretary does take on board the effect of this on a small company which is squeezed between a large supplier and a large customer, where the supplier presses for payment but where the customer delays paying for the services or product received.
      There is a further reason why smaller companies are being squeezed in a way which does not apply so much to the larger groups. The directors running small companies already have their personal cash heavily involved in these companies. The directors are already fully involved in their businesses. The future of such directors and of their families is tied up in their companies and their prosperity. In many cases the directors even have to give bank guarantees personally to help provide extra loans for small businesses. In other cases the directors have to "throw in" their house mortgages in order to secure extra bank loans. Those are additional burdens and risks which small businesses have to take in order to raise the working capital they need. That is a valid additional reason why this very moderate tax concession should be granted to those small businesses on whom the prosperity of this country so much depends.
      Mr. Cecil Parkinson: I support the new clauses and the amendments which my hon. Friend the Member for Basingstoke (Mr. Mitchell) introduced so well this afternoon. I supported my right hon. Friend the then Chancellor in introducing the imputation system and opting for it, but I also agreed at that time with the very good speeches made by the Chief Secretary to the Treasury pointing out that this would have the effect of substantially increasing the tax liability of a number of close companies. My right hon. Friend recognised the problem and introduced the idea of small business relief, recognising that there is a band of companies which relies very much on retained profits to finance expansion. He recognised that those companies perform a service and deserve special help.

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      It was pointless to force out of those companies and into the hands of shareholders dividends which would then be surtaxed. The shareholder would be left to pile back into the business what was left of the surtaxed income. For that reason my hon. Friend introduced the idea of small business relief at the levels of £15,000 and £25,000.
      The Chief Secretary to the Treasury, with his immense practical experience, recognised the problems of the small business and argued at that time that close companies would be damaged by the imputation system, and, by implication, lent his support to the idea of small business relief. Unlike many of us, he is now in the happy situation of being in a position to make the rules and not just to have to interpret and live with them. I urge him to take his pick from the large range of options which my hon. Friend has placed at his disposal.
      I do not go the whole way with my hon. Friend in saying that we should allow this relief to companies up to the stage where they go public that would be going too far. Once the company reaches a certain size and attains a certain profitability, it does not have to look to the market for its money. In fact very few companies do that, very wisely so. I think it is wrong to go to the market too soon.
      I hope that the Minister will now accept this opportunity, which my hon. Friend has temptingly provided, for an increase in the level at which small business relief becomes available. In so doing he will be achieving two things. He will be putting his money where his mouth is and, in addition, he will be gaining the support of a group of people who do not always look on his party with favour but who provide this country with a source of growth and employment which is valuable to it. I hope that at the end of the debate the hon. Gentleman will not miss this golden and exciting chance.
      7.0 p.m.
      Mr. Maurice Macmillan: In supporting the new clause, I must declare a partial interest. In so far as my family business does not, I think, come within the range of any of the new clauses that we are discussing, I have no personal interest, but in so far as it is
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      an unquoted company, I do. I think, therefore, that the only point I would add to the argument is to urge the Chief Secretary to remember that the whole of our industrial society depends, not upon wages or prices or profits, but upon the capacity of British industry to create new wealth and to go on creating it.
      We have not got the sources of overseas wealth which we once had and which, in effect, provided the nation with a very large unearned income. We now have to rely wholly on what we produce and manufacture in goods and services and sell overseas, and on what we can invest and create for that purpose at home. I urge the hon. Gentleman to think of these new clauses in such terms and to pick the one which gives the highest relief possible.
      This is perhaps particularly important at present, for it is virtually impossible for any company to get a new quotation. I believe that there has only been one new quotation this year, and that was an internal affair. So a larger number of companies than usual depend on their retained profits not only to expand but actually to exist.
      In an inflationary situation, the turnover can increase, in money terms, without any new real wealth being produced at all. Yet that increase in turnover, albeit in itself expressed only in money terms, requires extra capital to finance it, and in the companies we are talking about that extra capital can only come from retained profits. It just is not possible for them to use the banks to finance expansion and an increasing real turnover.
      If, for example, a firm has an unexpected success in exporting, it is liable to find itself having to finance a longer credit with greater stocks and more work in progress, and therefore its very success may lead it to risk financial problems or, alternatively, to refuse valuable export orders. That is not the way to create new wealth. It is not a way to get innovation. I hope that the hon. Gentleman will remember the size and scope of these companies, and the effect they have collectively, on employment and the economy as a whole.
      About 9,000 companies have shares which are quoted on the Stock Exchange. Leaving aside institutions like finance

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      companies, and so on, there are about 300,000 active unquoted companies. There are about 50,000 unquoted companies with a turnover of £500,000 a year or more; so this is a not inconsiderable proportion of our manufacturing and service industries. Again, leaving aside those employed by the State—in the broadest sense—of the employees in the private sector, 51 per cent. are employed by unquoted companies—including small businesses—and 49 per cent. by quoted companies. It is the capacity of small businesses to grow which must greatly affect employment prospects for the future.
      Finally, records since the war show that most of the technical innovations of British industry started—I do not say that they necessarily continued—in small companies in the unquoted sector—very often for the very good reason that the innovation required a risk to be taken by those who made it—a risk which they could not properly have taken as directors of a public company with other people's money but which they were willing to take with their own, backing their own knowledge, expertise and work, having faith in themselves and believing that they could build up their innovation as part of our industrial heritage for the future. It is that spirit which over the years has built up our industry and it is that process that we seek to foster for the future.
      Mr. Andrew Bowden: I must declare an interest. I am and have been associated with companies which have had profit figures in the ranges mentioned in some of the new clauses. I do not intend to bore the House by repeating the effective arguments which have been made by my right hon. and hon. Friends; I merely make an appeal to the Chief Secretary to the Treasury. I think the House knows that he understands the problems rather better than many of the right hon. and hon. Friends, and I remind him now of the many effective speeches he has made in the past on this subject and ask him to search his heart, not his conscience, very carefully and see whether he can find a way of accommodating the House and the small businesses.
      It is natural that any Government should look for areas for increased taxation, but let these companies produce
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      their small golden eggs with a minimum amount of tax, because those golden eggs will turn into bigger golden eggs and then, when they reach that size, the Government will find it much easier to take a substantial share. But if the Government kill the chicken too soon, even the small golden eggs will disappear. If the Government want money, let them give the small companies a chance to produce it.
      Sir Harmar Nicholls: Of necessity, when one is supporting the point of view set out in these new clauses a certain amount of reiteration has to go on. I do not suppose that, after the speeches we have heard already in the debate, there are many new points left. But what can and ought to be done, particularly to an accountant Minister, is to produce a little practical evidence to support some of the points made.
      I was particularly impressed by the reminder of my right hon. Friend the Member for Farnham (Mr. Macmillan) that large and important companies have developed from small owner-managed companies of only a few years ago. I come from the Midlands—the part of England that really matters. For example, there is the great Guest Keen and Nettle-fold organisation, which so impresses the world today. Its ingredients were Cottrell's factory, in Station Street, Darlaston, and Garringtons, of The Green, Darlaston. We have seen all these small factories eventually merge into something of world-wide significance. I agree that if, in those early days, they had had to withstand all the bureaucracy, taxation and interference that we have today, they could not have grown to this kind of importance.
      Many new industries are developing, upon which the Great Britain of the future will depend. One knows from one's contacts that the bureaucracy and the stranglehold of the regulations and taxation that they have to face will make it almost impossible for these people to make the contribution for which they have the potential.
      I also support the new clauses from the philosophical point of view. One of our problems is that industry is pretty well controlled by what is called the managerial-technological society. We have managers with great power at the head of great organisations, who are important

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      as long as they are there but who become of no significance once they retire. Their stake in the future—their desire to leave behind a viable firm—is not as great as that of the old owner-employers, who were concerned with passing on their assets. One of the inducements to people to work hard and develop things is the desire to leave something to their children.
      Unless we keep an important segment of owner-employers who are prepared to work harder than many managerial dictators, the general structure and balance of our industrial society will not be so good. The Chief Secretary laughs; we have lots of laughs outside, but I am now making a serious point. The hon. Gentleman's Government are opposed to the profit system, but the minute the profit incentive is removed from this country we shall remove our chance of remaining a worth-while industrial power.
      One cannot make a profit by producing something that people do not want; instead, one goes bankrupt. Nor can one make a profit by producing what people want, but at too high a price; that, too, leads to bankruptcy. One makes a profit only by producing something that people want at a price they can pay. It is from that profit that good wages come and reasonable taxation can be paid to maintain our general social structure and look after the disabled and the weak.
      If one accepts that philosophy, which has stood the test of a century and more, one must acknowledge the strength of the new clauses. I hope that the Chief Secretary will not simply smile—although he smiles delightfully—and pass them off as an ideological and dogmatic approach by the Conservative Party. He should recognise them as an important part of our industrial structure and look at them with sympathy. Then, one of the new clauses may be accepted.
      Mr. Nicholas Winterton: I support the new clauses. I must declare that I am associated with one small company. The clauses have been debated fully, and I endorse the comments of my right hon. Friend the Member for Farnham (Mr. Macmillan) and my hon. Friend the Member for Basingstoke (Mr. Mitchell).
      My party can take some of the blame for the situation facing small business
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      today. Successive Governments have failed to appreciate the value of small commercial undertakings, which have been penally taxed. I hope that the Chief Secretary, for whom I have considerable respect and who knows a great deal about small business, will be sympathetic. It is easy for a member of the Government to answer comments one by one, without any intention of seriously considering any concessions. I hope that he will, instead, deal with the points raised sympathetically and fully and not just make the party points that perhaps, traditionally, he is expected to make.
      7.15 p.m.
      Small business can make an increasing contribution, and these clauses will help. Many of the Chief Secretary's hon. Friends have talked about the amount of taxpayers' money which is given to industry. As many of my right hon. Friends have said, the amount given to industry is only £1 for every £5 that they contribute to this country and the Exchequer. Small industry takes very little money from the Exchequer but provides a considerable amount in taxation.
      Small businesses are in need of help. They were when my party was in Government, and unfortunately they received an unsympathetic hearing. The present Government have an opportunity to put some of this right and I hope that their party dogma will not overrule their under standing of the realities of the situation. These are reasonable clauses. For every £ 1 that the Minister gives, he will be rewarded tenfold if he sees his way clear to helping small business.
      Mr. Joel Barnett: I am overwhelmed by the flattering way in which I have been described. Since hon. Members feel that I understand these matters so well, I hope that they will be able to accept my arguments.
      I have long declared an interest in close companies, both before I became a Minister and since. The only way in which I have ever allowed that to influence me is that what I have learned has led me to realise the problems of different types of corporation tax and of measures which may hurt them. I do not retract one word that I have uttered in debates that we have had over many years.

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      There are eight new clauses before us and I am asked to perm one from them. The first seeks to lift the profits ceiling from £15,000 to £25,000 for entitlement to the 42 per cent. small companies rate of corporation tax under Section 95 of the Finance Act 1972. It would also increase the profits limit for marginal relief from £25,000 to £40,000.
      The new clause would cost £15 million and the others would cost varying amounts. But I do not rest my case on the cost alone. The new clauses are also technically inadequate, because there is something wrong with the tapering basis, but as I am not resting my case on technical inadequacies, I will not weary the House with the details. I am sure that by the time I have finished I shall have convinced the House that it should not agree to these clauses.
      Mr. David Mitchell: There is a suggested alteration in the tapering basis to make it rather longer than under the original provisions, simply in order to ensure that there is less discouragement to a company, once it is into the transitional period, from increasing its profits within that period. If it is too short, the company will be paying tax on its additional profits at a higher rate than 52 per cent.
      Mr. Barnett: The hon. Gentleman understands the point exactly. But because of the way that he has the marginal relief in the new clauses, the proposed limits would mean a marginal rate of tax of 68·67 per cent. on profits between £25,000 and £40,000, whereas the present marginal relief is 67 per cent. Therefore, he wants to increase it. I mentioned that only because it may be of interest to the House. It is a piece of information that is very important to some people. It is as well that it be known.
      At it stands at present, the effect of the Section 95 relief, if the amendment to Section 95 were carried, would be to leave only a small minority of companies—perhaps 4 per cent. or so—paying the full rate of corporation tax. I always like to give the House as much information as possible. I thought that these titbits of information might be useful to hon. Members. They should know that if these new clauses are passed they will be taking some 96 per cent. of companies outside
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      of the highest rate of corporation tax under the imputation system.
      I do not dispute a number of the arguments which have been made about the difficulties of running the small company. I am only too well aware of them. But when I heard the hon. Member for Derbyshire, South-East (Mr. Rost) telling me that I needed to fertilise delicate flowers, I wondered where I was. When I heard the hon. Member for Brighton, Kemptown (Mr. Bowden) telling me that we were talking about golden eggs, I wondered whether they were the same sort of close companies that I used to deal with. But let us be quite clear. Many hon. Members have said that they want to help close companies which are unable to be quoted and floated on the Stock Exchange, which made it, therefore, less easy for them to obtain funds, and that we should enable them to plough back more of their profits and pay less in tax. But these new clauses would not apply merely to what is known as close companies. They would apply equally to quoted companies and to non-quoted companies, and to investment companies as well as to trading companies.
      The hon. Member for Basingstoke (Mr. Mitchell) is always very fair. We have debated this matter at great length on many occasions. Indeed, this is the third time that we have debated the matter on this Bill. The hon. Gentleman quoted me as saying in Committee on the Finance Bill in 1972:
      "It is a fact that small companies of this kind that plough back their profits for growth and rarely, if ever, make a distribution will find their tax liability increased by 25 per cent."
      That is absolutely true. But the hon. Gentleman should have gone on to read what I said after that. Perhaps it will help the House if I repeat what I said then:
      "Having said that, I am not myself prepared to assist those companies with an amendment which at the same time assists what I consider to be the wrong type of company."—[OFFICIAL REPORT, Standing Committee E, 26th June 1972; c. 1492.]
      I was referring to the type of companies that I do not particularly want to help, that is, those companies which do not plough back their profits, and those companies such as small investment companies, which these clauses would help. This was the advantage of the old, classical type of corporation tax.
      Mr. David Mitchell: I would not wish the hon. Gentleman to think that I had, either intentionally or unintentionally, quoted only part of his remarks on that occasion and that by failing to complete the sentences I had left the House with an erroneous impression. If the hon. Gentleman will look at column 1492, he will find that the words that I quoted were at the end of his speech and that he was then followed immediately by my right hon. Friend the Member for Wan-stead and Woodford (Mr. Jenkin). Therefore, while the hon. Gentleman is quoting no doubt from his speech on that day or some other day near it, it is not the quotation that I used. Therefore, I would not want him to think that I had failed to give full weight to his words on that occasion.
      Mr. Barnett: I do not want to make too much of this matter. I do not wish to accuse the hon. Gentleman of being unfair. However, I have with me a copy of the OFFICIAL REPORT Of Standing Committee E, and I was reading from column 1492.
      As I have said, the case that I have constantly made in the House and in Committee has been that the type of corporation tax that I personally prefer is not the imputation system. Indeed, judging from the great strength of feeling and the arguments put forward by the hon. Member for Peterborough (Sir Harmar Nicholls), the hon. Member for Macclesfield (Mr. Winterton) and many others, saying how strongly they feel about close companies—I am delighted that that is so—I am a little surprised that they did not express those views about the imputation system when it was being introduced.
      Mr. Winterton: I did.
      Mr. Barnett: I absolve the hon. Gentleman. The fact is, however, that it is the imputation system that makes life very difficult for small companies. I do not dispute that, nor does the hon. Member for Basingstoke. The trouble is that hon. Members are trying to have it both ways. I do not blame them for that. It is an understandable desire. But it is very difficult in the corporation tax system because one cannot have both the imputation system and the classical system at the same time. That is the best way
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      to help close companies, but one cannot do it.
      However, that is not the purpose of these new clauses. The reason that it is not the purpose is that I assume that certainly hon. Members on the Opposition Front Bench and the former Chief Secretary, the right hon. Member for Farnham, will know very well that it is not possible to have an imputation system for 4 per cent. of companies and a classical system for 96 per cent. That is the reason and the real cause of the trouble. So I fear that hon. Members are complaining about the wrong things.
      In an excellent speech about close companies the hon. Member for Basingstoke said that we ought to have a corporation tax system for small companies which encourages plough-back. I agree with him, but that is not what the House has now got. The previous Government chose a different form of corporation tax. Hon. Members are now trying to change it for close companies—not in the new clauses, but from their speeches it would seem that that is what they want to do, otherwise we should not have heard the enormously powerful speeches from the hon. Member for Peterborough and others who feel so strongly about close companies.
      Incidentally I would not want to accuse the hon. Member for Peterborough of not having read the eight new clauses. If he read them diligently, as I am sure he always reads such things, he would have realised that what he is seeking to do is not precisely what hon. Members have in mind. They will certainly give some assistance to companies with small profits, but that is not the same thing as assisting small companies. Hon. Members wish, therefore, to give assistance under these clauses to quoted companies and to investment companies—the companies which were not referred to by them. They were talking about trading companies and the need to help the great trading companies of this nation which they desperately want to make larger profits. Why did we not hear this sort of speech from the hon. Member for Peter borough—
      Sir Harmar Nicholls rose—
      Mr. Barnett: I love to hear the hon. Gentleman, but not now. All right I will give way to him.
      Sir Harmar Nicholls: I am glad that the time has not yet come when the hon. Gentleman decides when I shall speak or remain silent.
      I never agreed with the imputation system. All that I want to get into the Committee is the recognition that small companies need help. If it is that they are to be told to fertilise their companies front their own profits and if the hon. Gentleman has that in his head, let him put that point of view in some form. I do not care whether it be in these new clauses or in amendments from him, provided that the net result will help small companies which need help. If in the process of helping the many we help one or two investment companies, which the hon. Gentleman hates, or finance companies, which he dislikes, I do not mind that. If it is to the general good to strengthen the base of small companies, it is the right price to pay.
      7.30 p.m.
      Mr. Barnett: If the hon. Gentleman is now telling me that he is not too happy about the eight clauses but would like something else I would be happy to look into that on another occasion, but at the moment we are discussing the eight clauses. I am taking a tally of all Members of the Opposition who do not like the imputation system, and I will note it.
      What the clauses are seeking to do is not what hon. Members have in mind. The proposals would not help family businesses—
      Mr. Redmond: As the Chief Secretary is taking note of who does and who does not like the imputation system, may I go on record for the imputation system for the publicly owned enterprise but not for the small company? However, this does not alter what we are arguing about on the clauses.
      Mr. Barnett: The hon. Gentleman shows how impossible it is to have an imputation system for 4 per cent. of companies and the classical system for the remaining 96 per cent.—
      Mr. Maurice Macmillan: The Chief Secretary has failed completely to deal with the imporant part of the argument. Much as I agree with the imputation system and relief for small companies—which we gave—the difficulty for small
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      companies is greatly increased by the fact that the borrowing rate is now 15 per cent. That and the present inflation rate makes it extremely difficulty to finance expanding turnover. The Chief Secretary has ignored that part of the argument.
      Mr. Barnett: That was an ingenious intervention, but it did not deal with the point I was making that it is impossible to have the imputation system for 4 per cent. of the companies and the classical system for the other 96 per cent. The right hon. Gentleman is on a wholly different point. He is on a point on which he is now prepared to move a little further than he and his right hon. Friends did under Section 95 and increase the amount for small companies.
      I resist what is being proposed because of what it would give to a large number of companies. I do not hate these companies. It would be absurd to suggest that I do. We are talking about what type of companies should pay a higher rate and what type should pay a lower rate. It was the right hon. Gentleman who introduced the system, not we. I am surprised that he does not like it—[Interruption.] It seems he does like it. I am glad that he likes the system we have. We are left with the situation in which companies with small profits will suffer, close companies amongst them. Hon. Members opposite have said how much they appreciate the knowledge which I bring to these matters and I naturally expect them to withdraw the eight clauses and to allow us to move on.
      Mr. David Howell: The whole House will be deeply disappointed by that uncharacteristically lightweight contribution from the Chief Secretary. I was wondering, although a little despondently, which argument he would dodge behind this time. In Committee we discussed small companies, although in a different context, which related to payments in addition to advance corporation tax. The Chief Secretary then tried to turn the argument by saying that small companies which were expanding would not be able to pay dividends and would be hurt by payments in addition to ACT. I looked forward to hearing the Chief Secretary's excuse this time. He has dodged behind another tree. This time his feeble argument is that he cannot do anything about the situation because he does not like the imputation system.

      323
      That is the sole basis on which he is rejecting the arguments we put forward, not just as a criticism of the present tax system, but, as my right hon. Friend the Member for Farnham (Mr. Macmillan) emphasised, in a new situation. There is a problem here which we must get over to hon. Gentlemen on the Government side. In Committee the Government opposed the idea that there is a new tax situation in which they must act urgently to save us from greater disasters. We have had no success in establishing this in the minds of those on the Treasury Bench.
      My hon. Friends have raised their arguments with great restraint. I was pleased to hear them give explanations to hon. Gentlemen on the Government side who clearly do not understand the nature and role of profits. It is important to understand that profits are the engine of advance. If there are no profits there are no jobs. I know that it is difficult for hon. Members on the Government side to grasp this because they have been taught different ways over the years, but I am dealing here with hard economic facts, which must be faced, particularly in relation to the sector of small unquoted companies.
      The Chief Secretary has been a little sensitive about his past contributions in debates on this subject. In days gone by some of his hon. Friends, such as the hon. Member for Ashton-under-Lyne (Mr. Sheldon), as well as the Chief Secretary himself, played an important rôle in bringing to the House some sanity, intelligence and understanding in Opposition. Now things have changed substan-
      tially, and all we have is a feeble argument which does not begin to meet the points put from this side.
      New Clause 14 is a modest proposal, perhaps too modest. We have learnt from a parliamentary answer that the cost which it would involve would be about £15 million. I would have thought this a cheap way for the Government to do something they desperately need to do, and which they are even beginning to admit they need to do, that is, to try to restore business confidence, particularly among smaller companies. We can all think of better ways of restoring business confidence. For instance, we could silence the Secretary of State for Industry, who must cost the country at least £15 million a day, not a year. That would be a much better way to deal with business confidence.
      It seems incredible to me, and, I am sure, to my lion. Friends, that while many companies—I do not know how many extra companies would be involved in this, certainly tens of thousands—are trapped by higher corporation tax, by the consequences of the investment income surcharge, high interest rates and a rapidly deteriorating situation, the Chief Secretary can sit there and say that action cannot be taken because he does not like the imputation system. That is a feeble reaction in the face of a difficult situation which my right hon. and hon. Friends have described. I advise my right hon. and hon. Friends to press this matter in the Lobby.
      Question put:—
      The House divided: Ayes 292, Noes 267.

      Divison No. 83.]

      AYES

      17.40 p.m.

      Adley, Robert

      Bowden, Andrew (Brighton, Kemptown)

      Clarke, Kenneth (Rushcliffe)

      Aitken, Jonathan

      Boyson, Dr. Rhodes (Brent, N.)

      Clegg, Walter

      Alison, Michael (Barkston Ash)

      Braine, Sir Bernard

      Cockcroft, John

      Allason, James (Hemel Hempstead)

      Bray, Ronald

      Cooke, Robert (Bristol, W.)

      Amery, Rt. Hn. Julian

      Brittan, Leon

      Cope, John

      Ancram, M.

      Brocklebank-Fowler, Christopher

      Cordle, John

      Archer, Jeffrey

      Brown, Sir Edward (Bath)

      Cormack, Patrick

      Atkins, Rt. Hn. Humphrey (Spelthorne)

      Bruce-Gardyne, J.

      Corrie, John

      Awdry, Daniel

      Bryan, Sir Paul

      Costain, A. P.

      Banks, Robert

      Buchanan-Smith, Alick

      Craig, Rt. Hn. William (Belfast, W.)

      Beith, A. J.

      Buck, Antony

      Critchley, Julian

      Bell, Ronald

      Budgen, Nick

      Crouch, David

      Bennett, Sir Frederic (Torbay)

      Bulmer, Esmond

      Crowder, F. P.

      Bennett, Dr. Reginald (Fareham)

      Burden, F. A.

      Davies, Rt. Hn. John (Knutsford)

      Benyon, W.

      Butler, Adam (Bosworth)

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

      Berry, Hon. Anthony

      Carr, Rt. Hn. Robert

      Dean, Paul (Somerset, N.)

      Biffen, John

      Chalker, Mrs. Lynda

      Dixon, Piers

      Biggs-Davison, John

      Channon, Paul

      Dodds-Parker, Sir Douglas

      Blaker, Peter

      Chataway, Rt. Hn. Christopher

      Dodsworth, Geoffrey

      Boardman, Tom (Leicester, S.)

      Churchill, W. S.

      Douglas-Home, Rt. Hn Sir Alec

      Body, Richard

      Clark, A. K. M. (Plymouth, Sutton)

      Drayson, Bu aby

      Boscawen, Hon. Robert

      Clark, William (Croydon, S.)

      du Cann, Rt. Hn. Edward

      Durant, Tony

      Joseph, Rt. Hn. Sir Keith

      Rawlinson, Rt. Hn. Sir Peter

      Eden, Rt. Hn. Sir John

      Kaberry, Sir Donald

      Redmond, Robert

      Edwards, Nicholas (Pembroke)

      Kellett-Bowman, Mrs. Elaine

      Rees, Peter (Dover & Deal)

      Elliott, Sir William

      Kershaw, Anthony

      Rees-Davies, W. R.

      Emery, Peter

      Kilfedder, James A.

      Reid, George

      Ewing, Mrs. Winifred (Moray & Nairn)

      Kimball, Marcus

      Renton, Rt. Hn. Sir David (H't' gd 'ns' re)

      Eyre, Reginald

      King, Evelyn (Dorset, S.)

      Renton, R. T. (Mid-Sussex)

      Fairgrieve, Russell

      King, Tom (Bridgwater)

      Rhys Williams, Sir Brandon

      Farr, John

      Kitson, Sir Timothy

      Ridley, Hn. Nicholas

      Fell, Anthony

      Knight, Mrs. Jill

      Ridsdale, Julian

      Fenner, Mrs. Peggy

      Knox, David

      Rifkind, Malcolm

      Fidler, Michael

      Lamont, Norman

      Rippon, Rt. Hn. Geoffrey

      Finsberg, Geoffrey

      Lane, David

      Roberts, Wyn (Conway)

      Fisher, Sir Nigel

      Langford-Holt, Sir John

      Rodgers, Sir John (Sevenoaks)

      Fletcher-Cooke, Charles

      Latham, Michael (Melton)

      Ross, Stephen (Isle of Wight)

      Fookes, Miss Janet

      Lawrence, Ivan

      Rossi, Hugh (Hornsey)

      Fowler, Norman (Sutton C'field)

      Lawson, Nigel (Blaby)

      Rost, Peter (Derbyshire, S.-E.)

      Fox, Marcus

      Lester, Jim (Beeston)

      Royle, Sir Anthony

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

      Lewis, Kenneth (Rtland & Simford)

      Scott-Hopkins, James

      Freud, Clement

      Lloyd, Ian (Havant & Waterloo)

      Shaw, Giles (Pudsey)

      Fry, Peter

      Luce, Richard

      Shaw, Michael (Scarborough)

      Galbraith, Hn. T. G. D.

      McAdden, Sir Stephen

      Shelton, William (L'mb'th, Streath'm)

      Gardiner, George (Reigate & Banstead)

      MacArthur, Ian

      Shersby, Michael

      Gardner, Edward (S. Fylde)

      MacCormack, Iain

      Silvester, Fred

      Gibson-Watt, Rt. Hn. David

      McCrindle, R. A.

      Sims, Roger

      Gilmour, Rt. Hn. Ian (Ch'sh' & Amsh'm)

      McCusker, H.

      Skeet, T. H. H.

      Gilmour, Sir John (Fife, E.)

      Macfarlane, Neil

      Smith, Cyril (Rochdale)

      Glyn, Dr. Alan

      MacGregor, John

      Smith, Dudley (W'wick & L'm'ngton)

      Goodhew, Victor

      McLaren, Martin

      Spence, John

      Goodlad, A.

      Macmillan, Rt. Hn. M. (Farnham)

      Spicer, Jim (Dorset, W.)

      Gorst John

      McNair-Wilson, Michael (Newbury)

      Spicer, Michael (Worcestershire, S.)

      Gow, Ian (Eastbourne)

      McNair-Wilson, Patrick (New Forest)

      Sproat, Iain

      Gower, Sir Raymond (Barry)

      Madel, David

      Stainton, Keith

      Grant, Anthony (Harrow, C.)

      Marshall, Michael (Arundel)

      Stanbrook, Ivor

      Gray, Hamish

      Marten, Neil

      Stanley, John

      Grieve, Percy

      Maude, Angus

      Steel, David

      Griffiths, Eldon (Bury St. Edmunds)

      Maudling, Rt. Hn. Reginald

      Steen, Anthony (L'pool, Wavertree)

      Grimond, Rt. Hn. J

      Mawby, Ray

      Stewart, Donald (Western Isles)

      Grist, Ian

      Maxwell-Hyslop, R. J.

      Stewart, Ian (Hitchin)

      Grylls, Michael

      Mayhew, Christopher (G'wh, W'wch, E)

      Stodart, Rt. Hn. A. (Edinburgh, W.)

      Gurden, Harold

      Mayhew, Patrick (Royal T'bridge Wells)

      Stokes, John

      Hall, Sir John

      Meyer, Sir Anthony

      Stradling Thomas, John

      Hall-Davis, A. G. F.

      Miller, Hal (B'grove & R'ditch)

      Taylor, Edward M. (Glgow, C'cart)

      Hamilton, Michael (Salisbury)

      Mills, Peter

      Taylor, Robert (Croydon, N.W.)

      Hampson, Dr. Keith

      Miscampbell, Norman

      Tebbit, Norman

      Hannam, John

      Mitchell, David (Basingstoke)

      Temple-Morris, Peter

      Harrison, Col. Sir Harwood (Eye)

      Moate, Roger

      Thatcher, Rt. Hn. Margaret

      Harvie Anderson, Rt. Hn. Miss

      Molyneaux, James

      Thomas, D. E. (Merioneth)

      Hastings, Stephen

      Money, Ernle

      Thorpe, Rt, Hn. Jeremy

      Havers, Sir Michael

      Monro, Hector

      Townsend, C. D.

      Hawkins, Paul

      Moore, J. E. M. (Croydon, C.)

      Trotter, Neville

      Hayhoe, Barney

      Morgan-Giles, Rear-Adm.

      Tugendhat, Christopher

      Heath, Rt. Hn. Edward

      Morris, Michael (Northampton, S.)

      Tyler, Paul

      Henderson, Douglas (Ab 'rd' nsh 're, E)

      Morrison, Charles (Devizes)

      van Straubenzee, W. R.

      Henderson, J.S.B.(Dunbartonshire, E.)

      Morrison Peter (City of Chester)

      Vaughan, Dr. Gerard

      Heseltine, Michael

      Mudd, David

      Viggers, Peter

      Higgins, Terence

      Neave, Airey

      Waddington, David

      Hill, James A.

      Neubert, Michael

      Wainwright, Richard (Colne Valley)

      Holland, Philip

      Newton, Tony (Braintree)

      Wakeham, John

      Hooson, Emlyn

      Nicholls, Sir Harmar

      Walder, David (Clitheroe)

      Hordern, Peter

      Normanton, Tom

      Walker-Smith, Rt. Hn. Sir Derek

      Howe, Rt. Hn. Sir Geoffrey (Surrey, E.)

      Nott, John

      Wall, Patrick

      Howell, David (Guildford)

      Onslow, Cranley

      Warren, Kenneth

      Howell, Ralph (Norfolk, North)

      Oppenheim, Mrs. Sally

      Wells, John

      Howells. Geraint (Cardigan)

      Orr, Capt. L. P. S.

      Wiggin, Jerry

      Hunt, John

      Osborn, John

      Wigley, Dafydd (Caernarvon)

      Hurd, Douglas

      Page, Rt. Hn. Graham (Crosby)

      Wilson, Gordon (Dundee, E.)

      Hutchison, Michael Clark

      Page, John (Harrow, W.)

      Winstanley, Dr. Michael

      Iremonger, T. L.

      Pardoe, John

      Winterton, Nicholas

      Irvine, Bryant Godman (Rye)

      Parkinson, Cecil (Hertfordshire, S.)

      Wood, Rt. Hn. Richard

      James, David

      Pattie, Geoffrey

      Worsley, Sir Marcus

      Jenkin, Rt. Hn. P. (R'dge W'std & W'fd)

      Percival, Ian

      Young, Sir George (Ealing, Acton)

      Jessel, Toby

      Pink, R. Bonner

      Johnson Smith, G. (E. Grinstead)

      Price, David (Eastleigh)

      TELLERS FOR THE AYES:

      Johnston, Russell (Inverness)

      Prior, Rt. Hn. James

      Mr. Spencer Le Marchant and

      Jones, Arthur (Daventry)

      Raison, Timothy

      Mr. Michael Roberts

      Jopling, Michael

      Rathbone, Tim

      NOES

      Abse, Leo

      Atkins, Ronald

      Baxter, William

      Allaun, Frank

      Atkinson, Norman

      Bennett, Andrew F. (Stockport, N)

      Archer, Peter

      Bagier, Gordon A. T.

      Bidwell, Sydney

      Armstrong, Ernest

      Barnett, Guy (Greenwich)

      Bishop, E. S.

      Ashley, Jack

      Barnett, Joel (Heywood & Royton)

      Blenkinsop, Arthur

      Ashton, Joe

      Bates Alf

      Boardman, H.

      Booth, Albert

      Golding, John

      Moyle, Roland

      Boothroyd, Miss Betty

      Gourlay, Harry

      Murray, Ronald King

      Bottomley, Rt. Hn. Arthur

      Graham, Ted

      Newens, Stanley (Harlow)

      Boyden, James (Bishop Auckland)

      Grant, George (Morpeth)

      Oakes, Gordon

      Bradley, Tom

      Grant, John (Islington, C.)

      Ogden, Eric

      Broughton, Sir Alfred

      Griffiths, Eddie (Sheffield, Brightside)

      O'Halloran, Michael

      Brown, Bob (Newcastle upon Tyne, W.)

      Hamilton, William (Fife, C.)

      O'Malley, Brian

      Brown, Hugh D. (Glasgow, Provan)

      Hamling, William

      Orbach, Maurice

      Brown, Ronald (H'kney, S. & Sh'ditch)

      Hardy, Peter

      Ovenden, John

      Buchan, Norman

      Harper, Joseph

      Owen, Dr. David

      Butler, Mrs. Joyce (H'gey, WoodGreen)

      Harrison, Walter (Wakefield)

      Padley, Walter

      Callaghan, Jim (M'dd'ton & Pr'wich)

      Hatton, Frank

      Palmer, Arthur

      Campbell, Ian

      Healey, Rt. Hn. Denis

      Park, George (Coventry, N.E.)

      Cant, R. B.

      Heffer, Eric S.

      Parker, John (Dagenham)

      Carmichael, Neil

      Hooley, Frank

      Parry, Robert

      Carter, Ray

      Horam, John

      Pendry, Tom

      Carter-Jones, Lewis

      Huckfield, Leslie

      Phipps, Dr. Colin

      Castle, Rt. Hn. Barbara

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Prescott, John

      Clemitson, Ivor

      Hughes, Mark (Durham)

      Price, Christopher (Lewisham, W.)

      Cocks, Michael

      Hughes, Robert (Aberdeen, North)

      Price, William (Rugby)

      Cohen, Stanley

      Hughes, Roy (Newport)

      Radice, Giles

      Coleman, Donald

      Hunter, Adam

      Richardson, Miss Jo

      Colquhoun, Mrs. M. N.

      Irvine, Rt. Hn. Sir A. (L'p'I, EdgeHI)

      Roberts, Albert (Normanton)

      Conlan, Bernard

      Irving, Rt. Hn. Sydney (Dartford)

      Roberts, Gwilym (Cannock)

      Cook, Robert F. (Edinburgh, C.)

      Jackson, Colin

      Robertson, John (Paisley)

      Cox, Thomas

      Janner, Greville

      Roderick, Caerwyn E.

      Craigen, J. M. (G'gow, Maryhill)

      Jay, Rt. Hn. Douglas

      Rodgers, George (Chorley)

      Cronin, John

      Jeger, Mrs. Lena

      Rodgers, William (Teesside, St'ckton)

      Crosland, Rt. Hn. Anthony

      Jenkins, Hugh (W'worth, Putney)

      Rooker, J. W.

      Cryer, G. R.

      Jenkins, Rt. Hn. Roy (B'ham, St' fd)

      Roper, John

      Cunningham, G. (Isl 'ngt' n, S & F'sb'ry)

      John, Brynmor

      Rose, Paul B.

      Cunningham, Dr. John A. (Whiteh'v'n)

      Johnson, James (K'ston upon Hull, W)

      Ross, Rt. Hn. William (Kilmarnock)

      Dalyell, Tam

      Jones, Alec (Rhondda)

      Rowlands, Edward

      Davidson, Arthur

      Jones, Barry (Flint, E.)

      Sandelson, Neville

      Davies, Bryan (Enfield, N.)

      Jones, Dan (Burnley)

      Sedgemere, Bryan

      Davies, Denzil (Llanelli)

      Jones, Gwynoro (Carmarthen)

      Selby, Harry

      Davies, Ifor (Gower)

      Judd, Frank

      Shaw, Arnold (Redbridge, Ilford, S.)

      Davis, Clinton (Hackney, C.)

      Kaufman, Gerald

      Sheldon, Robert (Ashton-under-Lyne)

      Deakins, Eric

      Kelley, Richard

      Shore, Rt. Hn. Peter (S'pney & P'plar)

      Dean, Joseph (Leeds, W.)

      Kilroy-Silk, Robert

      Short, Mrs. Renée (W'hamp'n, N.E.)

      de Freitas, Rt. Hn. Sir Geoffrey

      Kinnock, Neil

      Silkin, Rt. Hn. John (L'sham, D'ford)

      Delargy, Hugh

      Lambie, David

      Silkin, Rt. Hn. S. C. (S'hwark, Dulwich)

      Dell, Rt. Hn. Edmund

      Lamborn, Harry

      Sillars, James

      Dempsey, James

      Lamond, James

      Silverman, Julius

      Doig, Peter

      Latham, Arthur (City of W' minster P'ton)

      Skinner, Dennis

      Dormand, J. D.

      Lawson, George (Motherwell & Wishaw)

      Small, William

      Douglas-Mann, Bruce

      Leadbitter, Ted

      Smith, John (Lanarkshire, N.)

      Dunn, James A.

      Lee, John

      Snape, Peter

      Dunnett, Jack

      Lewis, Arthur (Newham, N.)

      Spearing, Nigel

      Dunwoody, Mrs. Gwyneth

      Lewis, Ron (Carlisle)

      Spriggs, Leslie

      Eadie, Alex

      Loughlin, Charles

      Stallard, A. W.

      Edelman, Maurice

      Loyden, Eddie

      Stewart, Rt. Hn. M. (H'sth, Fulh'm)

      Edge, Geoff

      Lyons, Edward (Bradford, W.)

      Stoddart, David (Swindon)

      Edwards, Robert (W'hampton, S.E.)

      Mahon, Dr. J. Dickson

      Stonehouse, Rt. Hn. John

      Ellis, John (Brigg & Scunthorpe)

      McCartney, Hugh

      Stott, Roger

      Ellis, Tom (Wrexham)

      McElhone, Frank

      Strang, Gavin

      English, Michael

      MacFarquhar, Roderick

      Strauss, Rt. Hn. G. R.

      Evans, Fred (Caerphilly)

      McGuire, Michael

      Summerskill, Hn. Dr. Shirley

      Evans, Ioan (Aberdare)

      Mackenzie, Gregor

      Swain, Thomas

      Evans, John (Newton)

      McMillan, Tom (Glasgow, C.)

      Thomas, Jeffrey (Abertillery)

      Ewing, Harry (Stling, F'kirk & G'm'th)

      Madden, M. O. F.

      Tierney, Sydney

      Faulds, Andrew

      Magee, Bryan

      Tinn, James

      Fernyhough, Rt. Hn. E.

      Mahon, Simon

      Tomlinson, John

      Fitch, Alan (Wigan)

      Mallalieu, J. P. W.

      Tomney, Frank

      Fitt, Gerard (Belfast, W.)

      Marks, Kenneth

      Torney, Tom

      Flannery, Martin

      Marquand, David

      Tuck, Raphael

      Fletcher, Raymond (Ilkeston)

      Marshall, Dr. Edmund (Goole)

      Urwin, T. W.

      Fletcher, Ted (Darlington)

      Mason, Rt. Hn. Roy

      Varley, Rt. Hn. Eric G.

      Foot, Rt. Hn. Michael

      Meacher, Michael

      Wainwright, Edwin (Dearne Valley)

      Ford, Ben

      Mellish, Rt. Hn. Robert

      Walden, Brian (B'm'ham, Ladywood)

      Forrester, John

      Mendelson, John

      Walker, Harold (Doncaster)

      Fowler, Gerry (The Wrekin)

      Mikardo, Ian

      Walker, Terry (Kingswood)

      Fraser, John (Lambeth, Norwood)

      Millan, Bruce

      Watkins, David

      Freeson, Reginald

      Miller, Dr. M. S. (E. Kilbride)

      Weitzman, David

      Galpern, Sir Myer

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

      Wellbeloved, James

      Garrett, John (Norwich, S.)

      Molloy, William

      White, James

      George, Bruce

      Moonman, Eric

      Whitehead, Phillip

      Gilbert, Dr. John

      Morris, Alfred (Wythenshawe)

      Whitlock, William

      Ginsburg, David

      Morris, Charles R. (Openshaw)

      Willey, Rt. Hn. Frederick

      Morris, Rt. Hn. John (Aberavon)

      Williams, Alan (Swansea, W.)

      Wilson, William (Coventry, S.E.)

      Young, David (Bolton, E.)

      Williams, Alan Lee (Hvrng, Hchurch)

      Wise, Mrs. Audrey

      TELLERS FOR THE NOES:

      Williams, Rt. Hn. Shirley (H'f'd & St'ge)

      Woodall, Alec

      Mr. Walter Johnson and

      Williams, W. T. (Warrington)

      Woof, Robert

      Mr. Laurie Pavitt.

      Wilson, Alexander (Hamilton)

      Wrigglesworth, Ian

      Question accordingly agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 26

      AMENDMENT OF SECTION 343 OF INCOME AND CORPORATION TAXES ACT 1970 TO ALLOW PENSION FUNDS TO INVEST IN BUILDING SOCIETIES AND RECLAIM INCOME TAX.
      'Where any arrangements under section 343 of the Income and Corporation Taxes Act 1970 are in force in the case of any building society, as respects any year of assessment, income tax shall be deducted from, and repayment of income tax shall be made in respect of, dividends or interest payable in that year in respect of shares in or deposits with or loans to that building society by Pension Funds'.—[Mr. William Clark.]
      Brought up, and read the First time.
      Mr. William Clark: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Oscar Murton): With this new clause I suggest that we discuss new Clause 27 (Consequential amendments).
      Mr. Clark: The House will no doubt remember that on 13th June in Committee on the Floor of the House we dealt with a similar clause. In view of that, I am the that it would be for the convenience of the House if we did not repeat all the speeches that we rehearsed on that occasion. I am delighted that the Chancellor of the Exchequer is present to listen to this debate.
      One of the snags that faces building societies is that they borrow short and lend long. That is the essence of the building societies' cash flow problem. There is only one source of finance which is capable of lending long—namely, pension funds. By their very nature they lend long. There is a snag for the pension funds in that they are exempt from income tax. I hope that the Financial Secretary will agree and take on board—this is a point that we discussed in Committee—that pension funds are even excluded from development gains tax.
      I remind the Financial Secretary that the income of pension funds is running
      330
      at approximately £1,600 million a year. Consequently, they have a tremendous amount of money to invest. I have tabled the new clause so as to try to convince the Treasury of the true position and to help the economy by allowing pension funds to be allowed, if so desired, to invest in building societies. The one snag is Section 343 of the Income and Corporation Taxes Act 1970. That is the section that controls tax regulations for building societies. I shall not go into the technicalities. The meaning of the section, in a nutshell, is that building societies borrow from the public and pay to the Exchequer what is known as a composite rate. That rate is based on the estimate of the Treasury of the investors who are liable at the standard rate and the investors who are liable at below the standard rate. By that means we get the composite rate, which at the moment is running at 23½ per cent.
      I regret—this is a digression—that the result of the talks that have been going on between the Government and the Building Societies Association is that no relief will be given, on the composite rate, to buildings societies. With the increase in the standard rate rising from 30 per cent. to 33 per cent. it is obvious that the composite rate, in the normal course of events, would have followed that upward trend. I regret that the recent talks have been abortive.
      Because building societies have the composite rate, the other regulation is that they cannot repay the tax that they deduct from the interest that they pay to their investors. For example, if I invest £100 in a building society and I receive 7½ per cent. tax free, I in fact receive £7·50 interest. It may be that my tax bracket is such that I do not pay tax at the standard rate, or I do not pay tax at the composite rate of 23½ per cent. Nevertheless, the building societies cannot repay any of that tax because of the tax regulations.
      That is where the burden of the new clause lies, and I hope that the Financial Secretary will deal with this matter sympathetically. I do not quote from HANSARD, but the Minister said that he

      331
      would consider the matter with his advisers so as to determine whether he could come forward with something on Report which would allow pension funds to invest in building societies.
      Why do pension funds not invest in building societies? The reason is that pension funds are exempted from tax. If they invest with the building societies the regulations do not allow them to reclaim tax. That means that nothing from the pension institutions is flowing into the building societies' coffers. I think it will be readily recognised on both sides of the House that building societies have a cash flow problem. No doubt they will have the same problem in future. I accept that the problem has been overcome temporarily by an injection of £500 million from the taxpayer. However, I do not think that that is the right way to deal with building societies. I think that they should have the right to borrow money from pension funds and that pension funds should have the right to have the tax that is deducted by the building societies repaid to them.
      The Financial Secretary knows as well as everyone else that this proposal would not cost the Exchequer one farthing. It would allow pension funds, if they so wished, to invest in building societies. The Financial Secretary said in Committee that he would consider this matter sympathetically. He agreed with me that it would be of no cost to the Inland Revenue. For the life of me I cannot understand why building societies, who want to borrow long because they lend long, should not have this reservoir of long-term investment from pension funds made available to them. It is not available to them, because of the income tax regulations of building societies.
      I hope that the Financial Secretary will accept new Clause 26 and also new Clause 27, which is consequential. By doing so he will confer great benefit on building societies and, in turn, on people who want to borrow from building societies.
      8.0 p.m.
      Mr. Michael Latham: I congratulate my hon. Friend the Member for Croydon, South (Mr. Clark) on tabling the new clause, which is similar to the one he moved in Committe of the whole House. I congratulate him further on getting it
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      selected for a second time. This has given the Financial Secretary an opportunity to tell the House his thoughts on the matter.
      When we discussed the clause before, I said that although I was sympathetic to the idea in principle—as I still am—it was essential to ensure that any money from pension funds which came into building societies should be long-term money. We cannot have huge sums of hot money flowing in and out.
      The record of the building societies over the last 20 years in increasing their assets has been truly remarkable. For example, between 1950 and 1972 the value of their total shares and deposits rose from £1,160 million to £14,269 million, making them one of the largest financial institutions in the country, with one building society bigger than the whole unit trust movement.
      We must also remember the amount of pension fund money which would be potentially available if the clause were accepted. Over the last few years the value of life insurance and pension funds has expanded even more rapidly than that of building societies, rising from about £9 billion in 1960 to about £25 billion in 1971. We are talking about potentially enormous sums of money being attracted into the building society movement, but it must be essentially on a long-term basis.
      Ironically, in spite of the difficulties with mortgages over the last few months, which have helped to motivate the new clause, the level of receipts from investors has never been particularly low. According to the table of receipts, in May 1973. building society receipts were £558.2 million. In May 1974, building society receipts were £502 million. The difference is that in May 1973 there was a far lower level of withdrawals. Whereas in May 1973 the net receipts of building societies—the money potentially available for mortgages—was £210.9 million. in May 1974 they were only £93 million. although the amount of money received was not dissimilar.
      The problem is not the amount of money which has come into the building societies—that has remained much the same; the problem is that the level of withdrawals is high. That is why I have expressed concern about the possibility of hot money from pension funds going in and out quickly.

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      The right hon. Gentleman the Secretary of State for the Environment, in a letter of 25th June to the Director General of the Brick Development Association which was published in a Press notice, said:
      "I believe that the threat of a mortgage famine has been ended. The short-term loans to building societies coupled with a marked improvement in building society receipts following the Budget have already been reflected in a sharp increase in the level of new mortgage commitments entered into by building societies."
      The remarks made by the Secretary of State were not received with a great deal of enthusiasm by the brickmakers, who responded by threatening to shut down several brick factories.
      I am concerned about the nature of the repayment of the building society loan which the Financial Secretary mentioned in replying to the earlier debate. The terms of the loan which the Government entered into with the building societies involved the building societies in having to pay back, from September this year, 50 per cent. of the amount by which their net receipts exceeded £50 million in any one month. If that scheme had been operated in May—the latest figures I have to hand—there would have been a repayment of £93–50/2 million, which equals £21½ million. That is a significant proportion of the net receipts available to the building societies in that month, and there would, therefore, have been less money available to be pumped out in home ownership mortgages.
      If the Government continue to require repayment of the loan, as they must—it would be better to set a higher figure than £50 million, which is the present basis. The figure should be raised to net receipts over £125 million, although I understand that that would entail the loan being rolled forward for a longer period. That revised figure is essential, if only to give a greater degree of confidence to prospective house buyers and to builders to get ahead with the work which the whole House wishes to be done.
      The main problem with new housing starts is not the availability of mortgage money. The House knows that I previously had interests in this regard, although I no longer have them. In my
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      discussions within the last two weeks with both large and small builders, many of them have told me that the availability of money for their new houses is all right. The problem conies in the secondhand chain, and also in the lack of confidence of people in buying houses. One big builder told me that he was embarrassed by not being able to use the whole of the mortgage quota available to him from his local building society. That shows that the availability of mortgage money is not as great a problem is as generally thought. What is needed is the confidence to go ahead and buy a house.
      The situation in the private house building market is very bad, and little has happened to induce me to believe that it will improve. If I may be so arrogant as to quote what I said in my maiden speech, I said:
      "It is no secret why this situation has arisen. It is because of the high level of interest rates and the shortage of building society finance. That is a fact of life. I have yet to be persuaded that any Government can do much about it…I fear, therefore, that the Secretary of State for the Environment has as gloomy a task ahead of him in his high office as had my right hon. and learned Friend the Member for Hexham (Mr. Rippon). There is little that either can do on their own. What needs to be done requires the support of the Chancellor of the Exchequer, and in some cases it is altogether beyond the control of the Government altogether."—[OFFICIAL REPORT, 12th March 1974; Vol. 870, c. 167.]
      Although the clause would certainly be a useful change, much more is needed and needed now. The Economic Development Committee for Building forecast is of 120,000 private housing starts this year, compared with the 215,000 achieved last year. I believe that that forecast will prove to be too optimistic and that the outturn will be even lower. There is a real need to reawaken long-term confidence in the house-buying public. This will require new measures by the Government, some of which will require changes in Part III of the Bill. Let us deal with that situation when the time comes.
      Dr. Gilbert: I have listened with interest to the well-informed remarks of the hon. Member for Melton (Mr. Latham). I shall not deal with all the points he raised, but his remarks were addressed more to the state of the building industry than they were to the provisions in the new clauses.

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      The hon. Member for Croydon, South (Mr. Clark), as usual, moved his new clause in a reasonable and constructive manner. I told the Committee at an earlier stage that I had considerable reservations about the practical effect of the proposals and about the attitude of the Building Societies Association towards them. I could not see that they would be particularly enthusiastic to have a facility of this sort available for I could see it having no practical effect.
      Having said that, I have honoured my commitment given in Committee and made inquiries into the subject. I discovered that the Building Societies Association is anxious to have a clause on the lines of the two new clauses. There fore I am prepared to be as reasonable as the hon. Gentleman in meeting his point. When one undertakes to meet a point in Committee one can always see what can be done about tying up technical defects later on Report. In this case I am in some difficulty because both clauses contain technical defects to which I shall refer briefly in a moment—defects which it has not been possible for us to smooth away by a Government new clause in time for today's proceedings.
      The difficulty about new Clause 27 is that it fails to delete a provision in Section 343(3) of the principal Act that prohibits any repayment of tax on building society interest. This would frustrate the whole object of the new clauses, which is to permit repayments of tax in the special case of pensions fund investments.
      Clause 26, which is a substantial new provision, contains rather more fundamental weaknesses. In the first place it provides for deduction of tax in respect of interest paid to pension funds but does not provide for that tax to be paid to the Revenue. Secondly, the repayment of tax to pension funds is mandatory and is not subject to the normal rules and provisos in the Income Tax Act. Thirdly the term "pension funds
      is not defined. It is not limited to approved pension funds. I could give the hon. Gentleman an illustration of the sort of tax avoidance device to take advantage of the somewhat loose drafting contained in the new clauses. However, I shall not weary the House unless the hon. Gentleman wishes me to do so. I assure him that we have looked closely at this matter.
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      I accept the full intention of what the hon. Gentleman seeks to achieve in legislative terms. It is no criticism of the hon. Gentleman that his clauses are somewhat defective. It is difficult for a private Member, even if well advised, to produce a draft that will satisfy the necessary scrutiny of the parliamentary draftsmen. I hope the hon. Gentleman will accept my assurance that, even though I am still unpersuaded that the economic effects of his proposals will be substantial—and I should be surprised if they have any economic effects in the short or medium term—I am prepared to accept the purpose of the new clauses.
      I would not wish it to be said that we have rejected an opportunity to help the building societies. Therefore, if the hon. Gentleman withdraws the new clauses, I give him a commitment that in the next Finance Bill we shall table some new clauses to give full effect to what he has in mind.
      8.15 p.m.
      Mr. R. Carr: I should like to say a few words about the new clauses. It seems unlikely that the Financial Secretary will have an opportunity to introduce another Finance Bill for many years to come. Therefore, I believe that the Opposition should express some view on this topic.
      I should like to pay tribute to my hon. Friend the Member for Croydon, South (Mr. Clark) because it is an example of what a Member of Parliament can do. My hon. Friend has been pursuing this line of argument with persistence and skill for some time in the life of the Conservative Government as well as during the term of office of the present Government. I am glad that he has come to a point at which the Government of the day have agreed to accept his argument in principle. One can be doubtful, as the Financial Secretary was doubtful, whether pension funds will flow into the building societies to the extent we would like to see even with the new Clauses. What is certain is that they will not flow into the building societies with the law as it now stands. I believe that the principle of the clause proposed by my hon. Friend will enable a possibility to be turned into a reality. Therefore, it is right that we should support the principle of the clause.

      337
      I am disappointed that, because of technical defects, the Financial Secretary could not accept the clause as it stood. I am also disappointed that the Government have not found it possible to come forward with their own corrected version of these provisions in time for the Bill. Nevertheless, we must accept that there are technical defects and we must look to the next Finance Bill.
      I note the undertaking given by the Financial Secretary. If, as I imagine and hope, the next Finance Bill falls to be introduced by a Conservative Chancellor. I see no reason why this provision should not be dealt with in that legislation, whoever introduces it.
      Mr. Graham Page: It was unreasonable of the Financial Secretary to reject the clause on technical drafting grounds. Each point he made in respect of drafting was such that the Bill could have been amended quite easily in the time between the clause having been tabled and the present debate. The hon. Gentleman could have brought forward Government amendments to put the clause right.
      He said that the principle of the clause was acceptable. There would be no loss to the Revenue if the clause were accepted. Indeed, there is every chance of further funds being introduced into building societies on a long-term basis of the clause were accepted. I cannot be as kind to the Financial Secretary as was my right hon. Friend the Member for Carshalton (Mr. Carr). I think that there has been unreasonable delay in bringing forward technical amendments to a clause which has been well known. It is not as though my hon. Friend the Member for Croydon, South (Mr. Clark) has just produced the clause at the last moment. He has campaigned for it for a long time. The clause has been on the Order Paper. I must protest at its rejection on technical grounds which could have been put right by Government amendment.
      Dr. Gilbert: I take the point made by the right hon. Member for Crosby (Mr. Page). We have tried in good faith to meet the proposal made by the hon. Member for Croydon, South (Mr. Clark) and at our instigation discussions were
      338
      held only this week with representatives of the Building Societies Association to try to meet the hon. Gentleman's points. I will not conceal that, before those meetings had taken place, my intention was to advise the House not to accept the new Clause. It was only as a result of those discussions, when I learned that the Building Societies Association was in favour of the hon. Gentleman's proposals, that I changed my mind and was prepared to recommend them to the House.
      The question then was whether we could put in a manuscript amendment in time to put the matter right. There would have been difficulties and it would not have been of service to the House to put down an amendment in that form in a great rush. Indeed, the hon. Member for Croydon, South conceded that these clauses would not have any practical effect in the near future. By the time that we managed to bring them forward the situation is unlikely to have changed very much. It do not think that the hon. Gentleman is losing anything at all.
      Mr. William Clark: I am grateful for the support given to me by my right hon. Friend the Member for Crosby (Mr. Page). I do not say this in a carping way—I know about the difficulties of printing and so on—but I think that from 13th June, when the matter was first raised and the undertaking was given, the Treasury could have started its discussions with the building societies earlier. I have no vested interest.
      In view of the categoric assurance from Government and the categoric assurance from my right hon. Friend the Member for Carshalton (Mr. Carr), who is the Opposition spokesman on Treasury matters, we cannot lose whichever—[Interruption.] Hon. Gentlemen opposite should get their facts right before they distort them. I was about to say that we cannot lose because, whichever party wins the General Election, the building societies have a categoric assurance from both sides on this matter. Therefore, I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 30

      VEHICLE EXCISE DUTY: EXEMPTION FOR THE DISABLED
      'A mechanically propelled vehicle fitted with controls enabling it to he driven by persons having a particular disability or a vehicle for use by persons having a particular disability that so incapacitates them in the use of their limbs that they have to be driven and cared for out doors by an attendant and registered in the name of such a disabled person under the Vehicles (Excise) Act 1971 shall not be chargeable with any duty under that Act by reason of its use by or for the purposes of that disabled person or by reason of its being kept for such use where—

      (a) he caused the controls to be fitted to the vehicle and obtained in respect of the cost thereby incurred a grant paid by the Secretary of State out of moneys provided by Parliament; or

      (b) whether or not he caused the controls to be fitted to the vehicle his disability is of the kind in the case of which grants in respect of the fitting of such controls are so paid; or

      (c) the disabled person is in receipt of a badge issued pursuant to section 21 of the chronically sick and disabled persons Act 1970, is in receipt of an attendance allowance under the National Insurance Act 1971 and 1972, or the equivalent constant attenance allowance of the Industrial Injuries Scheme, and the disabled person needs the use of a wheel chair and has attained the age of 16 and where the disabled person is sufficiently disabled to be eligible under the National Health Service Act 1946 and the Health Services and Public Health Act 1968 for an invalid tricycle but too disabled to drive it,

      and where regulations under section 23 of the Vehicles (Excise) Act 1971 requires a person to furnish particulars as to a vehicle exempted from duty by this section, they may require him to furnish in addition such evidence of the facts giving rise to the exemption as is prescribed by the regulations '.—[Mr. Higgins.]
      Brought up, and read the First time.
      Mr. Higgins: I beg to move, That the clause be read a Second time.
      This proposal to amend the Finance Act 1971 has a long history. The clause, which has been drafted to make further progress, is extremely long. The drafting is rather complex. Therefore, I should like to refer to some of its specific provisions. At the same time, it may be possible to simplify the drafting. I will comment on that point again later.
      Over the years the House has seen fit to extend the relief given to the disabled regarding the payment of vehicle excise duty. My hon. Friend the Member for
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      Banbury (Mr. Marten) has been very much in the forefront of this campaign. Indeed. he moved an amendment similar to the clause when we were in Government and it is part of the legislation which is embodied in the 1971 Act.
      A considerable campaign has also been launched by the Joint Committee on Mobility for the Disabled, particularly its chairman. Mr. Peter Large. He has always put forward his representations with great cogency and a great deal of humanity.
      Mr. Neil Marten: And with moderation.
      Mr. Higgins: Indeed, as my hon. Friend said, with moderation. He has been anxious that we should not create a situation where any concession to this deserving group would lead to abuse. This has also been the concern of successive Treasury Ministers. Therefore, it is right that we should have made gradual progress in this area moving by stages. The new clause seeks to move one stage further in the light of the changes which were brought about in the 1971 Act and the 1972 Act, which made a further extension.
      We are seeking to extend to more disabled passengers the relief which has hitherto been given. The number of permits issued by the Department of Health and Social Security for disabled passengers is probably over 1,000—perhaps 1.100. The Financial Secretary may be able to give us the up-to-date figure. Under the provisions of Section 7 of the 1971 Act the figure is probably about 500. Again, the hon. Gentleman may be able to confirm that.
      The 1971 Act was deliberately designed to ensure that the change was such that it was not open to abuse. We felt then, I think rightly, that the concession ought to be limited to what are called conspicuous and permanent alterations to a vehicle which would make it identifiable. None the less, in February 1972 the invalid vehicles service was extended to cover certain chest and heart cases, and these disabled drivers were allowed exemption even though their cars were unadapted. Generally speaking, it was felt that, even though a vehicle was not clearly identifiable for the use of a disabled person, arrangements could be made to administer the concession on a satisfactory basis which would not be open to abuse.

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      The clause seeks to extend the concession still further and to remove some of the limitations which have previously been imposed. A particular disabled person may go into a vehicle which is not conspicuously converted, perhaps because he is in a wheelchair and his assistant can get him into the vehicle in that way. None the less, in the hope that the clause will be acceptable to the Government, we have imposed certain restrictions which, to some extent, reflect the changes in the law regarding the treatment of vehicles for the disabled. I think that would have been more difficult at an earlier stage.
      I referred earlier to the restraints that we have imposed. For example, in paragraph (a) we refer to
      "the controls to be fitted to the vehicle and obtained in respect of the cost thereby incured a grant paid by the Secretary of State out of moneys provided by Parliament; or

      (b) whether or not he caused the controls to be fitted to the vehicle his disability is of a kind in the case of which grants in respect of the fitting of such controls are so paid;

      (c) the disabled person is in receipt of a badge issued pursuant to Section 21 of the Chronically Sick and Disabled Persons Act 1970",

      that he shall be over 16 years of age, and so on.
      I hope that those restrictions commend themselves to the House. At the same time they extend the relief to many people, probably many more than the two figures I mentioned earlier. Perhaps the Financial Secretary will give us his estimate of the number likely to benefit from the concession.
      Having simply recounted the history of the matter, I hope that I have moved the House to accept the views I have put forward. The Financial Secretary has been courteous enough to communicate with me. I understand that the Government are not unsympathetic to my arguments, but that they are somewhat unhappy about the drafting of the new clause. In contrast with my rather lengthy proposal, they have suggested that our purpose might be achieved in a much shorter way by amending Section 7 of the Finance Act 1971, substituting "suitable" for "specifically and extensively adapted", and omitting the words from conspicuous" to "and where". That is a much more elegant way of doing it than the almost three-
      342
      quarters of a page of typescript that I have produced with much labour.
      I think that our proposal is not defective, but that the Government would much prefer it in the form I have described. If I table a much more abbreviated proposal which appears to meet the case, perhaps the hon. Gentleman will be kind enough to confirm that it covers exactly the same ground and will not exclude anyone now covered by my much lengthier new clause. Perhaps the Government will then be prepared to accept the shorter version.
      8.30 p.m.
      However, we find ourselves in a difficulty of which I was not aware. I understand that one of the few things we cannot do is to move a manuscript new clause on Report, although we can move manuscript amendments on Report, and can move new clauses at times other than Report. If the hon. Gentleman accepts my arguments, I hope that the Government may be prepared briefly to allow a recommittal at the end of the Report stage so that we may meet this point.
      I hope that the clause commends itself to the House. I am sure that it will help a deserving group of people to whom it is appropriate that relief should be extended.
      Mr. Marten: I support the new clause. I gather that my hon. Friend the Member for Worthing (Mr. Higgins) has received an indication that the Government may accept its theme and make a slightly shorter job of it than my hon. Friend painstakingly did in his drafting. On the assumption that the Government will accept it, I thank them very much.
      This is a wonderful example of the tortoise's progress for the disabled in the House, which has been going on since about 1964. We have had one or two victories, and here is another I hope that in the fullness of time, when the Government's decisions on the Sharp Report are announced, there will be a big review of all these matters so that we may take a great leap forward in help for the disabled.
      Mr. William Molloy: I hope that my hon. Friend the Financial Secretary will heed what is said by hon. Members on both sides of the House. Many of us have been concerned with

      343
      all forms of disabled organisations. No one has made a more outstanding contribution, particularly for the disabled driver, than the hon. Member for Banbury (Mr. Marten). I have considered it an honour to work with the hon. Gentleman on many occasions since 1964 in advancing the case of disabled people. I think particularly of the Disabled Drivers Association, with which we are both connected.
      I remember our endeavours under the previous Government. Conservative Members now look so comfortable on the Opposition benches that I hope they will be there for a long time. Under the present Government, we have much more hope that in reply to the cases we advance we shall not receive detailed technical arguments—masses of sympathy, but no action. I hope that I shall not have to say that, although we have a different Government, we are still hearing the same story. Back benchers on both sides of the House want to see such a provision introduced to enrich the lives of many people who, because of their disability, cannot enjoy the normal way of life that the rest of us enjoy. I believe that that is the point of view of the mass of back benchers on both sides of the House. It is for that very good reason, therefore, quite apart from humanitarian considerations, that we hope that this provision will be met by a practical response from my hon. Friend the Financial Secretary.
      Mr. David Weitzman: I wish to add a few words in support of the new clause. Over the long years during which I have been a Member of this House, I have always been struck by the fact that, whenever the Opposition have moved very important amendments to Finance Bills, they have always received a tremendous amount of sympathy and finally the Government's answer has been, "We have not the money. We cannot do it." That was the situation time and time again during the last Parliament. Certain amendments were moved which would have greatly assisted the disabled. They were resisted strongly by the Conservative Government on the ground that the money was not available.
      This is a very worthy new clause. It helps the disabled, and it is very important
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      that they should be helped in every way possible. I hope that the Government will do all that they can to see that what is intended in it is put into effect.
      Mr. Bowden: I hope that the hon. and learned Member for Hackney, North and Stoke Newington (Mr. Weitzman) will not think that I am being too cynical if I say that the difference between the situations from 1964 to 1970 and from 1970 to 1974 and that today is that we now have a minority Government and it is much easier for back benchers to bring pressure to bear in favour of a very worthy new clause at such a time.
      Both sides of the House have earned a great deal of credit in this matter. Only today I was talking to representatives of the Brighton and Hove branch of the British Rheumatism and Arthritis Association. I referred to this new clause and said that I felt that there was a good chance of it being accepted by the Government. Although we have not had an actual acceptance yet, I hope very much that it is a foregone conclusion.
      I congratulate my hon. Friend the Member for Worthing (Mr. Higgins) on his drafting of the new clause. I look forward to hearing the Financial Secretary saying that he accepts the principle behind it. I believe that a very large number of my constituents and many people throughout the country will be grateful to this House for incorporating this new clause into the Bill.
      Sir Raymond Gower: Disregarding the respective statements by hon. Members on both sides of the House as to who is the more virtuous, I hope that the Government will accept the new clause.
      I appreciate that at no time do any Government find it easy to undertake to make concessions of this nature, and I realise that we are not discussing a small amount of money. Nevertheless, I feel that concessions of this kind have a very high priority. Even in circumstances of some economic difficulty they deserve special treatment. In that context, I hope that the new clause will be accepted.
      Dr. Gilbert: Perhaps I may start by assuring the hon. Member for Brighton, Kemptown (Mr. Bowden) that the Government are very happy to accept the new clause. I assure him, too, that we

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      would have been happy to accept it. whatever the figures in the Division Lobby, simply because it is clear that the present law contains an unsupportable anomaly in that disabled drivers may be exempted from vehicle excise duty without their vehicles being modified, which was the original requirement of the Department of the Environment, but that disabled passengers, who may be able to travel without any need for the vehicle to be modified, have to have that vehicle modified to meet the test for exemption from duty. On the face of it, that is nonsense, and I cannot see any Government resisting a proposition like this once it is put to them on the Floor of the House.
      I am grateful to the hon. Member for Worthing (Mr. Higgins) for the courteous way he put his remarks. I believe we have reached agreement on the technicalities of handling the matter and, if it is agreeable to whomsoever is in the Chair at the time, I would hope that when we reach the end of our proceedings on the Report stage we can have a brief re-committal motion which could produce the precise effect intended by the hon. Gentleman incorporated in words which he has been good enough to say were more elegant than his own.
      He asked several questions about the numbers who would be involved in a provision of this kind and the numbers already benefiting. I came armed with many figures but unfortunately I do not appear to have those for which the hon. Gentleman has asked, which would be a remit of a kind more for the Department of Health and Social Security than for the Treasury, but I can certainly tell him that so far only about 1,000 people have applied to the DHSS for a certificate of exemption, and between 40 per cent. and 50 per cent. have been refused on the ground that the vehicle was not conspicuously modified.
      This may be a reflection of the fact that the exemption is not as well known to the public as it might be and as we would hope it would be. It may also be a reflection of the fact that a great many individuals who are in receipt of constant attendance allowance are among the less-well-off section of the com-
      346
      munity and therefore, unfortunately, not in a position to contemplate running a car.
      I am always hesitant about rejecting compliments particularly when they come from the other side of the House, but I feel I would be misleading the House if I were to let it get away with the impression that the hon. Member for Barry (Sir R. Gower) was suggesting, that this was a concession which will cost a great deal of money.
      Sir R. Gower: I did not say that.
      Dr. Gilbert: Then I misunderstood the hon. Gentleman. I thought he did. The cost involved in this is minimal. Unless there is any other point to which any hon. Gentleman would wish me to address myself, we will leave it at that. We entirely accept the new clause. I am advised that the form of words we are offering the hon. Member for Worthing in no way dilutes the intention of his own new clause, and I hope we may leave it at that.
      Mr. Higgins: Soon after I entered the House about 10 years ago I put down a Question to the Prime Minister which turned out to be No. 1. To my astonishment as a new Member, the answer to my Question asking him to do something was "Yes, Sir" which so totally surprised me that all I could say as a supplementary was "Thanks very much", which some of my hon. Friends did not think was as effective a supplementary as I might have employed.
      On this occasion I find myself in much the same situation, and it would be appropriate to follow the course which has now the general agreement of the House and to ask leave to withdraw the new clause as it is tabled and to allow it to be retabled in the more elegant form which has been suggested. We can then return to the recommittal stage when we have finished the Report stage. I am most grateful to the Financial Secretary. I should like to pay tribute to him for the concession he has made. I beg to ask leave to withdraw the motion.
      Motion, and clause, by leave, withdrawn.

    Clause 2

      INCREASE OF CERTAIN DUTIES ON BETTING
      8.45 p.m.
      Mr. Reginald Eyre: I beg to move, in page 3, line 28, at end insert:
      except in the case of bets made by way of pool betting in respect of a competition for prizes held by—

      (a) the holder of a licence under the Pool Competitions Act 1971, or

      (h) any person approved by the Secretary of State in that behalf on the recommendation of the Gaming Board for Great Britain,

      in respect of which the amount of the pool betting duty shall be 33⅓ per cent.'
      I intend to speak briefly in moving the amendment in my name and that of my hon. Friend the Member for Coventry, South-East (Mr. Wilson), because I believe the case in its support is well known to right hon. and hon. Gentlemen on both sides of the House. The Financial Secretary showed his interest in and sympathy for the case when he recently received a deputation attending on behalf of a group of sports supporting pools.
      The first point I would stress is that the benefit of this amendment—a modest reduction in the rate of pool betting duty from 40 per cent. to 33⅓ per cent.—would be restricted to those societies promoting pools for the purpose of raising badly-needed funds to sustain sporting organisations and charities. My own special sympathy is for the Warwickshire Cricket Supporters Association, because its pool promotion enables it to help cricket groups all over the country through grants and loans.
      I am also glad that this amendment would aid several similar organisations supporting famous football clubs as well as charities serving worthy causes. I stress the great difference between these pools and commercial pools, which would pay the increased duty of 40 per cent. Those commercial pools pay out huge prizes, and they can afford the higher rate of tax.
      I believe that the Government mistakenly overlooked the plight of the sports-supporting and charity-supporting pools when the increase was planned. The amendment gives the Government the opportunity to correct that oversight.
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      When pool betting duty was increased from 25 per cent. to 33⅓ per cent., sports-supporting and charity-supporting pools suffered a considerable reduction in takings. They are now struggling to survive and continue their good work. They pay out modest prizes and therefore have difficulty in maintaining their attraction to supporters, especially in view of the heavy increase that has taken place in administrative expenses over the past year or two.
      We know that the whole question of financing sport and charitable causes is under review. I submit that in the meantime there is an urgent need to keep these organisations in being. I confidently plead with the Financial Secretary to accept this amendment, which has strong support on both sides of the House.
      Mr. William Wilson: I support this amendment, and I must do so first by declaring an interest. I am the proud possessor of 121 25p shares in Coventry City Football Club—one of the clubs which benefit from the pools which are the subject of this amendment. Suffice it to say that those shares have never paid a dividend and are never likely to do so. They were purchased when Coventry City was in the bottom half of the Fourth Division, and although we are now in the dizzy heights of the First Division the prospect of a dividend is as far away as ever.
      The greatest political insult I ever received was at the time of the last General Election when, wearing my red and white Labour Party ribbons in Coventry, I was asked by a small child whether I was a supporter of Manchester United.
      There are two points which need to be considered in relation to this amendment and the Clause. First, are the pools concerned worthy of support and recommendation? Second, if the Bill goes through as it stands, is the clause likely to produce more or less tax for the Exchequer? The pools which we seek to help are not run for private profit or individual gain; they all contribute to the sporting fraternity and well-being of sporting clubs. Obviously they are entitled to support.
      Anyone who studies the problem can see clearly that the Chancellor is likely to finish up with less revenue rather than more unless—I enter this simple proviso

      349
      —he says, "I am ready to soak Little-woods and Vernons and I do not mind what happens to sporting clubs and their pools." If he says that, we know where we are. Otherwise, the situation is clear—less revenue will be secured.
      The Chancellor should appreciate that when the tax was increased from 25 per cent. to 33; per cent. a number of pools helping sporting clubs went out of existence. More have given up since the 40 per cent. rate was imposed. The writing is on the wall.
      Let me explain what happened to Coventry City Football Club pool. It started in January 1967, and had the object of providing better facilities for football in Coventry and of improving the ground and club facilities, which are admirable objects. We were making £80,000 a year, all of it ploughed back into the club and its facilities. That was the beginning. When the tax was increased to 33⅓ per cent. the figure ploughed back was £50,000–60,000 per year. Now that the rate has risen to 40 per cent., to the pool helping Coventry Football Club is losing £200 per week. Obviously, we cannot go on in that way much longer. The Coventry City pool, which was one of the best in the country, is drying up. With inflation, the cost of running the pool, and now the increased tax, £200 per week is being lost. Those are the simple economics of the situation.
      The kindest thing I can say about the Bill's proposal affecting the football club pools is this: no one thought it through to the logical end, or could really see what was going to be achieved. Surely it was not the intention of the Chancellor that after they ceased to make a profit the pools supporting football clubs should be dealt with in this way. It is unfortunate that those helping football clubs are being hampered in this way.
      I urge the Financial Secretary to accept the amendment. The difference it will make to his revenue is neither here nor there. If he accepts this amendment he will probably finish up with more revenue.
      Dr. Gilbert: I have listened with close attention to the eloquent speeches of my hon. Friend the Member for Coventry, South-East (Mr. Wilson) and the hon. Member for Birmingham, Hall Green (Mr. Eyre).
      350
      I accept that sporting and charitable pools are now facing difficult times. I accept that they are faced, as are other forms of economic activity, with a situation in which expenses and taxes are rising and revenues are falling because of the difficulties in selling tickets. I listened with considerable sympathy to the remarks of the two hon. Members. Unfortunately, I do not think that I can be as forthcoming as I would wish in response to their representations.
      My hon. Friend the Member for Coventry, South-East, rightly in my view, suggested that the effect of the Finance Bill would be to produce less revenue for the Treasury from sporting and charitable pools. I would not resist that case very strongly, but my hon. Friend did not address himself to the consideration which Treasury Ministers have to have—whether the effect of his proposal would not also be to produce less revenue for the Treasury, in this case in terms of revenue from the commercial pools.
      The effect of the amendment would be to create a tax privilege position as between sporting and charitable pools on the one hand and the commercial pools on the other, and it follows that it would be easier for those pools, whose case my hon. Friend has been arguing, to offer prizes which would be a higher proportion of the stake money than would be the case with commercial pools. That is unarguable, and the consequence would be that the modest punter would be tempted to switch his custom away from the commercial pools to the non-commercial pools.
      Mr. Arthur Lewis: All the better.
      Dr. Gilbert: So be it, but I am addressing myself solely to the question of the net effect on the revenue, and there would be a good chance that the result of what is suggested, in its net effect would be a considerable loss to the Treasury. I should make it clear that some of the pools whose case hon. Members have argued are very big business. The larger so-called charitable pools have a gross revenue considerably in excess of all but a couple of the commercial pools. The loss to the revenue could be considerable.
      As the hon. Member for Birmingham, Hall Green said, I received a deputation—I hope. sympathetically—a 'week ago.

      351
      I listened carefully and we had a long discussion, which I hope the members of the deputation considered effective and detailed. I undertook to examine their case and asked them to let me have much more information. I have had a certain amount of information from one of the members of the deputation and I hope to get much more in due course. It would not be right for me to reveal everything contained in that communication, but I must tell the House that, so far, it has not met what I had in mind in terms of detailed financial information as to the effect of the proposed tax on individual pools and their costs and revenues.
      The law at present is in a very unsatisfactory state with regard to the pools. I see the right hon. Member for Crosby (Mr. Page) in his place. I hope he will not mind if I refer to him as the joker in the pack in this situation, because his contribution, in terms of the Local Revenue Bill, has been to make a confused situation considerably more confused.
      We are still considering the interdepartmental working party's report on lotteries generally. The report was published last December, as Cmnd. 5506, and we have not yet been able to complete our consideration of it. It suggested that the long-term interests of charitable and sporting pools might lie along the general line of promotion of lotteries. It also envisaged two-tier lotteries, the smaller type being duty-free and the larger ones paying the full rate of duty. This concept may have to be modified as a result of the progress of the legislation sponsored by the right hon. Gentleman.
      9.0 p.m.
      We sympathise with the difficulty here. The sporting pools hold a privileged position, as I am sure they would be the first to recognise. It is impossible for any outsider to join the group. I recognise that paragraph (b) is probably intended to deal with that difficulty in respect of the preceding words:
      "except in the case of bets by way of pool betting in respect of a competition … held by any person approved by the Secretary of State in that behalf".
      That might be intened to extend the membership of that select group, but its
      352
      effect is highly uncertain, and new competitions on the same lines as those already registered under the Act would fall to be regarded as lotteries and, as such, unlawful under the Betting, Gaming and Lotteries Act—
      Mr. Eyre: Of course, if on technical grounds the Minister sought to improve the wording of paragraph (b), I am sure that the hon. Member for Coventry, South-East (Mr. Wilson) and I would be glad to agree.
      Dr. Gilbert: I am obliged. I was not resisting the proposal on technical grounds, but simply pointing out the effect in substantive terms. Without paragraph (b) we should still perpetuate a priviliged fiscal arrangement for a small group of pools which run only a few football clubs—about a dozen or so—although I recognise that the Warwickshire Cricket Club pool spreads its benefits widely over sport in different parts of the country.
      Although I have great sympathy for this proposal, I should need to see in greater detail than I have so far the immediate financial implications, for the pools, of my right hon. Friend's proposals. The most satisfactory way to proceed is by a general review of the law in this regard, which, it will be agreed, is very confused. I recognise that this is an argument for delay and will not satisfy the hon. Gentleman, who wants action immediately. I hope that he will accept that I have tried to consider the amendment as sympathetically as possible but unfortunately am unable to be as forthcoming as I have been able to be with the House on previous amendments.
      Mr. R. Carr: No one knows better than someone who has been Home Secretary what a mess this whole field of lotteries and so on is in and the need for rationalisation. It was when I was Home Secretary that the inter-departmental working party report was published. I hope that that leads quickly to some conclusions by the Government about the proper structure of law in this area. So I speak from a clear knowledge of and feeling about the present muddle and the need for reform.
      But it is just because I am conscious that the present position can last for only a short time that I find the Financial

      353
      Secretary's arguments wholly unconvincing. He has not opposed the amendment because of the great direst cost involved. In fact, he said in Committee that the total direct cost of removing the duty altogether would be about £7 million, whereas the proposition is not to remove the proposed 40 per cent. duty altogether but to reduce it from a proposed 40 per cent. to the existing rate of 33½ per cent. or whatever it is. The direct cost of the amendment, therefore, is very small.
      What we have to assess is the weight which we ought to attach to the Financial Secretary's fear that this may lead to a substantial indirect cost because these privileged pools will take advantage in the future of their differential rate of duty to make themselves so attractive that they will attract an enormous amount of business from the commercial pools and, therefore, the Exchequer will lose revenue from the commercial pools. When we examine that proposition we see that it is a typical Treasury argument of the least convincing kind.
      The House will notice that paragraph (a) of the amendment is couched in terms of licensing under the Pool Competitions Act 1971. I forget exactly when that Act runs out, but it is an interim Act with a fixed term. Therefore, the Government will, in any event, have to legislate in this field on a permanent basis—I think within a couple of years—whatever Government are in power.
      Therefore, the maximum amount of time that these privileged pools under this temporary Act have in which to redress their affairs and attract all this business away from commercial pools is at most about a couple of years. They will not do that. It is not worth it in the time involved. Moreover, they know that as they have a maximum of two years life, if they were to start to do that they would not be in a very popular position with the Government of the day, of whichever party they may be, in getting suitable arrangements to replace the 1971 Act.
      I suggest, therefore, that the fear that the Financial Secretary expresses about the privileged pools using, if we allowed the amendment to go through, differential rates of duty to attract a large amount
      354
      of business from the commercial pools is more a figment of the imagination, a sort of fevered fear on the part of the Treasury, than something based on any hard reality. What is more, we heard a great deal from the Financial Secretary about another Finance Bill that is coming, he hopes, in the near future. If that happens, or if we do not have another Finance Bill until next April or May, or whatever the normal time is, there is not all that long a period. If this fear proved to have substance, the door could be closed at that stage.
      This is an imagined fear and not a real fear. This whole area of legislation must be amended in the near future, partly because of the basic need and partly because the 1971 Act comes to an end anyhow within the next couple of years. Why should these beneficial pools be hit and suffer, and why should sport, recreation and certain charities suffer, in the meantime? If the Government maintain their position, I am afraid that I must advise my right hon. and hon. Friends to support the amendment in the Division Lobby.
      Mr. Graham Page: I join with my right hon. Friend the Member for Carshalton (Mr. Carr) in giving that advice.
      The Financial Secretary kindly referred to what he called the joker in the pack—the Bill on local lotteries. I sought no advantage to local authorities over the sports pools or charitable pools in initiating that legislation. I should be very pleased to see an advantage to the sports pools as against local lotteries. I should like to see the differentials between 40 per cent. and 33½ per cent., to give that little edge on it for the sports pools. This seems the entirely wrong moment to increase taxation on those pools when the clubs concerned are having difficulties. I ask the Financial Secretary not to use the Bill which I have introduced as an argument against the amendment.
      The problem is that of getting on with the job of legislating for lotteries. The Financial Secretary said that the report he mentioned had been published last December. The Government have therefore had a long time to consider it and indeed Civil Servants have had this matter before them for much longer and are ready with advice, as they were last December.

      355
      To leave the existing tax on the sports pools and not to increase it will not mess up legislation on the law on lotteries. The action suggested can be taken pending the massive reform of lotteries. Let us give a little advantage now and not increase the
      taxation at this time when these pools are having difficulties.
      Question put, That the amendment be made:—
      The House divided: Ayes 291, Noes 274.

      Division No. 84.

      AYES

      [9.13 p.m.

      Adley, Robert

      Elliott, Sir William

      Jones, Arthur (Daventry)

      Aitken, Jonathan

      Emery, Peter

      Jopling, Michael

      Alison, Michael (Barkston Ash)

      Eyre, Reginald

      Joseph, Rt. Hn. Sir Keith

      Allason, James (Hemel Hempstead)

      Fairgrieve, Russell

      Kaberry, Sir Donald

      Amery, Rt. Hn. Julian

      Farr, John

      Kellett-Bowman, Mrs. Elaine

      Ancram, M.

      Fell, Anthony

      Kershaw, Anthony

      Archer, Jeffrey

      Fenner, Mrs. Peggy

      Kilfedder, James A.

      Atkins, Rt. Hn. Humphrey (Spelthorne)

      Fidler, Michael

      Kimball, Marcus

      Awdry, Daniel

      Finsberg, Geoffrey

      King, Evelyn (Dorset, S.)

      Balniel, Rt. Hn. Lord

      Fisher, Sir Nigel

      King, Tom (Bridgwater)

      Banks, Robert

      Fletcher, Alexander (Edinburgh, N.)

      Kitson, Sir Timothy

      Bell, Ronald

      Fletcher-Cooke, Charles

      Knight, Mrs. Jill

      Bennett, Sir Frederic (Torbay)

      Fookes, Miss Janet

      Knox, David

      Bennett, Dr. Reginald (Fareham)

      Fowler, Norman (Sutton C'field)

      Lament, Norman

      Benyon, W.

      Fox, Marcus

      Lane, David

      Berry, Hon. Anthony

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

      Langford-Holt, Sir John

      Biffen, John

      Freud, Clement

      Latham, Michael (Melton)

      Biggs-Davison, John

      Fry, Peter

      Lawrence, Ivan

      Blaker, Peter

      Galbraith, Hn. T. G. D.

      Lawson. Nigel (Blaby)

      Boardman, Tom (Leicester, S.)

      Gardiner, George (Reigate & Banstead)

      Le Marchant, Spencer

      Body, Richard

      Gardner, Edward (S. Fylde)

      Lester, Jim (Beeston)

      Boscawen, Hon. Robert

      Gibson-Watt, Rt. Hn. David

      Lewis, Kenneth (Rtland & Stmford)

      Bowden, Andrew (Brighton, Kemptown)

      Gilmour, Rt. Hn. Ian (Ch'sh' & Amsh'm)

      Lloyd, Ian (Havant & Waterloo)

      Boyson, Dr. Rhodes (Brent, N.)

      Gilmour, Sir John (Fife, E.)

      McAdden, Sir Stephen

      Braine, Sir Bernard

      Glyn, Dr. Alan

      MacArthur, Ian

      Bray, Ronald

      Goodhart, Philip

      McCrindle, R. A.

      Britlan, Leon

      Goodhew, Victor

      McCusker, H.

      Brocklebank-Fowler, Christopher

      Goodlad, A.

      Macfarlane, Neil

      Brown, Sir Edward (Bath)

      Gorst, John

      MacGregor, John

      Bruce-Gardyne, J.

      Gow, Ian (Eastbourne)

      McLaren, Martin

      Bryan, Sir Paul

      Gower, Sir Raymond (Barry)

      Macmillan, Rt. Hn. M. (Farnham)

      Buchanan-Smith, Alick

      Grant, Anthony (Harrow, C.)

      McNair-Wilson, Michael (Newbury)

      Buck, Antony

      Gray, Hamish

      McNair-Wilson, Patrick (New Forest)

      Budgen, Nick

      Grieve, Percy

      Madel, David

      Bulmer, Esmond

      Griffiths, Eldon (Bury St. Edmunds)

      Marshall, Michael (Arundel)

      Burden, F. A.

      Grimond, Rt. Hn. J.

      Marten, Neil

      Butler, Adam (Bosworth)

      Grist, Ian

      Mather, Carol

      Carlisle, Mark

      Grylls, Michael

      Maude, Angus

      Carr, Rt. Hn. Robert

      Gurden, Harold

      Maudling, Rt. Hn. Reginald

      Chalker, Mrs. Lynda

      Hall, Sir John

      Mawby, Ray

      Channon, Paul

      Hall-Davis, A. G. F.

      Maxwell-Hyslop, R. J.

      Chataway, Rt. Hn. Christopher

      Hamilton, Michael (Salisbury)

      Mayhew, Christopher (G'wh, W'wch, E)

      Clark, A. K. M. (Plymouth, Sutton)

      Hampson, Dr. Keith

      Mayhew, Patrick (RoyalT' bridge Wells)

      Clark, William (Croydon, S.)

      Hannam, John

      Meyer, Sir Anthony

      Clarke, Kenneth (Rushcliffe)

      Harrison, Col. Sir Harwood (Eye)

      Miller, Hal (B'grove & R'ditch)

      Clegg, Walter

      Harvie Anderson, Rt. Hn. Miss

      Mills, Peter

      Cockcroft, John

      Hastings, Stephen

      Miscampbell, Norman

      Cooke, Robert (Bristol. W.)

      Havers, Sir Michael

      Mitchell, David (Basingstoke)

      Cope, John

      Hawkins, Paul

      Moate, Roger

      Cordle, John

      Hayhoe, Barney

      Molyneaux, James

      Cormack, Patrick

      Heath, Rt. Hn. Edward

      Money, Ernie

      Corrie, John

      Henderson, J. S. B. (Dunbartonshire, E.)

      Monro, Hector

      Costain, A. P.

      Heseltine, Michael

      Moore, J. E. M. (Croydon, C.)

      Craig, Rt. Hn. William (Belfast. W.)

      Higgins, Terence

      Morgan-Giles, Rear-Adm.

      Critchley, Julian

      Hill, James A.

      Morris, Michael (Northampton, S.)

      Crouch, David

      Holland, Philip

      Morrison, Charles (Devizes)

      Crowder, F. P.

      Hooson, Emlyn

      Morrison Peter (City of Chester)

      Davies, Rt. Kn. John (Knutsford)

      Hordern, Peter

      Mudd, David

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

      Howell, Rt. Hn. Sir Geoffrey (Surrey, E.)

      Neave, Airey

      Dean, Paul (Somerset, N.)

      Howell, David (Guildford)

      Neubert, Michael

      Deedes, Rt. Hn. W. F.

      Howell, Ralph (Norfolk, North)

      Newton, Tony (Braintree)

      Dixon, Piers

      Howells, Geraint (Cardigan)

      Nicholls, Sir Harmar

      Dodds-Parker, Sir Douglas

      Hunt, John

      Normanton, Tom

      Dodsworth, Geoffrey

      Hurd, Douglas

      Nott, John

      Douglas-Home, Rt. Hn. Sir Alec

      Hutchison, Michael Clark

      Onslow, Cranley

      Drayson, Burnaby

      Iremonger, T. L.

      Oppenheim, Mrs. Sally

      du Cann, Rt. Hn. Edward

      Irvine, Bryant Godman (Rye)

      Orr, Capt. L. P. S.

      Durant, Tony

      James, David

      Osborn, John

      Dykes, Hugh

      Jenkin, Rt. Hn. P. (R'dge W'std & W'fd)

      Page, Rt. Hn. Graham (Crosby)

      Eden, Rt. Hn. Sir John

      Jessel, Toby

      Page, John (Harrow, W.)

      Edwards, Nicholas (Pembroke)

      Johnson Smith, G. (E. Grinstead)

      Pardoe, John

      Johnston, Russell (Inverness)

      Parkinson, Cecil (Hertfordshire, S.)

      Pattie, Geoffrey

      Shaw, Giles (Pudsey)

      Townsend, C. D.

      Percival, Ian

      Shaw, Michael (Scarborough)

      Trotter, Neville

      Pink, R. Bonner

      Shelton, William (L'mb'th, Streath'm)

      Tugendhat, Christopher

      Price, David (Eastleigh)

      Shersby, Michael

      Tyler, Paul

      Prior, Rt. Hn. James

      Silvester, Fred

      van Straubenzee, W. R.

      Raison, Timothy

      Sims, Roger

      Vaughan, Dr. Gerard

      Rathbone, Tim

      Sinclair, Sir George

      Viggers, Peter

      Rawlinson, Rt. Hn. Sir Peter

      Skeet, T. H. H.

      Waddington, David

      Redmond, Robert

      Smith, Cyril (Rochdale)

      Wainwright, Richard (Colne Valley)

      Rees, Peter (Dover & Deal)

      Smith, Dudley (W'wick & L'm'ngton)

      Wakeham, John

      Rees-Davies, W. R.

      Spence, John

      Walder, David (Clitheroe)

      Renton, Rt. Hn. Sir David (H't' gd 'ns' re)

      Spicer, Jim (Dorset, W.)

      Walker-Smith, Rt. Hn. Sir Derek

      Renton, R. T. (Mid-Sussex)

      Spicer, Michael (Worcestershire, S.)

      Wall, Patrick

      Rhys Williams, Sir Brandon

      Sproat, Iain

      Warren, Kenneth

      Ridley, Hn. Nicholas

      Stanbrook, Ivor

      Wells, John

      Ridsdale, Julian

      Stanley, John

      Wiggin, Jerry

      Rifkind, Malcolm

      Steel, David

      Wilson, William (Coventry, S.F.)

      Pippon, Rt. Hn. Geoffrey

      Steen, Anthony (L'pool, Wavertree)

      Winstanley, Dr. Michael

      Roberts, Michael (Cardiff, N.-W.)

      Stewart, Ian (Hitchin)

      Winterton, Nicholas

      Roberts, Wyn (Conway)

      Stodart, Rt. Hn. A. (Edinburgh, W.)

      Wood, Rt. Hn. Richard

      Rodgers, Sir John (Sevenoaks)

      Stokes, John

      Worsley, Sir Marcus

      Ross, Stephen (Isle of Wight)

      Taylor, Edward M. (Glgow, C'cart)

      Young, Sir George (Ealing, Acton)

      Rossi, Hugh (Hornsey)

      Taylor, Robert (Croydon, N.W.)

      Rost, Peter (Derbyshire, S.-E.)

      Tebbit, Norman

      TELLERS FOR THE AYES:

      Royle, Sir Anthony

      Temple-Morris, Peter

      St. John-Stevas, Norman

      Thatcher, Rt. Hn. Margaret

      Mr. John Stradling Thomas and

      Scott-Hopkins, James

      Thorpe, Rt. Hn. Jeremy

      Mr. Richard Luce.

      NOES

      Abse, Leo

      Davies, Denzil (Llanelli)

      Hardy, Peter

      Allaun, Frank

      Davies, Ifor (Gower)

      Harper, Joseph

      Archer, Peter

      Davis, Clinton (Hackney, C.)

      Harrison, Walter (Wakefield)

      Armstrong, Ernest

      Deakins, Eric

      Hatton, Frank

      Ashley, Jack

      Dean, Joseph (Leeds, W.)

      Healey, Rt. Hn. Denis

      Ashton, Joe

      de Freitas, Rt. Hn. Sir Geoffrey

      Heffer, Eric S.

      Atkins, Ronald

      Delargy, Hugh

      Hooley, Frank

      Atkinson, Norman

      Dell, Rt. Hn. Edmund

      Horam, John

      Bagier, Gordon A. T.

      Dempsey, James

      Howell, Denis (B'ham, Small Heath)

      Barnett, Guy (Greenwich)

      Doig, Peter

      Huckfield, Leslie

      Barnett, Joel (Heywood & Royton)

      Dormand, J. D.

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Bates, Alf

      Douglas-Mann, Bruce

      Hughes, Mark (Durham)

      Baxter, William

      Duffy, A. E. P.

      Hughes, Robert (Aberdeen, North)

      Benn, Rt. Hn. Anthony Wedgwood

      Dunn, James A.

      Hughes, Roy (Newport)

      Bennett, Andrew F. (Stockport, N.)

      Dunnett, Jack

      Hunter, Adam

      Bidwell, Sydney

      Dunwoody, Mrs. Gwyneth

      Irvine, Rt. Hn. Sir A. (L'p'I, EdgeHI)

      Bishop, E. S.

      Eadie, Alex

      Irving, Rt. Hn. Sydney (Dartford)

      Blenkinsop, Arthur

      Edelman, Maurice

      Jackson, Colin

      Boardman, H.

      Edge, Geoff

      Janner, Greville

      Booth, Albert

      Edwards, Robert (W'hampton, S.E.)

      Jay, Rt. Hn. Douglas

      Boothroyd, Miss Betty

      Ellis, John (Brigg & Scunthorpe)

      Jeger, Mrs. Lena

      Bottomley, Rt. Hn. Arthur

      Ellis, Tom (Wrexham)

      Jenkins, Hugh (W'worth, Putney)

      Boyden, James (Bishop Auckland)

      English, Michael

      Jenkins, Rt. Hn. Roy (B'ham, St'fd)

      Bradley, Tom

      Evans, Fred (Caerphilly)

      John, Brynmor

      Broughton, Sir Alfred

      Evans, Ioan (Aberdare)

      Johnson, James (K'ston upon Hull, W)

      Brown, Bob (Newcastle upon Tyne, W.)

      Evans, John (Newton)

      Johnson, Walter (Derby, S.)

      Brown, Hugh D. (Glasgow, Provan)

      Ewing, Harry (St'ling, F'kirk & G'm'th)

      Jones, Barry (Flint, E.)

      Brown, Ronald (H'kney, S. & Sh'ditch)

      Faulds, Andrew

      Jones, Dan (Burnley)

      Buchan, Norman

      Fernyhough, Rt. Hn. E.

      Jones, Gwynoro (Carmarthen)

      Butler, Mrs. Joyce (H'gey, WoodGreen)

      Fitch, Alan (Wigan)

      Jones, Alec (Rhondda)

      Callaghan, Jim (M'dd'ton & Pr'wch)

      Fitt, Gerard (Belfast, W.)

      Judd, Frank

      Campbell, Ian

      Flannery, Martin

      Kaufman, Gerald

      Cant, R. B.

      Fletcher, Raymond (Ilkeston)

      Kelley, Richard

      Carmichael, Neil

      Fletcher, Ted (Darlington)

      Kerr, Russell

      Carter, Ray

      Foot, Rt. Hn. Michael

      Kilroy-Silk, Robert

      Carter-Jones, Lewis

      Ford, Ben

      Kinnock, Neil

      Castle, Rt. Hn. Barbara

      Forrester, John

      Lambie, David

      Clemitson, Ivor

      Fowler, Gerry (The Wrekin)

      Lamborn, Harry

      Cocks, Michael

      Fraser, John (Lambeth, Norwood)

      Lamond, James

      Cohen, Stanley

      Freeson, Reginald

      Lawson, George (Motherwell & Wishaw)

      Coleman, Donald

      Galpern, Sir Myer

      Leadbitter, Ted

      Colquhoun, Mrs. M. N.

      Garrett, John (Norwich, S.)

      Lee, John

      Conlan, Bernard

      Garrett, W. E. (Wallsend)

      Lestor, Miss Joan (Eton & Slough)

      Cook, Robert F. (Edinburgh, C.)

      George, Bruce

      Lewis, Arthur (Newham, N.)

      Cox, Thomas

      Gilbert, Dr. John

      Lewis, Ron (Carlisle)

      Craigen, J. M. (G'gow, Maryhill)

      Ginsburg, David

      Loughlin, Charles

      Cronin, John

      Golding, John

      Loyden, Eddie

      Crosland, Rt. Hn. Anthony

      Gourlay, Harry

      Lyons, Edward (Bradford, W.)

      Cryer, G. R.

      Graham, Ted

      Mabon, Dr. J. Dickson

      Cunningham, G. (Isl'ngt'n, S & F'sb'ry)

      Grant, George (Morpeth)

      McCartney, Hugh

      Cunningham, Dr. John A.(Whiteh 'v' n)

      Grant, John (Islington, C.)

      McElhone, Frank

      Dalyell, Tam

      Griffiths, Eddie (Sheffield, Brightside)

      MacFarquhar, Roderick

      Davidson, Arthur

      Hamilton, William (Fife, C.)

      McGuire, Michael

      Davies, Bryan (Enfield, N.)

      Hamling, William

      Mackenzie, Gregor

      McMillan, Tom (Glasgow, C.)

      Madden, M. O. F.

      Prescott, John

      Strauss, Rt. Hn. G. R.

      Magee, Bryan

      Price, Christopher (Lewisham, W.)

      Summerskill, Hn. Dr. Shirley

      Mahon, Simon

      Price, William (Rugby)

      Swain, Thomas

      Mallalieu, J. P. W.

      Radice, Giles

      Thomas, Jeffrey (Abertillery)

      Marks, Kenneth

      Richardson, Miss Jo

      Thorne, Stan (Preston, S.)

      Marquand, David

      Roberts, Albert (Normanton)

      Tierney, Sydney

      Marshall, Dr. Edmund (Goole)

      Roberts, Gwilym (Cannock)

      Tinn, James

      Mason, Rt. Hn. Roy

      Robertson, John (Paisley)

      Tomlinson, John

      Meacher, Michael

      Roderick, Caerwyn E.

      Tomney, Frank

      Mellish, Rt. Hn. Robert

      Rodgers, George (Chorley)

      Torney, Tom

      Mendelson, John

      Rodgers, William (Teesside, St'ckton)

      Urwin, T. W.

      Mikardo, Ian

      Rooker, J. W.

      Varley, Rt. Hn. Eric G.

      Millan, Bruce

      Roper, John

      Wainwright, Edwin (Dearne Valley)

      Miller, Dr. M. S. (E. Kilbride)

      Rose, Paul B.

      Walden, Brian (B'm'ham, Ladywood)

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

      Ross, Rt. Hn. William (Kilmarnock)

      Walker, Harold (Doncaster)

      Molloy, William

      Rowlands, Edward

      Walker, Terry (Kingswood)

      Moonman, Eric

      Sandelson, Neville

      Watkins, David

      Morris, Alfred (Wythenshawe)

      Sedgemore, Bryan

      Weitzman, David

      Morris, Charles R. (Openshaw)

      Selby, Harry

      Wellbeloved, James

      Morris, Rt. Hn. John (Aberavon)

      Shaw, Arnold (Redbridge, Ilford, S.)

      White, James

      Moyle, Roland

      Sheldon, Robert (Ashton-under-Lyne)

      Whitehead, Phillip

      Murray, Ronald King

      Shore, Rt. Hn. Peter (S'pney & P'plar)

      Whitlock, William

      Newens, Stanley (Harlow)

      Short, Mrs. Renée (W'hamp'n, N.E.)

      Willey, Rt. Hn. Frederick

      Oakes, Gordon

      Silkin, Rt. Hn. John (L'sham, D'ford)

      Williams, Alan (Swansea, W.)

      Ogden, Eric

      Silkin, Rt. Hn. S. C. (S'hwark, Dulwich)

      Williams, Alan Lee (Hvrng, Hchurch)

      O'Halloran, Michael

      Sillars, James

      Williams, Rt. Hn. Shirley (H'f'd & St'ge)

      O'Malley, Brian

      Silverman, Julius

      Williams, W. T. (Warrington)

      Orbach, Maurice

      Skinner, Dennis

      Wilson, Alexander (Hamilton)

      Ovenden, John

      Small, William

      Wilson, Rt. Hn. Harold (Huyton)

      Owen, Dr. David

      Smith, John (Lanarkshire, N.)

      Woodall, Alec

      Padley, Walter

      Snape, Peter

      Woof, Robert

      Palmer, Arthur

      Spearing, Nigel

      Wrigglesworth, Ian

      Park, George (Coventry, N.E.)

      Spriggs, Leslie

      Young, David (Bolton, E.)

      Parker, John (Dagenham)

      Stallard, A. W.

      Parry, Robert

      Stewart, Rt. Hn. M. (H'sth, Fulh'm)

      TELLERS FOR THE NOES:

      Pavitt, Laurie

      Stoddart, David (Swindon)

      Pendry, Tom

      Stonehouse, Rt. Hn. John

      Mr. James Hamilton and

      Phipps, Dr. Colin

      Stott, Roger

      Mr. Ernest G. Perry.

      Prentice, Rt. Hn. Reg

      Strang, Gavin

      Question accordingly agreed to.

    Clause 5

      VALUE ADDED TAX—TIME OF SUPPLY
      Dr. Gilbert: I beg to move Amendment No. 2, in page 3, line 42, after 'effect' insert:
      'and be deemed always to have had effect'.
      The amendment seeks to restore to the clause its original intention by reinstating words deleted from it in Committee on an amendment moved by the hon. and learned Member for Dover and Deal (Mr. Rees). I will not detain the House for long, but it is desirable that I should explain briefly the background of the amendment to hon. Members who were not present in Committee.
      It is fair to say, in the light of what was said on both sides of the Committee and of the House in the debates on the 1972 Finance Bill—which is what got us into these difficulties—that it was Parliament's clear intention at the time that VAT should be applied—[Interruption.]—
      Mr. Deputy Speaker (Mr. George Thomas): Order. The hon. Gentleman is entitled to be heard in silence.
      Dr. Gilbert:—it was Parliament's clear intention that VAT should be applied from 1st April 1973 to charges for the hiring of goods whether or not hire agreements had been concluded or the goods delivered to the customer before that or any other date. That was the proposal put before the House by right hon. and hon. Gentlemen opposite, and it will be within the recollection of the hon. Member for Worthing (Mr. Higgins) who introduced the 1972 Bill.
      The proposal was not readily accepted by those of us who were in opposition at that time, because it involved an element of double taxation on those hired goods which had previously borne purchase tax. After two debates and a Division, the proposal was carried, and both sides understood it to be the intention of the Bill. That intention has been largely fulfilled.
      I assure the House that the great majority of traders have been fully accounting for and paying tax on those supplies. The impression was given by some speeches in Committee and else-here that there had been widespread seeking of legal advice and widespread withholding of tax as a result of legal advice received. Those impressions are quite

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      unfounded. Indeed, I go further and assure the House that since the debate in Committee I have received representations from certain quarters of industry, namely, the Equipment Leasing Association, which positively urged that the words I have moved should be restored to the clause, because tax has already been paid on that basis, and the unscrambling of the situation between suppliers and customers would be troublesome and an extremely unwelcome process.
      It will be within your recollection, Mr. Deputy Speaker, that in February this year the London VAT Appeal Tribunal gave a decision on appeals brought by three large television hire concerns that in its interpretation of the wording of Section 7(8) of the 1972 Finance Act VAT was not chargeable on goods supplied on hire and delivered to customers before 27th July 1972, the date of the Royal Assent to that Act.
      It can be reasonably assumed that a distinction between hirings before 27th July 1972 and hirings on or after that date was not in the minds of anyone who participated in the 1972 debates in respect of VAT either in Committee of the whole House or in Committee upstairs. Hon. Members who were present will recall that a measure of relief on double taxation on television sets was provided after full debate on the basis that rental under all agreements entered into before 1st April 1973—not the relatively small proportion of cases in which the agreement was made and the set installed between 27th July 1972 and 31st March 1973—would be liable to VAT from 1st April 1973 onwards. That relief was provided in Section 48 of the 1972 Act and reduced the tax base to which, as was understood on both sides, the tax was to apply.
      What is now Clause 5 of the Bill was introduced as the only feasible course to restore the original intention of the legislation brought forward by the Conservative Government and to validate what had been happening since April 1973, in the great majority of cases affected, in the belief that the legislation had achieved its Intention.
      9.30 p.m.
      If the amendment passed in Committee is allowed to stand, the effect will be that the tax will not become chargeable on these supplies until the date of Royal
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      Assent to the current Finance Bill. The cost of that to the Exchequer would be substantial. Apart from television rental, hiring charges for other kinds of goods, such as motor vehicles, computers, office equipment, domestic appliances, furniture, carpets, linen, gaming machines and many other items, would be affected. At a rough estimate we would say that in respect of hirings to non-taxable persons from 1st April 1973 to date about £50 million of tax could be involved. If it is not possible to resist the proposal that the tax will be relieved retrospectively from services, the amount could be more than double—namely, about £120 million. If we take into account hirings to taxable persons who deduct as input tax the VAT charged to them, the amount involved becomes substantially greater.
      In moving the amendment in Committee the hon. and learned Gentleman pointed out that the Commissioners of Customs and Excise had an appeal pending and said that it would be improper for the Executive to over-ride the decision of the courts in relation to a particular case before the possibilities of appeal were exhausted. With respect, the position is not as simple as the hon. and learned Member has represented. The Commissioners are unavoidably placed in some difficulty. If they won their appeal to the Divisional Court, the television rental companies might be expected to take the matter further and the issue might not be finally resolved for another year, or possibly longer. If, on the other hand, the Customs and Excise lost the appeal, they might feel entitled to take the matter to a higher court. This might well be the outcome of our proceedings here this evening, and I shall not conceal that from hon. Members.
      The hon. and learned Gentleman criticised the official statement and particularly the statement that the effect of the clause—and I quote from the statement—
      "… is to correct the uncertainty created by a recent decision of the London Value Added Tax Tribunal."
      I make clear that we make no apology for that statement. The tribunal's decision must have had the effect of creating uncertainty in the minds of many traders who were accounting for tax on hiring charges in the way in which they and the House had all along intended the 1972 Act should operate. Traders were

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      bound to be uncertain whether the decision extended as widely as it appeared to do and whether, if it did, it could be reconciled with equitable treatment, for VAT purposes, of hirings as compared with other transactions which had taken place from 1st April 1973.
      Furthermore, legal processes could be expected to last for a year or more. At that time if the final decision were given to sustain the VAT tribunal decision, the administrative operation, which is already extremely formidable, in collecting arrears would be further complicated.
      The right hon. Gentleman in good humour this evening suggested that before long he might introduce a Budget. I do not seek to trade jests with him for this is a serious matter. If he finds himself responsible for a Finance Bill in the near future, he will face a serious problem in seeking to administer the relief afforded in Standing Committee. I assure him that it is no joke.
      The hon. Member for Cornwall, North (Mr. Pardoe) implied in Committee that there would be no serious administrative burden regarding the making of payments to traders because it would be left to individual companies to make their claims and that would virtually be the end of the problem. The hon. Gentleman suggested it would be almost a self-policing operation. I assure him and the House that if the amendment were allowed to stand the operation would be formidable, even if no further complications were to ensue from subsequent appeals, which I do not rule out, to divisional and higher courts.
      The majority of traders have already been accounting for tax—I want to make that clear to the House—in accordance with the original intention. It is likely that if the matter is left on its present basis a large number of claims for repayment will be involved. The formulation of the claims for the traders would not be a simple matter. It would mean calculating the tax on each charge made between 1st April 1973 and the date of Royal Assent to the current Finance Bill under hiring contracts in which the goods had been delivered before the date of Royal Assent to the Finance Act 1972.
      Hon. Gentlemen may look mystified. Therefore, it is only right that I should repeat that precisely to the House so that
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      it is clear. It would mean calculating the tax on each charge made between 1st April 1973 and the date of Royal Assent to the current Finance Bill under hiring contracts in which the goods had been delivered before the date of Royal Assent to the Finance Act 1972.
      That would be a burden in the first place not on Her Majesty's Customs and Excise but on the individual traders who were seeking to make claims under the provisions of the clause as amended. There would be additional transitional problems in determining the tax payable on supplies which span the date of the Royal Assent to the current Finance Bill.
      In view of the large amounts of revenue involved—I have already suggested a minimum of £50 million and it could be considerably more—the Customs and Excise—I am sure that I carry hon. Gentlemen with me on this at least—could not be expected to accept traders' claims without official verification. It would be the height of irresponsibility if it were to do so.
      The verification of individual claims would be far from straightforward. Individual transactions between claimants and their customers would need to be verified to ascertain whether the supplies were made to business customers entitled to deduct input tax. It would also be necessary to confirm that business customers who had been credited with a tax charged to them had properly adjusted their deductions of input tax. The dates of original supply agreements and installations would have to be checked, and also the dates when payments would be made. It would be nothing short of a nightmarish situation.
      I have indicated that in some cases there would be a substantial problem about passing on repayments effectively to those people, the customers of taxable suppliers, who have borne the burden of the tax.
      I understand that the television rental companies in general did not increase their charges to their customers in 1973–74 on account of value added tax. I would judge that their reason for not doing so was not that they all along took the view taken by the London Value Added Tax Tribunal, but rather that the value added tax on television rentals was a much reduced charge by reason of the concession given in Section 48 of the 1972 Act

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      and that the rental companies felt that they had sound commercial reasons for refraining from passing it on at that time.
      Even so, they have in most cases been paying amounts of value added tax to the Exchequer, and I think it likely that it will be open to their customers to argue that the charges were that much higher than they would have been if there had been no value added tax and that refunds should, in effect, be made to the end customers as well.
      Where charges have been increased since April 1973 on account of value added tax, the customer unquestionably has a moral claim and may have a sound legal claim—this would remain to be settled in the courts—for a refund from the supplier. Some contracts may have terminated. Customers may be difficult to trace. Therefore, I very much doubt whether repayments could or would be effectively passed on to all customers. If they were not, they would constitute a clear bounty to the suppliers.
      That apart, there are the administrative problems for the small supplier confronted with a procession of aggrieved customers who learn of the proceedings in Standing Committee and are under the impression that, if the decisions there were not reversed, they would be entitled to a refund of their value added tax on hirings covering this period. The fall-out for the individual suppliers in having to deal with disgruntled customers and process their claims, if they threatened action or became legally entitled to repayment of value added tax, would be enormous.
      As I said in Standing Committee, this is not at all a happy situation. Its origins are not of this Government's making. I make no criticism of Conservative Members as to the drafting of the 1972 Act, because my hon. Friends and I accepted the intention of the Bill. We are seeking merely to restore the intended effect of the 1972 Act. We are not seeking any element of retrospection in the sense that we are legislating afresh by removing an ambiguity in the legislation. We understand all the arguments against the principle of retrospective legislation. I have used them myself more than once.
      We must consider not only the abstract principle but the practicalities of the situation, which potentially affect thousands of businesses and millions of custo-
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      mers. The Standing Committee is asking the House to accept an administrative monstrosity with the clause as unamended. For the reasons I have given, I hope that the House will accept the amendment.
      Mr. R. Carr: To what sectors of industry, individual companies, trade associations and so on has the Customs and Excise explained all the difficulties and complexities? I have not received a single representation from industry that it is in any way aware of them or that it supports the hon. Gentleman's view that industry would like this retrospective element to go forward.
      Dr. Gilbert: I cannot tell the right hon. Gentleman to what extent representations have been made to industry by Customs and Excise. We have not solicited support for our view. The representations to us from the Equipment Leasing Association, an extremely responsible body of companies, were completely unsolicited. The association asked us to restore the position as it was intended to be under the 1972 Act.
      Mr. Redmond: Would not it be worth mentioning the Radio and Television Retailers Association, which made representations to the hon. Gentleman?
      Dr. Gilbert: I am happy to discuss the meeting I had with that association. Its concern was not with the clause but with the relief under the two-thirds/one-third arrangement, which it considered inadequate. I will not embarrass the hon Gentleman or the hon. Member for Worthing by discussing its comments on the precise form of the 1972 legislation. The thrust of the association's complaint was that the one-third relief would run out at the end of this year, and it was seeking an extension. Its complaint was in no way addressed to the clause.

  TRADE UNION AND LABOUR RELATIONS BILL
  Order for Third Reading read
  9.45 p.m.
  Mr. Speaker: I must interrupt the proceedings on the Finance Bill, with regard to the matter of privilege which arose earlier today.

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  I have to inform the House that, following the order made earlier regarding proceedings on the Trade Union and Labour Relations Bill, the Bill has been returned by the Lords and that Clause 27 and Schedule I have been corrected by the insertion of Amendments Nos. 101 and 66.
  Pursuant to the order of the House this day, it now falls to me to put the Question, That the Bill be now read the Third time.
  Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 56 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed.
  Ordered,
  That the Bill, as corrected in this House, be returned to the Lords.

  FINANCE BILL
  As amended (in the Committee and the Standing Committee), again considered.
  9.46 p.m.
  Mr. Peter Rees: As the Financial Secretary said in Committee, the privilege fell to me to move the amendment which struck out the retrospective element in what was then Clause 4 and is now Clause 5.
  On that occasion, the Financial Secretary resisted the amendment in temporate terms, and his case was very much that which he has made today. It is obvious that in the intervening month he has sought comfort and counsel from his Department. As a result, we have had a speech from him highly charged in content, which I suggest has been both insensitive and arrogant. In particular—this characterises his approach to this question—he made an extremely partial and selective quotation from the Treasury handout on the clause. Since it throws a flood of light on the approach of his Department and on his own approach to the clause, I hope that I shall be forgiven if I read the whole passage.
  It is as follows:
  "A Ways and Means Resolution has been introduced to authorise legislation in the forthcoming Finance Bill which will restate the intention of Section 7(8) of the Finance Act 1972, concerning the application of value added tax to 'continuing supplies' such as hirings
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  and rentals. The effect is to correct uncertainty created by a recent decision of the London Value Added Tax Tribunal concerning television rentals …"
  It was at that point that the Financial Secretary's quotation ceased. I intend to read on, because what follows is extremely revealing about his approach to this problem:
  "… and to confirm that tax has been properly chargeable on hiring and rental charges from 1st April 1973 onwards irrespective of the date when the hiring or rental agreement began."
  According to that statement, the London Value Added Tax Tribunal has held clearly and unequivocably that no tax has been properly charged to date. In view of that, it would have been better if the Financial Secretary had cited the whole passage so that the House could judge how his administration have approached this problem.
  In essence, the case which the hon. Gentleman has deployed today, although in more highly charged terms, is the same case that he deployed in Committee. He rests his case, first, on the amount involved.
  Before the proceedings in Committee, I put down a Question to the Chancellor of the Exchequer asking how much tax was involved. Unfortunately, I had not received my answer by the time that this clause was debated in Committee. However, by the courtesy of the Financial Secretary, I was given the gist of the answer, which was that it was impossible to calculate how much tax was involved.
  Apparently, between 17th June and 16th July—so great are the resources of the Customs and Excise—between £50 million and £100 million of tax is involved. I do not mind how much tax is involved. But if we are to test the arguments of the Financial Secretary, at least there is cause to stop and think why, if he was so uncertain on 17th June, he is so confident on 16th July.
  The hon. Gentleman's second argument is that old-age argument of all administrations—but the point we are here debating is not a partisan one. It does not lie between the Liberal and Conservative Parties or the Labour and Conservative Parties; it lies, on the whole, between those who believe that in any given situation the Executive must be protected from the consequences of its own ill thought-out legislation and those who believe that at the end of the day

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  the convenience of the taxpayer or the subject is paramount. In that I know exactly where my allegiance lies.
  If it is a question of inconvenience, we have to balance the inconvenience to the Customs and Excise, who may, if this amendment is rejected and if the decision of the London Value Added Tax Tribunal is confirmed on appeal, be met with a certain number of inconvenient reclaims of tax improperly deducted and accounted to Customs and Excise. I recognise the difficulties and I know that a Department finds it particularly irksome to have to admit that on occasion it has been wrong, but it is a common experience of all great Departments of State that, on occasion, the courts will find that they have been incorrectly administering the law that we have passed in Parliament. This is an experience, particularly in the complex field of VAT, to which they must reconcile themselves sooner rather than later.
  I say that that inconvenience does not balance against the inconvenience of those companies which have not charged tax to their suppliers and which, if this amendment is carried, would never be able to recover tax for periods past and gone. If it is a question of balancing the hardship and inconvenience of those two groups of people, again I know where my allegiance and support lies. It is to those who have not—as the courts have so far held, quite properly—charged and accounted for VAT on hirings and supplies derived from contracts entered into before the 1972 Finance Act. Now the Financial Secretary has almost put it that this amendment is designed to protect retailers who are involved in this mesh of provisions.
  The hon. Gentleman conveniently omitted to remind the House or point out to it, as my hon. and right hon. Friends have, that there is a responsible body of opinion in the trades concerned which was enormously relieved that Clause 4 was amended in Committee. The Radio and Television Retailers Association has been mentioned. There is a representative of that association in the Gallery, and I am sure that if the rules of order permitted he would confirm everything that I am saying. That association quite spontaneously came to me and said that it was enormously gratified by the amendment carried in Standing
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  Committe. We have not heard from the Financial Secretary about the representations it made to him, and we have not heard of any of the very substantial bodies which have been lobbying in support of the amendment.
  Leaving aside questions of inconvenience—which, at the end of the day, if deep principles are involved, I suggest must count as nothing—let us look at the principles involved. The Financial Secretary is asking us to enact a piece of retrospective legislation. In our debates retrospectivity has become a kind of talisman, but the point can be overplayed. Indeed, when it came to granting relief to those who have improved their fire protection I was very glad, and admitted that the measure introduced was retrospective, because it is always right retrospectively to relieve the subject of burdens. But I believe, equally, that it is quite wrong to impose burdens retrospectively. I believe that any taxpayer, or any subject, is entitled to order his affairs on the basis of the law then prevailing and, so far, the courts of this country, in dealing with legislation between television companies and Customs and Excise, have held emphatically that those who did not charge VAT on supplies and hiring agreements deriving from before the introduction of VAT were quite proper in not having done so, and were taking a correct view of the law.
  The Financial Secretary's argument really boils down to a matter of inconvenience—that, notwithstanding that they have quite properly ordered their own and their customers' affairs on a certain basis, we now wish them to re-order their affairs and to charge them tax which they will never be able to recover from their customers. I find that a particularly unattractive position for any administration to take up. The hon. Gentleman attempts to put the convenience of his own Department above the convenience of individual taxpayers. Again I find that an unattractive position for any serious-minded Minister to adopt.
  Dr. Gilbert: I have never at any time suggested that the interests of the Customs and Excise came above those of individual taxpayers; I was merely saying that they were joined together, and that all would be suffering seriously from this.
  Mr. Rees: I find that the most extraordinary and specious argument. If the Financial Secretary can convince the House that on this occasion the interests of Customs and Excise and those companies which have quite properly not charged VAT to their customers are identical, he is capable of sophisticated argument of a kind that quite passes over my head, and, I suspect, will pass over the heads of most of my right hon. and hon. Friends. This must be left to the House to judge.
  The hon. Gentleman passed over, with considerable smoothness and speed, the fact that the amendment would have the effect of annulling a decision which litigants have so far obtained in their favour from the VAT tribunals. The precedents for this course of action are few, I am happy to say, and entirely dishonourable. The only one which I can readily recall is that of Burmah Oil Corporation, and I do not feel that that lends substantial support to the case which the Financial Secretary is seeking to deploy.
  I can well remember a blush passing over the features of Lord Elwyn-Jones, who was called on in debates in the previous Parliament to justify his own position on that case. I should like to hear at considerably greater length, and with considerably more eloquence than has so far been deployed, any good point of principle which should lead Parliament to override a decision of the courts that has been quite properly obtained.
  The proper and honourable course for Customs and Excise in this case, if, as it states in its Press handout, uncertainty is being created and it wishes to confirm that tax has been properly charged, is to take the matter to appeal. The improper way is to say, in this House, "We wish to override the decision of the courts." In this amendment considerable points of principle are at stake.
  It may be a small amendment in a narrow compass, but involved in it is the role of the courts, the position of the Executive and the rights of the subject. I hope that I shall not be guilty of undue rhetoric if I say that, speaking for myself and—I hope—for most of my right hon. and hon. Friends, we are elected to this House to preserve the position of the courts, to make certain that the Executive does not become overweening and,
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  arrogant, and, above all, to protect our constituents from the power of the Executive when it is improperly exercised.
  The London VAT Tribunal has held that in this regard Customs and Excise has not behaved in accordance with the law. The proper and honourable course is for this House and this administration to abide by that decision. I hope that the amendment will be contemptuously rejected.
  10.0 p.m.
  Mr. Geoffrey Dodsworth: In proposing this amendment the Financial Secretary made a reference to the Equipment Leasing Association in which I should declare an interest since I am a vice-chairman of the association.
  It might be helpful if I were to recount briefly the conversation I had with one of the officials of that organisation late yesterday. I understood then that there had been discussions between the officers and representatives of the Treasury on this point and the view had been expressed by the association that the position which appertained before the VAT tribunal was the one being operated effectively in the industry. It was a procedure which had been arrived at after consultation at the time of the 1972 measure and was, therefore, acceptable to the industry as a whole.
  When this change in the proposed legislation was made known it was felt that there was doubt and uncertainty. To see yet further doubt and uncertainty was a source of great concern to those in the narrow area affected by this Bill. That was the view of the officials of the association. They were concerned, however, that their view should not be expressed in any way on their behalf without proper consultation with the officers of their association. I understand that the matter was discussed by the management committee of the organisation this morning and their authority and permission were given to say that they felt that the changes proposed in Standing Committee were not in the best interests of that association. It is right that I should say so this evening.
  It seems strange, even though that be the case, that we have had a tribunal which has brought about an effect which was not in accord with everybody's

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  understanding of the Bill as originally presented. When the understanding arrived at was not the law, it does not seem very satisfactory that we do not follow the course of the law. If there is a proper procedure and method to establish the true intention of the original Act, then that course should be followed. In those circumstances I should be very happy to support that part of the views expressed by my hon. and learned Friend.
  Mr. Pardoe: The Financial Secretary addressed some of his comments to me, particularly those about the difficulties of administration involved in setting this matter right, partly as a result of my comments made on this passage during the Committee Stage. I am deeply sorry to see that the Government have brought forward this amendment. We have debated it very fully in Committee and today. Alas, retrospective legislation is before us again. We have to consider the matter afresh tonight.
  The facts of the matter are clear. Parliament and Government have made a mistake. There is no point in trying to allocate the blame for that. It is bound to happen from time to time. It has been caught out by the courts.
  The question which we have to decide is simple. Do we accept the verdict of the court and the tribunal or do we use our privileged position and power to change the past? Those who are familiar with the arguments of mediaeval theologians know that a lot of argument took place whether God could change the past at that time in history. The question was never satisfactorily settled one way or the other.
  I cannot vote to put this House in a position which I do not believe God occupies. We cannot change the past and we should not endeavour to do so. Therefore I stick fast to the general principle on retrospective legislation which I enunciated during the Committee Stage. I do not believe that we should set any more precedents to go alongside that of Burmah Oil. If we accept this amendment, that will provide one more argument which others can bring forward in future debates when this question again arises.
  The second argument concerns the question of cost. I accept that whether the sum amounts to £50 million or £100
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  million it is a considerable amount of money. It is money which could well be put to very good effect elsewhere in our society and indeed in the public sector. But this is the price of the mistake made by Parliament and Government. Other people have to pay when they fall foul of the courts. I see no reason why Government and Parliament should not have to pay.
  The Financial Secretary addressed his remarks on the question of administration very closely to me. I admit that there will be an enormous number of problems. I never denied that. He spelt out clearly the detail of those claims and what would be involved, with every transaction having to be recalculated. At the Committee Stage I said—I think he accepted it—that the claims will in the first instance have to be made by the traders. He said that Customs and Excise will have to check those claims. But surely Customs and Excise will not have to check every one of those claims.
  It is normal practice, I know, to check a certain proportion of the claims—not 100 per cent., but 10 or 15 or 20 per cent., whatever it is. If the Financial Secretary can assure me that there is some magical reason why in this case every claim will have to be gone through, calculated and recalculated by civil servants, his argument begins to stand up. But it is not true that this would have to happen.
  If these administrative difficulties are as great as the hon. Gentleman says they are—and I accept that they are great—and are insuperable, as he seems to imply, I would have thought that the industry would have concluded that it could not work them either. It has not done so. Many of us have had letters from the Radio and Television Retailers' Association welcoming the decision of the Committee and not casting any doubt on the trade's ability to go through this administrative process.
  I remain totally unconvinced that the House should set aside in this way the decision of the court, and I intend to oppose again tonight the whole principle and extension of retrospective legislation
  Mr. John Cope: I find the amendment constitutionally highly objectionable. I want to draw attention to two consequences which would flow from it. First, no one

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  would be able to know in future precisely what the tax law was because everyone would have to bear in mind the argument used by the Government today for the amendment—that the intention of Parliament at the time of passing the law was paramount even if the law has subsequently turned out to mean something else.
  Taxpayers and their advisers should not have to look back at HANSARD in order to find out the intention of the House at the time it passed a law in case that argument were to be used to change that law in the future. When playing family croquet, it is an acceptable ploy to try to bend the rules in one's own direction in order to get an advantage, but it should not be open to Governments to say, "We wrote the rules wrongly and now want to change them retrospectively".
  The second consequence is that it would scarcely be worth while for people to take the Government to court in order to decide a particular point in tax law because they would know that what had been done in this case could be done again. They would know that if the Government lost, even in a lower court, they could come to the House and say, "We did not mean this and therefore we must overrule the court and change the position", even before there was time for the taxpayer to appeal to a higher court.
  The hon. Gentleman made a great deal of the delay which might be involved if the case had to work its way up through the courts on the insistence of either side. But the slowness of the courts or the uncertainty of the law, referred to in the Press release read by my hon. and learned Friend the Member for Dover and Deal (Mr. Rees), are not arguments which should weigh with us in judging this constitutional issue.
  The question is, was the tax legally paid or not? If the tribunal was right, then the last Parliament itself created the administrative problems and difficulties and, possibly, the expense to which the hon. Gentleman referred. If, on the other hand, the tribunal was wrong in its decision, that is a matter not for us but for the higher court to which appeal is still open and to which, we are told, the Customs and Excise would appeal if this amendment were rejected.
  376
  These two consequences alone should persuade us of the constitutional reasons for rejecting the amendment. No one will again be able to know the tax law with certainty without referring to Parliament's intentions and no one will feel confident about going to the courts against the Government in case they lost and then changed the rules in their own favour. I shall therefore do my best to ensure that the amendment is not accepted.
  Mr. Carr: The House should recognise that we are dealing with a serious case but also an important principle. This is one of the occasions when the House was to consider the expediency of the matter, in the full sense of the word, involving considerable sums, considerable work and inconvenience for the Customs and Excise as well as for industries and many organisations and private people. As the Financial Secretary said, it is difficult to unscramble this egg.
  Against that inconvenience there is the great point of principle. When the House introduced value added tax we set up special value added tax tribunals to deal with questions of this kind. There is no doubt about the clarity of our intention, but taxpayers took advantage of the machinery for judging disputes. These cases came before the London Value Added Tax Appeal Tribunal, with the result we know.
  The Government's proposal is offensive to me. The Financial Secretary did not make himself clear in Committee, but I got the impression that although a formal notice of appeal had been lodged there had been no determined effort to pursue it. Therefore, because the case went against them in the tribunal—the first court—without going to the appeal provided for by Parliament the Government are making a retrospective effort to upset that decision.
  There are serious consequences to the lack of clarity in the Act. I suppose that Parliament must take some responsibility for that, but so must my party as the Government of the day. Nevertheless, however we look at it, we come back to the awkward principle that Parliament passed the law and set up a special tribunal as the proper remedy for grievance and uncertainty. When taxpayers use that procedure and win against the Executive, without testing the matter

  377
  any further the Government propose to reverse the decision.
  10.15 p.m.
  I am afraid that on balance—I say "I am afraid" because I realise the serious consequences, and repeat that—when faced with this situation Parliament ought to have no option but to stand by the rule of law in this matter. I do not want to make light complaint, but I wish that the Financial Secretary had gone as fully into the matter in Committee as he has this evening. I have just been reading what he said in Committee. A number of things might then have happened which might—I do not think that they "would"—have changed my view. Whether they would have changed the view of other hon. Members I cannot say. For example, regarding the amount of money, the Financial Secretary spoke about tens of millions of pounds in Committee, and that was all that he had to say. This evening he quantified it as £50 million to begin with, but then gave a number of other consequential effects. It looked as though it might be a very much higher amount.
  From my shadow position I can only say that had I felt that it was, perhaps, this much larger sum of money than he had indicated, I would have taken special measures to see some of the people involved outside this House, in the industries and among the circles involved, and investigated it personally much more closely than I have done. Second, had the Financial Secretary told the Committee that many people in the trades affected wished the matter to be left as it was, again I would have made inquiries. But I have to repeat formally to the House what I said in an intervention just before the Financial Secretary ended his speech. Whereas I have had many representations made to me against the retrospective nature of the original Clause 4—Clause 5 as it is in the amended Bill—I have not received a single representation from anyone supporting what the Financial Secretary said, namely, that many people were asking the Treasury to leave it as it is.
  I have now noted that my hon. Friend the Member for Hertfordshire, South-West (Mr. Dodsworth), declaring his position as Deputy Chairman of the Equipment leasing Association, confirms what
  378
  the Financial Secretary says. I was expecting him to confirm it. I am sure that the Financial Secretary would tell us only what was true in this matter. He told us how he had spoken to some officials of the association and then, I gather as recently as this morning, the elected officers of the association met him about the matter.
  It is several weeks since this matter was dealt with in Standing Committee. One would have thought that if the Government wanted to argue that the Standing Committee decision should be reversed because people outside the House want to reverse it, they would have gone to them and discussed it with them in time for associations such as that of which my hon. Friend is deputy chairman to consider it properly, and not just to have a meeting with the officers on the morning of the day on which we are considering it. They should have given the association a proper chance to talk to the Opposition and to back benchers. I have had not a single representation from outside the House wishing the Opposition and the House generally to do what the Government are now asking them to do. Without exception, all the weight of opinion that I have received from outside the House is begging us to support the amendment passed in Standing Committee.
  Dr. Gilbert: I do not seek to interrupt the flow of the right hon. Gentleman's argument. The meeting that was held very recently was not concerned with the substance of the case. That had been the subject of representations to us previously by the association. The meeting this morning was to clear, among the officials of the association, the question whether I was at liberty to use their name.
  Mr. Carr: It is clear that the view expressed by the association has not gone through all the channels of the association in great detail.
  We come back to the point of principle. The only thing that could have diverted us from the point of principle was evidence that many citizens, either individual or corporate, affected by this legislation had come to Parliament and said, "On balance we would rather it was left as it was, and we accept this retrospectively." But that has not been

  379
  the case. I repeat that I have not had a single representation to that effect.
  I realise the great practical difficulty, but Parliament must maintain the position that in this case the rule of law must prevail.
  The Chancellor of the Exchequer (Mr. Denis Healey): I wish to address my remarks to the right hon. Member for Carshalton (Mr. Carr), who has just addressed the House with a great deal of moderation, and some caution, as well he might in the light of the information he now has. The right hon. Gentleman has asserted several times recently his belief that he may before long be holding the responsibility which I at present hold, and I ask him to reflect carefully on the implications of the course he is advising his right hon. and hon. Friends to follow.
  The amendment formally establishes the position which until a few months ago the whole House believed to have existed since 1972. That position was initially established and put to the House by the then Conservative Government, who persuaded the House that it was right that VAT should apply to all hirings as from 1st April, 1973, although they accepted some concessions pressed upon them by the then Labour Opposition. The right hon. Gentleman proposes tonight to lead his Party into the Lobby against a decision taken by the Conservative Government when it was last in power. It is not the first occasion in the discussions on this Bill that he has done so.
  When we were discussing the question of the trade unions' provident funds he accepted that the measure we wished to introduce sought to restore the position as he had claimed that it should be when he was in office. He also accepted during that debate that in principle he believed that retrospective legislation was justified. The right hon. Gentleman argued then, as he has argued tonight, that because of the way in which the matter has been handled, in that case by the trade unions and in this case by the Government, he is not prepared to recommend his right hon. and hon. Friends to restore a position which he himself supported when in Government—
  Mr. Carr: The right hon. Gentleman must not misrepresent me in this serious and fundamental way. The case I made about the trade unions was that in exceptional circumstances Parliament is justified in passing retrospective legislation to relieve citizens of a burden imposed upon them in a way which Parliament did not intend, and from which citizens could not relieve themselves. In this case the matter is entirely the other way around. We are relieving citizens from a burden which the Government are trying to impose retrospectively. If we believe in the rule of law, then we believe in the rule of law.
  No doubt we must criticise ourselves if the drafting of a law was evidently not sufficiently perfect, yet it is clear here that the Executive are asking Parliament to reverse that law without even having gone through the proper processes of appeal laid down by Parliament.
  Mr. Healey: I do not want any unnecessary argument with the right hon. Gentleman. I accept the distinction that he regards as important—and there is an important distinction between retrospective legislation which is intended to relieve the citizen of a burden and retrospective legislation which has the opposite effect. But the point concerns the principle of retrospective legislation in circumstances which he then accepted, but which he would claim do not exist in the situation in which the House finds itself tonight. I fully accept that.
  I come to the second point, which is that not to accept the Government's amendment tonight—and I suspect from the way in which the right hon. Gentleman spoke just now that he accepts this fact—would involve appalling administrative difficulties. I think that he accepts this evidence given by my hon. Friend the Financial Secretary and confirmed by the hon. Member for Hertfordshire, South-West (Mr. Dodsworth) in an impressive speech, that part of industry—I do not claim all of it—would find it troublesome and unwelcome to attempt to unscramble eggs which have been scrambled over the last 18 months.
  I am glad that the right hon. Gentleman gave this aspect of the matter its due importance tonight, but he decided, on balance, that what he called respect

  381
  for the law should override this consideration. However, I come now to a far more important point. I ask the right hon. Gentleman as pretender to my throne to consider it seriously, and I ask his hon. Friends to do the same. To refuse assent to the amendment would involve increasing the public sector borrowing requirement by up to £120 million. Opposition amendments which have been carried this afternoon would raise this sum to £200 million. New Clause 14 and Amendment No. 101 would cost £15 million and £13 million respectively. Amendment No. 120 on the investment income surcharge would cost £40 million. This is an important aspect of the matter. Later we shall be debating Amendment No. 116 on the payment of advance corporation tax, and the passing of that amendment in itself would cost £300 million and would raise the total increase in the public sector borrowing requirement by £500 million.
  I and my right hon. Friends understood that when the right hon. Gentleman and the Leader of Opposition addressed themselves to the Bill they would not press any amendments which would have the effect of calling into question the Budget judgment and which would seriously unbalance the relationship between revenue and expenditure on which I based the Budget judgment four months ago. The right hon. Gentleman may be right to change his view on that. I might myself decide to change my view in the next week or so, but if I do so decide I shall tell the House frankly the magnitude of the change which I think is required and the nature of the expenditures which it is most appropriate to make in order to effect this change.
  I asked the right hon. Gentleman at Question Time last Thursday whether he would like to give us his view about whether more reflation was needed. His hon. Friends were not backward in putting their views forward. I cannot claim that I counted every intervention, but my impression was that at least a dozen Conservative Members declared themselves strongly opposed to any increase in the public sector borrowing requirement at this time, yet many of them voted for such increases this afternoon.
  If the right hon. Gentleman presses his oppositon to the Government's amendment tonight and continues to vote for
  382
  the other amendments which stand in his name and those of his hon. Friends, he will be saying not only that he favours reflating the economy by £500 million; he will be saying—
  10.30 p.m.
  Mr. Carr: The right hon. Gentleman should not go on talking about £500 million. Of course, he can talk about what he likes but he cannot talk about what we are doing when we have not done it. First, as he knows quite well, the largest sum which he is talking about involves the timing of cash flow. That is a different matter. The two amendments which have been passed today do not total anything like the sum which he has mentioned unless we have been given the wrong information by the Government.
  Mr. Healey: The right hon. Gentleman is shouting before he is hurt. We shall be interested to pursue this aspect of the argument later. It may be that the right hon. Gentleman does not intend to press some of the more important amendments which he has tabled, but he has pressed his amendments so far, and those which he has pressed today have cost some £15 million. We have not yet taken the amendment relating to small company taxation—
  Mr. Carr rose—
  Mr. Healey: If the right hon. Gentleman wishes I shall repeat the figures. The position which he is asking his hon. Friends to take will add £120 million to the public sector borrowing requirement.
  Mr. Carr: If the right hon. Gentleman now says that it will cost £120 million, why did not the Financial Secretary tell the Standing Committee that a month ago?
  Mr. Pardoe: Tens of millions.
  Mr. Healey: Let me give the right hon. Gentleman, who I presume is interested—[HON. MEMBERS: "Answer"] I presume that the right hon. Gentleman is interested to hear the figures. I hope that some of his hon. Friends are, too. I shall give the make-up of the £120 million. If we take services first, there will be £54 million on telephone rentals, £10 million on continuous services other than telephones, £10 million on television

  383
  rentals, £10 million on the hire of motor vehicles, £5 million on the hire of computers and office equipment, £5 million on equipment leasing, £1 million on the hire of refrigerators and so on, with some 25 per cent. to be added in the period 1st April to Royal Assent. Those are important figures.
  If the amendment and if other amendments are pressed to the vote, or if the Opposition's intentions are pressed to the vote, the right hon. Gentleman will not only be adding £500 million to the public sector borrowing requirement but will be ensuring that £300 million of advance corporation tax falls out of the current financial year, thus increasing the public sector borrowing requirement in the year covered by the Bill.
  Mr. William Clark rose—
  Mr. Healey: Let me pass on. We shall have more time if hon. Members wish to pursue the matter. The right hon. Gentleman will not only be saying that he and his right hon. Friends believe in a reflation of £500 million, they will be saying that the additional demand should go exclusively to football pools, to persons who have paid tax according to the intentions of his own Government, to the property speculators and to small and large companies. He has a perfect right to say so if he wishes. He has every right, and so have his hon. Friends, to fight the General Election on that programme.
  Mr. Carr rose—
  Mr. John Tomlinson: Sit down and shut up.
  Mr. Carr: The right hon. Gentleman is now mentioning the property speculators and football pools. He is allowing his imagination to become even more vivid than usual.
  Mr. Healey: The right hon. Gentleman has put down and carried an amendment on development gains, and that involves moneys made out of property speculation. Nobody made that clearer than did his predecessor—
  Mr. William Clark rose—
  Mr. Healey:—the right hon. Member for Altrincham and Sale (Mr. Barber)—
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. If the right hon. Gentleman is not prepared to give way he must not be pressed.
  Mr. Healey: If the right hon. Gentleman continues to vote along these lines, millions of his supporters in the country will see his behaviour as political opportunism and as representing a fiscal irresponsibility which would indeed make him a worthy successor to the previous Conservative Chancellor—the exponent of a type of profligacy which was rightly stigmatised only yesterday by an eminent group of Conservative economists.
  I want to address myself to the hon. Member for Croydon, South (Mr. Clark) who wishes to intervene. He and his hon. Friends have expressed themselves firmly in recent weeks against any reflation in the economy and against any increase in the public sector borrowing requirements. They did so only last week at Question Time. As they did so, the right hon. Member for Carshalton sat down. He gave no opinion of his own on the question, but he has given it tonight. He believes that it would be proper at this time to increase the public sector borrowing requirement in this way. I ask the right hon. Gentleman to reflect most carefully on the points which I have put to him. If he does so, he will recognise that to press his intention to a vote in the Lobby will be to seal the doom of his party at the polls.
  Mr. Clark: Before the right hon. Gentleman sits down—
  Mr. Deputy Speaker: Order.
  Mr. Clark: Perhaps I misunderstood the right hon. Gentleman, but I was clearly under the impression that he said he would give way to me. The Chancellor got the increased public sector borrowing requirement up to £500 million on the assumption that all the amendments which are still to be debated would be passed by the House. If the Chancellor is so keen to keep down the borrowing requirement, why did he and his party allow a Government amendment to be defeated by 25 votes? Is it Government policy to allow all Opposition amendments to be passed? The logic of the Chancellor's argument that there will be an increase of £500 million in the public sector borrowing requirement is that the

  385
  Government will not resist any other amendment.
  Mr. Healey: The hon. Gentleman's arithmetic is disappointing for a man who has some pretensions to a knowledge of economics. He must be aware that the overall majority of opposition parties is 33. We have said many times that if the opposition parties collectively wished to behave irresponsibly they could defeat the Government at any time they wished to do so. I assume from the way in which opposition parties have behaved in recent weeks and from the amendments which they have pressed today that they
  have put down amendments with the intention of carrying them.
  I have demonstrated—I believe to the satisfaction of the House—the consequence of carrying these amendments, and I ask the right hon. Member for Carshalton, who still maintains pretensions to exercise Government responsibility at a time of national economic crisis, to reflect on the profligacy to which he may condemn the country if he presses the amendment to a vote.
  Question put, That the amendment be made:—
  The House divided: Ayes 280, Noes 298.

  Mellish, Rt. Hn. Robert

  Robertson, John (Paisley)

  Thorne, Stan (Preston, S.)

  Mendelson, John

  Roderick, Caerwyn E.

  Tierney, Sydney

  Millan, Bruce

  Rodgers, George (Chorley)

  Tinn, James

  Miller, Dr. M. S. (E. Kilbride)

  Rodgers, William (Teesside, St'ckton)

  Tomlinson, John

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

  Rooker, J. W.

  Tomney, Frank

  Molloy, William

  Roper, John

  Torney, Tom

  Moonman, Eric

  Rose, Paul B.

  Tuck, Raphael

  Morris, Alfred (Wythenshawe)

  Ross, Rt. Hn. William (Kilmarnock)

  Urwin, T. W.

  Morris, Charles R. (Openshaw)

  Rowlands, Edward

  Varley, Rt. Hn. Eric G.

  Morris, Rt. Hn. John (Aberavon)

  Sandelson, Neville

  Wainwright, Edwin (Dearne Valley)

  Moyle, Roland

  Sedgemore. Bryan

  Walden, Brian (B'm'ham, Ladywood)

  Murray, Ronald King

  Selby, Harry

  Walker, Harold (Doncaster)

  Newens, Stanley (Harlow)

  Shaw, Arnold (Redbridge, Ilford, S.)

  Walker, Terry (Kingswood)

  Oakes, Gordon

  Sheldon, Robert (Ashton-under-Lyne)

  Watkins, David

  Ogden, Eric

  Shore, Rt. Hn. Peter (S'pney & P'plar)

  Weitzman, David

  O'Halloran, Michael

  Short, Mrs. Renée (W'hamp'n, N.E.)

  Wellbeloved, James

  O'Malley, Brian

  Silkin, Rt. Hn. John (L'sham, D'ford)

  White, James

  Orbach, Maurice

  Silkin, Rt. Hn. S.C.(S'hwark, Dulwich)

  Whitehead, Phillip

  Ovenden, John

  Sillars, James

  Whitlock, William

  Owen, Dr. David

  Silverman, Julius

  Willey, Rt. Hn. Frederick

  Padley, Walter

  Skinner, Dennis

  Williams, Alan (Swansea, W.)

  Palmer, Arthur

  Small, William

  Williams, Alan Lee (Hvrng, Hchurch)

  Park, George (Coventry, N.E.)

  Smith, John (Lanarkshire, N.)

  Williams, Rt. Hn. Shirley (H'f'd & St'ge)

  Parker, John (Dagenham)

  Snape, Peter

  Williams, W. T. (Warrington)

  Parry, Robert

  Spearing, Nigel

  Wilson, Alexander (Hamilton)

  Pavitt, Laurie

  Spriggs, Leslie

  Wilson, Rt. Hn. Harold (Huyton)

  Pendry, Tom

  Stallard, A. W.

  Wilson, William (Coventry, S.E.)

  Perry, Ernest G.

  Stewart, Rt. Hn. Michael (Fulham)

  Wise, Mrs. Audrey

  Phipps, Dr. Colin

  Stoddart, David (Swindon)

  Woodall, Alec

  Prentice, Rt. Hn. Reg.

  Stonehouse, Rt. Hn. John

  Woof, Robert

  Prescott, John

  Stott, Roger

  Wrigglesworth, Ian

  Price, Christopher (Lewisham, W.)

  Strang, Gavin

  Young, David (Bolton, E.)

  Price, William (Rugby)

  Strauss, Rt. Hn. G. R.

  Radice, Giles

  Summerskill, Rt. Hn. Shirley

  TELLERS FOR THE AYES:

  Richardson, Miss Jo

  Swain, Thomas

  Mr. John Golding and

  Roberts, Albert (Normanton)

  Taverne, Dick

  Mr. Thomas Cox.

  Roberts, Gwilym (Cannock)

  Thomas, Jeffrey (Abertillery)

  NOES

  Adley, Robert

  Clark, William (Croydon, S.)

  Galbraith, Hn. T. G. D.

  Aitkon, Jonathan

  Clarke, Kenneth (Rushcliffe)

  Gardiner, George (Reigate & Banstead)

  Alison, Michael (Barkston Ash)

  Clegg, Walter

  Gardner, Edward (S. Fylde)

  Allason, James (Hemel Hempstead)

  Cockcroft, John

  Gibson-Watt, Rt. Hn. David

  Amery, Rt. Hn. Julian

  Cooke, Robert (Bristol, W.)

  Gilmour, Rt. Hn. Ian (Ch'sh' & Amsh'm)

  Ancram, M.

  Cope, John

  Gilmour, Sir John (Fife, E.)

  Archer, Jeffrey

  Cordle, John

  Glyn, Dr. Alan

  Atkins, Rt. Hn. Humphrey (Spelthorne)

  Cormack, Patrick

  Goodhart, Philip

  Awdry, Daniel

  Corrie, John

  Goodhew, Victor

  Balniel, Rt. Hn. Lord

  Costain, A. P.

  Goodlad, A.

  Banks, Robert

  Crouch, David

  Gorst, John

  Beith, A. J.

  Crowder, F. P.

  Gow, Ian (Eastbourne)

  Bell, Ronald

  Davies, Rt. John (Knutstord)

  Gower, Sir Raymond (Barry)

  Bennett, Sir Frederic (Torbay)

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

  Grant, Anthony (Harrow, C.)

  Bennett, Dr. Reginald (Fareham)

  Dean, Paul (Somerset, N.)

  Gray, Hamish

  Benyon, W.

  Deedes, Rt. Hn. W. F.

  Grieve, Percy

  Berry, Hon. Anthony

  Dixon, Piers

  Griffiths, Eldon (Bury St. Edmunds)

  Brittan, Leon

  Dodds-Parker, Sir Douglas

  Grimond, Rt. Hn. J.

  Biggs-Davison, John

  Dodsworth, Geoffrey

  Grist, Ian

  Blaker, Peter

  Douglas-Home, Rt. Hn. Sir Alec

  Grylls, Michael

  Boardman, Tom (Leicester, S.)

  Drayson, Burnaby

  Gurden, Harold

  Body, Richard

  du Cann, Rt. Hn. Edward

  Hall, Sir John

  Boscawen, Hon. Robert

  Durant, Tony

  Hall-Davies, A. G. F.

  Bowden, Andrew (Brighton, Kemptown)

  Dykes. Hugh

  Hamilton, Michael (Salisbury)

  Boyson, Dr. Rhodes (Brent, N.)

  Eden, Rt. Hn. Sir John

  Hampson, Dr. Keith

  Braine, Sir Bernard

  Edwards, Nicholas (Pembroke)

  Hannam, John

  Bray, Ronald

  Elliott, Sir William

  Harrison, Col. Sir Harwood (Eye)

  Brittan, John

  Emery, Peter

  Harvie Anderson, Rt. Hn. Miss

  Brocklebank-Fowler, Christopher

  Ewing, Mrs. Winifred (Moray & Nairn)

  Hastings, Stephen

  Brown, Sir Edward (Bath)

  Eyre, Reginald

  Havers, Sir Michael

  Bruce-Gardyne, J.

  Fairgrieve, Russell

  Hayhoe, Barney

  Bryan, Sir Paul

  Farr, John

  Heath, Rt. Hn. Edward

  Buchanan-Smith, Alick

  Fell, Anthony

  Henderson, Douglas (Ab'rd'nsh're, E)

  Buck, Antony

  Fenner, Mrs. Peggy

  Henderson, J.S.B. (Dunbartonshire, E.)

  Budgen, Nick

  Fidler, Michael

  Heseltine, Michael

  Bulmer, Esmond

  Finsberg, Geoffrey

  Higgins, Terence

  Burden, F. A.

  Fisher, Sir Nigel

  Hill, James A.

  Butler, Adam (Bosworth)

  Fletcher, Alexander (Edinburgh, N.)

  Holland, Philip

  Carlisle, Mark

  Fletcher-Cooke, Charles

  Hooson, Emlyn

  Carr, Rt. Hn. Robert

  Fookes, Miss Janet

  Howe, Rt. Hn. Sir Geoffrey (Surry, E)

  Chalker, Mrs. Lynda

  Fowler, Norman (Sutton C'field)

  Howell, David (Guildford)

  Channon, Paul

  Fox, Marcus

  Howell, Ralph (Norfolk, North)

  Chataway, Rt. Hn. Christopher

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

  Howells, Geraint (Cardigan)

  Churchill, W. S.

  Freud, Clement

  Hunt, John

  Clark, A. K. M. (Plymouth, Sutton)

  Fry, Peter

  Hurd Douglas

  Question accordingly negatived.

  FINANCE BILL
    Clause 7

      CHARGE OF INCOME TAX FOR 1974–75
      Mr. Higgins rose—
      Mr. Pardoe: I beg to move Amendment No. 120, in page 4, leave out lines 9 to 17 and insert:
      (B) in respect of so much of the investment income included in an individual's total income as exceeds £2,000, at the additional rate of 15 per cent.'
      Mr. Deputy Speaker (Mr. Oscar Murton): With this amendment, we are to discuss the following:

      No. 113, in line 10, leave out ' £1,000 ' and insert £2,000'.

      No. 114, in line 11, leave out from of ' to end of line 12 and insert 15 per cent.

      No. 206, to leave out lines 13 to 17.

      Mr. Pardoe: I can understand the mistake of the hon. Member for Worthing (Mr. Higgins) in rising to move this amendment. He will have recognised the familiarity of it, because it is the amendment which he moved in Committee and which I supported.
      The Chancellor, who is just leaving the Chamber, will be sorry to hear that this will cost a little money. But all the best things in life and in Parliament do. This is about investment income and whether the Government are right to bring down the relief for what some people would call small savers, but what I will content myself by calling those who are not big savers anyway. At the outset I ask why it is that we make these distinctions so that we may get clear in our minds why we differentiate between so-called investment income or savings income and so-called earned income.
      Savings income can come from many different sources. [Interruption.] If the money comes from inherited wealth then I believe that to tax money deriving from that inherited wealth at an exceptional rate is probably reasonable. To a large extent in this amendment we are dealing with those whose income comes from their life-long savings. [Interruption.] It seems that it is better to deal with inherited wealth—
      Mr. Deputy Speaker: Order. May I plead with the House for silence so that
      392
      the hon. Member may move his amendment.
      Mr. PardoeI am grateful to you, Mr. Deputy Speaker. It seems that it is better to deal with the problem of inherited wealth through the reform of such things as the inheritance tax and the introduction of a wealth tax, which I believe the Government are eventually to introduce. If the savings income derives from capital which has been saved out of income, then these savings might have had some measure of income tax relief on the way as, for example, with income deriving from an insurance policy. The premiums would have had some tax relief.
      If the savings from which the income derives come from, for instance, buying shares then they have come completely out of taxed income, with no tax relief at all. The income may come from so-called savings that are derived entirely from the effects of inflation. In that case I would not have thought that there was any reason to argue for a separate investment income surcharge. Most rates of interest these days are negative rates because of inflation. Unfortunately unearned income tax does not distinguish between real and money profits. I ask the Government to consider in their reply the effects of inflation on unearned income.
      For instance, a man who lends £1,000 for a year at 10 per cent. should at the end of the year have £1,100. If no inflation was taking place his wealth would have increased by £100 and he could count this as part of his real income. If inflation of 5 per cent. is taking place the final nominal wealth at the end of the year is only £1,050. His real income is £50 not £100. The difference is the addition to his nominal wealth which is required to maintain its real value.
      I would have thought that the Government would wish to redistribute income, perhaps as part of the price of the social contract. I hope that they wish to dis If we are in the business of redistribution we ought to be endeavouring to redistribute real income not money income. tribute real income and real wealth, not phoney income and phoney wealth.
      It is not possible to sweep away the whole of the investment income surcharge

      393
      in one Budget. I hope that the Government will do so if they introduce a wealth tax. I hope that they will then abolish the investment income surcharge, capital gains tax and death duty and replace the lot with an efficient wealth tax on real wealth and not inflationary wealth. This is certainly not the time for the Government to bring down the level above which a special small income relief obtains.
      11.0 p.m.
      I find it incredible that the Government should have done this as part of its social contract. These are not wealthy people. They are not people who ought to be asked to pay the price of the social contract. This change will do considerable harm to savings. It will sweep away any incentive to save at a lower income level. The amendment provides a limited improvement. It is not a very expensive improvement. I hope the Government will accept the amendment.
      Mr. Higgins: I rise to speak about the amendment moved by the hon. Member for Cornwall, North (Mr. John Pardoe) and to support Amendments Nos. 113 and 114 standing in the names of my hon. Friends and myself.
      All the amendments tabled in Committee and today have basically the same objective. They constitute an extremely important set of amendments. The proposals which the Chancellor of the Exchequer put forward in his Budget were to reduce the amount which my right hon. Friend the Member for Altrincham and Sale (Mr. Barber) had previously suggested should be the limit below which investment income—that is to say income from past savings—should be charged, namely, at the earned income rate rather than at the so-called unearned income rate. The purpose of these amendments is to restore the position to what it was under the previous Conservative Government and before this Budget.
      It is very important that these amendments should be put forward and carried. First, they encourage savings. There is no matter more important in the present economic situation. We should do everything we can to encourage savings.
      I think the House will wish to attach importance to my second point. A number of people living on fixed incomes have been those worst hit by inflation. It is
      394
      therefore extremely important that we should not attack this group, as this Budget has done, and add the problems of increasing taxation to the problems of inflation.
      I agree that many of these people are not wealthy. The limit set by my right hon. Friend the Member for Altrincham and Sale was far from generous. To cut it further will affect a large number of people, many of them retired for a considerable period, living on incomes from savings.
      From our constituency experience we know that a great many of these people suffer a very real decline in their standard of living. They have done so over a period of time. The Government's proposals will add to their problems. It is right that we should move these amendments on this occasion to recognise the problems which they face, which get worse as the rate of inflation, under this Government, increases. Therefore we seek to help people living on fixed incomes in one of the few ways open to us. Many of them have benefited from the increased national insurance pensions. None the less, the purchasing power of their total income, including the savings income which they already had, has declined steadily and is now declining faster than ever before.
      Therefore I ask my hon. Friends to support the amendment—if necessary, since that is the one selected, the Liberal amendment—which is the same in substance as that which we have moved on previous occasions. I hope that my hon. Friends will join me in the Division Lobby with that object in view.
      Mr. Joel Barnett: We are coming to a very important and interesting stage in the Bill. We had better recognise that, when all the talk and excuses for the amendment have finished, the Opposition—Conservative and Liberal—are proposing to give £40 million in tax relief to those with investment incomes above £1,000 a year. [Interruption.] I am sure that it will be noted outside. I do not pretend that these people are wealthy, but if £40 million of tax relief is to be given, it should be a matter of priorities who should get it. Do we give the £40 million to those with investment incomes of more than £1,000 a year or to the more deserving of whom we know?

      395
      I have no intention of suggesting that the House should accept the amendment. I am absolutely astonished that the joint Opposition, if I may put it that way, are prepared to vote for this £40 million, for £120 million on the last amendment, for £15 million on the amendment before that and for £300 million on an amendment that they have tabled for tomorrow. Presumably they mean it. Otherwise, I do not know why they tabled it. That is a total of nearly £500 million.
      I assume that among hon. Gentlemen opposite who intend to vote for the amendment are those who have told us that we should not reflate. They are now suggesting not only that we should reflate but that we should reflate in a specific way which will give an increase in income to those with the lowest priority.
      Mr. Nigel Lawson rose—
      Mr. Barnett: There will be plenty of opportunities to debate these matters at the hustings very soon. We are delighted that both Oppositions have decided on their priorities. They are not our priorities. Without wasting any further time, I ask my right hon. and hon. Friends to vote against the amendment.
      Mr. Peyton: I rise for only a moment, to point out two matters of real interest about the extraordinary speech of the Chief Secretary, to which we have just listened, echoing, as best he can, his master's voice.
      The first was his utter refusal to give way and discuss anything in the House of Commons. He would rather retain his remarks for the hustings, where the lack of sense about certain matters will be less obvious.
      The second was the interesting comment that he made, or appeared to make, at the beginning of his remarks, to the effect that anybody with an income of more than £1,000 a year—[Hon. Memmers: "Unearned."]—I know of this favoured discrimination, which the Labour Party loves so much. The hon. Gentleman said that anybody with that kind of inordinate wealth should not be entitled to any consideration at all. In other words, we reach the conclusion that, after a few more years of Socialist Government—
      Mr. Kaufman: Which we shall have.
      Mr. Peyton: This country has not gone wholly mad yet.
      After a few more years of Socialist Government the end and the purpose would be to confine people to this kind of miserable pedestrian living which hon. Members opposite like so much.
      Mr. Dick Taverne: We are facing an extraordinary situation in which Opposition Members are in a position to carry any amendment which they move. They therefore have power, and they do not exercise responsibility.
      The position is that under the Finance Bill at this stage it is impossible to increase taxation. All we can do is to lessen the burden of taxation. If hon. Members opposite are serious about talking of a financial crisis, or of a serious economic situation—and as the Chancellor, at the same time, has pointed out the need to balance the Budget or to limit the excess of public expenditure over income—they should consider the consequences of the actions in which they are now indulging.
      There may be merits for some of these amendments, but on the last occasion £120 million was removed from taxation. It is unusual at this stage of the Finance Bill for Opposition Members to vote to reduce the Budget by that amount. This is not a minor amount. It is £40 million, and with the other £14 million we have a total of £170 million off the previous sum.
      That is not a light matter. I hope that a number of Opposition Members will take this to heart, realise what they are doing, and absent themselves from the Lobby, so that the amendment is not carried.
      Mr. Tom Boardman: I did not intend to intervene, but the Chief Secretary has referred to his lowest priority. It should be clearly understood whether, by that, he means those who have savings income earned by working hard all their lives. He referred to investment income, which is savings that have been invested. The Clause applies to those who worked hard all their lives, and if the Chief Secretary says that it does not apply to those who have saved sufficient to get an investment income of this

      397
      kind he should say so in the Bill. He referred to people of lowest priority.
      The clause will include those who have worked hard all their lives to put aside part of their earning for their old age—for a savings or investment income of £1,000 a year. He also referred to giving to these people. It should not be necessary to remind Treasury Ministers that they would not be giving but refraining from taking away. The Chief Secretary should recognise that.
      Mr. Paul Dean: I much regret that the Chief Secretary has not addressed himself to the main arguments put in the debate. He seems to have disregarded the commitment on the Floor when this clause was discussed, when the Financial Secretary, in response to many speeches from the Opposition, undertook to consider carefully the position of many people who have retired on a modest investment income which they have saved all their lives to achieve. They are not entitled to national insurance pensions or other sums which are to some degree inflation-proof. The hon. Gentleman said that we were suggesting that something should be given back to these people. We are in fact saying that the Bill is taking from people who are already suffering the effects of inflation.
      I hope that before the end of the debate the Chief Secretary will address himself to our remarks, which concern people on modest incomes, who have saved hard all their lives and who will be penalised by this increased taxation.
      11.15 p.m.
      Mr. Kenneth Clarke: The hon. and learned Member for Lincoln (Mr. Taverne) echoed the Chief Secretary's remarks in suggesting that the amendment was a late afterthought by the Opposition. He implied that having suddenly found ourselves with the power to rewrite the Finance Bill—as we do, because of mismanagement by the Government—we were making ill-considered changes, with unfortunate and inflationary effects. In Committee on the Floor of the House this part of the Bill was singled out for attack by the Opposition. I am sure that my hon. Friends and the Liberal Party are making a careful choice of priority in forcing the amendment on the Government.
      398
      At the last Labour Party Conference, the present Chancellor said that a Labour Government, if elected, would make the rich squeal. The Budget and the Bill show that their interpretation of making the rich squeal is in fact mean-minded legislation against people with comparatively modest incomes derived from savings. People with investment income below £2,000 are not the very rich. Of course they are better off than many because they have carefully provided for their retirement, but in these inflationary times and with the present rates of interest, income of the sort affected by the Government's proposals can be realised from a capital sum of £8,000 or £9,000. To say that a man who has managed to save that sort of sum during his working life deserves punitive taxation is ridiculous.
      I throw back what the Minister said about inflation and ask him to accept his responsibility to minimise its effects on the groups most adversely affected. No group has been more adversely affected than those who depend on their savings income when they find that it is not inflation proof and that its real purchasing power has been sadly reduced. At a time like this, for the Government to propose increasing punitive taxation on savings income simply because they have a prejudice against those with the good fortune or thriftiness of habit to provide for their retirement—
      Mr. John Garrett: The hon. Member should have said "hard work".
      Mr. Clarke:—and hard work, of course—is the most irresponsible behaviour. We want to protect particularly those who have retired against the ravages of their savings income that the Government would produce. We do not accept that this is irresponsible, ill-considered behaviour. We have carefully considered this priority and believe it is the right one. If the Chief Secretary re-reads the reports of the Committee debates he will discover the arguments that have brought us to the amendment.
      Mr. Nigel Lawson: I shall not detain the House for long. I certainly do not wish to address my remarks to the Government Front Bench, and certainly not to the Chief Secretary, with his contemptuous attitude towards every argument

      399
      that has been advanced from the Opposition side of the House and the contemptible way in which he stated that people with a savings income of £1,000 a year were the lowest priority of all. I certainly do not intend to respond to that sort of approach.
      I intend to address my remarks to the only serious argument that we have heard from the Government side of the House, which was advanced by the hon. and learned Member for Lincoln (Mr. Taverne). The amount of £120 million is a deceptive figure. We were told first that it might be £50 million, or it might be £120 million. It has no impact during the present fiscal year, despite what the Chancellor tried to pretend to the House about the borrowing requirement for this year or about demand this year.
      I do not know whether hon. Members on the Government side understand the position, but the matter concerning that tax is in dispute. We have been told by the Financial Secretary that there is first to be an appeal by the Customs and Excise against this and that if that appeal goes against the Customs and Excise there may be an appeal to a higher court. If that still goes against the Customs and Excise, there will have to be a vetting of every claim by a retailer for repayment, and at the end of the day it will have to be decided which customers should get back that tax. Therefore, it would be years before this would have any effect on demand, on the monetary situation, or on the borrowing requirement. We can dispose of that argument.
      What we are left with is the figure of £14 million from a previous amendment and £40 million if the amendment is carried—a total of £54 million. It is perfectly open to the Chancellor—I hope that he will take the opportunity—to cut public expenditure by an equivalent amount. He can announce the cut when he introduces his mini-Budget next week. Some of us would like him to do that, as he has expressed such concern about any increase in the borrowing requirement. Some of us wish that he would reveal to the House by how much he has increased the borrowing requirement this year by increases in public expenditure since the Budget. He has done it by a consider-
      400
      able amount. He should come clean about this matter.
      However, we are now talking about a very much smaller sum than the hon. and learned Member for Lincoln thought we were talking about. This is important, because we on the Opposition side of the House wish to be responsible.
      Mr. Thomas Cox: Tell us about your house.
      Mr. Lawson: This is a very serious matter, and that is why the amendment should be carried. The overall budgetary situation, the overall financial judgment and the overall borrowing requirement will not be thrown out of kilter by the amendments that have passed today. I find it will be thrown out of kilter by what the Chancellor has to announce next week.
      Mr. Adley: I have many thousands of constituents—
      Mr. Joel Barnett: So has every hon. Member.
      Mr. Adley: I tell the Chief Secretary that I have every right and intention of fighting as hard for the rights of my constituents as he fights for the rights of his. I have many thousands of constituents who are old, who have worked hard and served their country, very often abroad, for many years, and who are now retired and are desperately trying to retain a standard of living for which they have worked and to which they have grown accustomed. They are finding it exceedingly difficult. I have pledged myself to do everything I can to support their efforts to retain a reasonable standard of living. I will not accept from the Chief Secretary suggestions that my constituents are any less justified in wanting to protect their standard of living than anyone else in this country.
      I take up a point made by the hon. and learned Member for Lincoln (Mr. Taverne) when he suggested that the Opposition bore responsibility in this respect. We are sensible of the power the people put in the hands of the elected Members of this House at the last election. If he and Labour Members are as concerned as he gives the impression they are, the solution may well be that the Chancellor and his right hon. Friends should invite Members of other parties

      401
      in the House to advise them so that the Government may be sure that a proper degree of responsibility is exercised by all hon. Members.
      Sir A. Meyer: The relative position of the people we are talking about is that much worse than has been explained so far because they have a small sum of capital savings or investment and they are debarred from all forms of means-tested benefit. Therefore, with every fresh means-tested benefit evolved by those of us who seek to direct the help to those in greatest need the position of these people is made that much worse.
      Mr. Pardoe: With the leave of the House, I seek to reply to the debate. I am only sorry that the Chief Secretary did not answer the arguments adduced in favour of the amendment, or debate the question of investment income surcharge versus other forms of income tax. I simply ask him why the Government changed the threshold. They have never made a case for doing that. This is no time—in an inflationary situation—to lower the income tax threshold, but that is what they have done. As for the hon. Gentleman's point about priorities, I can say only that this is not the most important way in which we can spend f40 million. He must bear in mind, however, that not all of our amendments are selected for debate. I prepared and tabled amendments in Committee and on Report to change the whole basis of tax allowances for children and to increase family allowances in exchange for that proposal. That would have been redistributive in a way that I would have thought would appeal to the Government. The amendments were not debated, and there are many other such proposals on which I would have much preferred to spend the money than on the amendment now being discussed.
      I want to reply to the important point raised by the hon. and learned Member for Lincoln (Mr. Taverne). I hope that he will accept that I do not regard this amendment or the others that we have supported this evening as being in any way irresponsible. The hon. and learned Gentleman put forward serious and important arguments, and they have been made
      402
      in the House before. They were made well before King Charles lost his head. The argument whether Parliament or the Government were able to raise taxation was carried on repeatedly then. We are not going outside the remit of our responsibilities, nor are we exceeding our duties in controlling the Government's means and methods of redistributing the burden of income tax. If the Government think they have some God-given right to distribute or redistribute the burden of income tax, they must accept that Parliament controls that and that we are exercising that power. The fact that this is the first Parliament since the war which has had the votes and the power to do it is neither here nor there. The hon. and learned Gentleman must realise that we approach the situation of this Government with great responsibility. [Interruption.] Yes, indeed. Hon. Members opposite must get used to the new rules of the game called minority government. That means that no Government can steam-roller their ideas through the House without trying to convince, argue and persuade.
      11.30 p.m.
      We offered this Government, as we offered the Government—had there been one—of the Leader of the Conservative Party, support from the back benches on an agreed programme. The Prime Minister turned that offer down. The answer to the Chief Secretary and to the hon. and learned Member for Lincoln is this: yes, indeed, the Government could have brought forward an agreed Budget and we would have supported it had they consulted us in the first place. That is a perfectly legitimate way of running a minority Government.
      The Government did not accept that offer. Because the Government did not accept that offer, we are now asked to take the Government's proposals and their Budget, lock, stock and barrel. We are not taking the Government's proposals, lock, stock and barrel. They have not argued the case. We intend to press the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 296, Noes 280.

      Division No. 85]

      AYES

      [10.42 p.m

      Abse, Leo

      de Freitas, Rt. Hn. Sir Geoffrey

      Huckfield, Leslie

      Allaun, Frank

      Delargy, Hugh

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Archer, Peter

      Dell, Rt. Hn. Edmund

      Hughes, Mark (Durham)

      Armstrong, Ernest

      Dempsey, James

      Hughes, Robert (Aberdeen, North)

      Ashley, Jack

      Doig, Peter

      Hughes, Roy (Newport)

      Ashton, Joe

      Dormand, J. D.

      Hunter, Adam

      Atkins Ronald

      Douglas-Mann, Bruce

      Irvine, Rt. Hn. Sir A. (L'p'I, EdgeHI)

      Atkinson, Norman

      Duffy, A. E. P.

      Irving, Rt. Hn. Sydney (Dartford)

      Bagier, Gordon, A. T.

      Dunn, James A.

      Jackson, Colin

      Barnett, Guy (Greenwich)

      Dunnett, Jack

      Janner, Greville

      Barnett, Joel (Heywood & Royton)

      Dunwoody, Mrs. Gwyneth

      Jay, Rt. Hn. Douglas

      Bates, Alt

      Eadie, Alex

      Jeger, Mrs. Lena

      Baxter, William

      Edelman, Maurice

      Jenkins, Hugh (W'worth, Putney)

      Benn, Rt. Hn. Anthony Wedgwood

      Edge, Geoff

      Jenkins, Rt. Hn. Roy (B'ham, St'fd)

      Bennett, Andrew F. (Stockport, N.)

      Edwards, Robert (W'hampton, S.E.)

      John, Brynmor

      Bidwell, Sydney

      Ellis, John (Brigg & Scunthorpe)

      Johnson, James (K'ston uponHull W)

      Bishop, E. S.

      Ellis, Tom (Wrexham)

      Johnson, Walter (Derby, S.)

      Blenkinsop, Arthur

      English, Michael

      Jones, Barry (Flint, E.)

      Boardman, H. (Leigh)

      Evans, Fred (Caerphilly)

      Jones, Dan (Burnley)

      Booth, Albert

      Evans, Ioan (Aberdare)

      Jones, Gwynoro (Carmarthen)

      Boothroyd, Miss Betty

      Evans, John (Newton)

      Jones, Alec (Rhondda)

      Bottomley, Rt. Hon. Arthur

      Ewing, Harry (St'ling, F'kirk & G'm'th)

      Judd, Frank

      Boyden, James (Bishop Auckland)

      Faulds, Andrew

      Kaufman, Gerald

      Bradley, Tom

      Fernyhough, Rt. Hn. E.

      Kelley, Richard

      Broughton, Sir Alfred

      Fitch, Alan (Wigan)

      Kerr, Russell

      Brown, Bob (Newcastle upon Tyne, W.)

      Fitt, Gerard (Belfast, W.)

      Kilroy-Silk, Robert

      Brown, Hugh D. (Glasgow, Provan)

      Flannery, Martin

      Kinnock, Neil

      Brown, Ronald (H'kney, S. & Sh'ditch)

      Fletcher, Raymond (IIkeston)

      Lambie, David

      Buchan, Norman

      Fletcher, Ted (Darlington)

      Lamborn, Harry

      Butler, Mrs. Joyce (H' gey, WoodGreen)

      Foot, Rt. Hn. Michael

      Lamond, James

      Callaghan, Jim (M'dd'ton & Pr'wch)

      Ford, Ben

      Latham, Arthur (City of W'minster P'ton)

      Campbell, Ian

      Forrester, John

      Lawson, George (Motherwell & Wishaw)

      Cant, R. B.

      Fowler, Gerry (The Wrekin)

      Leadbitter, Ted

      Carmichael, Neil

      Fraser, John (Lambeth, Norwood)

      Lee, John

      Carter, Ray

      Freeson, Reginald

      Lestor, Miss Joan (Eton & Slough)

      Carter-Jones, Lewis

      Galpern, Sir Myer

      Lewis, Arthur (Newham, N.)

      Castle, Rt. Hn. Barbara

      Garrett, John (Norwich, S.)

      Lewis, Ron (Carlisle)

      Clemitson, Ivor

      Garrett, W. E. (Wallsend)

      Lipton, Marcus

      Cocks, Michael

      George, Bruce

      Loughlin, Charles

      Cohen, Stanley

      Gilbert, Dr. John

      Loyden, Eddie

      Coleman, Donald

      Ginsburg, David

      Lyons, Edward (Bradford, W.)

      Colquhoun, Mrs. M. N.

      Gourlay, Harry

      Mabon, Dr. J. Dickson

      Conlan, Bernard

      Graham, Ted

      McCartney, Hugh

      Cook, Robert F. (Edinburgh, C.)

      Grant, George (Morpeth)

      McElhone, Frank

      Craigen, J. M. (G'gow, Maryhill)

      Grant, John (Islington, C.)

      MacFarquhar, Roderick

      Cronin, John

      Griffiths, Eddie (Sheffield, Brightside)

      McGuire, Michael

      Crosland, Rt. Hn. Anthony

      Hamilton, James (Bothwell)

      Mackenzie, Gregor

      Cryer, G. R.

      Hamilton, William (Fife, C.)

      Maclennan, Robert

      Cunningham, G. (Isl'ngt'n, S & F'sb'ry)

      Hamling, William

      McMillan, Tom (Glasgow, C.)

      Cunningham, Dr. John A. (Whiteh'v'n)

      Hardy, Peter

      Madden, M. O. F.

      Dalyell, Tam

      Harper, Joseph

      Magee, Bryan

      Davidson, Arthur

      Harrison, Walter (Wakefield)

      Mahon, Simon

      Davies, Bryan (Enfield, N.)

      Hatton, Frank

      Mallalieu, J. P. W.

      Davies, Denzil (Llanelli)

      Healey, Rt. Hn. Denis

      Marks, Kenneth

      Davies, Ifor (Gower)

      Heffer, Eric S.

      Marquand, David

      Davis, Clinton (Hackney, C.)

      Hooley, Frank

      Marshall, Dr. Edmund (Goole)

      Deakins, Eric

      Horam, John

      Mason, Rt. Hn. Roy

      Dean, Joseph (Leeds, W.)

      Howell, Denis (B'ham, Small Heath)

      Meacher, Michael

      Mellish, Rt. Hn. Robert

      Robertson, John (Paisley)

      Thorne, Stan (Preston, S.)

      Mendelson, John

      Roderick, Caerwyn E.

      Tierney, Sydney

      Millan, Bruce

      Rodgers, George (Chorley)

      Tinn, James

      Miller, Dr. M. S. (E. Kilbride)

      Rodgers, William (Teesside, St'ckton)

      Tomlinson, John

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

      Rooker, J. W.

      Tomney, Frank

      Molloy, William

      Roper, John

      Torney, Tom

      Moonman, Eric

      Rose, Paul B.

      Tuck, Raphael

      Morris, Alfred (Wythenshawe)

      Ross, Rt. Hn. William (Kilmarnock)

      Urwin, T. W.

      Morris, Charles R. (Openshaw)

      Rowlands, Edward

      Varley, Rt. Hn. Eric G.

      Morris, Rt. Hn. John (Aberavon)

      Sandelson, Neville

      Wainwright, Edwin (Dearne Valley)

      Moyle, Roland

      Sedgemore. Bryan

      Walden, Brian (B'm'ham, Ladywood)

      Murray, Ronald King

      Selby, Harry

      Walker, Harold (Doncaster)

      Newens, Stanley (Harlow)

      Shaw, Arnold (Redbridge, Ilford, S.)

      Walker, Terry (Kingswood)

      Oakes, Gordon

      Sheldon, Robert (Ashton-under-Lyne)

      Watkins, David

      Ogden, Eric

      Shore, Rt. Hn. Peter (S'pney & P'plar)

      Weitzman, David

      O'Halloran, Michael

      Short, Mrs. Renée (W'hamp'n, N.E.)

      Wellbeloved, James

      O'Malley, Brian

      Silkin, Rt. Hn. John (L'sham, D'ford)

      White, James

      Orbach, Maurice

      Silkin, Rt. Hn. S.C.(S'hwark, Dulwich)

      Whitehead, Phillip

      Ovenden, John

      Sillars, James

      Whitlock, William

      Owen, Dr. David

      Silverman, Julius

      Willey, Rt. Hn. Frederick

      Padley, Walter

      Skinner, Dennis

      Williams, Alan (Swansea, W.)

      Palmer, Arthur

      Small, William

      Williams, Alan Lee (Hvrng, Hchurch)

      Park, George (Coventry, N.E.)

      Smith, John (Lanarkshire, N.)

      Williams, Rt. Hn. Shirley (H'f'd & St'ge)

      Parker, John (Dagenham)

      Snape, Peter

      Williams, W. T. (Warrington)

      Parry, Robert

      Spearing, Nigel

      Wilson, Alexander (Hamilton)

      Pavitt, Laurie

      Spriggs, Leslie

      Wilson, Rt. Hn. Harold (Huyton)

      Pendry, Tom

      Stallard, A. W.

      Wilson, William (Coventry, S.E.)

      Perry, Ernest G.

      Stewart, Rt. Hn. Michael (Fulham)

      Wise, Mrs. Audrey

      Phipps, Dr. Colin

      Stoddart, David (Swindon)

      Woodall, Alec

      Prentice, Rt. Hn. Reg.

      Stonehouse, Rt. Hn. John

      Woof, Robert

      Prescott, John

      Stott, Roger

      Wrigglesworth, Ian

      Price, Christopher (Lewisham, W.)

      Strang, Gavin

      Young, David (Bolton, E.)

      Price, William (Rugby)

      Strauss, Rt. Hn. G. R.

      Radice, Giles

      Summerskill, Rt. Hn. Shirley

      TELLERS FOR THE AYES:

      Richardson, Miss Jo

      Swain, Thomas

      Mr. John Golding and

      Roberts, Albert (Normanton)

      Taverne, Dick

      Mr. Thomas Cox.

      Roberts, Gwilym (Cannock)

      Thomas, Jeffrey (Abertillery)

      NOES

      Adley, Robert

      Clark, William (Croydon, S.)

      Galbraith, Hn. T. G. D.

      Aitkon, Jonathan

      Clarke, Kenneth (Rushcliffe)

      Gardiner, George (Reigate & Banstead)

      Alison, Michael (Barkston Ash)

      Clegg, Walter

      Gardner, Edward (S. Fylde)

      Allason, James (Hemel Hempstead)

      Cockcroft, John

      Gibson-Watt, Rt. Hn. David

      Amery, Rt. Hn. Julian

      Cooke, Robert (Bristol, W.)

      Gilmour, Rt. Hn. Ian (Ch'sh' & Amsh'm)

      Ancram, M.

      Cope, John

      Gilmour, Sir John (Fife, E.)

      Archer, Jeffrey

      Cordle, John

      Glyn, Dr. Alan

      Atkins, Rt. Hn. Humphrey (Spelthorne)

      Cormack, Patrick

      Goodhart, Philip

      Awdry, Daniel

      Corrie, John

      Goodhew, Victor

      Balniel, Rt. Hn. Lord

      Costain, A. P.

      Goodlad, A.

      Banks, Robert

      Crouch, David

      Gorst, John

      Beith, A. J.

      Crowder, F. P.

      Gow, Ian (Eastbourne)

      Bell, Ronald

      Davies, Rt. John (Knutstord)

      Gower, Sir Raymond (Barry)

      Bennett, Sir Frederic (Torbay)

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

      Grant, Anthony (Harrow, C.)

      Bennett, Dr. Reginald (Fareham)

      Dean, Paul (Somerset, N.)

      Gray, Hamish

      Benyon, W.

      Deedes, Rt. Hn. W. F.

      Grieve, Percy

      Berry, Hon. Anthony

      Dixon, Piers

      Griffiths, Eldon (Bury St. Edmunds)

      Brittan, Leon

      Dodds-Parker, Sir Douglas

      Grimond, Rt. Hn. J.

      Biggs-Davison, John

      Dodsworth, Geoffrey

      Grist, Ian

      Blaker, Peter

      Douglas-Home, Rt. Hn. Sir Alec

      Grylls, Michael

      Boardman, Tom (Leicester, S.)

      Drayson, Burnaby

      Gurden, Harold

      Body, Richard

      du Cann, Rt. Hn. Edward

      Hall, Sir John

      Boscawen, Hon. Robert

      Durant, Tony

      Hall-Davies, A. G. F.

      Bowden, Andrew (Brighton, Kemptown)

      Dykes. Hugh

      Hamilton, Michael (Salisbury)

      Boyson, Dr. Rhodes (Brent, N.)

      Eden, Rt. Hn. Sir John

      Hampson, Dr. Keith

      Braine, Sir Bernard

      Edwards, Nicholas (Pembroke)

      Hannam, John

      Bray, Ronald

      Elliott, Sir William

      Harrison, Col. Sir Harwood (Eye)

      Brittan, John

      Emery, Peter

      Harvie Anderson, Rt. Hn. Miss

      Brocklebank-Fowler, Christopher

      Ewing, Mrs. Winifred (Moray & Nairn)

      Hastings, Stephen

      Brown, Sir Edward (Bath)

      Eyre, Reginald

      Havers, Sir Michael

      Bruce-Gardyne, J.

      Fairgrieve, Russell

      Hayhoe, Barney

      Bryan, Sir Paul

      Farr, John

      Heath, Rt. Hn. Edward

      Buchanan-Smith, Alick

      Fell, Anthony

      Henderson, Douglas (Ab'rd'nsh're, E)

      Buck, Antony

      Fenner, Mrs. Peggy

      Henderson, J.S.B. (Dunbartonshire, E.)

      Budgen, Nick

      Fidler, Michael

      Heseltine, Michael

      Bulmer, Esmond

      Finsberg, Geoffrey

      Higgins, Terence

      Burden, F. A.

      Fisher, Sir Nigel

      Hill, James A.

      Butler, Adam (Bosworth)

      Fletcher, Alexander (Edinburgh, N.)

      Holland, Philip

      Carlisle, Mark

      Fletcher-Cooke, Charles

      Hooson, Emlyn

      Carr, Rt. Hn. Robert

      Fookes, Miss Janet

      Howe, Rt. Hn. Sir Geoffrey (Surry, E)

      Chalker, Mrs. Lynda

      Fowler, Norman (Sutton C'field)

      Howell, David (Guildford)

      Channon, Paul

      Fox, Marcus

      Howell, Ralph (Norfolk, North)

      Chataway, Rt. Hn. Christopher

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

      Howells, Geraint (Cardigan)

      Churchill, W. S.

      Freud, Clement

      Hunt, John

      Clark, A. K. M. (Plymouth, Sutton)

      Fry, Peter

      Hurd Douglas

      Hutchison, Michael Clark

      Mitchell, David (Basingstoke)

      Shersby, Michael

      Iremonger, T. L.

      Moate, Roger

      Silvester, Fred

      Irvine, Bryant Godman (Rye)

      Molyneaux, James

      Sims, Roger

      James, David

      Money, Ernle

      Sinclair, Sir George

      Jenkin, Rt. Hn. P. (R'dgeW'std & W'fd)

      Monro, Hector

      Skeet, T. H. H.

      Jessel, Toby

      Moore, J. E. M. (Croydon, C.)

      Smith, Cyril (Rochdale)

      Johnson Smith, G. (E. Grinstead)

      Morgan-Giles, Rear-Adm.

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

      Johnston, Russell (Inverness)

      Morris, Mitchell (Northampton, S.)

      Spence, John

      Jones, Arthur (Daventry)

      Morrison, Charles (Devizes)

      Spicer, Jim (Dorset, W.)

      Jopling, Michael

      Morrison, Peter (City of Chester)

      Spicer, Michael (Worcestershire, S.)

      Joseph, Rt. Hn. Sir Keith

      Mudd, David

      Sproat, lain

      Kaberry, Sir Donald

      Neave, Airey

      Stainton, Keith

      Kellett-Bowman, Mrs. Elaine

      Neubert, Michael

      Stanbrook, Ivor

      Kershaw, Anthony

      Newton, Tony (Braintree)

      Stanley, John

      Kilfedder, James A.

      Nicholis, Sir Harmar

      Steel, David

      Kimball, Marcus

      Normanton, Tom

      Steen, Anthony (L'pool, Wavertree)

      King, Evelyn (Dorset, S.)

      Onslow, Cranley

      Stewart, Donald (Western Isles)

      King, Tom (Bridgwater)

      Oppenheim, Mrs. Sally

      Stewart, Ian (Hitchin)

      Kirk, Peter

      Orr, Capt. L. P. S.

      Stodart, R. Hn. A. (Edinburgh, W.)

      Kitson, Sir Timothy

      Osborn, John

      Stokes, John

      Knight, Mrs. Jill

      Page, Rt. Hn. Graham (Crosby)

      Stradling Thomas, John

      Knox, David

      Page, John (Harrow, W.)

      Taylor, Edward M. (Glgow, C'cart)

      Lamont, Norman

      Pardoe, John

      Taylor, Robert (Croydon, N.W.)

      Lane, David

      Parkinson, Cecil (Hertfordshire, S.)

      Tebbit, Norman

      Langford-Holt, Sir John

      Pattie, Geoffrey

      Temple-Morris, Peter

      Latham, Michael (Melton)

      Percival, Ian

      Thatcher, Rt. Hn. Margaret

      Lawrence, Ivan

      Peyton, Rt. Hn. John

      Thorpe, Rt. Hn. Jeremy

      Lawson, Nigel (Blaby)

      Pink, R. Bonner

      Townsend, C. D.

      Lester, Jim (Beeston)

      Price, David (Eastleigh)

      Trotter, Neville

      Lewis, Kenneth (Rtland & Stmford)

      Prior, Rt. Hn. James

      Tugendhat, Christopher

      Lloyd, Ian (Havant & Waterloo)

      Raison, Timothy

      Tyler, Paul

      Luce, Richard

      Rathbone, Tim

      van Straubenzee, W. R.

      McAdden, Sir Stephen

      Rawlinson, Rt. Hn. Sir Peter

      Vaughan, Dr. Gerard

      MacArthur, Ian

      Redmond, Robert

      Viggers, Peter

      MacCormack, Iain

      Rees, Peter (Dover & Deal)

      Waddington, David

      McCrindle, R. A.

      Rees-Davies, W. R.

      Wainwright, Richard (Colne Valley)

      Macfarlane, Neil

      Reid, George

      Wakeham, John

      MacGregor, John

      Renton, Rt. Hn. Sir David (H't' gd' ns' re)

      Walder, David (Clitheroe)

      McLaren, Martin

      Renton, R. T. (Mid-Sussex)

      Walker, Rt. Hn. Peter (Worcester)

      Macmillan, Rt. Hn. M. (Farnham)

      Rhys Williams, Sir Brandon

      Walker-Smith, Rt. Hn. Sir Derek

      McNair-Wilson, Michael (Newbury)

      Ridley, Hn. Nicholas

      Wall, Patrick

      McNair-Wilson, Patrick (New Forest)

      Ridsdale, Julian

      Warren, Kenneth

      Madel, David

      Rifkind, Malcolm

      Watt, Hamish

      Marshall, Michael (Arundel)

      Rippon, Rt. Hn. Geoffrey

      Wells, John

      Marten, Neil

      Roberts, Michael (Cardiff, N.-W.)

      Wiggin, Jerry

      Mather, Carol

      Roberts, Wyn (Conway)

      Wilson, Gordon (Dundee, E.)

      Maude, Angus

      Rodgers, Sir John (Sevenoaks)

      Winstanley, Dr. Michael

      Maudling, Rt. Hn. Reginald

      Ross, Stephen (Isle of Wight)

      Winterton, Nicholas

      Mawby, Ray

      Rossi, Hugh (Hornsey)

      Worsley, Sir Marcus

      Maxwell-Hyslop, R. J.

      Rost, Peter

      Young, Sir George (Ealing, Acton)

      Mayhew, Christopher (G'wh, W'wch, E)

      Royle, Sir Anthony

      Mayhew, Patrick (RoyalT'bridge Wells)

      St. John-Stevas, Norman

      TELLERS FOR THE NOES:

      Meyer, Sir Anthony

      Scott-Hopkins, James

      Mr. Paul Hawkins and

      Miller, Hal (B'grove & R'ditch)

      Shaw, Giles (Pudsey

      Mr. Spencer Le Marchant.

      Mills, Peter

      Shaw, Michael (Scarborough)

      Miscampbell, Norman

      Shelton, Willam (L'mb'th, Streath'm)

      Division No. 86.]

      AYES

      [11.34 p.m.

      Adley, Robert

      Fisher, Sir Nigel

      Latham, Michael (Melton)

      Aitken, Jonathan

      Fletcher, Alexander (Edinburgh, N.)

      Lawrence, Ivan

      Alison, Michael (Barkaton Ash)

      Fletcher-Cooke, Charles

      Lawson, Nigel (Blaby)

      Allason, James (Hemel Hempstead)

      Fookes, Miss Janet

      Le Marchant, Spencer

      Amery, Rt. Hn. Julian

      Fowler, Norman (Sutton C'field)

      Lester, Jim (Beeston)

      Ancram, M.

      Fox, Marcus

      Lewis, Kenneth (Rtland & Stmford)

      Archer, Jeffrey

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

      Lloyd, Ian (Havant & Waterloo)

      Atkins, Rt. Hn. Humphrey (Spelthorne)

      Freud, Clement

      Luce, Richard

      Awdry, Daniel

      Fry, Peter

      McAdden, Sir Stephen

      Baker, Kenneth

      Galbraith, Hn. T. G. D.

      MacArthur, Ian

      Balniel, Rt. Hn. Lord

      Gardiner, George (Reigate & Banstead)

      MacCormack, Iain

      Banks, Robert

      Gardner, Edward (S. Fylde)

      McCrindle, R. A.

      Beith, A. J.

      Gibson-Watt, Rt. Hn. David

      Macfarlane, Neil

      Bell, Ronald

      Gilmour, Rt. Hn. Ian (Ch'sh' & Amsh'm)

      MacGregor, John

      Bennett, Sir Frederic (Torbay)

      Gilmour, Sir John (Fife, E.)

      McLaren, Martin

      Bennett, Dr. Reginald (Fareham)

      Glyn, Dr. Alan

      Macmillan, Rt. Hn. M. (Farnham)

      Benyon, W.

      Goodhart, Philip

      McNair-Wilson, Michael (Newbury)

      Berry, Hon. Anthony

      Goodhew, Victor

      McNair-Wilson, Patrick (New Forest)

      Biffen, John

      Goodlad, A.

      Madel, David

      Biggs-Davison, John

      Gorst, John

      Marshall, Michael (Arundel)

      Blaker, Peter

      Gow, Ian (Eastbourne)

      Mather, Carol

      Boardman, Tom (Leicester, S.)

      Gower, Sir Raymond (Barry)

      Maude, Angus

      Body, Richard

      Grant, Anthony (Harrow, C.)

      Maudling, Rt. Hn. Reginald

      Boscawen, Hon. Robert

      Gray, Hamish

      Mawby, Ray

      Bowden, Andrew (Brighton, Kemptown)

      Grieve, Percy

      Maxwell-Hyslop, R. J.

      Boyson, Dr. Rhodes (Brent, N.)

      Grimond, Rt. Hn. J.

      Mayhew, Christopher (G'wh, W'wch, E)

      Braine, Sir Bernard

      Grist, Ian

      Mayhew, Patrick (Royal T'bridge Wells)

      Bray, Ronald

      Grylls, Michael

      Meyer, Sir Anthony

      Brittan, Leon

      Gurden, Harold

      Miller, Hal (B'grove & R'ditch)

      Brocklebank-Fowler, Christopher

      Hall, Sir John

      Mills, Peter

      Brown, Sir Edward (Bath)

      Hall-Davies, A. G. F.

      Miscampbell, Norman

      Bruce-Gardyne, J.

      Hamilton, Michael (Salisbury)

      Mitchell, David (Basingstoke)

      Bryan, Sir Paul

      Hampson, Dr. Keith

      Moate, Roger

      Buchanan-Smith, Alick

      Hannam, John

      Molyneaux, James

      Buck, Antony

      Harrison, Col. Sir Harwood (Eye)

      Money, Ernle

      Budgen, Nick

      Harvie Anderson, Rt. Hn. Miss

      Monro, Hector

      Bulmer, Esmond

      Hastings, Stephen

      Moore, J. E. M. (Croydon, C.)

      Burden, F. A.

      Havers, Sir Michael

      Morgan-Giles, Rear-Adm.

      Butler, Adam (Bosworth)

      Hawkins, Paul

      Morris, Michael (Northampton, S.)

      Carlisle, Mark

      Hayhoe, Barney

      Morrison, Charles (Devizes)

      Carr, Rt. Hn. Robert

      Heath, Rt. Hn. Edward

      Morrison, Peter (City of Chester)

      Chalker, Mrs. Lynda

      Henderson, Douglas (Ab 'rd' nsh 're, E)

      Mudd, David

      Chataway, Rt. Hn. Christopher

      Henderson, J.S.B. (Dunbartonshire, E.)

      Neave, Airey

      Clark, A. K. M. (Plymouth, Sutton)

      Heseltine, Michael

      Neubert, Michael

      Clark, William (Croydon, S.)

      Higgins, Terence

      Newton, Tony (Braintree)

      Clarke, Kenneth (Rushcliffe)

      Hill, James A.

      Nicholls, Sir Harmar

      Clegg, Walter

      Holland, Philip

      Normanton, Tom

      Cockcroft, John

      Hooson, Emlyn

      Nott, John

      Cooke, Robert (Bristol, W.)

      Hordern, Peter

      Onslow, Cranley

      Cope, John

      Howe, Rt. Hn. Sir Geoffrey (Surry, E)

      Oppenheim, Mrs. Sally

      Cordle, John

      Howell, David (Guildford)

      Orr, Capt. L. P. S.

      Cormack, Patrick

      Howell, Ralph (Norfolk, North)

      Osborn, John

      Corrie, John

      Howells, Geraint (Cardigan)

      Page, Rt. Hn. Graham (Crosby)

      Costain, A. P.

      Hunt, John

      Page, John (Harrow, W.)

      Crouch, David

      Hurd, Douglas

      Pardoe, John

      Crowder, F. P.

      Hutchison, Michael Clark

      Parkinson, Cecil (Hertfordshire, S.)

      Davies, Rt. Hn. John (Knutsford)

      Iremonger, T. L.

      Pattie, Geoffrey

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

      Irvine, Bryant Godman (Rye)

      Percival, Ian

      Dean, Paul (Somerset, N.)

      James, David

      Peyton, Rt. Hn. John

      Deedes, Rt. Hn. W. F.

      Jenkin, Rt. Hn. P. (R'dge W'std & W'fd)

      Pink, R. Bonner

      Dixon, Piers

      Jessel, Toby

      Price, David (Eastleigh)

      Dodds-Parker, Sir Douglas

      Johnson Smith, G. (E. Grinstead)

      Prior, Rt. Hn. James

      Dodsworth, Geoffrey

      Johnston, Russell (Inverness)

      Raison, Timothy

      Douglas-Home, Rt. Hn. Sir Alec

      Jones, Arthur (Daventry)

      Rathbone, Tim

      Drayson, Burnaby

      Jopling, Michael

      Rawlinson, Rt. Hn. Sir Peter

      du Cann, Rt. Hn. Edward

      Joseph, Rt. Hn. Sir Keith

      Redmond, Robert

      Durant, Tony

      Kaberry, Sir Donald

      Rees, Peter (Dover & Deal)

      Dykes, Hugh

      Kellett-Bowman, Mrs. Elaine

      Rees-Davies, W. R.

      Eden, Rt. Hn. Sir John

      Kershaw, Anthony

      Reid, George

      Edwards, Nicholas (Pembroke)

      Kilfedder, James A.

      Renton, Rt. Hn. Sir David (H't' gd 'ns' re)

      Elliott, Sir William

      Kimball, Marcus

      Renton, R. T. (Mid-Sussex)

      Emery, Peter

      King, Evelyn (Dorset, S.)

      Rhys Williams, Sir Brandon

      Ewing, Mrs. Winifred (Moray & Nairn)

      King, Tom (Bridgwater)

      Ridley, Hn. Nicholas

      Eyre, Reginald

      Kirk, Peter

      Ridsdale, Julian

      Fairgrieve, Russell

      Kitson, Sir Timothy

      Rifkind, Malcolm

      Farr, John

      Knight, Mrs. Jill

      Rippon, Rt. Hn. Geoffrey

      Fell, Anthony

      Knox, David

      Roberts, Michael (Cardiff, N.W.)

      Fenner, Mrs. Peggy

      Lamont, Norman

      Roberts, Wyn (Conway)

      Fidler, Michael

      Lane, David

      Rodgers, Sir John (Sevenoaks)

      Finsberg, Geoffrey

      Langford-Holt, Sir John

      Ross, Stephen (Isle of Wight)

      Rossi, Hugh (Hornsey)

      Stanbrook, Ivor

      Viggers, Peter

      Rost, Peter (Derbyshire, S.E.)

      Stanley, John

      Waddington, David

      Royle, Sir Anthony

      Steen, Anthony (L'pool, Wavertree)

      Wainwright, Richard (Colne Valley)

      Sainsbury, Tim

      Stewart, Donald (Western Isles)

      Wakeham, John

      St. John-Stevas, Norman

      Stewart, Ian (Hitchin)

      Walder, David (Clitheroe)

      Scott-Hopkins, James

      Stodart, R. Hn. A. (Edinburgh, W.)

      Walker, Rt. Hn. Peter (Worcester)

      Shaw, Giles (Pudsey)

      Stokes, John

      Walker-Smith, Rt. Hn. Sir Derek

      Shaw, Michael (Scarborough)

      Stradling Thomas, John

      Wall, Patrick

      Shelton, William (L'mb'th, Streath'm)

      Taylor, Edward M. (Glgow, C'cart)

      Warren, Kenneth

      Shersby, Michael

      Taylor, Robert (Croydon, N.W.)

      Watt, Hamish

      Silvester, Fred

      Tebbit, Norman

      Wells, John

      Sims, Roger

      Temple-Morris, Peter

      Wiggin, Jerry

      Skeet, T. H. H.

      Thatcher, Rt. Hn. Margaret

      Winterton, Nicholas

      Smith, Cyril (Rochdale)

      Thorpe, Rt. Hn. Jeremy

      Worsley, Sir Marcus

      Smith, Dudley (W'wick & L'm'ngton)

      Townsend, C. D.

      Young, Sir George (Ealing, Acton)

      Spence, John

      Trotter, Neville

      Spicer, Jim (Dorset, W.)

      Tugendhat, Christopher

      TELLERS FOR THE AYES:

      Spicer, Michael (Worcestershire, S.)

      Tyler, Paul

      Mr. David Steel and

      Sproat, Iain

      van Straubenzee, W. R.

      Dr. Michael Winstanley

      Stainton, Keith

      Vaughan, Dr. Gerard

      NOES

      Abse, Leo

      Doig, Peter

      Jackson, Colin

      Allaun, Frank

      Dormand, J. D.

      Janner, Greville

      Archer, Peter

      Douglas-Mann, Bruce

      Jay, Rt. Hn. Douglas

      Armstrong, Ernest

      Duffy, A. E. P.

      Jeger, Mrs. Lena

      Ashton, Joe

      Dunn, James, A.

      Jenkins, Hugh (W'worth, Putney)

      Atkins, Ronald

      Dunnett, Jack

      Jenkins, Rt. Hn. Roy (B'ham, St'fd)

      Atkinson, Norman

      Dunwoody, Mrs. Gwyneth

      John, Brynmor

      Bagier, Gordon, A. T.

      Eadie, Alex

      Johnson, James (K'ston upon Hull, W)

      Barnett, Guy (Greenwich)

      Edelman, Maurice

      Johnson, Walter (Derby, S.)

      Barnett, Joel (Heywood & Royton)

      Edge, Geoff

      Jones, Barry (Flint, E.)

      Bates, Alf

      Edwards, Robert (W'hampton, S.E.)

      Jones, Dan (Burnley)

      Baxter, William

      Ellis, John (Brigg & Scunthorpe)

      Jones, Gwynoro (Carmarthen)

      Benn, Rt. Hn. Anthony Wedgwood

      Ellis, Tom (Wrexham)

      Jones, Alec (Rhondda)

      Bennett, Andrew F. (Stockport, N.)

      English, Michael

      Judd, Frank

      Bidwell, Sydney

      Ennals, David

      Kaufman, Gerald

      Bishop, E. S.

      Evans, Fred (Caerphilly)

      Kelley, Richard

      Blenkinsop, Arthur

      Evans, Ioan (Aberdare)

      Kerr, Russell

      Boardman, H.

      Evans, John (Newton)

      Kilroy-Silk, Robert

      Booth, Albert

      Ewing, Harry (St'ling, F'kirk & G'm'th)

      Kinnock, Neil

      Boothroyd, Miss Betty

      Faulds, Andrew

      Lambie, David

      Bottomley, Rt. Hon. Arthur

      Fernyhough, Rt. Hn. E.

      Lamborn, Harry

      Boyden, James (Bishop Auckland)

      Fitch, Alan (Wigan)

      Lamond, James

      Bradley, Tom

      Flannery, Martin

      Latham, Arthur(City of W'minster P'ton)

      Broughton, Sir Alfred

      Fletcher, Raymond (Ilkeston)

      Lawson, George (Motherwell & Wishaw)

      Brown, Bob (Newcastle upon Tyne, W.)

      Fletcher, Ted (Darlington)

      Leadbitter, Ted

      Brown, Hugh D. (Glasgow, Provan)

      Foot, Rt. Hn. Michael

      Lee, John

      Brown, Ronald (H'kney, S. & Sh'ditch)

      Ford, Ben

      Lestor, Miss Joan (Eton & Slough)

      Buchan, Norman

      Forrester, John

      Lewis, Arthur (Newham, N.)

      Butler, Mrs. Joyce (H'gey, WoodGreen)

      Fowler, Gerry (The Wrekin)

      Lewis, Ron (Carlisle)

      Callaghan, Jim (M'dd'ton & Pr'wch)

      Fraser, John (Lambeth, Norwood)

      Lipton, Marcus

      Campbell, Ian

      Freeson, Reginald

      Loughlin, Charles

      Cant, R. B.

      Galpern, Sir Myer

      Loyden, Eddie

      Carmichael, Neil

      Garrett, John (Norwich, S.)

      Lyons, Edward (Bradford, W.)

      Carter, Ray

      Garrett, W. E. (Wailsend)

      Mabon, Dr. J. Dickson

      Carter-Jones, Lewis

      George, Bruce

      McCartney, Hugh

      Castle, Rt. Hn. Barbara

      Gilbert, Dr. John

      McElhone, Frank

      Clemitson, Ivor

      Ginsburg, David

      Macfarlane, Neil

      Cocks, Michael

      Gourlay, Harry

      McGuire, Michael

      Cohen, Stanley

      Graham, Ted

      Mackenzie, Gregor

      Coleman, Donald

      Grant, George (Morpeth)

      Maclennan, Robert

      Colquhoun, Mrs. M. N.

      Grant, John (Islington, C.)

      McMillan, Tom (Glasgow, C.)

      Conlan, Bernard

      Griffiths, Eddie (Sheffield, Brightside)

      Madden, M. O. F.

      Cook, Robert F. (Edinburgh, C.)

      Hamilton, James (Bothwell)

      Magee, Bryan

      Cox, Thomas

      Hamilton, William (Fife, C.)

      Mahon, Simon

      Craigen, J. M. (G'gow, Maryhill)

      Hamling, William

      Mallalieu, J. P. W.

      Cronin, John

      Hardy, Peter

      Marks, Kenneth

      Crosland, Rt. Hn. Anthony

      Harrison, Walter (Wakefield)

      Marquand, David

      Cryer, G. R.

      Hattersley, Roy

      Marshall, Dr. Edmund (Goole)

      Cunningham, G. (Isl 'ngt 'n, S & F'sb'ry)

      Hatton, Frank

      Meacher, Michael

      Cunningham, Dr. John A. (Whiteh 'v' n)

      Healey, Rt. Hn. Denis

      Mellish, Rt. Hn. Robert

      Dalyell, Tam

      Heffer, Eric S.

      Mendelson, John

      Davidson, Arthur

      Hooley, Frank

      Mikardo, Ian

      Davies, Bryan (Enfield, N.)

      Horam, John

      Millan, Bruce

      Davies, Denzil (Llanelli)

      Howell, Denis (B'ham, Small eath)

      Miller, Dr. M. S. (E. Kilbride)

      Davies, Ifor (Gower)

      Huckfield, Leslie

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

      Davis, Clinton (Hackney, C.)

      Hughes, Rt. Hn. Cledwyn (Anglesey)

      Molloy, William

      Deakins, Eric

      Hughes, Mark (Durham)

      Moonman, Eric

      Dean, Joseph (Leeds, W.)

      Hughes, Robert (Aberdeen, North)

      Morris, Alfred (Wythenshawe)

      de Freitas, Rt. Hn. Sir Geoffrey

      Hughes, Roy (Newport)

      Morris, Charles R. (Openshaw)

      Delargy, Hugh

      Hunter, Adam

      Morris, Rt. Hn John (Aberavon)

      Dell, Rt. Hn. Edmund

      Irvine, Rt. Hn. Sir A. (L'p'I, EdgeHI)

      Moyle, Roland

      Dempsey, James

      Irving, Rt. Hn. Sydney (Dartford)

      Murray, Ronald King

      Newens, Stanley (Harlow)

      Rowlands, Edward

      Tomney, Frank

      Oakes, Gordon

      Sandelson, Neville

      Torney, Tom

      Ogden, Eric

      Sedgemore. Bryan

      Tuck, Raphael

      O'Halloran, Michael

      Selby, Harry

      Urwin, T. W.

      O'Malley, Brian

      Shaw, Arnold (Redbridge, Ilford, S.)

      Varley, Rt. Hn. Eric G.

      Orbach, Maurice

      Sheldon, Robert (Ashton-under-Lyne)

      Wainwright, Edwin (Dearne Valley)

      Ovenden, John,

      Shore, Rt. Hn. Peter (S'pney & P'plar)

      Walden, Brian (B'm'ham, Ladywood)

      Owen, Dr. David

      Short, Mrs. Renée (W'hamp'n, N.E.)

      Walker, Harold (Doncaster)

      Padley, Walter

      Silkin, Rt. Hn. John (L'sham, D'ford)

      Walker, Terry (Kingswood)

      Palmer, Arthur

      Silkin, Rt. Hn. S. C. (S'hwark, Dulwich)

      Watkins, David

      Park, George (Coventry, N.E.)

      Sillars, James

      Weitzman, David

      Parker, John (Dagenham)

      Silverman, Julius

      Wellbeloved, James

      Parry, Robert

      Skinner, Dennis

      White, James

      Pavitt, Laurie

      Small, William

      Whitehead, Phillip

      Pendry, Tom

      Smith, John (Lanarkshire, N.)

      Whitlock, William

      Perry, Ernest G.

      Snape, Peter

      Willey, Rt. Hn. Frederick

      Phipps, Dr. Colin

      Spearing, Nigel

      Williams, Alan (Swansea, W.)

      Prentice, Rt. Hn. Reg

      Spriggs, Leslie

      Williams, Alan Lee (Hvrng, Hchurch)

      Prescott, John

      Stallard, A. W.

      Williams, Rt. Hn. Shirley(H'f'd & St'ge)

      Price, Christopher (Lewisham, W.)

      Stewart, Rt. Hn. M. (H'sth, Fulham)

      Williams, W. T. (Warrington)

      Price, William (Rugby)

      Stoddart, David (Swindon)

      Wilson, Alexander (Hamilton)

      Radice, Giles

      Stonehouse, Rt. Hn. John

      Wilson, Rt. Hn. Harold (Huyton)

      Richardson, Miss Jo

      Stott, Roger

      Wilson, William (Coventry, S.E.)

      Roberts, Albert (Normanton)

      Strang, Gavin

      Wise, Mrs. Audrey

      Roberts, Gwilym (Cannock)

      Strauss, Rt. Hn. G. R.

      Woodall, Alec

      Robertson, John (Paisley)

      Summerskill, Rt. Hn. Shirley

      Woof, Robert

      Roderick, Caerwyn E.

      Swain, Thomas

      Wrigglesworth, Ian

      Rodgers, George (Chorley)

      Taverne, Dick

      Young, David (Bolton, E.)

      Rodgers, William (Teesside, St'ckton)

      Thomas, Jeffrey (Abertillery)

      Rooker, J. W.

      Thorne, Stan (Preston, S.)

      TELLERS FOR THE NOES:

      Roper, John

      Tierney, Sydney

      Mr. John Golding and

      Rose, Paul B.

      Tinn, James

      Mr. Joseph Harper.

      Ross, Rt. Hn. William (Kilmarnock)

      Tomlinson, John

      Question accordingly agreed to
      Mr. Joel Barnett: I beg to move, That further consideration of the Bill, as amended, be now adjourned.
      I think the House will agree that we have made some remarkable progress.
      Question put and agreed to.
      Bill, as amended (in the Committee and in the Standing Committee), to be further considered tomorrow.

      CHARGE OF INCOME TAX FOR 1974–75

        HOUSE OF COMMONS (SERVICES)
        Ordered,
        That the Catering Sub-Committee of the Select Committee on House of Commons (Services) have power to appoint persons with expert knowledge for the purpose of particular inquiries, either to supply information which is not readily available or to elucidate matters of complexity within the Sub-Committee's Order of Reference.—[Mr. Walter Harrison.]

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

  UFFINGTON (WHITE HORSE)
  11.45 p.m.
  Mr. Michael McNair-Wilson: I am grateful to you, Mr. Deputy Speaker, for allowing time for this
  Adjournment debate even at this late hour.
  On a point of order, Mr. Deputy Speaker. The Minister who is to answer the debate does not appear to be in his place.
  Mr. Deputy Speaker (Mr. George Thomas): That is not a matter for me.
  Mr. McNair-Wilson: I shall proceed with my speech, although it is difficult to know how the Minister will be able to reply to it, as he is not present.
  At a time like this, when so many problems are besetting our nation, it may seem to some that the question where a county's boundary is drawn is not a matter on which I should delay the House, yet I believe that one of Parliament's functions is to right wrongs, no matter how great or how small, and that as the county boundary is now drawn between Berkshire and Oxfordshire a wrong has been committed.
  Tonight I shall ask the Minister—who is now present—to reconsider the decision of the boundary commissioners, who ruled four important monuments out of Berkshire and in what we in Berkshire describe as "New Oxfordshire". I seek the return of the White Horse to Berkshire.
  I ask the Minister to agree that the boundary line shall be redrawn in such a

  409
  way that the White Horse and three other monuments that have been within Berkshire for a thousand years shall once again be within the royal county. The monuments to which I refer, apart from the White Horse, are part of the Ridgeway, Dragon Hill, Wayland Smith's Cave, and the Blowing Stone. All these monuments lie within an area of 3½ square miles and are about three miles from the county boundary, which came into existence on 1st April. In other words, a boundary change which would encompass about 10 square miles of the new county of Oxfordshire would satisfy the desires of my constituents and of many people living throughout Berkshire.
  It may be wondered why the change of a county line matters so much, why more than 10,000 people signed a petition which was presented to Her Majesty the Queen at Windsor Castle in June, or why the well-known archaeologist, Miss Jacquetta Hawkes—the wife of J. B. Priestley, the novelist—should have written in The Times recently, about the boundary commissioners' decision to leave the White Horse out of Berkshire:
  "This disregard of people's feelings and the power of symbols to give meaning and identity is slowly destroying us."
  It is because Berkshire and the White Horse have had a relationship which has gone back more than a thousand years. After a thousand years each of us should wonder whether this is the moment to turn his back on the history of an important part of our country.
  I admit that the White Horse is far older than the county boundary of Berkshire as it was up to 1st April. The White Horse symbol is thought to have been cut perhaps 2,000 years ago by a British tribe, the Atrebates. It so happened that their territory corresponded to what was the old County of Berkshire, so perhaps when they cut that rough design on the down-land they were setting a seal upon an area which until 1st April was the Royal County of Berkshire.
  Nearby is a hill, called Dragon Hill. By popular myth or history—have it as you will—it is believed that on that hill St. George slew the dragon. If one doubts this, one should look at the hill and see the marks on the chalk where the dragon's blood ran down and where, even to this day, no grass will grow. Close by is
  410
  Wayland Smith's Cave, which has been described as the most legendary long barrow in England and which featured in Sir Walter Scott's great novel, "Kenilworth".
  These are some of the historical monuments of this small area which once were in the county and which now are excluded. Over them, standing as it has always stood, is the Ridgeway, the path that cuts across the centre of England and has been a route of commerce for so many centuries that no one really knows when it first started. It, too, was in the county of Berkshire and it, too, was excluded by the Boundary Commission's decision.
  These, then, are the treasures which once were Berkshire's, and always there is the White Horse. Once—until this year—the White Horse was a symbol of the county's coat of arms. It is still part of Hungerford's coat of arms. It was the cap badge of the Berkshire Yeomanry in two world wars. The headstones of the members of that regiment, whose bodies lie in this country and abroad bear the White Horse symbol to show where they came from, and the regiment to which they belonged. It is the badge even to this day of the Berkshire Signals Squadron of the Territorial Army. It is the emblem of the Berkshire Federation of Women's Institutes. It is the badge of one of the halls of Reading University. It is the trade mark of local companies, in particular, one company which sells widely overseas—Lambourn Engineering.
  Yet the White Horse—and the symbols of the White Horse in each of the ways I have described—is no longer Berkshire's. It belongs to Oxfordshire. All those people who once believed that it was part of the county's traditions now have to dismiss it from their thoughts, and they wonder why this has to be—why the stroke of a civil servant's pen can end 1,000 years of history, and of historical connection. For anyone who cares about tradition, this is a tragedy, and something which must make us all wonder how a boundary change—a line on a map—can be drawn so arbitrarily as to end so many historical links.
  Nor are the arguments against changing the boundary really worth more than a cursory glance. Since I took up the cudgels to have the White Horse returned

  411
  to Berkshire, I have received 105 letters and postcards, mainly from people living in and around Uffington, telling me they would prefer the White Horse to stay in their parish. I set this against the 10,000 names on the petition, and this shows clearly that the argument is overwhelmingly in favour of the people of Berkshire.
  Of course, I admit the link between the White Horse and Uffington, and, as we are told so often in our history books, how they scoured the chalk and kept the horse in order. I feel for them, that they, too, should have been taken out of the royal county, but that is no reason to deprive the county of its traditional symbol.
  Uffington, I suppose, must stay in Oxfordshire, but I want the White Horse back in Berkshire. Since when have parish boundaries—the boundaries which the people of Uffington claim embrace the White Horse, and so make it theirs rather than Berkshire's—taken precedence over county boundaries? Here, surely, is a case where the parish boundary might encompass the White Horse and the county boundary of Berkshire do the same? There are no more than perhaps 20 people involved in what I am talking about as a boundary change. It is a line on a map, something that will give back to Berkshire a thing that matters so much to her.
  To those who have argued "Why should Berkshire care about the White Horse? Although it stands high on the Berkshire downland, nobody in Berkshire can see it, but only the people below in Oxfordshire as they look up", I reply that if that argument is to have any validity we should give the White Cliffs of Dover to the French—the only people who can see them. Which hon. Member would stand by such an argument? It is palpable nonsense. Our White Horse, standing on our downland, reminds all the people below that they are coming to the royal county of Berkshire, and they had better look to their laurels before crossing our county boundary. At least, that was the position before 1st April, but, alas, is no more.
  Some people are undoubtedly intoxicated by the effectiveness of a certain whisky advertisement, which tells us that we can
  412
  take a White Horse anywhere. To them I retort, "You can't take the White Horse from Berkshire. You may draw your line for the moment so that it is not in the county, but the traditions are there; the headstones lie in foreign fields the coats of arms are there for all to see."
  I appeal to the Minister to do justice to the royal county by—in Miss Jacquetta Hawke's words—restoring
  "the White Horse and the chalk beneath its hooves to their original owners."
  I urge the Minister to say that he will lend the weight of his Department to ask the Boundary Commission to bring forward its review of Berkshire's boundaries from 1979 to the present day, and to remember the 10,000 names on the petition, and the tiny opposition that I have received.
  If my words have failed to persuade the hon. Gentleman that he should lend the weight of his Department to that, may I ask him to consider the possibility of a referendum in the counties of Berkshire and Oxfordshire to decide where the White Horse should be. I promise him that if we have such a referendum, we in Berkshire will not fight whatever decision the people make, for we believe that the people want the White Horse back in the royal county of Berkshire.
  11.59 p.m.
  Mr. Airey Neave: As the White Horse is in my constituency, I am grateful to have a few minutes to say something about the position of my constituents in the matter.
  My hon. Friend the Member for Newbury (Mr. McNair-Wilson) has made a most eloquent plea for the return of the White Horse to Berkshire. I should like to put one or two points about that plea. First, affection for the White Horse is not confined to the county of Berkshire. Many people revere this ancient monument. I live quite close to it, and I know the feelings of my constituents about the matter. There is no tiny opposition to the restoration of the White Horse to new Berkshire.
  The campaign to keep the White Horse in Berkshire did not begin until after thepassing of the Local Government Act. There was hardly a clause or schedule in that Bill which was not contested hotly and scrutinised by hon. Members. That

  413
  was not so in this case. No representations were ever made to the Local Government Boundary Commission about it.
  As we know, the campaign has continued since. But the Vale of White Horse District Council has only just been set up and has only just started work. To divorce the White Horse from the new district which bears its name would seem to be absurd. I make no criticism of my hon. Friend, but it is rather extraordinary that since the boundary changes took effect, neither the Vale of White Horse District Council nor the Oxfordshire County Council has been consulted by those responsible for this agitation.
  Since ancient times, this monument has been in the parish of Uffington. No doubt the Local Government Boundary Commission, realising that the limits of that parish were 1½ miles south of White Horse Hill, framed its recommendations on that basis.
  Unfortunately for my hon. Friend's eloquent argument, the Vale of White Horse district is on the north side of the hill, invisible from the new Berkshire and dominating the vale itself. It would be wrong, in those circumstances, to alter the ancient parish boundaries either of Uffington or in relation to the other monuments my hon. Friend mentioned—the Blowing Stone and Wayland Smith's Smithy. It is the people of Uffington who scoured the White Horse, which has no connection with Lambourn parish, and the White Horse is only a mile from the village of Uffington itself.
  Then there is the effect on the Vale of White Horse and the new district council. Since April, it has been settling down to its work, and it has been irritated, to say the least, by the suggestion that the White Horse should be removed from it as it forms an integral part of the vale from which it takes its title. It has been known that the reorganisation has been proceeding for two and a half years.
  All boundary changes arouse controversy, and I have had many representations in opposite terms to those received by my hon. Friend. Many of my constituents wished to remain in Berkshire. There was considerable feeling about it. But I have heard from all political parties—Abingdon Labour Party, the Liberal Association and my
  414
  own party. All have written strongly supporting what I have been saying. So have most of the parish councils in the Ridgeway area, and a mass of my constituents have written to me. I have had only two letters supporting my hon. Friend's point of view.
  Many people feel with me that this famous and much admired memorial is not owned by Berkshire or Oxfordshire. It does not belong to counties, and it should not be the subject of boundary disputes. It belongs to the nation, and it is in the care of the Secretary of State for the Environment. I made this point in a letter to The Times in reply to Miss Jacquetta Hawkes. Everyone has access to the White Horse, and it is the property of the nation.
  In reply to the debate, I hope that the Under-Secretary will support the decisions of the Boundary Commission and the views of my constituents.
  12.4 a.m.
  The Under-Secretary of State for the Environment (Mr. Gordon Oakes): I am grateful to both the hon. Member for Newbury (Mr. McNair-Wilson) and the hon. Member for Abingdon (Mr. Neave) for their contributions, which have displayed the eloquent force of the arguments with regard to both counties over this unique archæological feature of the British Isles which is obviously held dear by both counties.
  We know from the advertisement to which reference has been made that "You can take a White Horse anywhere". The hon. Member for Newbury refutes that argument by saying that this White Horse cannot be taken anywhere.
  As the hon. Member for Abingdon said, the Local Government Bill of 1972 was one of the most fiercely debated and contested Bills ever to come before this House. Never once—during Second Reading, in Committee, lasting day and night, on Report, again lasting day and night—was the question of the boundaries of Berkshire and Oxfordshire debated in relation to the White Horse. It is true that the people in this part of Berkshire are not objecting to the fact that they have been transferred to the county of Oxfordshire. It is the county symbol, as the hon. Member describes it, which finds itself across the boundary in another county.

  415
  The hon. Member for Abingdon pointed out with force that the monument faces north. It is approached by roads from the north and significantly gives its name to that part of Oxfordshire which it overlooks. It is a most charming name for the district—the Vale of White Horse. That is the district in which it is now situated.
  All the signs, for a considerable time, have been that the parish has maintained this horse. It is referred to as the Uffington Horse. I do not think that is a fair description, because this horse has far more than a parish, county or, indeed, national significance. I appear tonight as the Minister concerned with local government, and as the groom—because the Department of the Environment has, since 1856, been responsible for the scouring of the White Horse. This is a charming ceremony, which went on originally from the parish of Uffington. Every year there was an annual scouring fair, when the horse was scoured, its boundaries maintained in pristine whiteness, and cheeses were rolled down the Manger sides for the villagers to eat. That was a charming British ceremony.
  Now it is not so glamorous. The useful and essential work is carried on by the Department's Ancient Monuments section. The White Horse still remains a magnificent figure on the landscape for the people of the area and the country to enjoy.
  Mr. McNair-Wilson: The Minister used the expression "a charming British custom". I think he has the wrong words. Surely he meant "a charming Berkshire custom".
  Mr. Oakes: I did not mean a charming Berkshire custom. I am sorry to disappoint the hon. Gentleman. One of the hon. Gentleman's supporters is the Poet Laureate, who wrote in support of this horse's remaining in the Royal County of Berkshire. I refer the hon. Gentleman and the Poet Laureate to some lines by G. K. Chesterton about this horse:
  "Before the gods that made the gods
  Had seen their sunrise pass
  The white horse of the White Horse Vale
  Was cut out of the grass".
  The White Horse was cut out 2,000 years ago. It was maintained long before the parish came into existence. It was probably maintained even during
  416
  Roman times. It is truly an ancient British monument.
  I can understand the feeling in Berkshire about this monument because of its symbolic significance. Many hon. Members who may not have had quite so symbolic or ancient a monument in their constituencies as the White Horse had to part company with things which were dear to their hearts as a result of the Local Government Act 1972. They found that they were in a different county, with different traditions, in different company. Most of them are now—some reluctantly—learning to adapt to their new county.
  We, as a Government did not fully support all that was behind the Local Government Act 1972. As a Government we are indeed reluctant to disturb the whole pattern of that measure because of the trauma that local government suffered. We have no objection to this boundary adjustment. Indeed, the Redcliffe-Maud Committee supported the idea that this part or Berkshire should go into Oxfordshire. It did not refer to the White Horse. It accepted that this part of the county of Berkshire should go into Oxfordshire. We in the Opposition concurred, and the then Government concurred. Not one voice was raised in this House against the proposal, neither on behalf of people of the parish nor in respect of the symbol. There are few areas, few boundaries, few parish boundaries that one can say that about in respect of the passage of the Local Government Act.
  Both hon. Gentlemen lay claim to the horse. The horse looks to the north. The Boundary Commission will deal with this matter in 1984—because this is a country boundary matter—10 years from the coming into operation of the Act. That commission will be open to receive representations from both hon. Gentlemen. I hope that both hon. Gentlemen will be here in 1984 to make those representations, and that their constituents, likewise, will make representations to the commission. The commission will decide between the two on the question of the county boundary.
  I accept the hon. Gentleman's argument that few people are involved in this matter. This is downland, in a most attractive area—both physically and archeologically—in the county.

  417
  I endorse what the hon. Member for Abingdon said, both in his speech tonight and in his letter. This treasured ancient monument is not the property of the county of Berkshire; it is not the property of the county of Oxfordshire; it is not the property of the country of England. It has been there for 2,000 years. Before the Romans came the White Horse was in the hills—a symbol similar to that on the coins which existed in Grecian times. This is not a county matter, a parish matter or even a country matter. It is not a Berkshire symbol, an Oxfordshire symbol or an English symbol. You, Mr. Deputy Speaker, will
  418
  appreciate that it belongs to us all. This is a British monument and symbol.
  I hope that the hon. Gentleman, having heard the reply to the debate, will realise that the treasure that Berkshire has given up has been given to the British nation. The treasure that Oxfordshire now has is a trust on behalf of the whole British nation—indeed, of the civilised Western world.
  Question put and agreed to.
  Adjourned accordingly at fourteen minutes past Twelve o'clock.

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    Rubber and Plastics Training Board
  NORTHERN IRELAND
    Young Offenders
    Young Offenders
  OVERSEAS DEVELOPMENT
    Departmental Advisory Committees
    Departmental Advisory Committees
  PRICES AND CONSUMER PROTECTION
    Nickel Manufactures
    Nickel Manufactures
SCOTLAND
  Police
  Police
  School Building Programme (Clackmannan and Stirlingshire)
  School Building Programme (Clackmannan and Stirlingshire)
  Peat
  Peat
  Pensioners (Rent and Rate Rebates)
  Pensioners (Rent and Rate Rebates)
  Tay Road Bridge
  Tay Road Bridge
  North Sea Oil Developments (Environmental Reinstatement)
  North Sea Oil Developments (Environmental Reinstatement)
  Brucellosis
  Brucellosis
TRADE
  Insurance (Property Funds and Bonds)
  Insurance (Property Funds and Bonds)
  Food Supermarkets
  Food Supermarkets
WALES
  Improvement Grants (Wrexham)
  Improvement Grants (Wrexham)
  Personal Wealth
  Personal Wealth
  Rented Accomodation
  Rented Accomodation
  Housing (Bedrooms)
  Housing (Bedrooms)
  Hospital Waiting Times
  Hospital Waiting Times
  Welsh Advisory Oil Committee
  Welsh Advisory Oil Committee
  Pig Swill Licences
  Pig Swill Licences
  Hospitals (Amenity Beds)
  Hospitals (Amenity Beds)
  Local Government Staff
  Local Government Staff
ENVIRONMENT
  Rent and Rate Rebates (Pensioners)
  Rent and Rate Rebates (Pensioners)
  Council Housing
  Council Housing
  Housing
  Housing
  Compulsory Purchase Orders
  Compulsory Purchase Orders
  Cost Yardstick
  Cost Yardstick
  Building Programmes (Scotland)
  Building Programmes (Scotland)
  Warrington New Town
  Warrington New Town
  Alkali Pollution (Prosecutions)
  Alkali Pollution (Prosecutions)
  Land Disposal (Nationalised Industries)
  Land Disposal (Nationalised Industries)
  Local Government Officers
  Local Government Officers
  Oil Pollution
  Oil Pollution
  Channel Tunnel
  Channel Tunnel
  Rating System (Inquiry)
  Rating System (Inquiry)
  Shipping (Aberdeen)
  Shipping (Aberdeen)
  Lancashire
  Lancashire
  Inland Waterways
  Inland Waterways
  Hampshire District Councils (Grants)
  Hampshire District Councils (Grants)
  Rate Support Grant
  Rate Support Grant
  Water Authority Areas
  Water Authority Areas
  Rents
  Rents
  Rates
  Rates
  Local Authority Employees (Yorkshire)
  Local Authority Employees (Yorkshire)
  Clay Cross
  Clay Cross
  Local Government (Overstaffing Inquiry)
  Local Government (Overstaffing Inquiry)
  Vehicle Registration Marks
  Vehicle Registration Marks
  Vehicle Licensing
  Vehicle Licensing
  A66, Thornaby
  A66, Thornaby
HOUSE OF COMMONS
  Catering
  Catering

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

LORD FISHER OF CAMDEN
Sir Samuel Fisher, Knight, having been created Baron Fisher of Camden, of Camden in Greater London, for life—Was, in his robes, introduced between the Lord Wells-Pestell and the Lord Greenwood of Rossendale.

BARONESS DELACOURT-SMITH OF ALTERYN
Margaret Rosalind, Baroness Delacourt-Smith, widow of the Right Honourable Charles George Percy Baron Delacourt-Smith, having been created Baroness Delacourt-Smith of Alteryn, of Alteryn in the County of Gwent, for life—Was, in her robes, introduced between the Lord Royle and the Baroness Llewelyn-Davies of Hastoe.
The Lord Hartwell—Took the Oath.

ARAB TERRORIST ACTIVITIES
2.57 p.m.
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 whether a statement has been received containing a list of activities by Arab terrorists against people and property since March 1973; and whether Her Majesty's Government have considered raising the subject at the United Nations.
THE PARLIAMENTARY UNDERSECRETARY OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD GORONWY-ROBERTS): My Lords, I have received the list sent to me by
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the noble Lord. Her Majesty's Government have repeatedly made it clear that they condemn all acts of terrorism. They have also played their full part in the United Nations and elsewhere in attempting to devise means of combating terrorism.
LORD SHINWELL: My Lords, may I thank my noble friend for that Answer and express the hope that if and when a submission is made to the United Nations it will receive objective consideration? May I further ask him, in view of occasional criticism even from some noble Lords in your Lordships' House, whether, because of reprisals by the State of Israel against terrorists, he would consider publishing in the OFFICIAL Report the list which I sent to him, so as to furnish information for those who are doubtful about the matter, thereby justifying to some extent the action taken by the State of Israel?
LORD GORONWY-ROBERTS: My Lords, I shall have to take the second suggestion very much under advisement, but I will indeed consider what my noble friend has said. On the first point, I entirely agree with him that we must continue to give not only objective support in the U.N. and elsewhere to all measures to combat terrorism, but indeed strong and constructive support. This country has done so in the past and I am quite sure it will do so in the future.
LORD JANNER: My Lords, while appreciating the fact that Her Majesty's Government have taken certain steps at the United Nations to condemn terrorism, may I ask whether my noble friend is aware of the fact that a large number of the members of the United Nations are (themselves harbouring these terrorists? Would it not be an idea that those nations which do not harbour the terrorists could be called together with a view to seeing what could be done? If that is not possible, would it be possible to ensure that those who harbour these terrorists are not allowed to vote at the United Nations when these matters are being discussed?
LORD GORONWY-ROBERTS: My Lords, as my noble friend knows, the United Kingdom has in fact taken a lead in proposing effective ways of bringing proper pressure to bear on any countries who are guilty of harbouring terrorists.

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But it is not enough for this country or, indeed, a minority of the membership of the United Nations to take these attitudes. If action in this sphere is to be effective, it is necessary that it should be collective.
LORD JANNER: My Lords, may I ask, as a supplementary question, whether it would not be an idea for those nations who do not harbour these arch-criminals to make some united declaration to the United Nations to the effect that there is no alternative way, that they condemn this action, and that the United Nations must do something about it?
LORD GORONWY-ROBERTS: My Lords, in fact this is continually being done. The latest resolution on this point was Resolution No. 347, which was very strongly supported by this Government. The United Kingdom is continually doing what my noble friend urges it to do.
LORD SHINWELL: My Lords, is my noble friend aware that I am fully seized of the complications and difficulties associated with this problem? In the circumstances, and knowing what the situation is in the Security Council of the United Nations, I am quite content to leave the matter to the common sense and good will of Her Majesty's Government.
LORD SEGAL: My Lords, I have not had the advantage of seeing this list, so may I ask my noble friend whether it also included acts of terrorism aiding and abetting those who have been attacking Her Majesty's subjects in Northern Ireland? Further, may I ask whether this list, if it is published, should not be amplified in that direction?
LORD GORONWY-ROBERTS: My Lords, this is a list furnished to me by my noble friend, giving details of acts of terrorism in the Middle East. Of course, it does not include any references to Northern Ireland or any other area. I suggest the point raised by the noble Lord, Lord Segal, is somewhat wide of the Question before us.
LORD WIGG: My Lords, would the noble Lord be kind enough to say whether he would ask the Government to publish a White Paper laying down the considerations that turn a terrorist into a respectable person, with particular regard to several members of the State of Israel
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who were not averse, not so long ago, to murdering British soldiers?
LORD GORONWY-ROBERTS: My Lords, frankly I do not think that would be at all helpful.
LORD SHINWELL: My Lords, is my noble friend aware that he should not pay the slightest attention to my noble friend Lord Wigg?

SECURITY AND CO-OPERATION CONFERENCE
LORD BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government for a Statement on the discussions at the 35-nation Conference on Security and Co-operation.
LORD GORONWY-ROBERTS: My Lords, the Conference has made some progress but much still remains to be done. We shall continue to work patiently and constructively with our allies to obtain satisfactory results in all areas of the work of the Conference.
LORD BROCKWAY: My Lords, while thanking my noble friend for that reply, may I ask two separate questions. First, do the agreements already reached include the proposal that after a Summit Meeting there should be continuing commissions so that security and co-operation can be progressively resumed?
LORD GORONWY-ROBERTS: My Lords, the decisions or recommendations have not so far been formalised. They will be formalised towards the end of Stage 2 and will be adopted for ratification at proper Ministerial level. I should like to say how very strongly I agree, and I am sure Her Majesty's Government agree, with the suggestion of my noble friend Lord Brockway, that there should be continuing commissions to see that agreements in this vital area are in fact implemented and added to as occasion offers in the future.
LORD BROCKWAY: My Lords, I thank my noble friend for that answer. May I now ask whether it is the case that the greatest difficulty in the present

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discussions relates to freedom of movement, of ideas, and of information? Would it not be possible to find a form of words so that those freedoms which we all desire can progressively take place as trust extends as a result of the work of the continuing commissions, to which my noble friend has referred?
LORD GORONWY-ROBERTS: My Lords, human freedom is of paramount importance, especially freedom of movement and the reunification of families, with which is joined the whole question of the exchange of culture and information. A search is now going on for the form of words referred to by my noble friend Lord Brockway. Hopefully, after achieving a syntactical agreement we may move to practical action.

STORAGE HEATERS: ELECTRICITY CHARGES
3.7 p.m.
BARONESS BURTON OF COVENTRY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a Statement concerning electricity rates for night storage heating.
THE MINISTER OF STATE, DEPARTMENT OF ENERGY (LORD BALOGH): My Lords, as I indicated to this House on June 27, my right honourable friend the Secretary of State for Energy made an announcement in another place on June 20 that he had asked the Chairman of the Electricity Council to examine urgently what adjustment could be made to give relief to the domestic consumer on the off-peak rates. He indicated then that his aim would be to see the previous percentage relationship between off-peak and standard rates re-restored and the necessary adjustment implemented as soon as possible. This examination of the whole problem gives rise to a number of very complex issues which the Government are discussing with the industry and I am not at present able to report further on them. My right honourable friend the Secretary of State has, however, undertaken to make a further Statement before the Summer Recess.
BARONESS BURTON OF COVENTRY: My Lords, the noble Lord keeps making long statements and repeating what I have said to him. Is he aware that I have been wating three weeks for an answer? Is he further aware that he has answered neither my Question of June 25, nor that of to-day for the same reason? Because of this long delay, and because of the interest shown in both Houses, can the noble Lord tell me the actual day on which I can put down a Question so that this House may have the benefit of the Statement of his right honourable friend?
LORD BALOGH: My Lords, I am sure my noble friend Lady Burton will not have to be told when to put down Questions. I tried to answer her Questions on June 13, 17, 25 and 27. I wrote to her on June 28 and July 10. I can only repeat that these questions are quite complicated, though she will not believe me, and therefore I must ask very humbly for her patience, which has not been shown hitherto.
BARONESS BACON: My Lords, can my noble friend say what are the complications which have not applied hitherto?
LORD BALOGH: My Lords, they have applied hitherto.
BARONESS BURTON OF COVENTRY: My Lords, while accepting that the noble Lord is my noble friend, may I ask him whether he is aware that it is impossible for a Back Bencher to know when a Statement will be made if not so informed? I am asking my noble friend whether he or the Lord Privy Seal can please let me know the date on which this Question can be put down.
LORD BALOGH: My Lords, I undertake to do that.
LORD SLATER: My Lords, will the noble Lord tell me when the position changed? When did the C.E.G.B. cease to regard these supplies during off-peak periods as wastage? The attitude of the C.E.G.B. has always been that during off-peak periods, the electricity supplied was wastage and therefore commanded reduced charges.
LORD BALOGH: My Lords, I will very carefully study what my noble friend

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has said in Hansard, when available, and undertake to write to him.
LORD BYERS: My Lords, may I ask the Minister whether we are likely to get a decision reached sometime before winter sets in?
LORD BALOGH: My Lords, as I said, my right honourable friend the Secretary of State has undertaken to make a further Statement before the Summer Recess. He gave this undertaking several weeks ago.

DEFENCE LANDS COMMITTEE RECOMMENDATIONS
LORD ELTON: 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 yet taken a decision upon the recommendations of the Defence Lands Committee 1971–73.
LORD GORONWY-ROBERTS: My Lords, the Report and public comment received about it are now under consideration and the Government will announce their decision shortly.
LORD ELTON: My Lords, while thanking the noble Lord for that reply, may I ask whether he is aware that the already considerable delay in coming to a conclusion inhibits the processes of planning in civil Departments and also the training in military Departments? Would he accept that the efficiency of our Forces, upon which the safety of this Realm depends, ultimately depends on their ability to train efficiently and therefore this delay is diminishing the security of this Realm? May I further ask the noble Lord, since a decision apparently has not been reached, whether the Government will bear in mind when they are considering arrangements at Lulworth and Castlemartin the fact that there is a sort of domino effect, that the closure of Lulworth for training would mean the transfer of training facilities from Lulworth to Castlemartin, and does he agree that that can only be achieved by making room at Castlemartin by withdrawing facilities for the training of the German
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troops? Would he further concede that those troops would have to be trained in their own country, in Germany, and following that the Germans would withdraw facilities for the training of our troops who train there? The question is, where will our troops train, except back in Lulworth?
LORD GORONWY-ROBERTS: My Lords, the noble Lord has quite properly made an extended argument in favour of a certain kind of decision in relation to one of these localities. No doubt what he has said will be studied and considered very carefully by those who, in due course, will be coming to a decision. On his first remark about delay, I agree that all delay is bad for planning authorities and indeed for the Services. However, these are very important matters which must not be unduly rushed. I see that the Report was published in July, 1973, which somewhat pre-dates the accession of this Administration to office.
LORD ELTON: My Lords, I do not wish to enter into dispute about what has passed. I am urgently concerned about the future. May I ask the Government how short is short? If this decision is delayed beyond the Recess, it will not be reached before the winter training session begins.
LORD GORONWY-ROBERTS: My Lords, how short is as short as we can make it.
LORD SLATER: My Lords, would my noble friend not agree that the supplementary questions asked of my noble friend in regard to the training of our troops indicate that there must be something seriously wrong in regard to the training of our personnel so far as the Armed Forces are concerned?
LORD GORONWY-ROBERTS: My Lords, these are important matters. Matters of training, security, amenity, are extremely important matters, the balance between which must be very carefully weighed and, as I said, not unduly rushed. I entirely agree with what the noble Lord said about the need for haste and for facing the future. In fact, I would quote to him a very famous phrase, "let us all face the future".
LORD CARRINGTON: My Lords, since it was I, as Secretary of State for

1009
Defence, who asked my noble friend Lord Nugent to take on this Committee, may I ask the noble Lord whether he is aware that some of us on this side are rather surprised that he is answering this Question, and not the noble Lord responsible for the Army? There may be a very good reason for this, but it seems to me it would really fall to the noble Lord, Lord Brayley, rather than the Foreign Office, to answer this Question.
May I further ask the noble Lord whether he is aware that on the only really controversial decision which the Government have to make, the decision about the question of Lulworth and of Castlemantin, whichever decision the Government come to I assure him will be wrong? Would it not be possible to decide on the other issues which are not controversial, so that more land might be released and people put out of uncertainty?
LORD GORONWY-ROBERTS: Yes, my Lords, I think it should be possible. In fact, we take the view that some decisions can go forward without necessarily waiting for a position in which all decisions can be made. As to the reason why I am answering to-day, it is because my noble friend Lord Brayley is unwell, and as the noble Lord, Lord Carrington, knows, it is a convention, a friendly convention, that Questions are answered from this Dispatch Box on behalf of the Government, not on behalf of Departments.
LORD BROCKWAY: My Lords, may I ask my noble friend, without wishing to take advantage of this Question to put a particular case, whether the Minister for Defence would be prepared to receive deputations from the areas concerned, as the noble Lord, Lord Carrington, did when he was Minister for Defence? Secondly, what form will the decisions take? Is legislation necessary? Will it be by Orders, and will Parliament be able to register its decision on what the Government decide?
LORD GORONWY-ROBERTS: My Lords, on the second point, I could not to-day anticipate the Parliamentary form, if it were necessary, in relation to each question that arose; they vary a great deal in the kind of procedure that may
1010
be necessary. On the first point, namely whether my right honourable friend would receive deputations, I should think he would be very favourable to receiving deputations on this kind of question, especially from my noble friend Lord Brockway.

CYPRUS
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, with the leave of the House, my noble friend Lord Goronwy-Roberts will be making a Statement on the situation in Cyprus at a convenient moment after 3.30 p.m.
ORKNEY COUNTY COUNCIL BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.

FRIENDLY SOCIETIES BILL [H.L.]
3.18 p.m.
THE LORD CHANCELLOR (LORD ELWYN-JONES): My Lords, I understand that no Amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript Amendment or to speak in Committee. Unless therefore any noble Lord objects, I beg to move, pursuant to Standing Order No. 45(2), that the Order of Recommitment be discharged.
I should inform your Lordships that this Bill was referred to the Joint Committee, together with two recommendations made by the Law Commissions in a Report presented to Parliament on June 26, last. The Committee reported that the recommendations of the Commissions were for the purpose of producing a satisfactory consolidation of the law, and they approved the recommendations. They were of the opinion that apart from those portions of the Bill which implement the recommendations, and certain repeals of spent, unnecessary or superseded enactments, the Bill is pure consolidation and represents the existing law. They recommend that there was no point to which the attention of Parliament should be drawn. I beg to move that the Order of Recommitment be discharged.
Moved, That the Order of Recommitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.
Then, Standing Order No. 44 having been suspended, pursuant to Resolution, Bill read 3a, and passed, and sent to the Commons.

TRADE UNION AND LABOUR RELATIONS BILL
3.20 p.m.
THE LORD PRIVY SEAL (LORD SHEPHERD): My Lords, I beg to move that this Bill be now read a second time. At the outset I acknowledge and appreciate the very great difficulties that confront the House in considering this Bill. If it is difficult for a Minister, I fully appreciate how much more difficult it must be for the Opposition and other interested Members. For this reason I had copies of the Bill distributed by hand on Friday afternoon. Of course, it had to be selective, but the distribution was made after consultation through the usual channels. I wish to make clear that anything I can do I will do to help Members between now and Third Reading. Noble Lords need only approach me direct or through my office. I hope that the House will understand that I mean this offer most seriously, and I say it in a spirit of well-meant co-operation.
My Lords:
"Industrial Relations are a domain where peace comes only by willing co-operation. In other walks of life, where people disagree they can simply part; but if management and employees disagree they cannot just take up their marbles and go home. They still have to learn to live together if the enterprise is to continue and to prosper. To a large extent they must forge their own law of association and forget contracts and tort and other legal chains. They must, in a word, evolve the common law of the shop. They cannot do that by fighting each other in the courts …".
My Lords, those words are not mine. They belong to the late Lord Donovan, in whom so much wordly wisdom was vested. They were spoken at the time of the Second Reading in this House of the Industrial Relations Bill on April 5, 1971, at column 45 of the OFFICIAL REPORT. This House debated at great length and in great depth the possible consequences of what we now know as
1012
the Industrial Relations Act. While, of course, I could not claim that every argument and every point of view put forward at that time by the late Lord Donovan is reflected in the Bill before this House today, his direct critique of industrial relations goes, I think, to the heart of the matter. He said:
"Industrial relations are a domain where peace comes only by willing co-operation".
It is not a game—and it should never have been turned into a battlefield. It must surely be the task of Government always to seek willing co-operation, always to help to achieve industrial peace. This cannot be brought about by Government alone. The right framework is necessary. It was this which the Industrial Relations Act failed to provide.
Of course, it is generally recognised that the Act did not succeed. Those who expressed such high hopes three years ago in the lengthy debates in this House have, of course, been disappointed. Lord Jellicoe, in our Second Reading debate (April 6, 1971) went so far as to say that it was the Government's
"belief—right or wrong—that over a period of time this Bill should do much to strengthen, to buttress and to encourage the resolution of industrial disputes in this country, and with that bring a more hopeful climate of industrial relations and greater prosperity and … a breakthrough into a higher plateau of economic performance which has been denied to this country for far too long."
Ever since the 1971 Act reached the Statute Book, instead of resolution there has been added confusion. We have suffered a painful and bewildering three years. The very expression "Industrial relations" has now gathered to itself complexities of meaning which can hinder clear-headed analysis. To those of us on this side of the House, the past three years have not been full of surprises; but, while we must reflect on failure I must admit we would prefer to analyse this repeal Bill as positive and effective legislation.
First of all, though, let us talk about failure. I think it must be true to say that noble Lords from all sides of this House—whether their interests lie most heavily with management or unions—readily admit that the Industrial Relations Act did fail; that it did not achieve industrial peace. I am not going to say that the record of strikes during the past

1013
three years—a damaging record in all conscience—is the direct outcome of the Industrial Relations Act. But few of us could doubt that the atmosphere of mistrust and ill-temper—the industrial air we breath—has in no way helped men of reason and conciliation. It has made the rôle of the moderate infinitely more difficult. However commendable intentions may be, it is my belief that any law in the field of industrial relations which fails must be a bad law; we pay for it very dearly indeed.
The late Lord Delacourt-Sraith, who played such a valiant part in our consideration of the Act, and whose lady we welcome here this afternoon, thought that the Industrial Relations Act was "legalism run mad". I am fairly certain he was right, but perhaps the gravest errors grew first from failing to appreciate an obvious fact of life; good industrial relations are very much good human relations. An Act of Parliament which, by its nature, implies a deep lack of trust in one section of the community is unlikely ever to improve the human condition.
At root, trade unions consist of workpeople for the benefit of workpeople. Understandably, the members of any such union feel themselves chiefly responsible for the welfare of their colleagues. Almost half of the working population in this country are members of one union or another. The history of trade unionism in this country is a proud one and the T.U.C., in times of crisis, given its rightful discretion, is capable of exercising wide responsibilities. In 1969, for instance, when the T.U.C. promised to grasp the nettle of demarcation disputes, it was as good as its word. Every year since then between 80 and 100 demarcation disputes have been dealt with within the ambit of unionism itself; the old worry of strikes in that area of industrial relations has been pre-empted time and time again. That, my Lords, represents worker responsibility for workers and, as a natural consequence, worker responsibility for the welfare of the community at large. That is what we must seek to strengthen and encourage.
I have implied that what was basically wrong with the Industrial Relations Act was a failure of imagination. By that I mean imagination which draws upon the common experience of a nation's
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history, the reactions of individuals under stress, the interwoven and incredibly variable forces of reason and feeling—among individuals and groups of individuals; the everyday notion of loyalty.
Bearing that in mind, I should like to offer a plain man's analysis of the two crucial subjects in the Industrial Relations Act where disagreements were bound to deepen and develop into open hostility: they are registration, and the closed shop. These are particularly important because the provisions in the repeal Bill, in part, take the form they do because of the reaction to the provisions of the Industrial Relations Act and the way they were operated. Could it be otherwise given the basic failure of those who designed the Act: the imaginative gap between legislators and the attitude of ordinary workpeople, trade unionists and indeed employers?
Let me start with the closed shop. The previous Administration took the view that the closed shop was such a bad thing that it should be specifically outlawed in one of its forms (the pre-entry closed shop) and made unenforceable in the other form (the post-entry closed shop). They ignored the advice of the Donovan Commission which said that,
"prohibition of the closed shop must be rejected"—
advice based on years of expert research; and they failed to understand the collective values inherent in the closed shop. Of course it is right to stress the rights of the individual—unions are just as much concerned about that as we are. But, for balanced judgment, we really must try to appreciate the rationale of the closed shop. It does indeed help unions to obtain and then retain higher levels of membership which can match the power of the employer. But, at the same time, it can provide stable employment and stable industrial relations in industries where entry control is vital for the maintenance of established standards.
Let me put it more dramatically. When there is a mining disaster we can do nothing except stand by and admire the men who, without hesitation, organise and carry out the rescue of their comrades. We accept all that as an admirable, instinctive, community enterprise. My Lords, it is that same sort of instinct, that unity of purpose, which insists on the closed shop. In a mining village the

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closed shop is as much a part of the social fabric as the strength of character which can cope so heroically with sudden injury and death. If we can accept that, we may understand why the Donovan Commission forecast that prohibition of the closed shop could not in any case be effective, and why that has been exactly the experience of the last two years during which, in theory, the closed shop has been outlawed.
The Donovan Commission said:
"The law would presumably declare such things to be void, but this of itself would not necessarily deprive them of practical effect".
And that is just what happened. I am not surprised to recall that the Industrial Relations Act itself was amended in the course of its passage through Parliament to include provision for the "approved closed shop". The agency shop, which was supposed to replace the closed shop, never got off the ground.
Registration, the second subject I want to discuss, is, in a sense, the more difficult to treat coolly as a political concept. In the context of the Industrial Relations Act it is, at once, a system, a requirement, an enticement—an iron door bearing the words, "Trust Me". But let me try to explain our views. We have two main objections to the system of registration introduced by the 1971 Act. First, we object to the obligations which registration imposes upon a union. In our view, these amount to a quite unacceptable degree of interference in the internal affairs of unions, representing another example of the general theme running throughout the 1971 Act—that unions are somehow not to be trusted to run their affairs properly. In particular, we object to the detailed requirements as to the rules of trade unions and employers' associations set out in Schedule 4 to the 1971 Act.
Our second main objection to the registration system under the 1971 Act is that, for the first time, we were all obliged to discriminate between registered and unregistered unions. This goes much deeper than semantics. For the sake of apparent coherence, for the sake of an impossibly vast legal structure, we were prepared to contemplate the loss of hard-won democratic rights—rights which unions have enjoyed since the turn of the century. The crucial immunity for
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inducing breach of contract—introduced by the Trade Disputes Act 1906 for the benefit of any person—is restricted to registered unions and their officials. That has meant that unregistered unions—in effect, the bulk of the union movement—are at present in the same position as they were at the time of the Taff Vale case of 1901. Their funds are at risk every time that circumstances oblige them to take industrial action without notice.
But I think the most telling case against the registration system is that it has not worked. The opposition of the unions has been united. The Register itself wears a very odd look. Although over 200 organisations are registered as unions, the majority are small and obscure organisations, many catering only for the employees of a single firm. These 200-odd organisations represent only about 10 per cent. of the total union membership of this country. Less than half of them were to be found on the pre-1971 Register. I cannot think that this was intended by the previous Government. It certainly makes no sense in industrial relations terms and makes a nonsense of the whole registration system of the 1971 Act. We think that the time has come to sweep away the registration system altogether and start on a fresh basis.
My Lords, I hope you will understand why I have thought it right to dwell for so long on past history. I thank your Lordships for your patience. I realise I have yet to offer a plain man's guide to the Bill before us, but at this point I must make it clear that the Government see this Bill as only one of the measures which they propose to take in the industrial relations field. There are important areas which it does not cover. The Government are committed to the establishment of an independent conciliation and arbitration service. That is not dealt with at all in the Bill. However, as noble Lords will know, plans are going ahead for the establishment of the service as soon as possible on an administrative basis. My right honourable friend the Secretary of State for Employment published a consultative document on May 17. His proposals have been generally welcomed by industry. Of course, the service will not have its full range of functions until it is put on a statutory basis. That must await the

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Employment Protection Bill for which the Government intend to publish a Consultative Document in the autumn with a view to introducing legislation as soon as possible.
Some noble Lords may consider that the present Bill is not short enough, but if it had covered all the matters on which the Government intend to legislate, as well as putting the C.A.S. on a statutory footing, we should have had a very long Bill indeed. And the Industrial Relations Act would have remained on the Statute Book for much longer than we think right. Hence, also, the question of trade union membership rights is not dealt with in the Bill except in so far as they are relevant to the question of unfair dismissal. There is no equivalent of the right to belong—only protection against dismissal. This, again, is for the Employment Protection Bill.
In the Consultative Document published on March 22, it was stated that consideration would be given to providing, either in this Bill or in a later one, safeguards against arbitrary exclusion or expulsion from union membership. This is a most important area which was examined at some length by the Donovan Commission. Though neither they nor other advocates of safeguards have claimed that there is a major problem here, we know that Donovan did suggest special appeals machinery. My noble and learned friend the Lord Chancellor may well have more to say on this subject later this evening. I will content myself with saying that we shall be consulting further with the T.U.C., this being an area where it is important to obtain a solution which takes proper account of existing procedures which, on the whole, work well. It is largely that consideration which has led the Government to conclude that the matter is best dealt with in the Employment Protection Bill.
My Lords, what, then, does the Bill itself do? Rightly, in our view, it repeals most of the provisions of the Industrial Relations Act. The main exception to that principle are the provisions of the Act dealing with unfair dismissal, which by and large are re-enacted in Schedule 1 of the Bill, though with a number of important improvements. Apart from transitional provisions designed to facilitate the winding up of the machinery of
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the Industrial Relations Act, the Bill has these main purposes: it lays down provisions concerning the status and regulation of trade unions and employers' associations; and it provides legal immunities for those carrying out certain acts in contemplation or furtherance of a trade dispute.
Clauses 2 to 8 deal with the status and regulation of trade unions and employers' associations. So far as unions generally are concerned, the Bill proposes a return to the pre-1971 position, under which no union was, or could be, a corporate body. My Lords, unions are essentially voluntary in nature. However, the Bill provides that unions are to have certain of the attributes of corporate bodies; for example, the power to sue and to be sued in their own names. The Bill was amended in another place so that bodies on the Special Register of the 1971 Act can retain their corporate status and generally attract the immunities in respect of activities in regard to the regulation of relations between employers and workers if they satisfy the definition of "trade union" in the Bill. Organisations on the Special Register were very concerned that no account was taken of their circumstances in the Bill as published; and the Amendments which were made recognise their special problems. Employers' associations, because they may have other objectives as well as the regulation of industrial relations, will be permitted to be either bodies corporate or unincorporated associations.
With the abolition of registration and the Registry of Trade Unions and Employers' Associations, the affairs of unions and employers' associations will once again be dealt with by the Registry of Friendly Societies. This is intended to be only a temporary arrangement pending the establishment of the Conciliation and Arbitration Service as a statutory body. The Bill will require the Registry of Friendly Societies to maintain lists of unions and employers' associations satisfying the relevant definition. Any union or employers' association which has been previously registered or, in the case of unions, affiliated to the T.U.C., will be put on the list without formal application. The Bill lays down administrative and accounting requirements with which all unions and employers' associations

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except temporary bodies and the employer and union sides of joint negotiating committees will have to comply. Clauses 10 to 14 deal with restrictions on legal liability and legal proceedings.
My Lords, many of the provisions represent a return to the position existing in 1970 before the Industrial Relations Act. However, a number of changes have been made designed, in part, to modernise the law, to meet developments in case law in the 1960s and to give protection to incorporated employers' associations and Special Register bodies in respect of acts done in connection with the regulation of relations between employers and workers.
Clause 10, which deals with immunity from action in breach of contract, stems from Section 3 of the 1906 Act. Unlike Clause 2(5), which continues the protection against liability for restraint in trade and the immunity from tort, which is the subject of Clause 11, it applies to persons and not simply to the organisations. The 1906 Act gave protection against action in breach of contract of employment. The present Bill protects against breach of all types of contract. This provision has attracted a good deal of comment and criticism, both in the debates in the other place and in the Press. Basically, however, the Government believe that the position before 1971 was unsatisfactory. This was the verdict of the Donovan Commission, which recommended that the law should be clarified and simplified and that Section 3 of the 1906 Act be extended to cover all contracts. It is the case that the majority of the Donovan Commission recommended that the immunity should be limited to registered trade unions. However, the Government consider that such a limitation is undesirable. Nearly all industrial action interferes directly or indirectly with commercial contracts. Experience has shown that employers are reluctant to sue workpeople. That this is not a tendency to be encouraged is amply confirmed by the experiences of the Industrial Relations Act.
Clause 11 is a modernised version of Section 4 of the 1906 Act. As in the case of protection against liability for restraint in trade, Clause 11 applies without restriction to unincorporated employers'
1020
associations and to trade unions, but only to acts in pursuance of the regulation of relations between employers and workers in the case of incorporated employers' associations and Special Register bodies. This distinction seems much more appropriate than that in the Bill as originally published, as it puts the majority of employers' associations on an equal footing with trade unions. Incorporated employers' associations are much more likely to have functions which extend beyond industrial relations. In the case of all organisations, incorporated or not, the immunity from tort is considerably restricted if the act is not in contemplation of furtherance of a trade dispute. Clause 11(2) is a revised and clearer version of Section 4(2) of the 1906 Act—a section renowned, I understand, for the obscurity of its drafting.
Picketing is the subject of Clause 12. Although this is a subject which always seems to attract controversy, I hope that this will not be the case in our debates because Clause 12 simply carries forward into the repeal Bill the effect of Section 134 of the Industrial Relations Act, which in turn was the same as the 1906 Act except that the right to picket a person's home was removed. The right to picket peacefully is important to workers and to trade unions.
My Lords, there is much else one could say on the details of the Bill, but I am conscious of the time. Perhaps we shall have an opportunity to deal with some of the other clauses in Committee. I hope I have said enough about this Bill to persuade your Lordships to give it a Second Reading. We think that this Bill will make some advance in the field of industrial relations. It should not be judged on its own, but as part of a series of proposals which this Government will bring forward in the next months and in the next few years. My Lords, I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a—(Lord Shepherd.)

CYPRUS
3.48 p.m.
LORD GORONWY-ROBERTS: My Lords, with the permission of the House, I should like to repeat a Statement being

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made in another place by my right honourable friend the Foreign and Commonwealth Secretary. The Statement reads as follows:
"With your permission, Mr. Speaker, and that of the House, I will make a further Statement about the situation in Cyprus.
"The House will be greatly relieved to learn that President Makarios is alive. He has requested that he should be allowed to enter the sovereign base areas and Her Majesty's Government have agreed to this request. It appears that the National Guard are at present in control of parts of the island and that fighting continues among the Greek Cypriot population; although the Turkish population is not at present involved. The situation clearly contains grave risks and it is of great importance that peace be restored as soon as possible.
"In Athens our Ambassador has conveyed to the Greek authorities my view that Greece should state unambiguously her intention to observe her international obligations in regard to Cyprus.
"I am glad to say that in a written statement this morning the Acting Foreign Minister is reported to have said that the policy of the Greek Government is to observe and safeguard the independence and territorial integrity of the Cyprus Republic He has added that the Greek Government attaches major importance to the inter-communal talks between Greek and Turkish Cypriots.
"Her Majesty's Ambassador is also informing the Greek Government that, in the view of Her Majesty's Government, it would do much to reduce tension in the area if the Greek officers of the Cypriot National Guard were to be replaced at the earliest possible moment.
"I continue to remain in contact with the Turkish and other Governments and with the Secretary General of the United Nations.
"As regards the many British holidaymakers at present in Cyprus, the Foreign and Commonwealth Office is keeping in close touch with the various travel organisations concerned in
1022
Cyprus. The travel organisations have plans for flying the tourists out of Cyprus as soon as the airport at Nicosia is open again. Alternative arrangements will be made if it remains closed."
My Lords, that is the end of the Statement.
3.51 p.m.
LORD CARRINGTON: My Lords, I should like to apologise to the noble Lord for not having been in my place when he started reading the Statement. I was misinformed about the length of the speech the noble Lord, Lord Shepherd, intended to make. I think all Members of the House would welcome the news about Archbishop Makarios. It is a great relief to know that he is alive. I should like to say that I and my noble friends support the Government in what they are doing, particularly in the way that they have pointed out to the Greek Government the latter's international obligations, and especially in the suggestion about the withdrawal of the officers of the National Guard which would at this juncture be particularly helpful. I do not think that there is any useful purpose to be served at this rather uncertain time, when we do not know exactly what is happening, in saying much more, except that those responsible for a coup of this kind, if it is successful—and we do not yet really know whether it will be successful—have a particular duty to reassure the Turkish community and the three Powers most particularly concerned with Cyprus that they will continue to respect their rights.
The only other question I would ask of the noble Lord is whether, if it looks as if the airport at Nicosia will remain closed for another day or two, the Government would consider allowing British Airways to use Akrotiri, thereby allowing those who are stranded in Cyprus to get home?
LORD GLADWYN: My Lords, we on these Benches would like to associate ourselves with what the noble Lord, Lord Carrington, has said, but may I ask the noble Lord, Lord Goronwy-Roberts, if it is not obvious that this armed revolt by Greek officers of the National Guard against the legitimate Government of Cyprus has as its declared objective the achievement of enosis, or union with

1023
Greece, and that they have installed a President whose lifelong ambition this has been? Is it therefore at all likely in the Government's opinion that the Greek Government will be willing, or even able, to replace the officers who have executed this coup by other officers? In the meantime, I imagine that we continue to recognise the Government of President Makarios and, if so, perhaps the Government could let us know who, in their view, is responsible for maintaining law and order now in the areas at present controlled by the National Guard and, if possible, for dispossessing them of such authority as they have?
3.54 p.m.
LORD GORONWY-ROBERTS: My Lords, may I say that I endorse everything that the noble Lord, Lord Carrington, has said, especially that we should be very careful not to pronounce judgments as to feasibility or futurity in this matter where the position is probably changing very rapidly indeed. On the practical point about the possibility of using the S.B.A. facilities for flying out British holiday-makers and possibly residents, I am sure that this is very much in the mind of Her Majesty's Government, and as soon as I leave this House I shall certainly bring the point which he made to the notice of the Foreign Secretary.
With regard to the points made by the noble Lord, Lord Gladwyn, on behalf of the Liberal Party, I think that we should wait until the situation is somewhat clearer before we pronounce on the intentions or indeed the permanency of the new régime, if that is how one should describe it. As to who is responsible for the maintenance of law and order on the island, this is very much in doubt because of the conditions created in the last day or so. We recognise only one President, President Archbishop Makarios. As to his capacity at the moment to exert his authority, this must clearly be, to say the least of it, in doubt. The new régime clearly does not meet with our criteria of recognition. However, at this point I entirely agree with the noble Lord, Lord Carrington, and implicitly with what the noble Lord, Lord Gladwyn, said on behalf of his Party, that it would be well to await the progress of events and to
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come to judgments in the light of those events.
LORD WIGG: My Lords, could my noble friend say whether Her Majesty's Government have entered into consultations with the Turkish Government to prepare contingency plans in case it should prove necessary to carry out the joint guarantee of the British and Turkish Governments to preserve the integrity of Cyprus?
LORD GORONWY-ROBERTS: My Lords, my noble friend is quite right in suggesting that our primary responsibility under the 1960 Treaty is to consult the two other Governments concerned—the Greek and Turkish Governments—and this we are now doing.
LORD MERRIVALE: My Lords, may I ask the Minister whether the fact, which I greatly welcome, that Archbishop Makarios has been welcomed into the sovereign base areas took place after his broadcast this morning at 10 o'clock in which he appealed over the radio in English for international support for the restoration of democracy in Cyprus? He was followed by a lady, speaking in French, who appealed to the international community for restoration of democracy. That is the first question. My second question is, has the noble Lord any information regarding the position in Limassol? It was reported that pro-Makarios forces were holding that area of Cyprus.
LORD GORONWY-ROBERTS: My Lords, on the second point, evidence is not at all conclusive, but there has been some evidence of pro-Makarios demonstrations in one or two places on the island. On the first point, I am not sure whether I understood the noble Lord's question completely. Was he asking whether we would welcome others, apart from the President, to the haven of the sovereign base areas?
LORD MERRIVALE: My Lords, I was asking the Minister whether, in effect, the Archbishop was welcomed into the sovereign base areas—which I am delighted about—after his broadcast to the international community as a whole regarding a restoration of democracy in Cyprus.
LORD GORONWY-ROBERTS: My Lords, the President Archbishop was welcomed into the sovereign base areas as soon as he intimated that he wanted to come in and was able to do so, and he will be given every facility, as befits a properly elected and accredited Head of State and, I may add, the senior Head of State in the Commonwealth.
LORD SEGAL: My Lords, in view of the fact that fighting still seems to be continuing and the lives of British Commonwealth subjects are still in danger, could not Her Majesty's Government enter into consultation with our NATO allies in an effort to bring about a ceasefire?
LORD GORONWY-ROBERTS: My Lords, we are in consultation with the Secretary General of NATO.
THE EARL OF LAUDERDALE: My Lords, could the noble Lord tell us whether he has any further information about the attitude of the Turkish community? Are they still quiet in their attitude and bearing?
LORD GORONWY-ROBERTS: My Lords, yes, indeed; they are facing this rather difficult and dangerous situation with exemplary calm and patient. I would add that the Turkish Government so far has shown a very good example of coolness.

TRADE UNION AND LABOUR RELATIONS BILL
Second Reading debate resumed.
4.1 p.m.
THE EARL OF GOWRIE: My Lords, I should like to start, if I may, with a short personal statement. I think your Lordships would expect that on a Bill of this consequence and importance the speech from the Opposition would be made at the very least by a member of the Shadow Cabinet. Of course, it was planned that my noble and learned friend Lord Hail-sham of Saint Marylebone, who is leading the Opposition on the Bill, would make the opening speech. However, I think the usual channels—as we call them—would confirm that there were some changes of date and my noble and learned friend is in Judicial Committee of the Privy Council on a long-standing Sitting which he felt it would be quite improper for him to cancel. The noble
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Lord the Leader of the House kindly made available his opening speech to my noble and learned friend, and I personally hope, and I am sure he does, that he will be able to get here in time for the maiden speeches of the noble Lords, Lord Feather and Lord Houghton of Sowerby, to which we all look forward so much.
My noble and learned friend gave me a splendid speech which he very kindly—as we would expect of him—said that I could read out. I was looking forward to this, but I discovered about half-way through that I had neither the personal verve and bounce nor the legal knowledge to carry it off, so your Lordships will have to put up with, "a poor thing but mine own." I know how irritating it is when one comes to consult Sherlock Holmes to have to sit through Dr. Watson and I must crave some slight indulgence.
My Lords, we are here to consider giving a Second Reading to a Bill which is very honestly named. It is a Trade Union Bill. It forms part—and I acknowledge with the noble Lord, Lord Shepherd, that it is a part only—of the Government's attempt to solve the single most intractable domestic problem since the war; that is to say labour relations in the United Kingdom. We are considering this afternoon the very essence of the social compact. On this compact, frail as it may be, rests the hope not simply of this Government but of all our chances to weather the worst inflation in living memory.
The phrase "social compact" is only one of many one could use my Lords for the pursuit of workable agreements between the community as a whole, represented by whichever Government might happen to be in power, and the labour organisations of this country. Such a pursuit of workable agreements is not peculiar to the present Labour Government. It occupied hours and days, weeks and months of the last Conservative Government. New notions and several old ones of how to make these workable agreements now occupy the collective minds of the Liberal Party. This subject is, I think, on all our minds. It is intensely serious; it is the domestic issue of our time.
My Lords, were it not for the seriousness of the issue, I believe that the climate in which we are discussing the Bill

1027
would tempt one to be mildly facetious—and I assure your Lordships that I shall try to resist the temptation. But we really are in a situation of black comedy. Here before us on this Table is a Bill the immediate and declared purpose of which is to repeal the Industrial Relations Act. It means to go back not merely to square one—to the situation before 1971—but beyond square one. It means to go back beyond the Industrial Relations Bill introduced by the last Labour Government; it means to go back beyond In Place of Strife; beyond that Government's Royal Commission and beyond the Donovan Report. We are told, privately if not publicly, that this may in some ways be regrettable but that it is necessary. It is the price, as the noble Lord, Lord Shepherd, called it, of willing co-operation. It is an acknowledgment of the principle of real politik.
Very well, then, we are paying the price; we are putting the money (in this case the Bill) on the Table. The Bill has gone through all immediate stages in another place, though not, it must be said, without the slightly black comic episode of the Tied Vote and the Minister's Dinner. Yet, my Lords, what do we find? What is the climate in which this necessary sacrifice is being made? The noble Lord, Lord Shepherd, has helped to describe it. We can barely consider the Bill itself in amended form as it came to us from another place. One needs a suitcase or two to carry about the mimeographed sheets, which we have in lieu of Hansard, on the proceedings of Standing Committees and Report stages in another place. We are lucky, I think, to have them at all, and they are a great credit to those who have the nightmare task of making them available. My Lords, I sometimes feel that we in Parliament are too protected. Perhaps it serves to concentrate our minds when industrial action by members of the National Graphical Association affects the supply of papers to Parliament. Another dispute has affected the supply of the Prime Minister to television and I imagine he does not know whether to be pleased or sorry.
My Lords, we are all rightly proud of our Health Service. When I lived in America—as I did for five years—it was considered a model, a living compensation for the loss by this country of a
1028
leading role on the world's stage. With all its faults it was a living tribute to the memory of the great Socialist statesman who designed it. It is now in danger of being torn apart and of course the persons left unaccommodated in the middle will be the patients. The democratic business of counting votes at local government elections has been interfered with, and a more crippling possibility of industrial action, occurring this time on the energy front, had to be bought off—cynically, if effectively—with private funds.
Then we are about to bring to an end a wages policy which contained anomalies and unfairness and which, allied to a price raising Budget, proved in its later stages to be inflationary. Yet with all its difficulties we can, in respect of this policy, use the word "contained" in another sense as well. It contained, in the sense of keeping within reasonable bounds, a wages explosion of the kind that followed the Wilberforce settlement. That explosion helped to generate the squabble over relativities which we are now continuing to suffer. It contained people's sense of injustice by outlining some kind of orderly queue for wage rises. It won far more widespread acceptance on both sides of industry than I think the present Government choose to remember. In return for the ending of this policy, and in return for the Bill before the House, we are facing a Wilber-force-obliterating wages explosion on the one flank, and a situation of almost permanent industrial friction on the other. With middle class groups of workers increasingly aware that the battle goes to the strong, we are beginning to institutionalise industrial friction and we are doing so far more effectively than the hated Industrial Relations Act was able to do.
My Lords, I earnestly hope that the House will have noticed that I am using the pronoun, "we". I believe that the situation is much too serious to launch into a diatribe against the Government. I do not directly blame the Government for what is happening, though, of course, I do blame them for this particular Bill as it stands before us at present. I hope that your Lordships, many of whom on all sides of the House have very great experience in industrial relations, will, if

1029
you give the Bill a Second Reading, seek to improve it later on.
If we are looking for blame, we must blame inflation. We should, therefore accord encouragement or condemnation to whatever Government or whatever set of policies proportionately succeeds or fails in fighting inflation. It is an old tune, but unfortunately we are still forced to dance to it. My criticism of the Government is that they are tying their own hands or, to continue the metaphore, their own feet. To deal with inflation, or at least to deal with it without suffering a hideous slump and hideous unemployment, one must, it seems to me, arm oneself with two weapons. The first is the imposition of some kind of queue for wage increases. The second is some set of procedures for dealing with wage disputes. These are really two edges of the same sword. Because we are dealing this afternoon with the repeal of the Industrial Relations Act, I shall not say anything further about the queue for wage increases, but we cannot, I suggest, ignore the inter-dependence of the two.
It looks perilously at the moment as if the end of the social compact is going to be a licensed, indeed a statutory, imposition of the old free-for-all. I believe that there will be a fearsome backlash if this turns out to be the case; a discovery of militant muscle within labour groupings which we now think of as "weak". Then would we have not only the inflationary effects to deal with—terrible as these would be—but also furious social resentment poisoning our whole society. It would not be directed at property developers: those gentlemen have suffered a bloody nose recently, and without any help from the Government. Indeed, I understand the Government are desperately trying to nurse the property sector as a whole into better health. It would not be directed towards the rich whose supposed stranglehold on our economy may be a chimera, but whose sufferings on the stock market are certainly felt in the flesh. It would not even be directed towards the Government. The Government are not particularly popular anyway, and do not at present, I dare suggest, raise any great expectations in the electorate.
This social resentment would, in my view, be directed at the great trades unions themselves. They would be seen,
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like some of your Lordships' ancestors of many hundreds of years ago, to have over-reached themselves. They would be seen to be not content with their bargaining power which we all acknowledge, and rightly acknowledge; they would be seen to be not content with the great decision-making experiment which was offered—and I may say offered to the dismay of some of his supporters—by my right honourable friend the then Prime Minister; they would be seen to be not content with the repeal of the Industrial Relations Act which failed surely through boycott, rather than through a single inherent injustice; they would be seen to be not content with a pay policy designed to protect their interests, and particularly to protect the interests of the lower paid; and they would be seen to be not prepared for scrutiny by, or appeal to, the wider dictates of individual and community.
Surely in this situation organised labour would be rounded on by individuals and by the wider community. One would argue that since the Government had failed, that two Governments of different political persuasions had failed, and since Parliament had failed, militancy must be met with militancy and might with might. Back we would all go in spirit to the reign of Stephen and Matilda, to battlefields littered this time with the corpses of our industry and of our currency. I have argued so far that the collective principle is not restricted to the great labour organisations. But, more positively, what can the collective "we" of Government, Parliament and people now do in the face of the present fratricidal strife in the work place? Can we at least avoid its getting worse? In my view, the important thing is for all sides to admit mistakes and to make sacrifices.
I am not thinking of coalition which, by itself, does not solve anything. On this side of the House we have sacrificed the Industrial Relations Act. We will not only not reintroduce it in Government, but we will, here and now, in Opposition seek to try to amend this Bill so that both sides of industry can live with it and make it work. It is not our business to-day, as the noble Lord, Lord Shepherd, said, to fight old battles or to go over old ground. Nevertheless, having privately given two cheers for the Industrial Relations Act (I withheld the third

1031
cheer until the unions co-operated with it and that did not happen), I cannot now forebear to shed one tear at its passing. I have never been able to understand why it was considered quite so abrasive, so stiff-necked, so divisive, so inflexible, so arrogant, so Selsdon—if that word word means anything—indeed, so Tory.
It did have the merit of comprehensiveness. A difficulty of the present Bill, as the noble Lord told us, is that essential strategies for good labour relations are jam to-morrow and will occur in another Bill. For to-day we have the stale bread of protections and immunities to chew on. Sir Michael Clapham has said that the 1971 Act,
"equalised the responsibilities of the two sides of industry"
and he has contrasted this with extension of immunities beyond those which obtained in 1971. Your Lordships will know what I mean when I say that Mr. Campbell Adamson is not exactly the most beloved figure of the Tory Party, but nevertheless, in a letter to The Times on June 11, he had this to say of the present Bill:
"If the Bill is passed as at present drafted unions, their officials and shop stewards will be free in law to strike or indulge in other industrial action, or to 'black', blockade or boycott, or threaten to do so, whenever they like, officially or unofficially, constitutionally or in breach of procedure, in respect of a trade dispute anywhere in Great Britain or in the rest of the world. … it will be lawful to use the picket line for the purpose of establishing boycotts for blockades whether against an employer in dispute or against employers, companies, public corporations or any other bodies which have nothing to do with the dispute in question."
These seem to me to be the kind of anxieties that the Government should acknowledge. They might also improve the atmosphere by admitting the closeness of the last Labour Government's proposed legislation, Donovan-based legislation, to our legislation. Only Mr. Christopher Mayhew has had the courage to do that in Parliament—and we all know what became of him. Admitting that would, I suggest, clear the air a little. I acknowledge that we have a lot to admit, too. The single most penetrating remark that I have read about the Industrial Relations Act was made when it was still in Bill form, and it came from the then Mr. Douglas Houghton who now
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I am delighted to see as a Member of your Lordships' House. He said:
"This Bill reads like a guide to good order and discipline in a grammar school. It was drafted in the solitude of the inner temple and many of the provisions will not withstand the mighty roars of disapproval from mass meetings."
I believe with the noble Lord that we perhaps got our sums right where checks and balances, safeguards and responsibilities were concerned, but we got our psychology, and by inference our timing, wrong. May I say to the noble Lord how wise I believe those words to be. My own political motto, for what it is worth, is borrowed from a road sign in current use. It is," Do not enter box unless your exit is clear". Perhaps we neglected that principle.
Assuming, then, that it does clear the air to admit mistakes and make sacrifices and concessions, what could the great labour organisations do to promote a better atmosphere? The best thing, I believe, would be for them to come to terms with their own power. Perhaps they could resist slipping quite so easily into the rhetoric, first of persecution and then of retaliation, against wholly imaginary enemies. I have often noticed that noble Lords opposite who are members of trade unions raise their eyes to Heaven in exasperation of Tory, Liberal or Cross-Bench obtuseness when it comes to discussing individual rights within labour organisations. "Of course we believe in individual rights", their expressions seem to say. "What Party of the Left could not champion the underdog?" Again—I am putting words into their mouths—they seem to say, "All of you cannot get it into your heads that trade unionism is just what it says. Without the closest collusion and co-operation, there is division, retreat and exploitation."
I do not think this is a very severe misrepresentation. I think the noble Lord, Lord Shepherd, more or less acknowledged it. But, really, I contend that it will not do any longer. In a mass society, a plural society, a consumer society, we all suffer from inflation and inflationary wage claims. We cannot lessen the agony by placing already powerful groups in society even further above the responsibilities and obligations with which their weaker brethren are burdened. Responsible use of power means imposing limits

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on oneself, if one has the power. Promotion of one's own good is only in the short term possible against the grain of the general good. Labour in the Western world has won the battle against exploitation by the employer. Let it now refrain from exploiting, and so ruining, itself.
In conclusion, I honestly cannot believe that there could be a better beginning than for the T.U.C. and the Government to acknowledge the concern about the extension of certain immunities and the exclusion of others' rights, be they individual rights or the rights of smaller labour associations. The concern going around the world of journalism, for instance, has to be heard to be believed. If the new Leviathan could contain its appetite during the Committee stage of this Bill, and if it were acknowledged that radical and far-reaching provisions should not go into law on majorities of four, three, two, one or even zero in another place, what fresh air and what light then would flow into this arena! Your Lordships' House has a chance to make all of us see sense. It is a last chance, and may it not go by.
4.24 p.m.
BARONESS SEEAR: My Lords, it is, we are all agreed, a bad workman who always blames his tools, but I must throw myself on the mercy of your Lordships' House if some of my statements are less accurate than I would wish them to be, in that I, like everybody else, have struggled not entirely successfully with the hieroglyphics which have arrived in place of our usual beautifully produced Hansard. I should also like to thank the noble Lord the Leader of the House, if he is in the House, for his gallant attempt to send papers in advance. I can only say that my gratitude is slightly blunted by the fact that so far as I am concerned they never arrived!
We on these Benches are glad to see the Industrial Relations Act go. We are glad not because, as in some parts of this country, we believe that the Industrial Relations Act was bora out of Class Hatred by Malice, but because we think it attempted to do too many things—many of them the wrong things—and to do those things too fast. There were, and still are, parts of the Act which we supported and which were of good intent; but that is now behind us and I do not
1034
intend to spend time this afternoon conducting an obituary on an Act which has plainly to depart.
We are glad, too, that a new Act is to take its place. It would, I think, have been the very greatest mistake if those who urged that all that was needed were a few short lines extolling the Industrial Relations Act had had their way. If there is anyone to-day still so stuck in the 1890s that he believes that the problems of industrial relations are merely a simple matter of the battle between the bosses and the cloth caps that can be settled in a very simple fashion, then indeed his name is Rip Van Winkle. For the fact of the matter is that there is no more complex subject than that of industrial relations, and that the network of relationships between individual and union, between union and union, between union and employer, between employee and employer and between the union and the community make a most complex and difficult pattern.
At all levels, regardless of the sexes, there are rights to be asserted and rights to be protected. If there are these rights to be asserted and these rights to be protected in all these aspects of the whole field of industrial relations, then surely they require an adequate legislative base. Our criticism of the Bill is that, as it stands, it does not provide that adequate legislative base. The noble Lord the Leader of the House has told us that further Bills are to follow (as we were, of course, aware) and we are at a disadvantage in discussing this Bill in that we do not know what the content of that further legislation is to be. Our criticisms can only be made of the Bill as it stands, although we fully accept that some of them may prove to be irrelevant when we know what is intended and what is to follow. We would accept the need for legislation and we believe that this legislation must cover at least three main areas of industrial relations—the relations between the individual member and the unions, relationships within the place of work and the relations between the union and the community—and our examination of this proposed legislation must be in terms of the adequacy of the protection given in all these areas.
We remain opposed, despite the plausible speech made by the noble Lord the Leader of the House, to the concept of

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the closed shop. Of course, the closed shop gets support not only from the trade union movement (though not, indeed, from the whole of the trade union movement) but also from many employers. There is no doubt that the closed shop often makes life easier for employers; but when one finds two groups as powerful as the trade unions and employers ganging up in support of a common policy, then indeed I think that libertarians must reach for their guns! The fact is that the pre-entry closed shop (and it is to that that I am referring at the moment) restricts the right of individual men and women to change their jobs as they wish; it restricts mobility of labour; and it restricts the employer's right to choose his own labour.
In our view, it also gives an excessive power to the trade union movement—excessive in the power it wields in industry, and excessive also (though this they will argue is their own affair) in relation to the membership, which after all the trade union is there to serve. So far as the post-entry closed shop is concerned—what used to be called "100 per cent. trade unionism "—we are prepared, with certain reservations, to go along with that development, but we are not satisfied that the safeguards required in relation to 100 per cent. trade unionism are to be found in the Bill. It may be, having regard to what the noble Lord the Leader of the House said in his speech, that some of these safeguards are to follow in subsequent legislation.
The first point I wish to make is that we do not consider that 100 per cent. trade unionism should carry with it the requirement that the individual member should have to join a specified trade union. In the old days of acceptance of 100 per cent. trade unionism implied that an employee had to join a union, an independent union—and we mean an independent union; we do not mean anything that can possibly be described as a "company" union—but he had the right to choose which union he would join. Provided he was a member of a proper, independent trade union, that was acceptable. In our view, the right to choose the union, so described, is an essential right to be maintained both from the point of view of the individual, and from the point of view of the community.
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We believe that if one specified trade union is in a position to command the membership, willingly or otherwise, of all the persons employed in that concern, then the power that goes to that union is in excess of what is safe or desirable for the community as a whole. We believe—and here I am encouraged by the speech of the noble Lord the Leader of the House—that there must be more adequate safeguards than appear in the Bill for the right to join a union provided rational requirements are met, and for the right against expulsion. This brings me to our belief that it is right that there should be some external check on the rule book of the union. After all, the rule book comprises a contract between the individual union member and the union. This is not a contract of the same order as joining a local tennis club, particularly with the increased powers that it is now proposed to give to the unions. It is a matter of a man's livelihood that he should be able to be in a union and remain in that union. This is a matter of the greatest importance to individuals.
Of course, I accept that in the great majority of cases the individual will get a fair deal from the union. It is only in a small number of cases that there have been abuses of the power that the trade union wields over its membership. It is of the essence of the libertarian case that it does not matter if there is only one person who is unfairly treated, he is entitled to defence; he is entitled to a right in law to have his case properly and fairly dealt with in accordance with the rules of natural justice. There is no one in this House or in the trade union movement who does not believe that the rules of natural justice should be observed. But we cannot accept that—and I do not believe the trade unions believe this themselves—simply because it is a trade union and a trade union's rules there will never be any breach, any injustice, any need for the individual member to be defended against his union. All other human relationships require some framework of law to deal with the small minority of people who abuse their position.
We have laws to deal with domestic relations because a small minority, so I understand, of husbands or, indeed, wives abuse their position. We have laws dealing with all forms of commercial relationships. We have laws dealing with other

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important institutions, such as Churches. Why should it be assumed that there is no need to provide law to protect the small but important minority who can suffer from abuse? Why should it be assumed that trade union rules will never be contrary to natural justice? I can give an example: I understand on good authority that one trade union has in its rule book the rule that no member shall be allowed to leave except with the consent of the executive of the union. I am not a lawyer, but I would doubt whether it is really in accordance with natural justice that the executive of the union should be the body which is able to decide whether or not the member has permission to leave. In relations between the unions and the individual person, we believe safeguards are needed which, at present, are not in the Bill.
There is a question of relations inside the place of work. This is what is first thought of when people talk about industrial relations. I will refer only to two aspects: first, the code of practice. I am glad to say this has been saved from the Industrial Relations Act in another place. I believe that most of that which goes wrong inside the place of work is not so much due to malaise or bloody-minded-ness as to muddle and ignorance. Muddle and ignorance are the main devils in industrial relations. The code of practice is a considerable source of enlightenment to a large number of the smaller less well-informed employers who, in a murky kind of way and when they get round to it, want to do the right thing, but often they do not know what it is and they are badly in need of assistance.
In addition to the code of practice, I hope that the excellent work of the C.I.R. will be fully salvaged in the new set-up. I gather from what has gone on in another place that it is intended to transfer much of the work of the C.I.R. to the Conciliation and Arbitration Service which is to be set up under subsequent legislation. I hope that noble Lords will watch that, because that, by itself, is not an adequate safeguard that the work of the C.I.R. will in fact go on adequately.
The heart and core of the work of the C.I.R. has been to study and devise improved procedural systems. This may sound rather dull to your Lordships, but it is the absence of good procedural systems in large areas of industry which
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leads to the confusion, disputes and misunderstandings from which industry and, by connection, the community as a whole, suffer. That painstaking work of investigation, that informed and experienced work of building up better procedures inside industry, is something which was not done before the C.I.R. came into being. If it goes to the C.A.S., it is important to see that machinery exists so that cases in a sufficient number get to that service. When it was first set up it looked as if it was not going to get sufficient cases but, as the months went on, that situation improved and it was able to do the job that it was established to do. However, unless the flow of work, the references which went to the C.I.R. and the machinery is going to exist to ensure that they are going to come in sufficient numbers, then the C.I.R. might be put into the C.A.S., but the good people working there now will not stay. Unless there is adequate and proper work to do they will leave and use their abilities elsewhere, and quite rightly so.
Just to say that the work will be transferred to the C.A.S. is insufficient. The work is different from conciliation and arbitration; it is constructive work of a different order and it needs special provision to see that full advantage is taken of an extremely important new development set up by the previous Labour Government (as I think they are apt to for-pet) based on a recommendation of the Donovan Report. I greatly respect that Report, though I sometimes wonder whether we ought to quote it as if it was Holy Writ, as it has sometimes been referred to this afternoon. A second aspect of the work of the C.I.R. which I regard as of the greatest importance is the publications which it produces which educate the general public in the field of industrial relations in a way which the general public badly needs to be educated.
Then we have the third area: the question of the relation between the union and the community at large. I do not know whether the noble Lord, Lord Feather, who is going to speak after me, will say, as I have often heard him say in the past, "The trade union movement speak for the community, because after all they have 10,000 members, and 10,000 members have 10,000 wives, and 10,000 wives have 10,000 children and that makes 30

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million"—I beg your Lordships' pardon for speaking of thousands when I meant millions—"does it not?" But, my Lords, do not be deceived by that attractive argument. A trade union rightly and properly, when it conducts its affairs, is thinking about the interest of its members as producers. Its members put its officials into business to do just that, and when a trade union goes into negotiation I defy any trade unionist to say that the thought uppermost in its mind is: "What will be the effect of this settlement on the community at large?" The thought uppermost in its mind, quite rightly and properly, is: "What will the effect of this settlement be on my members?" —and one cannot have two top priorities. So if the noble Lord, Lord Feather, has the intention of saying that, may I respectfully suggest that he removes it from his speech.
The relation between the union and the community, as we all know, is one of the greatest importance. There is a minor and a major aspect in relation to this Bill with which I wish briefly to deal. The minor aspect—not that I regard it as unimportant, but minor in relation to the second point I wish to make—is the power that is given in this Bill, the licence to conduct commercial boycotts, to extend the immunity of strikers to strikes connected with the suppliers of people who are direct parties to the strike. When this happens the disruption spreads far wider and the people affected by the strike are people who can in no way influence the effect of that strike, or who are not in any sense parties to it. In my view, that is an extension of the immunity allowed in the trade dispute, which is both unnecessary and undesirable.
The final point I want to make in considering the relation of the union and the community has to do with the rule of law and the position of non-industrial disputes. I was delighted in reading the debate in the other place—delighted but not in the least surprised—to find that the Secretary of State and other speakers from the Government Benches asserted again and again: "Of course, the trade union is subject to law. Of course, there is no question, as some critics of the trade unions have tried to say, that the trade union is in any shape or form above the law." No responsible trade unionist I
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know would support the idea that the trade union is not subject to the rule of law. Of course, my Lords, there is a very small group of people who see the strike weapon and the trade union movement as part of a wider effort, based on a class analysis of the troubles of this country, to destroy the Parliamentary democracy and the democratic society in which we live. But this is not, I am certain, the view of the great mass of trade unionists, who see trade unions as a free and powerful entity inside a democratic State and who therefore fully accept, as the Secretary of State himself asserted, that of I course unions are subject to the rule of law. May I say that if the Secretary of I State had not said that, then I believe that that great Liberal, his father, would have risen from his grave to put him right.
However, if that is accepted, a very important matter is omitted from this Bill. The Bill defines "a trade dispute" and it defines the immunities that are given to trade unions in conduct of a trade dispute—and that is absolutely right. There has to be freedom to strike in a trade dispute. After all, it was my Party that in 1871, and again in 1906, affirmed and reaffirmed that absolutely crucial right. This Bill also says—and the Secretary of State in another place affirmed it—that those immunities do not extend to disputes which are not trade disputes, which are not industrial disputes: those immunities do not extend to strikes which are in effect political strikes. A political strike is in fact a challenge to the rule of law. The trade union movement and the Government cannot have it both ways. If they believe in the rule of law, if they accept that trade unions are subject to the rule of law, then it is not enough merely to say that political strikes do not carry exemptions that trade unions can claim in industrial strikes.
Political strikes lead to disruption; they lead to loss which somebody has to bear. Who should bear the cost, the inconvenience, that comes from the political strike? Is it not appropriate that, in support of the rule of law, it is necessary to say who is going to be responsible, who will meet the costs that arise from strikes of this order? I know it is open to the individual employer, if he is suffering the loss, to bring an action against

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individuals who have been in breach of contract in a strike of this kind. But we all know that that is not a reality. Employers do not, and in my view should not, bring actions against individual employees. In any case, they are men of straw in the technical sense, and what is the point of so doing? But responsibility must be pinned somewhere, and I ask the Government—and it would greatly strengthen this Bill and in my view greatly strengthen the Government in the eyes of the country if they came out against political strikes, which are a direct threat to the rule of law, the most serious threat which faces us at the time, far more serious than disruptions inside industry—to make quite clear that someone is to be held directly responsible when acts of that kind take place.
4.48 p.m.
LORD FEATHER: My Lords, I am conscious of course of the tradition that maiden speeches should be non-controversial. This puts me in some difficulty because industrial relations is, and has been, one of the controversial questions in this country in recent years. It is almost impossible for anyone to express an opinion without upsetting someone, somewhere. Therefore, I have to ask your Lordships, please, to give me a little bit of elbow room with this maiden speech so that I may speak, as I think this House would expect, from the basis of long experience and work in the trade union movement. But I will try to observe the traditional constraints of a maiden speech, despite the provocations in the previous two speeches—I am glad I have a script because otherwise I might wander off trailing the red-herring which the noble Baroness, Lady Seear, put out for me.
Let me say at the outset that I very much welcome this Bill. Its primary purpose is to repeal the Industrial Relations Act, 1971, which in its time represented an attempt, either gallant or ill-conceived according to one's view, to reform industrial relations. As your Lordships will know, I was among those who thought that the 1971 Act was ill-conceived, and I forecast repeatedly as the then General Secretary of the Trades Union Congress that it would cause many more difficulties than it would ever solve. This was because the Act was based on a crucial misunderstanding of the nature of
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industrial relations. This misunderstanding was the failure to recognise that, although the law played only a minor role in industrial relations prior to 1971, nevertheless there was in existence, despite the law's having only a minor role, a vigorous and well-developed system of rules, procedures and conventions. These had been established by custom and negotiation rather than by legislation, but they were, and are, very firmly entrenched, having developed over a period of many years.
We in the Trades Union Congress recognised that the arrangements in some industries and some companies were defective and in need of reform; and this was the view supported by Lord Donovan's Royal Commission. But we did not believe that it was either desirable or possible to set these arrangements aside or transform them overnight by legal means. This was the mistake which was made by the previous Government. Their legal rules clashed on some fundamental points with the customs of British industrial relations and I think, in the event, proved weaker than those customs. By way of example, I refer to the closed shop, post-entry and pre-entry which flourishes and covers about 5 million workers, despite the provisions of the Industrial Relations Act. The closed shop is a very strong tradition in some industries and trades, and the forces of tradition and loyalty in trade unions, as in many other British institutions, are very powerful indeed.
My Lords, it is no use saying that other countries have legalistic systems of industrial relations which seem to work and, therefore, the same thing should work in Britain. This does not follow. In most overseas countries the laws were enacted to allow the unions to become established in the first place—in fact, to protect them from employers. Both sides of industry then became used to settling differences through the law and, as has been illustrated by the operation of the Industrial Relations Act, this is simply not the British way. The most evident proof of this statement is that the vast majority of employers decided not to go anywhere near die National Industrial Relations court, and I am pleased that spokesmen of all the main political Parties, of the C.B.I. and of the trade union movement have agreed that the 1971 Act has failed.

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My Lords, besides repealing the 1971 Act, with the exception of the useful provisions on unfair dismissal, this Bill will broadly restore the framework of law which existed prior to 1971, although in a modernised and relevant form. It will once more put the onus for improving industrial relations firmly on the parties in industry, without the law confusing the issues. In Britain there is no substitute for voluntary negotiations between employers and unions about the problems they jointly face. Contrary to the impression of many people (including, if I may say so without being controversial, Members of your Lordships' House), both in this country and abroad many sectors of British industry resolve their problems jointly and peacefully, without fuss or open conflict. Indeed, it is my belief, based on a wide knowledge of the position in many other countries, that the British system of industrial relations is one of the best in the world. A look at international strike figures shows that many countries lose more working days through strikes, in proportion to the size of their labour force, than does this country. And our system is considerably more democratic than many foreign systems, often giving workers and management at establishment level and works level considerable control over pay and working conditions. So please let us not fall into the all-too-familiar tendency of feeling rather ashamed of our industrial relations. I believe that the British at present have a fetish for self-criticism. This willingness critically to assess ourselves can be a strength, so long as it is not lopsided; otherwise it can lead to cynicism and despondency, and it has produced a situation where British prestige abroad has suffered.
As I have already said, we do not have a particularly high incidence of strikes, but in all the world we have the best publicised strikes. I often wish that the Press, radio and television would take a more balanced view of the situation and equally publicise the many constructive things which go on every day in British industry. The truth is that the vast majority of employers and workpeople in the United Kingdom are able to solve any differences of view which arise without conflict. Of course, I do not pretend that our industrial relations are perfect. All institutions involving human beings
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are far from perfect. Neither am I complacent about the present situation. I believe that there are necessary improvements which both management and unions need to make, jointly and individually, and we all know that the economic situation is making things difficult at present. But this should not be a matter for despair, rather for determination on the part of the nation to roll up its sleeves and get stuck into the job of making improvements; and it would be encouraging to hear and read about the many successes notched up by British companies and industries. When criticism is constantly lopsided or constantly of a nagging nature, there is a danger that working people will stop listening to even the sensible things that the critics may say.
My Lords, I regret, among other things, the recent decision of the other House on a detail. Their decision was not to refund the money that unions lost because unregistered unions were unable to claim tax exemption on investment income spent for provident purposes. I am being very careful in that description. The previous Government apparently believed, when the 1971 Act was being introduced, that unregistered unions would be able to claim tax exemption by forming separate provident societies. The Trades Union Council took expert legal advice on this course of action and found that it was impracticable. As a result, the unions' provident funds have lost about £10 million since 1971. These provident funds are used only to help the members who are sick, the injured, the pensioners and widows. I think it is necessary to say that these funds are not used in any way to finance strikes or other forms of industrial action. There has never been a tax rebate on unions' general funds or strike funds. The present Government are trying to right a wrong which has been done and, incidentally, to implement the stated intention of the previous Government. Many workpeople will believe that the denial of this money by the other House is a pretty grubby kind of action.
My Lords, the Bill will not of itself lead to improvements in industrial relations but, unlike the Industrial Relations Act 1971, it will not encourage small disputes involving a handful of workers and an often eccentric employer to be elevated to the status of major conflicts with the trade union movement nationally. I

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believe that the new Bill, together with the other measures proposed by the Government, will lead to a better climate in industry in which the problems which exist can be tackled realistically and effectively. What is needed are sustained efforts on a voluntary basis by unions, employers and Government to reach agreement on procedures through which disputes can be effectively and fairly resolved, on payments systems which are soundly based and free from anomalies, and on reasonable guarantees about security of employment. I expect the proposed Conciliation and Arbitration Service to play an important part in these spheres.
The unions are ready and willing to play their part in securing the attainment of these objectives. The T.U.C. has drawn up and published sound advice, in the form of a guide to unions and management, about the steps they can take, individually and jointly, to improve industrial relations. The T.U.C. is also helping unions to improve collective bargaining machinery, some of which is unsuited to the requirements of industrial relations in a period of change. For example, it has developed industry committees, with the aim of helping to co-ordinate, at national level, the policies and activities of unions so far as relations with employers are concerned.
Of course, some people will say that the new Bill will tilt the industrial balance of power too much towards workpeople. It is true that trade unions are increasing their membership and are more influential than they were. However, the individual worker in the 1970s needs the protection of his union just as much as in the 1870s, or the 1930s, though the problems are of a different scale and nature. The fact is that mergers and takeovers are creating larger, richer and more powerful companies than ever existed before. Many of these companies now have greater financial resources than the entire national incomes of fair sized industrialised countries. Those that operate internationally—and most of them do—can switch resources and production between one country and another, and they are favourably placed to exploit tax differences. It is essential to make these companies more accountable, not only to trade unions nationally and internationally, but also to Governments—and Governments collectively. Therefore I hope that this House
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will speedily pass this Bill, which I firmly believe is essential to the improvement of British industrial relations.
5.0 p.m.
LORD GORE-BOOTH: My Lords, it gives me particular personal pleasure to be the one of your Lordships who finds himself in the position of being the first to welcome to this House the noble Lord, Lord Feather. He has dedicated almost countless years of what I would call "cheerful dedication" to the cause of trade unionism. That is intended to be a deeply felt compliment, in the sense that these matters which we discuss, which are so difficult, are at least better dealt with by someone of a cheerful disposition as well as great technical skill as they would be by someone of a sour or quarrelsome nature. When having dealings with the noble Lord I have always felt that he was always hoping and wanting to reach agreement over whatever we were discussing. I was grateful to him for that, even if we did not agree, but in addition I have a special personal reason for which I should now like to thank the noble Lord. This is that at times I think the most loyal trade union leader would admit that the trade union movement tends to lose sight of the fact that there are trade union movements elsewhere who like to be in touch with our own trade unionists and indeed sometimes to get help from them. When these times occurred the one person on whose shoulder I could always weep was Vic Feather, because the noble Lord always understood that there was a fellowship between trade unions here and trade unions abroad and that the maintenance of that fellowship was for the benefit, not just of the trade unions but of international relations.
My Lords, I have a very great diffidence in rising at this time, partly because I lack the great expertise which most noble Lords who will speak in this debate possess, but also because I am the first person to discuss this subject during the debate in our Legislature who is uncommitted to any Party or to either side. What I have to try to do—and I shall do it, I fear, not very successfully—is to try to reflect some of the ideas of the ordinary citizen about this controversy. I do not mean the ordinary professional citizen; I mean the ordinary citizen of

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any profession whom one may meet anywhere, and there are quite a lot of reactions to this situation which are common to people in all parts of the country and at all levels of society. I will try to do a little of that even if it causes me to concentrate, your Lordships may feel, a little superficially to some extent on public relations as well as on the technicalities of what happens.
Before I begin to do that may I reiterate what other noble Lords have said about our indebtedness to the "usual channels" for their heroic efforts to help us. I thought perhaps the noble Earl, Lord Gowrie, did not carry his sense of irony quite far enough; it is really an ironical situation that our Legislature should be discussing the very difficult problem of industrial disputes when deprived of information by an industrial dispute.
I do not wish to go back very far into history, and perhaps we may take for granted (as other speakers have taken for granted) that century in which the employers quite frankly used the law to render ineffective any bargaining power that their employees might have had. We can take that for granted and start with the 1971 law on which there is, I think, a little to be said. If one goes through that law again and for the moment leaves on one side—and I will come back to it later—the matter of enforceable law, one certainly has the feeling that this is not a union bashing document. I think the criticisms that have been levelled at it are the ones which have been heard in this debate already: that the Act tried to do too much in too great detail all at once, and that some of the provisions have simply not worked out to be practicable. Of course another irony which confronts us in this situation is that one of the sections in the Act which was intended to be liberal has in fact been the one which caused the most trouble. With hindsight if there was going to be registration at all it might have been better to make it for all and not seek to conciliate (in a way that did not work) the trade union side by making it optional and thereby creating a source of discord which occupied a great deal of professional and public time.
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But if I may proceed with my process of making no friends and influencing nobody on this Bill, I think the real fault in that context was wrong handling. For instance, there was a fixation on the part of the previous Government speakers to talk about wages, and if you insist upon talking of all remuneration that is relevant as "wages" you give the whole argument a kind of class content which it should not have. I do claim credit for having reminded your Lordships—possibly too sotto voce—that many wages now exceed many salaries, and I thought Mr. Wilson's previous Government showed much greater skill in this matter by constantly plugging the slogan of "prices and incomes". It is surely incomes that we should always be talking about if we wish to avoid prejudice.
To my mind, another thing that confused the atmosphere in those long debates was a tendency by the then Government to refer to the trade unions as a sort of unidentifiable mass. If there is anything that we have learned in the time since those debates, it is that some trade unions and some trade union leaders are different from others. I think it is better for me not to specify who is different from whom, but nonetheless this is extremely relevant to the question we are trying to solve.
Before going on to this Bill I should like to return to the point about enforceable law. There has been a great deal of rather superficial talk which simply amounts to saying that trade unions are of a special variety which should have a totality of contracts not subject to enforceable law. That is arguable; but the problem which is seldom raised in this context, is this: if you insist upon that doctrine in all its purity, you must also admit that you expose the situation to industrial discord without a certain "cushion" that enforceable law gives you. I do not come down on one side or the other on that point, but it really is not possible just to lay down as a dogma that enforceable law is intolerable. I say this because whenever I think or speak on this subject I always go back to what I think was the most moving speech I have heard in your Lordships' House, which was a speech made by the noble Baroness, Lady Burton of Coventry, in December, when she said in fact, "Why

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does all this always have to land on the ordinary person who is not directly concerned?"
I now come to the present Bill, and here again I am going to speak for a moment about appearances because they are very important. When the present Government came to power the Secretary of State for Employment informed us all that he was going to have a Bill ready by May 1. That was a good Party encouraging statement, but perhaps it was not understood what that meant to the person who gave the subject a few minutes' serious thought. What it meant telling us all was that whatever would be wrong with this Bill there would—and I crave your Lordships' indulgence—"be no damned impartiality about it". I felt at that time that this gave the Bill a bad send off for middle-of-the-road people. It was followed by the publication of the Bill, and that was followed by the appearance on the radio of the estimable Mr. Campbell Adamson, who has a place in industrial relations history, and who said: "Why could we not have had some consultation between the T.U.C. and the C.B.I. on this very important matter in which, of course, we are deeply concerned?" He had reason to say that, because during the discontents of the winter there were times when the C.B.I. and T.U.C. seemed to me much closer to each other than either was with the Government. I felt Mr. Adamson at that moment was absolutely right. I am confirmed in this view by remarks made by the Secretary of State later in the Second Reading of the present Bill when he said that there would be further proposals, further ideas, further Bills, and consultation with the C.B.I. and T.U.C. Why the differentiation? No doubt haste, but that is not a good excuse. The middle-of-the-road public felt that in this way this argument had been distorted to an unreasonable and improper extent.
Obviously it is not for me to make a full critique of the Bill, but I should like to present one or two points rather hastily which seem to me to be important. I have noticed in the draft of the Bill that there is an abolition of Clauses 138 to 145 in the Act which deal with what I think is called officially "deferment of industrial action", known more popularly as the cooling-off period. I should have thought, and many think, that this
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is a desirable feature of any Industrial Relations Act. It is one more effort to prevent the worst happening. I am aware that this did not succeed in the interim period between 1971 and now. The case of failure was, I think, due to the Government in the end not choosing to use this facility. But, after all, one cannot call something a failure at its first attempt, as though Thomas Edison had called his first light bulb a failure. One must remember that other countries have this provision and have made successful use of it. If it is said that this provision is no use, one is saying that we are not capable of introducing and working a useful provision which other countries can. I do not think we want to say that, but if we leave it out, that is what we shall have to say.
My Lords, I would join with the noble Baroness, Lady Seear, and, incidentally, with several supporters of the Government in another place, in advocating the retention of the Commission on Industrial Relations, the C.I.R. I noticed many honourable Members put this forward. I must say I found the counter-argument very weak; it seemed simply to be: "Oh, this had too much to do with the Industrial Relations Court, and we cannot think of retaining it. "I do not think that that argument of guilt by association is in the least convincing. I cannot support that as ably as did the noble Baroness, and simply leave that proposition as it is, repeating my support of what the noble Baroness said.
My Lords, at this time, the Industrial Relations Court has no friends left. None the less, I think the balance of argument demands that I say one thing about its operation. No doubt the noble Lord, Lord Feather, is right in saying that many people purposely avoided it, but the fact remains that on the average the Industrial Relations Court dealt with cases at the rate of one a day during this period. Even more importantly and impressively, it dealt with 138 cases of unfair industrial practice. Out of the 138, 100 were settled without the court having to make a decision at all, either by settlement or by withdrawal. The court was not wasting its time, or ours. It may have been the wrong way to do things, but I think it is time someone—and I have nothing to lose by this—said a good word for the Industrial Relations Court, more especially as

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things were said, which should not have been, about the chairman of that court. I must say I would like to hear from the noble and learned Lord who sits on the Woolsack, something in his eloquent way that would redress that matter. I realise the learned and noble Lord is in a difficult position. If he cannot say anything he is still in a difficult position.
There is the question of what we should now do, on which I feel I should say something to your Lordships, having made these criticisms. These subjects are so difficult. They caused such difficulty to the previous Government. They have been dealt with in part and in such haste by the present Government that further examination of a sober and as far as possible independent nature is requisite. I feel very much as did the noble Baroness, Lady Seear, that it is really not good enough to present us with the Bill saying, "Oh well, the other instalments will be all right". In the French sense, that is not serious. If it were not for the strange events that go on all round us in these buildings, I should probably have left it at that, but with opinion in the Legislature so divided, with opinion in the country so worried, there really is a case for further examination of some of these very difficult questions.
The most difficult question is perhaps the one that has been mentioned, that of the closed shop. There seem to be decisive arguments on both sides. I can see that Equity has every reason to be an exclusive union. I have read about the worries of many journalists if the I.U.J. should become a closed shop, and so on. This is a difficult question indeed. In my opinion it deserves further investigation not just by the Government of the day, but by individuals and organisations who have now had the experience post-Donovan, the experience of the 1971 Act and the experience of debates on this Act. I express the hope that thought be given to further examination, not Departmentally, but on a broader scale, largely in private, of the problems and difficulties that exist still in producing legislation which is both practical and just.
I would make some final remarks of a more general kind. I think—and this has been suggested already—that there is still too much in Government thinking of the
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atmosphere of the cloth cap versus the stiff collar. Concepts of work are changing these days. Under the Marxist/Victorian vocabulary with which we are fettered, many people are "workers" (I think the definition in the new Bill is probably acceptable), but under that definition I am not a "worker", I just work. I feel that this is very out of date and this feeling proceeds from all sorts of reasons. One of these which we have to bear in mind is that a person who is a "worker" of yesterday may be the administrator of to-day. This happens all the time in the Civil Service. One day you may be arguing for the staff, in a few months' time you may be arguing for the administration against the staff. We must realise we are no longer in the period of the capitalist boss and the cloth cap worker. We are I in a period, once described by the noble Lord, Lord George-Brown, and by Professor Galbraith, of management and the work force, the employees. There is a shifting between the two which really requires a new kind of thought altogether.
Finally, we are trying to make rules. Of course, we must have the best possible, but the best possible rules are no use unless we have a reasonable morale in this country. Many foreigners have said to me, and I have felt it myself, that this has been a country where one could rely on people and where people, even in bad times, helped each other with a smile, even if it was a smile of resignation. Living in a big city we are going through a bad spell of unreliability, of people of all states of society saying they will do things and then not doing them, and what I would only call "service with a scowl". Accompanying any legislation which we may ultimately agree, the country has to look at itself in a mirror and say to itself that really it must do a bit better with its neighbour than it has been doing lately. I say this not in order to preach a sermon, but because I believe we are capable of this, but also believe it is indispensable to the ultimate legislation that we shall have covering this difficult question.
5.20 p.m.
LORD HOUGHTON OF SOWERBY: My Lords, I hope you will forgive the presumption of speaking in debate for the first time so soon after my introduction to your Lordships' House last Wednesday. But, like my noble friend

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Lord Feather, I have been very closely connected with the events leading up to the introduction of this Bill, and, also like him, I have had long experience in the trade union movement. For many years I was Secretary of the Inland Revenue Staff Federation, whose members keep up a regular correspondence with noble Lords on both sides of the House. Our friends may neglect us and even betray us, but the Inland Revenue never. I was a member of the General Council of the Trades Union Congress, which in my generation was perhaps a little wiser than it has been of late; a difficult body to persuade, but the repository of great experience and judgment in trade union affairs. And then, more latterly, I have been Chairman of the Parliamentary Labour Party, which is a more pleasurable occupation than your Lordships may have been led to believe.
I think it is necessary, my Lords, to appreciate how much damage this Bill sets out to repair. We must face this, I think, because this Bill is to remedy one of the worst mistakes of the last Administration. I think it is common ground that the Industrial Relations Act 1971, which this Bill repeals, did great harm to relations between the Government and the trade unions. And had the last Administration realised in 1971 how much in need they would be of the good will and co-operation of the trade union movement, surely they would have avoided antagonising them so bitterly and so soon after coming to power.
The trouble was that the last Administration failed to profit by the experience of their predecessor. Had they not heard of a White Paper called In Place of Strife and what happened to it? Were they unaware that the disenchantment of the trade unions with the Labour Government's industrial policies probably contributed to the Labour defeat of 1970? But instead of pausing to learn the lessons of those events, Ministers simply accused the Labour Government of running away and went blindly down the same path to disaster. I believe that the nation has suffered grievously from that mistake.
While the Industrial Relations Bill was going through Parliament, we in the Parliamentary Labour Party were trying hard to regain the confidence of the trade union movement. To begin with,
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we were held almost at arm's length by our friends in the trade unions until the follies of the Conservative Government and time healed the breach. Then we had tripartite talks between the T.U.C., the National Executive and the Parliamentary Labour Party to attempt to reach some understanding, some firm compact, which might avoid misunderstandings in a future Labour Government and provide a firm basis for the confidence of the people. A Bill to repeal the Industrial Relations Act 1971 was first on the agenda, and, as the noble Earl, Lord Gowrie, said, the repeal of the 1971 Act is central to the social compact with the trade unions.
I was present, along with the noble Lord, Lord Feather, at the meetings of this liaison committee over a very long period of time. The natural wariness of the Trades Union Congress of the intentions of a future Labour Government was aggravated by the deep resentment which the Conservative Government had created. So, my Lords, the Trades Union Congress was in no mood for concessions. They wanted an unconditional pledge of repeal of the 1971 Act, and if that could be done by a two-clause Bill so much the better. That was their view. But Acts of Parliament are not repealed quite so simply as that. The 1971 Act was not wholly bad, and some of the better parts of it require these long transitional provisions in the Bill, relating particularly to unfair dismissals. Naturally, when the Trades Union Congress found that a short sharp Bill was not possible, they wished to press for reforms in other matters which they believed had constituted impediments in the way of legitimate trade union activity.
There are several points in the Bill, and some not in the Bill, which the Trades Union Congress were pursuing. Picketing was one, particularly the problems which had arisen about stopping a moving vehicle on the highway. There is no removal of that doubt or difficulty in the present Bill, though the Secretary of State promises that it shall be considered later on. Another point was that covered by Clause 10, the restrictions on legal liability for persuading persons not directly involved in an industrial dispute to break their contracts; and there are other immunities provide for in Clause 10. These were very difficult matters but they came

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forward, and they come forward in this Bill, because the T.U.C. felt that doubts and difficulties might well be removed in the earlier legislation rather than left till later.
One of the things that I personally regret is not in the Bill is provision for appeal to an independent tribunal by a trade union member who feels serious injustice at being excluded from, or expelled from, a trade union. The Donovan Commission recommended that something should be provided for an independent appeal in circumstances of this kind, and indeed a provision to this effect appeared in the Labour Government's White Paper In Place of Strife, I hope that the Government will consider in due season the wider issues of human rights in connection with disciplinary matters, not only in unions but in professional bodies. I believe that nowadays it is unacceptable that any person's livelihood should be taken from him by the decision of an executive committee or council or disciplinary body of a professional institution, without a right of appeal to an independent tribunal. I hope that that will be seriously considered in future, and indeed the Secretary of State has promised that it shall be considered in relation to a possible code of practice for unions which may come in a later Bill.
But, my Lords, what a pity that these talks with the T.U.C. were made more difficult by the resentment aroused by the 1971 Act. Indeed, we now have such prejudice against many of the terms used in the Industrial Relations Act 1971 that we appear to have compiled a glossary of forbidden terms. It is not "industrial relations" any longer; it is "labour relations". "Registration", which we have had for 100 years, is now taboo; it has gathered so much smear as a result of the 1971 Act that it cannot now, apparently, be used with approval in the trade union movement. We are not to have a "register"; we are to have a "list". So unions will be listed, at least temporarily, and not registered.
Whatever critics of this Bill may say, I think that this Bill would not have been necessary at all but for the Industrial Relations Act 1971. As things are, the passage of the Bill is essential to the Government's economic policy, and
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without the Bill the social compact, still precarious in my judgment, would collapse. We simply had to reach agreement with the T.U.C., and the Bill reveals the give and take—more give, I admit, than take—in order to reach that agreement. I am sure that many of my noble friends share with me the regret that time and circumstance have prevented a more balanced and constructive Bill from being before us to-day. What we need in Britain is not the narrow scope and spirit of retaliation of this Bill, but the foundations of closer co-operation and active partnership of both sides of industry. It is the basis for a new start that we need so badly to-day.
I am glad that Mr. Heath has said that a future Conservative Government would not seek to reintroduce the Act of 1971. That, I think, is good; it relieves a great deal of the tension for the future. It will enable the unions and the Government to go much further than the demolition and repair job which is in the Bill. My profound conviction is that farseeing and courageous leadership in the unions could be matched under the present Goverment with some vision and hope for the future, and that is what we want to see. In my view the alternative is a depressing prospect which will sicken and exasperate the people, and quicken the loss of confidence in existing institutions, including the unions themselves, to cope with the nation's problems. It is from that point that we have to look to the future, dispose of the 1971 Act in this Bill, and then start on the constructive work of to-morrow.
LORD MAELOR: My Lords, I wish to raise a point of order. The Motion before the House is that we shall give a Second Reading to this Bill. This Bill has been withdrawn in the House of Commons.
LORD HAILSHAM OF SAINT MARYLEBONE: My Lords. I am not interrupting, nor am I seeking to speak on the Question, but I understand, from rather informal sources, that the noble Lord is not quite right. A message will in due course be received from another place, and I shall pose a question to the Leader of the House which I hope will enable him to explain what is in fact probably convenient to your Lordships. But, in the meantime, I respectfully suggest—and I do not see the Leader of the

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House here at the moment—that we continue with the debate because nothing has been officially brought to our notice.
LORD STRABOLGI: My Lords, I can confirm that my noble friend the Leader of the House will be making a Statement when he is in a position to do so.
5.34 p.m.
LORD HANKEY: My Lords, I should not like anything to interfere with the great pleasure it gives me to welcome the noble Lord, Lord Houghton of Sowerby, on making his maiden speech. He is a most distinguished trade unionist, a most distinguished Parliamentarian, he has enormous experience, and I think that he is a very great addition to your Lordships' House. We welcome him unreservedly, and we hope that we shall often hear him again. I must also say a word about the noble Lord, Lord Feather. Vic Feather's name and face, if I may say so, are familiar in every home in the land. For years we have admired his pawky humour, and his absolutely monumental common-sense in dealing with the most difficult and controversial issues. He has to-day shown a great capacity to deal uncontroversially with a very controversial subject. We shall hope to hear the noble Lord very often. I should like to say, as I have said before, that the presence of the General Secretary, or the former General Secretary, of the Trades Union Congress in this House, as a permanent feature of our debates, would add very much to the weight and authority of the opinions that we generate.
We have had a very interesting debate. I listened with particular interest to what the noble Baroness, Lady Seear, had to say. I thought that there was tremendous force in her fundamental analysis, and I thought that she made a great many good points. I shall not repeat them.
My basic objection to this Bill is that it seems to me almost backward-looking and retrogressive. I say, "almost" because mercifully it preserves the Code of Practice. Many of us have urged for years that our legislation ought to recognise and provide for the very valuable constructive function which trade unions ought to perform, and do perform, in our great society by assisting in the settlement of disputes and difficulties by collective action, and by giving our workpeople
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the assurance that their interests are reliably cared for and well protected and looked after. There was an admirable statement of this in Section 1 of the 1971 Act. As my noble friend Lord Gore-Booth has remarked, anything in the 1971 Act is now taboo. I think that if you look at the crossed-out passage at the head of Schedule 1 (the old paragraph 1 of Schedule 1), an admirable redraft of that section was produced in another place and, for some reason which, in the absence of Hansard, I have not been able to ascertain, was crossed out. I think that your Lordships should give serious consideration to putting it back, preferably in the body of the Bill itself, but, if not, in the place where it is printed (if that is the right term) at the top of Schedule 1.
If you look at Clause 2(5) of the Bill, you will see the strong implication that we are to go back to the traditional basis of British law which is, if I may summarise it in very lay terms, that trade unions should be able to commit conspiracy or act in restraint of trade with impunity. So much more that is constructive should really be said in the Bill. Speaking strictly from these Benches, I deeply deplore the traditionalist conservatism of the Labour Party's proposals which are before us to-day. The Bill is, for that reason, almost wholly retrogressive. For goodness sake! let us raise our eyes and sights to better things and move on from 1871, 1875, 1906 and the other provisions before and since that we have suffered for so many years, and move into the second half of the twentieth century.
My second objection to the Bill lies in the almost total immunity granted to trade unions to organise strikes and picketing, and break contracts at any time, anywhere and on any grounds so long as it is done in contemplation or in furtherance of a trade dispute—and, if I interpret the text correctly, so long as no personal injury is involved. I am referring to Clauses 10 to 14, and I hope that every noble Lord here has read that text with the utmost care.
Clause 15 also makes it clear that collective agreements are not enforceable in terms which, taken with Clauses 10 to 14, almost amount to saying that they need not be kept or adhered to. Under these provisions anyone from any industry

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can go on strike at any time in alleged furtherance of any trade dispute anywhere—in the mines, docks, Wales, Scotland, an oil rig, or even because of events in Zambia, Chile, or Ruritania. Just look, my Lords, at the definition of a trade dispute in Section 26, especially subsection (3), which states:
"There is a trade dispute for the purposes of this Act even though it relates to matters occurring outside Great Britain."
What a plum for the trouble-makers! The Government, the T.U.C. and the courts will no longer be able to protect the interests of the community in any way. I cannot think how all this stuff got through the other place. My Lords, we just have to put it right here. The implications are much too serious for our country. I should like to explain why.
For years we have been losing our hold on markets, both at home and abroad. One of the reasons is that in so many cases we do not fulfil our delivery commitments. I have spent many years of my life promoting British exports. I still travel extensively. I know what I am talking about. I have statistics relating to the Society of Motor Manufacturers and Traders. If noble Lords want to challenge what I am saying I am prepared to produce them, but at this late hour I should prefer not to do so. The reason given for the failure to fulfil commitments is almost invariably strikes, go-slows or other problems of our industrial relations which I think, with all due deference to the noble Lord, Lord Feather, are poor by modern standards. The damaging strikes are not necessarily in the exporting industry. They may be in components, in transport or in raw materials like coal or steel, in electric power, the docks or even ships. Please do not think, my Lords, that I just blame our unions for this—I do not. I believe that management must carry a considerable share of the blame. So, too, must successive Governments for allowing degrees of inflation guaranteed to wreck almost any system of industrial relations. You cannot have good industrial relations without inflation compensation. However, I will not say more about that now.
Referring to what my noble friend Lord Gore-Booth said, I think a good deal of the unpopularity of the 1971
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Act in practice derives from the fact that so much stress was laid on incomes policies at a time of inflation. The most offensive thing you can do to a man is to restrict his income and his earning power I at a time of rising prices. It has caused immense trouble in our community. Of course you must allow strikes in order to put that right. What else can a working man do? It is fair to recognise that. Thiolicy of restricting incomes has been carried to a point where it has brought the 1971 Act into a state of disrepute, which, I agree with my noble friend Lord Gore-Booth, it did not really merit.
But the point I wish to make and to drive home with all the emphasis I can, is that unless we have the right legislative framework neither unions, management, government nor anyone else can hope to produce reasonably happy and co-operative industrial relations, or even to protect the interests of workers and of the industries they work in. Our legislative framework, I previously based on the Trade Disputes Act 1906, and on other Acts before and since, has over the years proved disastrous. We have fallen years behind the successful countries, both in the sensible co-operative organisation of industrial relations and in the settlement of disputes, and behind, in consequence, in industrial progress and in investment. Our standards of wages and salaries are, by European standards, deplorable.
I do not wonder that our workpeople are discontented. They are right to be. Yet every Government tells us that to press for more would be inflationary. Only Italy and a few others are now below us in the Common Market in income per head. Why have we reached that state? It is because our production is so poor and our sales effort rendered I quite ineffective. Do you wonder that; our investment rate is one of the lowest in the O.E.C.D.? I entirely agree with the T.U.C. that it is essential to get the investment rate up. But if you cannot get it up without better productivity and better profits—and now the Soviet Union I also attaches importance to profits—we cannot go forward. Last year and the year before we had to import motor cars to meet home demand because of lost production. This year we have suffered the three-day week. So do you wonder,

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my Lords, that our balance of payments position is so bad?
Of course, it is high time to recognise that the 1971 Act was not by itself the correct answer. At the time, I said that it was only a step in the right direction. Personally, I think we could have used it to much better effect. The 1971 Act had one vital defect, however. Whereas the Swedish, German and many other systems run with the co-operation of the trade unions, our own reform had to be done over their dead bodies. I do not altogether blame the Conservative Government for this, because so far as I could ever find out the T.U.C., unfortunately, could not reach agreement on any useful reforms which could be accepted. Evidently, it cannot do so now or we would not have what I think is this truly pathetic, ultra Left Wing document which can only serve to complete the ruin of our country.
In making that alarming statement I have chosen my words carefully. I mean exactly what I say. If agreements have no sanctity whatever, either as to substance or procedure, how can any trade union leader or committee retain control of the situation? Anyone who wants to cause local trouble can do so. I do not see what arguments our many good and constructive trade union leaders—and we have a great many in this country—can use. I cannot recall any case of a trade union member or branch being effectively disciplined, except for registering under the 1971 Act in accordance with that law. The leaders are now bound to lose all control of the situation, if they ever had any. I am much in favour of the great leaders of our trade unions having real control. I cannot see that they will have it under the new Bill.
I have fervently hoped and prayed that under the Labour Government the Social Compact might really come to mean something and change the situation. Under this Bill, I am sure that it will have no more chance than the proverbial snowball in Hell. In my view, when we amend the Bill the law must make it clear that agreements are to be kept until they expire and are not to be broken. We must face the fact that if procedural agreements at least are not enforced, there is no chance of substantive collective agreements running without disturbance, or of our industries fulfilling their
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commitments, or of our workers getting proper salaries and wages.
I want to say more about procedural agreements. How can you expect the trade union leadership to get procedural or other agreements respected (and, after all, they are the ones who make them, although we must credit them with the intention to keep them) if the State pays our tax-free funds and supplementary benefits to strikers and their families, regardless of whether the proper procedures have been broken? It is futile. I put forward a serious, constructive proposal that a striker and his family should be able to enjoy these benefits only if a certificate is given by an industrial tribunal to show that the strike is constitutional, and that the proper procedural agreements have been observed. That would give real power and control to the unions. In the years of "Women's Lib" it would also mobilise our very sensible women on the side of better industrial relations. Please do not think, my Lords, that a small matter like this is unimportant or ineffective. It does not involve any punishment, fines or anything like that.
Last winter I remember the colossal trouble caused to commuters by the ASLEF work to rule. After about three weeks of major disruption and a real trauma to the commuters, the Chairman of British Rail announced that the railways had now lost over £12 million. Twelve million pounds, my Lords! They were now fed up, he said, and he would no longer pay any driver who refused to take a train out for inadequate reasons. From that moment I can certify as a commuter that there were plenty of trains by which to travel. But could there be a more damning commentary on railway management to leave it so late? And surely we should now profit from that lesson. So I shall press my proposal on supplementary benefits, although I know quite well it is rather revolutionary, because I believe it would be constructive and helpful.
My Lords, I have always hoped that the Labour Party or the T.U.C. would come up with the proposals on conciliation and arbitration that they have so often talked about. In my opinion they are absolutely essential for the development of better industrial relations. I shall be very sorry indeed to see this Bill go through without those proposals coming forward. I should

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have been very happy to see them incorporated in this Bill. I think that better participation of workers in industry is at least of equal importance, but I would not want to see that come about against the background of this Bill as it now stands.
In conclusion, my Lords, I want to express real alarm at the effect this Bill will have if it is not radically amended. We shall have innumerable strikes on grounds quite irrelevant to the industries affected. The universal dissatisfaction at our unchecked inflation makes trouble inevitable anyway, but this Bill makes it easy and indeed legitimate for communists and the extreme Left to exploit disputes. We shall again have coachloads of trouble-makers from Manchester, Liverpool or North London trying to envenom local situations as they did in Shropshire, in Scunthorpe and elsewhere. The Labour Party and the Government as a whole surely do not wish for this: I am absolutely certain they do not. I think they must beware of becoming a Trojan Horse for the roughs and rowdies and for the extreme Left. The electorate would be deeply shocked if that happened, and they would be right.
My Lords, speaking from these Benches, I say with total conviction and without fear of contradiction that our countrymen are completely fed up with confrontation politics, both in these matters and in others, and with to-ing and fro-ing in high places. This Bill represents a swing to one extreme. It would be ridiculous if it were not dangerously harmful. Let us in this House try hard to amend it, so that it will become a sensible middle-of-the-road Bill that can be made to work, even if the extreme Left and the extreme Right do not like the result. My Lords, let us hog the middle of the road. No other body in the United Kingdom can do this. We have as Members of our House so many distinguished lawyers, distinguished industrialists and distinguished trade unionists, including now also the noble Lords, Lord Houghton and Lord Feather, that we should be in an unrivalled position to do this. I think our House would indeed thereby earn the thanks and the gratitude of our great community.

BUSINESS STATEMENT
5.54 p.m.
LORD SHEPHERD: My Lords, with the permission of your Lordships' House, I wish to make a Business Statement. As some noble Lords may know, the Commons have sent a Message to your Lordships' House asking that we should return the Trade Union and Labour Relations Bill to them for further consideration. I would propose that this Message should be taken into consideration at the conclusion of our Second Reading debate to-day and before the Question on the Second Reading is put. I understand that if we return the Bill to the Commons they may consider it further to-morrow, in which case, of course, the Bill will be then returned to us. The Question on the Bill will be put at some stage after it has been returned, I hope on Thursday. My Lords, I hope that this course commends itself to your Lordships' House.
LORD WIGG: My Lords, before the House passes this, could we know something of the circumstances? What are the precedents? I looked up the Record, and there is a precedent on August 1, 1972, but this is related to minor printing errors. In this case the Bill has been passed by the House of Commons, and the Motion now before this House is to consider this Bill on Second Reading. Are we now being asked, just by your leave, to bring these proceedings to an end, or to go through the charade of a debate until all the list of speakers has been exhausted, and does the Leader of the House then propose to get up and ask that the Bill be sent back merely because the other place has demanded it? Is that the independence of the Second Chamber? I wish the Leader of the House would give the House some guidance on this. After all, this is his job. The Statement has now been made. Is it debatable? Is the Motion that he puts before the House debatable? And what is going to happen to the Motion for Second Reading that is now before the House? Is that going to be allowed to lapse? So the questions I would ask are: first of all, can we know about precedents—not precedents concerning printing errors, but substantive precedents—for the guidance of the House? Secondly,

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at what point can the House discuss this matter?
LORD SHEPHERD: My Lords, I am sure my noble friend will appreciate that, as Leader of the House, I should seek to do what, after consultation, I feel is in the interests of your Lordships' House. I have just made a Business Statement. I am never quite clear whether such a Statement is debatable. Sometimes, of course, extensive questioning leads into what appears to be a debate; but I think that in practice and by custom a Business Statement such as the one I have just made is not debatable.
My Lords, I would however say to my noble friend that the House is not yet aware of the Message. I hope the House will accept my advice that we consider that Message at the end of our Second Reading debate. Then it will be for the House to decide whether it should respond to the request of the other Chamber. There is no automatic reaction from this House; it is for this House to consider. I can only say to my noble friend that there will be a Motion in order that we can debate this issue, and certainly my noble friend will then have a full opportunity to deploy his views on the matter.
LORD WINDLESHAM: My Lords, if I might have the leave of the House to add a word, I think I would support what the noble Lord the Leader of the House has said. We are feeling our way here; the procedure is very loose. What we normally do is to act with common sense. What the Leader of the House has proposed is that we should discuss if we wish to do so—and the noble Lord, Lord Wigg, may well wish to do so—the reasons lying behind this, the precedents and advice on what Standing Orders have to say to us, at the conclusion of our debate. We are in the middle of a Second Reading debate, and I would advise your Lordships in all parts of the House to accept what the Leader of the House has said and to debate the matter further, if we wish to do so, after the Lord Chancellor has concluded the Second Reading debate.
LORD BYERS: My Lords, I should like to support this view, because the British Constitution is a flexible one. But may I say how gratifying it is to hear the noble Lord, Lord Wigg, plead for
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the independence of this Chamber? It really is magnificent.

TRADE UNION AND LABOUR RELATIONS BILL
5.58 p.m.
Debate resumed.
LORD SHINWELL: My Lords, it is remarkable, I will not venture to say significant, that this contretemps, this incident, this intrusion into our normal procedure in debates, should have ocurred before it was known to your Lordships that I was about to address the House. And the fact that my noble friend—if I can indeed now call him a friend—Lord Wigg should be associated with the saboteurs comes, I must confess, as a very great surprise and disappointment. But, my Lords, leaving aside the purpose of the Bill now before your Lordships' House, at any rate for the moment, I should like to direct the attention of your Lordships to some quite interesting features of this debate.
For example, there is the absence from the debate of the noble Lord who indeed is the villain of the piece. I refer to the noble Lord, Lord Drumalbyn. Where, oh where, has he gone? Noble Lords who were associated with the debates in 1971 will recall the late nights lasting sometimes almost through the night, Committee stage after Committee stage, speeches illuminating and otherwise. I ventured to make so many speeches myself that the Press actually took notice of them. They will remember all the fuss, all the confusion, all the disturbance and the turbulence that there was then and here we are back to square one. When I listened to the eloquent speech delivered with such refinement by the noble Earl, Lord Gowrie—most of it had nothing to do with the debate at all, but it sounded very pleasant though, as we know, fine words butter no parsnips—I recalled at once those well-known lines from Omar Khayyám,
"Myself when young did eagerly frequent Doctor and Saint and heard great Argument About it and about: and evermore Came out by the same Door as in I went."
That is the essence of the speech delivered by the noble Earl. "She didn't say, Yes. She didn't say, No." We dislike the Bill, we have to amend it. Otherwise, there will be another cataclysm in the

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country and we cannot afford that "—the Conservatives have been responsible for so many in the past. Then he wondered whether it was not a bad Bill after all—-with reservations and qualifications and amendments which of course would end the Bill anyhow. This is what we got. But where was the noble Lord, Lord Drumalbyn? Is it not an extraordinary feature, my Lords, that the noble Lord is not here though he was responsible night after night, day after day, hour after hour, minute after minute for seeking to convince your Lordships that unless the 1971 Bill was accepted by your Lordships with a huge majority, as it was—they all came in; they had not heard the speeches, but they came in as usual at the end, to vote—the trade unions would dominate the Labour Party, not that that would matter very much to the Conservatives, and would dominate the country? This is what they argued, and now they come along—including Mr. Heath, whose integrity I do not doubt for a moment, and whose honesty of purpose is obvious—and say, "No more of this nonsense". The noble Earl, Lord Gowrie, nearly went to that length himself, but not quite.
My Lords, other features of the debate were distinctive in character. There were the maiden speeches of my noble friend Lord Feather, whom I have known for many years as the chief of the Trades Union Congress General Council, laying down trade union law and having no nonsense about it—and he made an excellent speech this afternoon—and my noble friend Lord Houghton, who occupied a position which I adorned myself; that of Chairman of the Parliamentary Labour Party. We both knew what that meant. We had to suffer a great deal but we bore it with fortitude, which is customary with us. I congratulate them both and, naturally, I should like to hear them again because they both made constructive speeches; in contrast, if I may dare say so, to the noble Lord, Lord Hankey, who was most aggressive.
I have never heard him so aggressive. He was in a real fighting mood and he would tear the trade unions to bits if he had the opportunity. If only to embellish and embroider his observations, he brought in inflation and even something about the Common Market. I do
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not know how that managed to creep in, though, indeed, we had other speeches, including that of the noble Baroness, Lady Seear—to whose speeches we always like to listen—who this afternoon gave us a philosophical dissertation about human relations and all the rest of it, which had really nothing at all to do with the Bill, particularly when it came to the subject of inflation. If any Member of your Lordships' House really believes that inflation in this country is attributable to the demands of the trade unionists for higher wages, he is making a mistake. If any noble Lords want an authority on this subject, let them ask Mr. Enoch Powell. We should disabuse the minds of everybody about that. It bears some relation to inflation, but it is not the primary cause and we know it. Why bring it in, time and again, in a debate of this character? Anyhow, this is not an economic debate. But perhaps the most significant and outstanding feature of the debate so far is the fact that the noble Earl, Lord Gowrie, did not stand up to apologise for the misdeeds and misadventures and misdemeanours of the Conservative Government in 1971 when introducing the old Bill.
THE EARL OF GOWRIE: My Lords, perhaps to-morrow the noble Lord and I could go into conclave. My impression was that I was earnestly trying to give it to everybody in the neck.
LORD SHINWELL: Everybody to the noble Earl's taste, I agree, but, my Lords, why should I enter into a confrontation with him? We will set that aside. What is the purpose of this legislation?
BARONESS SEEAR: My Lords, I am sure that I said a great many things which the noble Lord did not like, but as a matter of fact he will see if he looks in Hansard that I never mentioned the word "inflation" once.
LORD SHINWELL: My Lords, I am sorry that the noble Baroness objects to what I said, because I really thought that she spoke with her customary eloquence and I congratulated her, but now she rails at me. Could we now come to the purpose of the legislation? What is it all about?—simply this. I thought that my noble friend Lord Houghton touched the point admirably. We want to repeal the

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old legislation. That is all. Does anybody really suppose that if the Bill goes through, as no doubt it will even with some reservations, qualifications and Amendments, it will solve the problem of industrial relations? Of course it will not. We have a long way to go.
We ought not to neglect the history of this business. I happen to be well acquainted with that. I recall, before the First World War, a whole series of disputes starting in 1911. The seamen, then the dockers, then the transport workers, then everybody else were engaged in disputes and, had it not been for the outbreak of war in 1914, we should have had a real general strike. Indeed, one can go back further into history. When we talk about trade union disruption and turbulence, let us consider the history of the problem. Four years after I was born, in 1888, there was a great strike in the East End of London and it eventually spread to other ports. Why did it occur? The dockers demanded sixpence an hour. It was the "tanner an hour" strike. Lord Devonport was the boss of the docks and he would have nothing to do with it. He said that it would be destructive of the whole system to give them sixpence an hour. They were getting threepence and fourpence an hour for casual labour. We can go back a long time. There is a history about this.
Let me give your Lordships one example of the kind of argument which has recently been used in connection with this struggle. Take, my Lords, the criticism of my right honourable friend Mr. Michael Foot, because he ventured to indulge in some criticism of Sir John Donaldson. I am sorry that the noble and learned Lord, Lord Hailsham of Saint Marylebone, is not present because if anybody invokes the law it is the noble and learned Lord. Why all the fuss about that? I have been indulging in a little research and for the purposes of accuracy I should like the permission of your Lordships' House to quote. As your Lordships know I never use any papers. I know that sometimes impromptu speeches are not worth the paper they are written on.
What did I discover on the question of criticism of judges? When in 1911—a long time ago—a Bill was introduced in the House of Commons to permit unions to use their funds for political purposes
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Winston Churchill made a formidable attack on the judiciary. He was then Home Secretary. I know the exact date when the statement was made, it was May 13. He deplored the interminable litigation to which trade unions had been subjected in the past few years and he claimed that it had not been of service to the unions or the courts to bring them into contact with one another. He went on to say that it is impossible to pretend that the courts command general confidence. On the contrary, they do not, and a very large proportion of the population have been led to the opinion they are—unconsciously no doubt—biased.
This remark of Winston Churchill in another place led to storms of protest in the House and to demands for withdrawal. But Churchill refused to withdraw. "I repeat what I said", he went on, "it is unfortunate that these commissions occur between the courts and the great union bodies". That is a kind of criticism, but now we are told it is a dastardly thing to venture to criticise Sir John Donaldson. I quote another authority for whom everybody in your Lordships' House has respect—my noble friend Lord Citrine. He is now in Devon and is not able to come to your Lordships' House to take part in our debates. He was at one time General Secretary of the T.U.C.—highly respected and not an extremist. By that I do not mean that my noble friend Lord Feather is an extremist. My noble friend Lord Citrine said—and this is an almost classical definition of the purpose of the trade union movement—that the trade union movement has not the slightest confidence in the impartiality or the competence of judges to deal equitably with trade union affairs. So why all this fuss? I exclude the Law Lords in your Lordships' House. Yesterday, I listened with the utmost interest and pleasure to the distinctive speeches made by the noble Lords, Lord Diplock and Lord Salmon, and the noble and learned Viscount, Lord Dilhorne, and others—wonderful speeches, the subject was illuminated, to my mind at any rate. But the one point I gathered was that they all disagreed with each other. If the Law Lords disagree with each other how are we expected to refrain from criticism of any of them?
I now come to what is perhaps the most important part of this debate; that

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is, with respect to all those who have taken part, the question of whether we have a mandate for this Bill. Often we are accused in the Press of not having a mandate for this, that and the other, but at the last Election the one point, among others, put before the electors was that if a Labour Government was returned it would repeal the 1971 Industrial Relations Act. We have a mandate for this. We have another part of the mandate—the Liberal Party. The noble Baroness, Lady Seear, nods her head affirmatively. She will agree that the Liberal Party said "we do not want art or part in that Bill"—although she would like some amendment of the Bill. I can understand that. We had a mandate from the country to repeal that Act. That is what it is about, it is not about inflation, or the economic situation or the calamitous things which occur and which I deplore as much as the noble Lord, Lord Hankey. I want to endorse almost every word which my noble friend Lord Houghton of Sowerby said on the subject. We have to get rid of confrontation, but let us be realistic about it. We cannot prevent working people demanding more money, but now it is not only the manual workers but teachers, scientific, professional people, even the Press and people on the B.B.C. They all demand more money. Heaven knows it is going too far now! Even some Members of your Lordships' House who come from the provinces and have to pay high costs for hotels are now demanding more money. If it comes to the aristocracy demanding more money, should we complain? We will not get rid of that by making speeches or by legislation or by this Bill.
This requires understanding, goodwill and something more—some understanding on the part of employers also. There are many enlightened employers, but we want more of them. So we will have to accept this. As I understood my noble friend, Lord Houghton of Sowerby, he advocated other legislation, conciliation and arbitration. Indeed, I would go further than my noble friend by saying, whether or not some trade unionists and trade union leaders like it, that we may have to accept some measure of legal enforcement. We cannot exclude the law entirely, nor do I believe that by accepting legal enforcement in some
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directions we are in any way militating against the organisation of the trade union movement.
I can recall that in 1909 Winston Churchill (I bring him in again) who was not Home Secretary but a President of the Board of Trade, introduced the Trade Boards' Bill which became the Trade Board Act, the purpose of which was to accord some protection for workers in the sweated trades. I was appointed by Churchill as the representative of the Scottish workers on that Board. He did not know he had appointed me or he never would have done it—he only got to know that afterwards. He just picked out the name and there it was. The trade union leaders objected to that Bill. They said that it interfered with the trade union organisation. But it had the opposite effect, therefore we must accept some measure of legal enforcement.
I regret that the noble and learned Lord, Lord Hailsham of Saint Marylebone, is not here. He is one of the greatest legal luminaries in this country. He frequently invokes the law on his side, and rightly so in many respects. I regret he was not present when I ventured with the utmost accuracy—not only out of my mouth but out of a document associated with Winston Churchill—to quote what he said about the judiciary. I should like him—if the OFFICIAL REPORT comes to us again, if we can persuade those who are on strike to let us have our documents again—to read it and perhaps he will mend his ways and come to different conclusions. Our purpose is to repeal the old Act. Away with it. It has contributed more harm to industrial relations than anything else. Let us make an end of it and have something new.
VISCOUNT MASSEREENE AND FERRARD: My Lords, before the noble Lord sits down may I say that I understand from his speech that the only thing this Bill does is to repeal the Industrial Relations Act. But surely the noble Lord is not quite correct there, because the Bill goes much further than that. As I read this Bill a union can come out on strike, with complete immunity, in favour of some dispute abroad if they do not like the complexion of a Government abroad. To put it mildly, that seems to me to be going a bit too far.
6.20 p.m.
VISCOUNT BRIDGEMAN: My Lords, I hope the noble Lord, Lord Shinwell, will excuse me if I do not follow him in detail, but there were moments when I thought, if I heard him aright, that I might be in partial agreement with some of the things that he said: one was that we have a long way to go in industrial relations; another was when he talked about confrontation, on which I shall try to say a word later on; and the last was when I thought he agreed that there must be a legal framework for industrial relations.
My Lords, I find myself in this debate the only Member of the Back-Benchers on this side of the House who has been unwise enough to rush in when my noble "angel" friends seem to have decided not to take part, so I suppose I ought to give some reason why I think I am entitled to trouble the House. Before I do that may I pay my own tribute to the maiden speech of the noble Lord, Lord Feather. I heard every word of his speech and listened with the attention one always gives in this House to those who know all about the subject under discussion. I am sorry that I was not in the House when the noble Lord, Lord Houghton of Sowerby, made his maiden speech, but I shall be reading it in Hansard when a copy of that work is available.
I said that I ought to try to justify myself for taking part in this debate. For about 30 years I have been a chairman and director of companies employing union labour of various colours both in this country and overseas. I am going further back even than the point to which my noble friend Lord Gowrie went. When I was concerned with the Home Guard I had, through the kindness of the noble Lord, Lord Citrine, a great deal of help, encouragement and advice on trade union matters from the Organisation Department in Transport House. I also on one occasion had a great deal of help from a Member from a mining constituency who I am glad to see now sitting opposite me as the noble Lord, Lord Taylor of Mansfield. It has taken me all this time to find an opportunity to acknowledge the debt which I owed at that time, and I gladly take it now.
The real reason why I thought fit to trouble the House is because in 1918, for
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reasons which need not trouble your Lordships, I had the opportunity of working in the Ministry of Labour in the department which was engaged in implementing the Whitley Report. I worked under two excellent chiefs whose names, believe it or not, were Heath and Wilson—Sir George Heath and Bertram Wilson. So when I knew this debate was to take place I thought I would have another look at the Whitley Report, since I had not looked at it for all those years. The Librarian found it for me and dusted it, and there I saw what indeed I remembered and everybody else knows, that it was an attempt to provide an organisation in which industrial affairs in each industry could be carried on by a joint committee of employers and workers sitting under a chairman of their own choice. That I think was the first blueprint for anything of the kind in this country, and there it was. The Joint Secretary was the father of the noble Lord, Lord Greenwood of Rossendale. That Whitley Report got off to a very good start in certain industries but not in others. It pointed the way to the Promised Land and one may ask: if it did, where we lost our way?
I noticed that there was one point which was not touched on in the Whitley Report and which I thought was a pity, and that was the need for those who came, whether they represented employers or workers, to come equipped with powers to negotiate on behalf of their constituents or if, for any reason, they could not have powers, at least to come with the reasonable expectation that when they went away from the the conference table the proposals which they had negotiated would be honoured by the rank and file when the got back. There is no real reference to that in the Whitley Report and I was left wondering, as your Lordships may be left wondering, whether that was an oversight, was taken for granted or was deliberately swept under the carpet. I just do not know. But, quite certainly, the Whitley Report might have done a great deal more than it did; the stage was set but the act did not quite take place.
Of course one can generalise if one wants to, because directly after the Whitley Report had been issued the temptation became apparent, particularly in the larger unions, to use the card vote

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power for things which were not immediately connected with the welfare of the industry. It has been too easy for that to go on. There were other things like the constitutions of the individual unions which varied and made it easier or more difficult to follow the lines of the Whitley Report.
Then one can look at the employers' association. It is probably fair to say in general terms that a great many of the wage negotiations were too short-term and on too low a level. I myself can think of at least one case (and if I can do that there must be hundreds) where a wage negotiation took place and was settled in a certain way because the particular firm which was largely affected had a large contract just nearing completion and their main aim on that occasion was to avoid the penalty clause being invoked by the customer. If those negotiations in that case had been carried on at the proper level a more statesmanlike view would have been taken. As it was, that wage agreement sowed the dragon's teeth in a certain industry. Then there is what it is fashionable to call failure in communication; in other words, excessive secrecy about one's business or telling "nowt to nobody". That, in my own experience, gets worse the further North you go in this country, and it always ends up by everybody knowing everything except the people who might well know.
I do not want to take up the time of your Lordships by generalising, but I want rather to concentrate on two things which I think have been two of the main obstacles on the road to the Promised Land and are both capable of being removed by those who want to remove them. The first one is the unofficial strike. There may well be good reasons, traditions, and all the rest of it, about the unofficial strike. But I do not want to look at it from that point of view; I want to look at it from the point of view of leadership, which is something I have tried to study in my life and occasionally have had the opportunity of trying to exercise. To my mind, the unofficial strike involves a state of affairs where the people who are supposed to be running the show—the union, if you like—are in fact running it at one moment and then at another moment affairs are
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being run by somebody else. Because I believe firmly that you cannot switch leadership on and off as you do the electric current, therefore I am quite sure that the practice and theory of the unofficial strike so long as it persists will be one of the great obstacles to the industrial peace which we all want, partly because once the leader has abandoned his leadership, if he tries to resume it he leads his army from behind, like the chap in the opera—or he has to pretend to lead. In neither of those conditions can one really keep order in the trade union world, or indeed anywhere else.
When we come to talk about keeping order, I should like to mention the White Paper entitled In Place of Strife. That title, I thought, had some mark of genius. It also may have been slightly naïve—I do not know—because it may have led some people to believe that everybody wanted to see strife replaced by something else; and I do not think that is so. There are two sets of people whom I am quite certain do not want to see strife replaced. The first are the professional troublemakers. There they are: they occupy their lives with making trouble and, for all I know, they get their living by it. I do not know whether it would be an infringement of the Race Relations Act to ask people to make a count of the names of those who constantly appear in the news in that regard and who turn out not to be English. But there one is.
I come now to something which I think the noble Lord, Lord Feather, started to talk about—that is, the media. The industries which are not in the news are nearly always able, so far as I can see, to carry on their negotiations in a sensible and businesslike atmosphere and no doubt they can achieve the right amount of "give and take" because they are not always having microphones thrust at them and being forced to appear in the news when that is probably the last thing for producing the right negotiations. My father, from whom I learned a lot, and who was the first Parliamentary Secretary to the Miinstry of Labour (as the noble Lord, Lord Henderson, will know) and later on became First Secretary for Mines, was able, at the time of the coal strikes of the 1920s, to establish confidence between both sides. Therefore he was able to pave the way for negotiations which

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ended successfully and were concluded in public, on the Government side by Sir Robert Hoare and Mr. Lloyd George. But I doubt very much whether he would have been able to hold the conversations which paved the way if he had been chased by the media into the secret places where he held conversations with Mr. Frank Hodges—I believe they met in a teashop on one occasion. Fortunately, he belonged to a day and age when he was able to do his work in peace and so were the union representatives.
I also remember his saying that he could never understand why more virtue was attached to a settlement reached after hours of wrangling in the middle of the night than to one reached after short and sensible discussion in the middle of the day. That is the sort of thing which seems to me to bedevil the affairs of the larger unions—the reporting of them by the Press and the media—because instead of using the language of peaceful and businesslike negotiations, which I imagine is what the sensible members of the unions and the employers' organisations would like, the reports are dressed up in the clothing of war and words such as "conflict" and "confrontation" are used, as the noble Lord, Lord Shinwell, said. You might think that instead of being a serious comment on something of the greatest importance to the community it was a sort of national dogfight or Punch and Judy Show.
And so it is you get the language all wrong. You get all the jargon about bitterness, frustration, betrayal and all the rest of it—none of which can really help to produce a solution or help the people concerned to produce a solution, or to make readers of the national Press understand that this is a matter not of a sort of national sport but of something vitally important which ought to be carried on in a businesslike fashion. So, although we may not be able to get away from this sort of thing entirely, I think we should all realise how very dearly we pay for this particular form of national sport. I myself, as a former professional soldier, dislike very much the idea of using the language of war for anything except those things connected with our national enemies, whoever they may be.
My Lords, I do not know the answer to any of the points that I have raised and I am not trying to lay down the law
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in any direction because I am not qualified to do that; but I have tried to indicate some lines of thought which may help to lead back to the Promised Land. I do not expect to get a reply to this. If there was a reply, it would almost certainly be that none of the things I am talking about could possibly be put in this Bill—nor are they at present, so far as I know, because like everybody else I have not seen the Bill. But they are all things which will need thought if we are to make progress in the right direction; and they are all things which will require, as the noble Lord, Lord Shinwell, said earlier, a framework of law. That, after all, is what this Bill ought to be about, whatever is going to happen to it now.
6.36 p.m.
BARONESS GAITSKELL: My Lords, I do not know why the noble Viscount sought to justify his intervention. He made what I thought were some very interesting points. I disagree profoundly with one or two of them, but all the same I agree with his point about leadership. However, he had not taken into account the shift of power in leadership and that leadership of yesterday is not that of to-day. Perhaps the noble Viscount does not realise that on the shop-floor there is now a great deal more power than there used to be. I am afraid I do not agree with his remarks about foreign workers or foreign people who set out to destroy our society. I do not really think those were very worthy remarks. It cannot just be foreign people who are out to destroy this country.
I intervene briefly, if only to pay homage to two new "stars" in your Lordships' House on delivering their maiden speeches: one of them a lifelong trade union leader, the noble Lord, Lord Feather, and the other an outstanding life-long Parliamentarian, the noble Lord, Lord Houghton of Sowerby. How appropriate it is that they both spoke about industrial relations. I hope we shall hear them often, for they both have great wisdom from which we can profit.
I quite unashamedly enjoy the interventions made by the noble Earl, Lord Gowrie. Of course, I do not agree with him on most occasions, but we sit on opposite sides of the House: why should we agree on everything? The noble Earl made what I call a very elegant

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"jeremiad" to-day about life in general. I rather agree with him. I think that life is a vale of tears. He said that all the injustices in industrial relations had disappeared; the injustices that used to occur from employers to workers have all gone; and now the only injustice that remains is that the trade unions are too strong. I should like to refer to the speech of the noble Baroness, Lady Seear, in which she spoke at length on political strikes. I do not know how one can separate the economic, the political or the industrial relations aspects of a strike. They are usually all mixed up.
My second reason for this brief intervention is that this separation of industrial practices from political attitudes is very confusing. I agree with the noble Baroness, Lady Seear, that the question of industrial relations is very complex, sophisticated and difficult to understand by ordinary people. I learned this in my apprenticeship when I listened to the debates on the Conservative Party's Bill in 1971. A simple phrase like "the freedom not to join a trade union", taken at face value, means "freedom" for the individual and "anarchy" for the trade union. Trade unionists who have fought for a century to achieve strength through organising together are not likely to risk losing their benefits for some abstract theory of liberty. Collective bargaining to advance industrial democracy is sacrosanct for trade unions. It is a fact of life that we have to accept to-day.
Looking back over the past 10 years and the efforts made by both the Labour Government and the Conservative Government to tailor industrial relations to some arid theories, I think both political Parties when in power have missed great opportunities. When the right honourable Lady Mrs. Barbara Castle presented In Place of Strife, many of us supported her, except for the penal clauses in the document. I wondered why the Trades Union Congress did not accept this document as a basis for negotiation. I have never understood this. I know that they have tried to explain it but I still do not understand it.
The reactions of the trade unions to successive Labour Governments could not have been more ironically chronicled than by Eric Whigham in The Times to-day. The idea that trade unionists are the
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friends of the Labour Party or, for that matter, vote Labour automatically in Elections, is one of the old unexplained myths. Then came that very wise Donovan Report. What a tragedy that Lord Donovan died. One would have thought that Mr. Edward Heath, when he became Prime Minister, would have grasped it and built upon it. But he appeared to be intoxicated with his own Party Election Manifesto. Inflexibility was the order of the day from then on. During the course of the long debates in this House during 1971, on May 17 two distinguished noble and learned Lords, Lord Tangley and Lord Wilberforce, told the Prime Minister in no uncertain terms that the lynch-pin of the Industrial Relations Bill—the law to formalise agreements between unions and employers in a legal framework—was legally unenforceable. It is remarkable that this was not portrayed at all in the Press. I heard Lord Donovan himself say that most collective agreements were not legally enforceable, yet we had this colossal Bill resting on the legal enforceability of certain aspects.
So now we are faced with this present Trade Union and Labour Relations Bill, wiping out the Conservative Industrial Relations Bill which did more to bring down the last Conservative Government than anything else. On the whole, this present Bill takes account of changed circumstances in the world, particularly, as I myself feel, the fact that industrial relations are no longer a static concept. They are changing. Also, I feel uneasy about such things as new protection in the area of secondary industrial action, such as sympathy action and blacking. I am not altogether happy about this. The law about picketing also should be clarified and looked at again. Finally, my Lords, much more education is needed among ordinary people about trade union issues, for these are not as simple as they are supposed to be. They are diverse and sophisticated and not explained by political slogans.
6.45 p.m.
LORD STAMP: My Lords, in intervening in this debate very briefly, I shall take a somewhat different line from those that have been followed by most noble Lords this afternoon. To me this is a debate of outstanding, even historic, importance! It is no exaggeration to say

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that it is comparable with those that preceded our entry into the European Economic Community, with due respect to the noble Lord, Lord Shinwell. Then one major point at issue was that of the sovereignty of Parliament. Now the same issue arises in an entirely different context, as I pointed out in a letter to The Times recently; namely, in the context of trade union power, a subject of widespread public concern.
In what I have to say I do not propose to consider the power of the trade unions in relation to excessive wage demands, and the effects of these on the inflation that threatens to destroy our society, important as this factor may be, with due respect to the noble Lord, Lord Shinwell, who referred to this earlier. What I should like to concentrate on for a few moments is the use of trade union power for political purposes, that has gained such momentum in recent months, spreading far and wide so that it is now being applied even in my own profession of medicine, and, according to the latest statement from Mr. Clive Jenkins, even in my own speciality of pathology. If this state of affairs continues it can only lead to utter and complete chaos.
When the present Bill is passed, as it seems it must be—though I sincerely hope not before it has been amended in several important respects—the crucial question will arise: how will the trade unions respond to the restoration of, and, in some respects, increase in, their powers that were limited by the Industrial Relations Act? Will the voice of responsibility and true moderation prevail? By that I mean not only that the avowedly Communist influences be defeated and indiscipline curbed, but also that the concept of the social contract, apparently accepted by the so-called moderates, should be re-examined, as I said in my letter, in the light of its implications for democracy.
Ill-defined as it is, the social contract involves the implementation by the Government of the trade union brand of Socialism as a pre-condition for their co-operation, without which the economic fate of the country is sealed—this in spite of the fact that nearly two-thirds of the electorate in the last Election cast anti-Socialist votes. The fact of the matter is that democracy as we know it will come to an end if trade union power is
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used in this way for political purposes. There is only one way in which Socialist policies can be promoted in a democratic country and that is through the ballot box.
It is sincerely to be hoped that at trade union executive councils, and at the next Trades Union Congress, the voice of true moderation—which means that this fact is recognised—will be heard loud and clear. The proceedings of the Congress will receive wide television coverage and be watched by millions, and the nation will be able to judge for itself the extent of this danger to our way of life. But if moderation does not prevail and trade union power continues to be used for furthering political aims, even to the extent of attempting to bring down a Government, what then? There will be an increasing demand for a Government of national unity supported, it is to be hoped, by all who put the survival of democracy above all other considerations. This would not by itself resolve the crisis, but it would at least fully mobilise public opinion in defence of what we all hold very dear.
In this connection, I would say in passing and as an aside, that the question arises, and may become urgent, as to how the leader of such a National Government would be chosen. One possibility might be by a ballot of all Members of the House of Commons, or at least of those who were prepared to vote. An extension of this proposal which might be generally accepted is that the Prime Minister thus appointed should allocate seats in the Cabinet among the main Parties in proportion to the total vole cast for each of them at the General Election. But I realise of course that this is very much of an aside. It is clear, though, that the time has not yet come when a Government of national unity for a limited period, however it may be formed, would be generally accepted grave though the economic crisis is, and that we shall have to go through yet another General Election with Party politics rampant and all that this will mean in dividing the country. But, surely, if we are to surmount our economic difficulties and restore to the nation that sense of unity which is essential, some form of National Government must come sooner or later.
My Lords, in going into this question I may seem to have strayed from the

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subject of this afternoon's debate, but for reasons I have given I feel it to be very relevant. I will not detain your Lordships further. I have not taken part in a debate on industrial relations before, as I have very little or no industrial experience. But, in my view, the fate of our country, that of our children and grandchildren, our whole way of life, depend increasingly on bringing the trade union movement, which has done so much for the underprivileged in the past, into harmony with Parliamentary democracy; and to-day I have felt impelled to intervene, even though very briefly, on this point.
6.52 p.m.
LORD SAINSBURY: My Lords, may I start by offering my congratulations to my two noble friends Lord Feather and Lord Houghton of Sowerby on such notable maiden speeches. I am sure we would all agree that their vast experience will greatly enrich the proceedings of your Lordships' House. My Lords, I welcome this Bill because it repeals the Industrial Relations Act. In my opinion, it was the greatest error of judgment of the previous Administration, with disastrous effects on our industrial well-being. And, what is more, these effects could be lasting if the lessons of recent experience are not learnt. As the noble Lord my Leader has said, one of the many lessons is to understand that industrial relations are about human relations and cannot be placed in the straitjacket of the law. I think it is not too unkind to point out that this fact is now admitted by leading Conservative spokesmen, and to add that conversion is better late than never.
Laws need the consent of those most affected if the whole notion of law is not to be brought into disrepute. May I make it perfectly clear that I do not approve of law breaking and in no way condone it. But one cannot escape the fact that the 1971 Act, as it worked out in practice, actively encouraged a dangerous disregard for the law. And we were warned. May I refer, like many other noble Lords in this debate, to the late Lord Donovan's most impressive and convincing speech on the Second Reading of the Industrial Relations Bill in your Lordships' House on April 5, 1971. In all humility, I thoroughly recommend that this speech should be studied by us all
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once again. Among the many wise things that the late Lord Donovan said was that common sense requires co-operation from both sides of industry. The trouble with the Industrial Relations Act was that it made this difficult, if not impossible. You cannot threaten to bring a person before a court one day and expect him to come and work for you the next. That is why, as we all know, employers were so reluctant to invoke the law.
Historically, as the late Lord Donovan also said, workers came to regard the law as their natural enemy. And I quote Hansard of April 5, 1971, column 40:
"… these inherited attitudes do not die; they crystallise into tradition, the force of which is immense."
I also agree with the late Lord Donovan on the importance of the historic perspective. Many of the present attitudes are determined by past experience, and we must admit that historically employers have abused their powers and that trade union resentment was justified. When I entered business over fifty years ago, a known and active trade unionist could not hope for promotion in many firms—and I am sad to say that Sainsburys was one of those firms in those distant days.
In this country, we have always avoided revolution by the pragmatic approach to our problems. I believe that that pragmatic approach is urgently needed to-day. Seeking solutions from abroad is not helpful in my opinion, especially from the United States and Germany which have such different histories and traditions from our own. During my active business life I always told my own management that, whatever the particular circumstances of a withdrawal of labour, be it official or unofficial, they must accept a large part of the responsibility for it. Often in the Press and elsewhere, management's responsibility for poor industrial relations is not widely enough acknowledged. It has long been my belief, and I have endeavoured to carry it out, that the greatest mistake of any generation of management is to proceed on an unquestionable acceptance of the attitudes of the previous generation of managers. Managers as well as politicians must adapt to modern conditions—first, the changed power relationship be-between workers and employers and, secondly, the better education of their employees.

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My Lords, the present legislation gives everybody a breathing space which we should welcome. It gives us an opportunity to turn our attention to the much more important debate upon the subsequent legislation which has been promised and which, among other things, will establish the conciliation and arbitration service. Let me end by repeating the comment of the noble and learned Lord, Lord Donovan:
"Common sense requires co-operation from both sides of industry".
We should heed that advice and encourage the speedy establishment of the machinery of conciliation and arbitration which is the only common sense way of regulating our industrial affairs. I am optimistic that people will have learned the lesson of recent experience, and I believe that this is particularly true of the younger generation of managers. Our duty is to provide them with a framework within which they can sensibly help to run our modern economy.
7.3 p.m.
LORD HAILSHAM OF SAINT MARYLEBONE: My Lords, I must begin with an apology. I had a public duty to perform which prevented me from coming here until the concluding peroration of the notable speech by my noble friend Lord Gowrie. Therefore I did not hear the speech of the noble Lord the Leader of the House with which he initiated this debate. He was, however, aware of this fact and courteously supplied me with a note of what he intended to say. I hope that he has not betrayed me by saying something different.
THE LORD CHANCELLOR: My Lords, perhaps the noble and learned Lord will permit me to say that the noble Lord the Leader of the House certainly did not depart in any particular from what was in the text but that he did not give the House the benefit of the whole of it.
LORD HAILSHAM OF SAINT MARYLEBONE: My Lords, certain passages which the noble Lord had thoughtfully marked in square brackets were, no doubt, those which he selected for omission, but perhaps I am betraying a confidence by disclosing this fact.
My Lords, I turn from my apology to the House and my note of thanks to the noble Lord the Leader of the House
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to the two "maidens", whom I hasten to congratulate upon the two speeches they have made which were as welcome on this side of the House as they were on the other. I thought that in both of them there was, perhaps, a little lacking in that coyness which one usually associates with complete virginity. Peeping out from the bridal veil of one of them there appeared to be the experienced countenance of a trade union leader with a background of tough negotiation behind him, and from the other blushing neophyte the hard periods of the experienced' politician. However, they have left church on the arm of their bridegroom with the triumphant strains of the "Wedding March" accompanying them, and I can assure them that their future contributions will be looked forward to with great eagerness. I think they will find, as most of us do, that this House is a friendly and cooperative place, despite differences of Party.
My Lords, I think that the noble Baroness, Lady Seear, began on this note, that it is perhaps a little ironic that we are here to discuss a Bill which will shortly be taken away from us, as I understand it, and which nobody can have read, owing to the total absence of copies of Hansard and the almost unintelligible typescripts and intercalations and interpolations with which industrial disputes have left us. This circumstance leads to a rather wry and bizarre comment upon the earlier passages of the speech made by the noble Lord, Lord Feather, when he congratulated us all upon having the best system of industrial relations in the world. I do not agree with the noble Lord, Lord Houghton, nor with the noble Lord, Lord Sainsbury, that the bad industrial relations of the past 18 months or two years were principally, or even perhaps at all, due to the Act which this Bill repeals. My own conviction, for what it is worth—and I view the situation as one who observes the match from the touchlines rather than from the muddied field—is that one cannot have good industrial relations in a period of raging inflation. I do not believe that it is possible; and if it be possible, nobody has discovered how. Therefore I am not entirely wrong, even in the second alternative. On the contrary, the recent industrial troubles have almost all, as one would expect in a period of inflation, been demands for

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wages, and whatever else the Act of 1971 purported to do it did not seek to prevent strikes which were based upon demands for increased wages.
I agree with the noble Baroness, Lady Seear, and respectfully disagree with the noble Lord, Lord Sainsbury, that this Bill can be justified on the double ground that it repeals the Act of 1971, and that one day a more important Bill containing totally different provisions will be introduced by the present Government, if they survive long enough to do so. I think, with the noble Baroness, that one must discuss the merits or otherwise of this Bill as they are presented to us in so far as we are able to decipher them. And, my Lords, that is what I propose to do.
May I begin, however, with one observation about Lord Donovan from whom, unless he has betrayed me, the noble Lord the Leader of the House began by quoting and from whom we all heard a number of quotations from the noble Lord, Lord Sainsbury, a few moments ago. Anybody who listened to those passages would suppose that Lord Donovan would have been a wholehearted supporter of the measure which is now before the House, and I feel that it is my duty to an old friend and to a judge for whom I had great respect when at the Bar, and to a colleague for whom I have great love in this House, to set the Record straight, because Lord Donovan was not, nor did he appear in that guise in his Second Reading speech, an enemy of the rule or framework of law within which industrial relations, like any other human activity, has to take its place.
With respect to the noble Lord, Lord Sainsbury, who went so far as to say that one could not embrace industrial relations in law at all, I think that all human relations are governed either by rules of some kind or another or by force. In a moment I will give way to the noble Lord, Lord Sainsbury, and he may castigate me as much as he pleases, but the noble Lord says that all industrial relations are human relations. So is the relationship between husband and wife about human relations, but nobody suggests that we have been wrong to pass a succession of Statutes in my time. So is the relationship between solicitor and client, and already in this short Parliament we have passed two more Acts
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about solicitors. So is the relationship between landlord and tenant, and the Statute Book is absolutely "stuffed"—if I may use the term—with laws about landlord and tenant. The fact is that the rule of law is not based on criminal law at all. There is a famous book in the Library called Halsbury's Laws of England which I am in the process of revising, if I may permit myself a "plug". It has about 45 volumes and there is only one volume about criminal law. The rule of law is about human relations: it is about cheques, it is about bankers, it is about companies and it is about trade unions, strangely enough. To suggest that of all these human relations trade unions are the only ones that cannot be embraced by rational rules is to qualify them for the mad house.
LORD SAINSBURY: My Lords, surely the noble and learned Lord would agree that there is a question of degree. I did not say that there should be no law governing trade unions; I believe there should always be in modern times. It is the question of the quantity, complication and interpretation of law that justified the word "stranglehold" in connection with his Act.
LORD HAILSHAM OF SAINT MARYLEBONE: My Lords, I blush at the reference to "my Act" because I think it was a collective effort, but I believe that when the noble Lord reads his speech in Hansard to-morrow he will find that he was guilty, at least in part, of some of the heresies which I have imputed to him. If he is asking for simple law I would respectfully agree, but the absence of statutory enactment does not usually make for simplicity. In fact, one of the principal recommendations of the Donovan Commission which is not carried out by the Bill, was precisely that the law on industrial relations should be resolved into a code to be contained within an Act of which he proposed the title the Industrial Relations Act.
Let us now consider how we got in to the present Bill and let us see exactly the course of events which we are discussing. It is now 10 years ago, I think; it was 1964 (I think) almost at the beginning of Mr. Wilson's first Administration that we set up the Donovan Commission and I can well remember that at the time Mr. Wilson, both in public and in private,

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preened himself on his action so early in his Government. He said the reason was that industrial relations were in a bad state and it was urgently necessary to do something about them, and he castigated the Tory Government of Mr. Macmillan, which had preceded him, on failing to set up this necessary piece of investigatory machinery. He was very proud of the Donovan Commission, and the Donovan Commission sat. The inquiry was already overdue, so we were led to believe, 10 years ago. It took a good deal of time to issue its Report, some part of the delay being due to the fact that the Trades Union Congress had delayed for a considerable time before submitting their evidence, as the noble Lord, Lord Feather, will not have forgotten. One wonders how far they had really been trying to bestir themselves in the interval. However, at length the Donovan Commission submitted their Report and they made some important recommendations.
That was in June 1968, six years ago, and let me say at once—again rather confirming what the noble Baroness, Lady Seear, told us—I would not shed any tears over what the noble Lord, Lord Sainsbury, was pleased to call "my Act" if something was to be put in its place by this Bill. After all, the good has to be replaced from time to time by the better and if the noble Lord the Leader of the House and his distinguished right honourable friend in another place had come before Parliament and said, "We are now going to introduce the terms of the Donovan Commission" (with a few embellishments and improvements, no doubt, as the Tory Government ought to have done in 1970), I might have been covered with shame. However, this is not what they have done.
Some of the recommendations of the Donovan Report require implementation by industry and I will not refer to those, but some undoubtedly require legislation, for which purpose the Donovan Report made a number of important recommendations, none of which is included in the present Bill. I have already told the House that they recommended the passage of an industrial relations Act, but as the noble Lord, Lord Houghton of Sowerby, said, we cannot use that phrase any more because it is a dirty word, like "registration". So instead of
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"industrial relations" we say "labour relations" and instead of "registration", like the gentleman in the Gilbert and Sullivan opera, we have a "little list" and they are all to be on the little list.
There was to be the establishment of the Industrial Relations Commission. I suppose that as they have murdered ours, which we called, rather unoriginally, the Commission of Industrial Relations, their conciliation service will ultimately take the place of that, but we have not seen it yet. There was to have been compulsory unilateral arbitration by the then Industrial Court—a different body from the one we sometimes discuss at the present time; there were to be safeguards for individuals against trade unions, including unfair exclusions and expulsions and unfair dismissal due to shop floor pressure. There was to be a compulsory system of supervision for electoral malpractices and a new mandatory supervision of trade union rules. May I say to one of the two noble Lords who spoke from that point of view, I really cannot understand, if the Companies Act provides minimum rules for a limited liability company and Table A or the Friendly Societies Acts provide minimum rules for friendly societies under the Statutes in that behalf, why it is considered to be such an intolerable interference in the private affairs of trade unions that they should not sometimes be asked to have a standard set of practices in their rules.
The Donovan Report had a special industrial law committee with a view to consolidating the jungle of trade union law, because I really must remind the noble Lord, Lord Sainsbury, that if you do not legislate in a comprehensive fashion your law becomes a jungle. Incidentally, now that I see the noble Lord, Lord Shinwell, in the Chamber, who I understand made polite references to me in my absence and quoted Winston Churchill against me, I really must tell him that Winston Churchill is like the Bible: you can find authority for any proposition in his voluminous works. It all depends whether you are quoting from Genesis the Book of Revelation, or from one of the major or minor prophetic works. As a matter of fact, the noble Lord's quotations came from nearer to Genesis or the Pentateuch than they did from the New Testament, because he

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referred to a speech he made in 1911. That was before the last of the changes in the great man's chequered and unparalleled political career.
Then there was to be a corporate personality for trade unions. Of course, they must not have that, because we had it. They now have a list instead of registration, and all the marks of corporate personality listed in the first or second section which deals with their status. I am so glad that the noble and learned Lord is going to reply to this debate. He will tell us the significance of having a list and not a register. He is also going to explain the value of having all the marks of corporate personality without making them corporations, and I know we shall be very grateful to him when he does so.
There was going to be withdrawal of the immunity granted in respect of trade disputes under Section 3 of the Trades Disputes Act 1906 to all save trade unions on the register, and the restriction of immunity in respect of actions of tort to actions in connection with industrial disputes. I understand from his courtesy that the noble Lord the Leader of the House was taking the view that all that had been done in this field of policy by the proposals in the Bill was to revert to or repeat some of the proposals in Section 134 of the Conservative Act. I am always grateful for plagiarism of this kind, but I am bound to say that in a humble way I venture to differ from him.
You see, it looks all right if you look at the text of the Bill, but then you have to examine the definition clause, because it is all very well to say that certain acts in contemplation of an industrial dispute are the subject of trade union immunity. That is common to both pieces of legislation, and looks all right. But when you look at the definition clause you find they have popped in a dispute between workers and workers; in other words, a "who does what" dispute, acts done in furtherance or contemplation of which are given total immunity under the present Bill. It is not only that, because you will find that his right honourable friend, that ingenious fellow Mr. Michael Foot, has altered the definition of "worker", which includes now everybody who is honestly seeking a job. Of course, the disputes can be in Chile and not in the United Kingdom. So you
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could rent a crowd of undergraduates who want to work in the Long Vacation, in a dispute in which they have no kind of interest, doing acts which can ruin innocent third parties who have contractual relations in this country and doing all they do in support of an industrial dispute in Chile. This is rather different from what we had contemplated when passing the Act in 1971. For these humble reasons, I venture to think that the noble Lord, Lord Shepherd, had not quite plumbed the subtlety of his right honourable friend to its abyssmal depths.
So far I have got to the Donovan Commission. The noble Baroness, Lady Gaitskell, was puzzled as to why this Labour Government had not introduced In Place of Strife, because the general criticism six years ago was that the Donovan Report was too mild. In January, 1969, when In Place of Strife was published by Mr. Wilson, he said that
"radical changes are needed in our system of industrial relations to meet the needs of a period of rapid technical and industrial change"—
our old friend the white heat of technological revolution. Does this Bill give radical changes? Only by putting the clock back to before Donovan. Mr. Wilson said:
"until action is taken, conflict in British industry will often be damaging and antisocial".
Does the present Bill produce any radical action? The Labour Government said, "The State has always been involved in the process of industrial relations. It has always had to provide a framework of law for dealing with the actions of individuals and groups struggling to advance and protect their interests." Is there a framework of law in the present Bill? The noble Baroness. Lady Seear, said not. I think I agree with her. "The need for State intervention", went on the Government of that day," and involvement in association with both sides of industry is now admitted by almost everyone". That was six years ago. Then they proposed an industrial relations Act, as they were then disposed to call their legislation, based on four principles—the reform of collective bargaining, the extension of the role and rights of trade unions, new aids to those involved in collective bargainings, and new safeguards for the community and individuals.

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How many safeguards for the community and individuals are contained in the present Act? They concluded then that the existing law does not place any unreasonable limitations on picketing, but now they promise us another Bill that will enlarge the law on picketing. So that is gone. It accepted then that the present legal requirements relating to the rules of trade unions are inadequate, and should be extended in the interests both of the unions and their members. What additional safeguards for the members are contained, six years later, in this Bill?
Then they adopted the principle of compulsory registration for the Donovan Report, the withdrawal of immunity of actions of tort except in connection with industrial disputes, defined somewhat differently, and provided for compulsory machinery for safeguarding the rights of individuals against unions, and proposed to pass an industrial relations Act. I agree with the noble Baroness that if the Government had said, "Well, the Tory Act is rotten; we are going to enact In Place of Strife instead", I might indeed have been covered with shame. But it has not happened that way.
The fact is that the Government's present Bill, as was pointed out, I think, by the noble Lord, Lord Gore-Booth, is not to be justified by any of those proposals, although the sacred name of Donovan has been taken in vain again and again from the Government Benches. He has now been put into the discard. No attempt has been made to justify the return to anarchy and confusion in the law which is now to be re-enacted by the present Bill. As the noble Lord, Lord Gore-Booth,, told us, there has been no fresh inquiry, no new evidence, no further White Paper and no effective consultation. What is done is a diktat, a diktat without moral authority or political or social justification attempted, or even offered. Of course, the explanation is the relationship between the T.U.C. and the Labour Party. It has no basis in the merits of the Bill. It has no basis in reasoned argument, and none in justice.
The trade union movement pays four-fifths of the funds, and exercises four-fifths of the votes in the Labour Party. I meant this when I described the Labour Party to-day as a wholly-owned, or at least almost a wholly-owned, subsidiary of the trade union movement. Let us
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face it, the Labour Government is a puppet Government, strong only in oppressing those who are not members of their particular organisations. For various reasons, I do not want to say much more about this. Of course, if the trade union movement were dominated by Bevins and Deakins, or even Douglasses or Citrines or Feathers, one would be considerably less anxious than we are about the development of Government policy. If it were only that the Labour Government was Lord Feather's poodle I would not mind, because I love the noble Lord, Lord Feather, and poodles are nice little dogs. But what happens if it is Mr. Magahey's Pekinese? It could easily become so if Mr. Foot has his way. The fact of the matter is, as I think numerous noble Lords have pointed out, that the Government have faced none of the problems underlying the situation in this country at the present time.
The reason which led Mr. Wilson ten years ago to take great pride in his Donovan Commission was, of course, that the trade union movement, as the noble Baroness, Lady Seear, told us, has developed very much in power and in function over the past years. It, of course, operated tremendously well, and one admires a great deal the heroism of the pioneers in defeating the economic power of the bosses at a time when there was virtually no social security in this country. But I do not think we can still talk in quite those terms. They are in a position now of immense power; and power must be accompanied, in my judgment, at any rate, not merely by a sense of responsibility in the moral sense—and some are more responsible than others—but also responsibility in the light of the law, and to the public and Parliament, and not only to their members.
One must ask, now that the situation has changed, how far they are prepared to face the questions which my noble friend Lord Bridgeman asked in his speech earlier this evening. How far are they entitled to go on using their strength without resort to arbitration in the monopoly conditions created by nationalised industries? How far are they entitled to do so to obtain some sort of political object by coercing the elected Government? And that was another theme developed by Lady Seear. How far are they entitled to do so when the sanction applied is deprivation from substantial

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numbers of the public of ordinary means of livelihood; namely, heat, light, water, and now, we learn, medical and surgical help, food or sewage disposal? Is this something which really can be left to what we call human relations and the good will of the executives concerned, or should it be regulated by some principle of law? How far are people to be entitled to extend their industrial action to beyond the actual parties to the dispute or the industries? Is it really just that if two unions are either so incompetent or so belligerent that they resort to industrial action as a means of settling their demarcation disputes, innocent third parties are to be ruined without compensation? That is what the Bill provides for at the moment. Is it really sensible that in our present economic condition people in this country, innocent third parties again, could be ruined by industrial action based on some dispute, real or imagined, which takes place, let us say, in Chile, for that is the effect of the present Bill?
If a closed shop is to be permitted, what protection is to be given to an individual unjustly excluded or expelled from a union and thereby deprived of his living and livelihood? The last Labour Government promised one six years ago, and so did Donovan. Why does not this Bill give it now? I know that we shall be told it is all coming for a Christmas present some time if Mr. Foot is still Secretary of State, but why is it not in this Bill? What guarantee have the members of a union against an Executive which fails to draft rules which are just or fails to apply just rules justly? Donovan and the last Labour Government promised protection. The Companies Act and the Friendly Societies Act give protection to their members On what grounds can industrial individual unionists or minorities be left in this Bill without protection?
Why should a union be immune from actions of tort except in relation to a trade dispute. Neither Donovan nor the last Labour Government thought that they should be. On what evidence have the present Government changed their mind, and whom did they consult, other than the T.U.C. and Lord Houghton's liaison committee, before they made up their mind? What guarantee under this Bill have the members that elections are
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properly carried out without unfair practices, or that officers elected are properly representative? We know the last Labour Government promised to provide some resort to the courts in these matters. What do the Government propose?
My Lords, it is not desirable—no one has suggested it is—that this House should seek to reject or postpone the carrying into law of what the Government propose in this Bill. But I must say that I share to the full the misgivings which have been expressed in every corner of the House, including notable speeches, among others, from Lady Gaitskell and I think Lord Shinwell; I must say that I share all their misgivings, and I shall look to the noble and learned Lord, whose skill as an advocate is equal to any occasion, to remove some of them.
7.36 p.m.
THE LORD CHANCELLOR: My Lords, may I begin, as did my noble friend Lady Gaitskell, by paying homage to our two maiden speakers who have delighted the House to-day with their maiden speeches. The noble Lord, Lord Feather, and the noble Lord, Lord Houghton, both have distinguished records, if I may say so, of public service that any noble Lord in the House would be proud of. It is very difficult to conceive of them as making maiden speeches, however. I have heard the expertise of the noble Lord, Lord Feather, as an expert witness, guiding his counsel so eloquently through the case, and to have heard the noble Lord, Lord Houghton, in Party meetings and on the Floor of the House in another place is a memory which I shall treasure. It is a great boon to this noble House that these two experts in the field of industrial relations, which, as the noble Earl, Lord Gowrie, said, is the domestic issue of our times, have come to join us, to give us and the nation the benefit of their guidance.
My Lords, the debate was begun in a speech of moderation by the noble Earl, Lord Gowrie, in which he said he would refrain from a diatribe against the Government. That had also been my intention until I heard the noble and learned Lord, Lord Hailsham, speak. But I will resist the temptation, save that I think I am entitled to say at least this; surely we could have expected some slight wearing of sackcloth from him,

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bearing in mind that he was a leading member of the Government which reduced industrial relations to the total chaos and breakdown which we inherited in March of this year. However, I am not the sort of politician to make a political speech on those lines, though I would add that when it comes to asking where the money comes from for the great political Parties, there is a promising field of research; there is an interesting exposure of all the things that old Sir Winston used to expose, the brewers, the financiers, the bankers, the landlords—
LORD HAILSHAM OF SAINT MARYLEBONE: My Lord—
THE LORD CHANCELLOR: Wait till I finish my flow—and all the rest of the famous backers of the Tory Party through the ages.
LORD HAILSHAM OF SAINT MARYLEBONE: My Lords, I am sorry I spoiled the noble Lord's eloquence; it was not my intention to do so. Let me tell him this beyond doubt, because I in the past have been Chairman of the Party. The one thing which is absolutely fundamental, or was in those days, in Conservative finance was that we would never accept any money with any sort of strings attached.
THE LORD CHANCELLOR: My Lords, I am sorry, but I am being directed on to a track that I did not intend to pursue at all. One has only to see the programme of the Tory Party, which is the finest tribute they can pay to those who finance them, to suspect that perhaps the strings are pretty tightly held after all. Really we are discussing the serious issue of industrial relations, and it is only, if I may say so, the naughtiness of the noble and learned Lord which has led me astray into the political field.
It is right that I should deal with the question why it is that the Labour Government have given first priority to getting rid of the Industrial Relations Act. The answer is that we believe that its continuing existence for even a day longer is doing, and would do, serious harm to industrial relations in this country. Quite apart from the more obvious damage it has done by polarising the attitudes of parties in particular cases before the National Industrial Relations Court in a way which would have been unlikely to have happened but for the legal
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framework which the Act provided, it has been a distraction from the more important tasks to which trade unions and employers should have been paying attention.
The last Government's energies were unhappily concentrated far too much on attempting, by means of the Industrial Relations Act, to improve the procedural aspects of industrial relations, instead of doing more to apply their energies to making, or improving, co-operative efforts to combat inflation. Moreover, because of the lengths to which legal processes were sometimes carried, the impact of the Act has often been to drive the moderates into supporting what, before 1971, they might well have regarded as extremist measures. The Act created an atmosphere in which there was no room for moderates.
Although the ability of trade unions to conduct collective bargaining has been dependent on the provisions of the law, it is I think the case that the general practice in British industrial relations up to 1971 was not to intervene in the operation of the industrial relations system. This was completely reversed in 1971. The noble Earl, Lord Gowrie, has said that the Act had the merit of comprehensiveness. Indeed it had; it embraced far too much. Detailed legal provisions were laid down for such areas as the closed shop, the agency shop, arrangements for improving procedures, and for resolving difficulties over recognition and bargaining rights. The long standing trade union immunities were revised, and related to a complex system of registration which was rejected, and perhaps rejected because it meant a much more detailed oversight of union rules and practices than had hitherto been the case. The whole operation was one of extreme complexity. It was not just an attempt to introduce new legal procedures into industrial relations over a particular area where arguably there might have been some justification for that. The attempt covered practically every aspect of industrial relations, including new provisions designed to deal with disputes in an emergency. In fact, as we know, many parts of the Act were scarcely made use of for the good reason that to have made use of them would have been disastrous. The Act just did not work.
The idea of large scale intervention by the law in industrial relations, as the

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noble Lord, Lord Feather, has pointed out on the trade union side, and my noble friend Lord Sainsbury has pointed out on the employer's side, was quite unacceptable to both sides of industry. To the employers the Act was an irrelevance; to the unions it was a threat to the position that they had acquired by years of struggle, before 1906 often in the teeth of the law. The previous Administration completely misjudged the reaction of industry—and here I include management, as my noble friend Lord Sainsbury has pointed out, as well as the trade unions.
It is interesting that the Social Science Research Council's Industrial Relations Research Unit at the University of Warwick has been studying the effects of the 1971 Act. In a recent article they emphasised the attitude of management. They say that in management's view it was their job to deal with various actions which the provisions of the Act were supposed to stop. They had to minimise the impact of dispute or argument with workers through the long-term application of personnel expertise. The threat of legal proceedings, they conclude, restricts management's room for manoeuvre. The Study quotes one personnel manager in a large engineering company as saying that legal proceedings may suppress the problem temporarily, but cannot assist in promoting lasting good relations between management and workers. Indeed, very often the trouble in litigation, as I used to find in my young days when appearing at the Bar on the Wales and Chester Circuit, was that by the time the wretched case came to court the dispute had long been settled, and the litigation was merely an irritant and a restoration of trouble, and would leave residual bitterness.
The Study comments:
"Many personnel officers and senior managers involved in industrial relations are firmly convinced that successful company industrial relations depend on a sensitive touch in each circumstance, a touch that the law and its agencies appear to them incapable of providing."
I have emphasised, as my noble friend Lord Sainsbury has done, management's attitude, because we often appreciate this less well than the attitude of trade unionists. The struggle on the part of the unions to establish themselves was a long and
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often bitter history of reversals, of legal difficulties which had to be surmounted, often with the help of Parliament, and which naturally gave rise, rightly or wrongly, to suspicion that the law might not be on their side. However, they did know that their basic ability to carry out their functions was guaranteed by a series of Acts of Parliament culminating in the Trades Disputes Act of 1906. If I may say so to the noble Lord, Lord Hankey, they attach far more importance to this protection than apparently he does.
Of course we recognise in the Government that there is a place for a legal framework in industrial relations, but we say that this must be much more limited than that which the 1971 Act attempted to provide. The question really is not whether there shall be a framework of law, but what sort of framework there shall be. When the full package is disclosed—and this will be before the noble and learned Lord, Lord Hailsham, has completed the revisal of the 45 volumes of Halsbury—we are satisfied that our package will be more appropriate than the Industrial Relations Act to the special industrial relations situation of this country.
A large number of questions have been raised in the course of this debate, and had we but world enough and time I should have been delighted to try to deal with them all, including even some of the esoteric matters which the noble and learned Lord asked in the confident expectation that I might not have been able to answer some of them, as to which he would not have been wholly incorrect. But coming to the major matters that have been raised, and first of all to the closed shop, my noble friend Lord Feather pointed out that there are 5 million employees working in closed shops, and the remarkable thing is that although the Industrial Relations Act made most of them illegal they continued to operate, which in the view of the Government is a measure of their value in securing stability of employment and sound industrial relations in several areas of industry.
In relation to the closed shop—the matter which very properly caused concern on both sides of the House—there was the question of safeguards for union members against arbitrary exclusion or expulsion from union membership. That

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is an anxiety which I personally share very much indeed. The Government have repeatedly made it clear that they do not regard the Common Law—valuable as it is, and I shall say a little more about it in a moment—as adequate to deal with expulsions and exclusions from unions. We are giving serious consideration to the question of further safeguards.
We say that this is a matter for the next stage of legislation on industrial relations; namely, the Employment Protection Bill which we shall publish in the autumn. The intervening period will give us more time for an acceptable solution to be worked out in co-operation with the T.U.C. I make no apology for saying that. Of course the T.U.C. must have an important say in a matter which affects trade unions so closely. The Government accept that the question of safeguards for union members is an important one. Perhaps the best appeals machinery is that which lies nearest to the original point of dispute. Consideration will have to be given to the kind of additional machinery which ought to be laid on top of existing appeals procedures. But whatever conclusion is arrived at, I assure the House that we attach great importance to this aspect of the matter.
The noble and learned Lord, Lord Hailsham of Saint Marylebone, and, I believe, the noble Baroness, Lady Seear, were concerned about their apparent fear that the Bill legalises the political strike. It does nothing of the kind. A political strike would not fall within the definition of a trade dispute, since it would not be a strike over any of the matters set out in the Bill which constitutes such a dispute. The Bill legalises certain acts, otherwise tortious, when they are done in furtherance of a trade dispute. A "trade dispute" is defined by Clause 26 and unless the content of the dispute falls within one of the paragraphs of Clause 26(1) it will not be a trade dispute. All those paragraphs relate to employment.
LORD HAILSHAM OF SAINT MARYLEBONE: My Lords, I wonder whether the noble and learned Lord will assist me on a matter about which I have not given him notice, and therefore I shall not complain if he says it is unfair. But let us take, for instance, a case in which a union including radiographers refused to work with doctors who did not
1102
want to join the National Health Service, and deprived their patients of medical treatment, which I would define as a political object. Can the noble and learned Lord tell me how that would not come within the definition of the kind of dispute which would be protected under the Bill?
THE LORD CHANCELLOR: My Lords, I do not want to be drawn to give a view on a specific case which may ultimately come before the courts for consideration. I know not, but I should have thought that at some stage that dispute would inevitably involve a trade dispute. I do not want to be firm about that, but it would be clear that a strike, for instance, to enforce a political attitude about Chile, or some matter remote from and unrelated to the trade dispute situation, would certainly not be protected by the provisions of the Bill.
BARONESS SEEAR: My Lords, with great respect to the noble and learned Lord, I am afraid that I cannot have made myself clear. Of course I am well aware that the Bill does not cover the political strike and give protection against it, but my point was that persons suffer as a result of political strikes. I think that the Bill should contain something positive in the way of redress to the community or to other individuals who suffer as a consequence of political strikes. The mere absence of immunity does not meet the need.
THE LORD CHANCELLOR: My Lords, I respectfully agree that the community does suffer from political strikes, but all I am seeking to say in my submissions at the moment is that this Bill does not legalise the political strike. Indeed, in the case of a political strike the union officials who might be concerned if the union was engaged upon it could be sued, even though the union itself was immune. I do not think it is always the case that union officials are men of straw, although I have not doubt that the noble Lord, Lord Feather, would say that not many of them are millionaires. As I see it that is the position.
So far as political strikes are concerned, the position is precisely the same as it was before the 1971 Act and a little different in practical terms from the position under the 1971 Act. The noble and learned Lord, Lord Hailsham of Saint Marylebone, was concerned because the

1103
Bill gives immunity to unions who cannot settle their "Who does what?" dispute with other unions. The 1906 Act included in the definition of "trade disputes" disputes between workers and workers. The 1971 Act confined "industrial disputes" to disputes between workers and employers. To that extent there is a difference. This Bill proposes to restore the 1906 position. In doing so, it rests upon the conclusions of the Donovan Commission. The majority of the Commission recommended no change in the pre-1971 definition on this point. Happily, the number of demarcation disputes is now very small. They represent only about 2 per cent. of all disputes occurring each year. As to the definition of "worker", to which the noble and learned Lord. Lord Hailsham of Saint Marylebone, referred, the Bill does not change the definition which is in substance the same as in the 1906 Act and in Section 167 of the 1971 Act.
LORD TAYLOR OF GRYFE: My Lords, can the noble and learned Lord advise us whether the statistic of 2 per cent. of industrial "Who does what?" disputes is computed by the number of disputes, or by the time taken by such disputes? I gathered that the number of industrial disputes in this field was much large than 2 per cent.
THE LORD CHANCELLOR: My Lords. I have the advantage of an indication from those who give one guidance on these matters, and I am told that the 2 per cent. figure is in relation to the number of disputes. A matter of concern raised by the noble Lord, Lord Hankey, and others, was the fact that a trade dispute could include and embrace overseas trade disputes. The first justification for that is to be found in the great increase in the number and size of multi-national companies and enterprises in recent years. Multi-national companies pose a legal problem in connection with industrial action, because the occasions increase on which workers take action in support of workers in another country—often workers employed by an enterprise integrally related economically to their own employer in Britain. It is right that workers taking action in such circumstances should enjoy the legal protections which they would enjoy if they were taking action in
1104
contemplation of furtherance of a dispute within Britain.
But this is not the only justification. It can be argued, I think, that if industrial action in sympathy with a dispute occurring inside this country is to be protected, as it is, similar protection should be available in the case of sympathetic action in support of a relevant dispute overseas. With the vast increases over the past decades in international trade and foreign travel, together with the development of international institutions, especially in the economic field, workers are much more aware of what is happening in other countries. Sympathetic strikes as such have always been regarded as lawful, and indeed strikes in relation to overseas trade disputes might well be regarded as lawful to-day. It is not by any means sure that the decision would go the other way. But there is no essential difference, in the view of the Government, between sympathetic action in support of a dispute within this country, and similar action in support of a dispute overseas relevant to the conditions of employment of the employees in this country.
But I emphasise that the golden formula, "in contemplation or furtherance of a trade dispute", is still the guide and still applies. With the exception of the Clause 11 immunity, all the immunities in the Bill hang on this golden formula; and, as I have ventured to say, it is unlikely, for example, that industrial action aimed at policies of another country, such as Chile or South Africa, would be protected. Moreover, any foreign dispute would have to satisfy the definition of "trade dispute" in the Bill, in order for sympathetic action in this country to enjoy the immunities. The definition does not cover political disputes.
I was asked questions by the noble and learned Lord, Lord Hailsham, about registration and lists—an esoteric and fascinating theme into which I do not propose to enter in any great detail. Registration was conceived in 1971 as a device for regulating trade unions. The list is an administrative arrangement analogous to certification by the Registrar of Friendly Societies under Section 2 of the Trade Union Act 1913; that is to say, it is evidence of status. Registration of the type that was insisted upon in 1971 is rejected. Then I was asked about corporate status for trade unions.

1105
The reason why the Bill does not, as the Donovan Commission recommended, make trade unions corporate bodies or give them the choice of incorporation is that the unions themselves do not want it. There are five elaborate reasons why they take that view. Owing to the passage of time I shall not burden the House with them, but if it is desired to return to the point I have little doubt that there will be opportunity for discussion before the long end of this journey is reached.
My Lords, during the debate serious reservations have been expressed about Parts of the Bill and, on the Opposition side, about the Government's approach to industrial relations. I ask noble Lords on the Opposition Front Bench to consider this point. They had their chance for three-and-a-half years to deal with our country's industrial relations problems. Clearly, they attached great importance to dealing with them, because indeed they made dealing with them one of their first priorities when they came to office in 1970. As the noble Earl, Lord Gowrie, has said, it is the domestic issue of our time. They chose their particular way of attacking our problems. That way was tried and found deplorably wanting, and I do not now think that any intelligent observer of the industrial relations scene could reasonably deny that the Industrial Relations Act has failed. There has not even been the faintest trumpet sound in its favour. It is dying, not with a bang but with a whimper.
What we are asking is that we should now be given the chance to try our approach to industrial relations problems, and we favour an approach completely different from that represented in the 1971 Act. We did a lot of forward thinking about this, as my noble friend Lord Houghton said in his speech, when we were in Opposition and our approach is based on conciliation rather than on confrontation. I am not of course suggesting that the Opposition deliberately sought confrontation, but it cannot be denied that during the last three years we saw the Government and trade unions seriously at loggerheads in a way which gravely damaged our industrial relations. We, on the other hand, are seeking conciliation and co-operation.
So far as the unions are concerned, this policy is embodied in the social contract. We make no secret of the fact that we
1106
have fully consulted with the T.U.C. as well as with the employers, of course, over the Bill, as we are doing over the rest of the package—and we make no apologies for this. Indeed, it would have been far better if the previous Government had listened to the T.U.C. before putting the 1971 Act on the Statute Book. I do not think that I am being unkind if I point out that a lot of the T.U.C.'s predictions about the working of the Act, as my noble friend Lord Feather pointed out, which were so clearly given by way of warning, have come true. As to consultations with the C.B.I., which is a point raised by the noble Lord, Lord Gore-Booth, admittedly there has not been a great deal of time for the fullest possible consultations on the present Bill. But the Secretary of State published his outline of the proposals in the Bill on March 22, so the C.B.I. and others had an opportunity to make their views known to the Government. That has been done, and notice has been taken of them.
My Lords, I was also asked by the noble Baroness, Lady Seear, about the importance of ensuring a proper workflow of the C.I.R. type for the C.A.S., the organisation for the conciliation and arbitration service which will be set up and provided for in the Employment Protection Bill. We are now hastening by administrative means the process of getting everything ready, and indeed starting the work of the C.A.S. The C.A.S. will be independent, but it is expected to have the capacity to carry out the kind of longer-term investigations which the C.I.R. carried out so usefully, and that it will be able to follow that same example. The C.I.R. itself is being wound up and, although this inevitably leads to loss of continuity for a short time, it is unfortunately the case that since 1971 the C.I.R. has been handicapped because it was identified with the Industrial Relations Act. A fresh start is necessary with a new institution, which we hope will prove acceptable to all.
My Lords, I have sought in my conclusions to indicate what is the philosophy behind our industrial relations policy and the present Bill. I emphasise that it is not the Government's total answer to our industrial relations problems. It is only the first, though the most urgent, stage, as we see it, in a three-stage programme for legislation. It

1107
is by way of being an emergency measure to get the 1971 Act off the Statute Book as soon as possible, while ensuring at the same time that the trade unions can operate on a legitimate basis. Our main proposals for legislation on industrial relations will be in the next stage of the programme; that is, the Employment Protection Bill, which will, as I have said, be published in the autumn. Finally, in the third stage of our programme, we shall deal with questions of industrial democracy. We believe that this Bill lays the foundation for the improvement of industrial relations in this country which we all seek and, on this basis, I commend it to the House.
8.11 p.m.
LORD SHEPHERD: My Lords, I beg to move that this debate be now adjourned. As I told the House a little earlier, a Message has been received from the Commons requesting the House to return the Trade Union and Labour Relations Bill to another place for further consideration there. I suggest to the House that, if your Lordships agree, we should adjourn the debate now and that we should take the Message from the Commons into immediate consideration. I suggest that if there is to be a debate, it should be on the Motion that we should accept the Commons request.
I hope that the Bill will be returned to your Lordships' House to-morrow in which case it seems to me, in consequence of consultation through the usual channels, that there is no reason why we should not take the Committee stage on Monday and Tuesday as planned. Clearly, Amendments which noble Lords may wish to put down for the Committee stage may be put down and, if necessary, adjustments can be made to the page and line references. My Lords, I beg to move that the debate on Second Reading be adjourned until tomorrow.
Moved, That the debate on Second Reading be adjourned until to-morrow.—(Lord Shepherd.)
LORD WIGG: My Lords, I entirely support what my noble friend the Leader of the House has said, and I accept it except for one point. On the previous occasion when a similar procedure was debated—that is, on August 1, 1972—
1108
the noble Lord, Lord Aberdare, informed the House at an early stage that a Message would be received and that it arose because there were misprints in the Bill. There was some agreement between the two sides of the House. I suppose that Back-Benchers on both sides were as ignorant as I am about the contents of the Message, but it is not unimportant before we let the Bill go, to know whether the reasons which prompt another place to take it back—and I understand the difficulties in dealing with the matter without referring to the content of the debate in another place—will be of such a character as to warrant a second debate. If the Bill will be substantially altered, it is a fundamentally different situation to that which arose on August 1, 1972, when the only concern was with misprints. It may be that there has been some discussion through what are euphemistically called "the usual channels" and some agreement reached. If that is the case, perhaps we may be told, or we may receive an expression of opinion from the Leader of the House as to whether it is his intention or his hope that when the Bill comes back from another place it will be taken formally.
LORD SHEPHERD: My Lords, as Leader of the House I am completely unaware of the contents of the Message. So, I suspect, are your Lordships, and we shall remain so until, as is customary, it is read by the Clerk. I have at this stage sought to move the adjournment of the Second Reading debate. Clearly, if the Bill were to undergo a major change—and here I have no idea what is in the mind of another place—we should have to consider whether a new situation had arisen in terms of debate. I can only say to my noble friend that we can only judge of that when we have heard what is the Message from the House of Commons, and, should the Bill be returned to the House of Commons, when we know in what shape and form it is returned to us. Then we should have to consider what we must do in the circumstances.
LORD WIGG: My Lords, I am much obliged.
On Question, Motion agreed to, and debate adjourned accordingly.

TRADE UNION AND LABOUR RELATIONS BILL
Message from the Commons: That they request that your Lordships will be pleased to return to them the Trade Union and Labour Relations Bill because Clause No. 27 and Schedule No. 1 to the said Bill are incorrect.
LORD SHEPHERD: My Lords, I beg to move that the Commons request be agreed to. I hope that your Lordships' House will accept the request we have received from another place. Like most, if not all, Members of your Lordships' House, I am particularly jealous of our rights as a Second Chamber, but Parliamentary government in this country depends essentially upon the good relations between the two Houses. I believe that if the Commons send a Message as they have just done, there must be a reasonable belief that they have reasons of substance for making their request.
Earlier on, my noble friend Lord Wigg referred to precedents. In recent years there have been two. I do not think that I need to draw the attention of the House specifically to the Administration of Justice Bill 1970, but the precedent which is perhaps clearest is that created by the noble Lord, Lord Aberdare—who I am very pleased to see opposite—on the Local Government Bill 1972. On that occasion, the Commons asked us to return the Bill because it was defective. Listening to the Commons Message—and I must frankly say that it was new to me, and that I was unaware of its contents until it was read—it appeared very close to, if not identical with, the precedent of 1972. Therefore, precedents are there, and I think that we can rest assured that we are not breaking new ground if we accept the request of another place.
My Lords, I think that I will leave it there. If there is a debate, I should seek the leave of the House to reply; but I ask the House to recognise that good relations between the two Houses are essential for the continuation of Parliamentary government and I hope that nothing will be said to-day that will in any way endanger those relations. My Lords, I beg to move that the Commons request be agreed to.
Moved, That the Commons request be agreed to.—(Lord Shepherd.)
8.20 p.m.
LORD WINDLESHAM: My Lords, the House is grateful for what the noble Lord has said and for guiding us in this novel situation. We have now received a Message from the Commons requesting the return of this Bill so that one clause and one Schedule which are incorrect can be rectified. I suggest to your Lordships that the way in which another place chooses to rectify any Part of the Bill which is incorrect is a matter for them and not a matter for us. Your Lordships' House has now completed the Second Reading debate of this Bill and we are asked whether we will send the Bill back to another place. I would advise your Lordships in the same way as the Leader of the House has done; that we should accede to that request.
Had it come earlier in the debate I would have been less sure in my response. The Leader of the House intervened in the course of the debate to help the House with a Business Statement. If it had been suggested by another place that we should have terminated our Second Reading debate then and there in order to send it back for their convenience, I think your Lordships would have wanted to consider seriously whether we should have complied. But the way in which the Leader of the House and the usual channels in both Houses have co-operated has meant that we have been able to continue with our Second Reading debate in the normal way, and we now have this Question before us.
We have heard what the Leader of the House said to the noble Lord, Lord Wigg, on the previous Motion, that he hopes the timetable can be maintained and that, if the Bill is sent back to the Commons, we hope to have it back here in the course of this week—perhaps tomorrow, but very shortly—and the Committee stage could be held as planned on Monday and Tuesday. I am sure that what the noble Lord, Lord Shepherd, has said about the relations between the two Houses is something which should be in our minds. It seems to me that it is these underlying factors that are so much more important in our procedure than what is contained in the Companion to Standing Orders. One of the fundamental principles is that the relationships which have been built up between the two

1111
Houses, not without a great deal of argument and conflict over the years, should be kept in a state of equilibrium.
Our procedure is exceptionally flexible, as we know. It is based on common sense and depends on what is regarded as being in the interests of the House and, indeed, in the interests of Parliament as a whole. It seems to me from what we have heard from the Leader of the House that there will be no inconvenience to your Lordships in this rather unusual procedure. It therefore seems to me that we should co-operate with what he has asked, and with what the Commons has asked us to do, and we should accept this Message and accordingly return the Bill to another place.
BARONESS SEEAR: My Lords, from these Benches I rise to say that we, too, agree that this is obviously the sensible thing to do, and that we should accede to the request of the Commons.
LORD WIGG: My Lords, regarding the issue of the relations between the two Houses, I cut my Parliamentary teeth in another place on Erskine May and I entirely accept that it would be out of order, both in another place and in this House, to allude to the debate which has taken place in another place. Therefore, it seems to me that the actual reasons for the Message cannot be discussed here. The Message which has been conveyed to us from another place by the learned Clerk is in accordance with the precedent established on August 1, 1972. I was handicapped when I first heard what the Leader of the House had to say, because I too had not had an opportunity of refreshing my memory as to the contents of Erskine May or of looking at the Companion. But both of them tally on this point, and I had the opportunity of looking at what happened on August 1, 1972, which I gather was then referred to as "Aberdare pie".
But be that as it may, the only doubt which surged through my mind was whether the precedent established on that occasion, which was concerned with a misprint, was strong enough to carry over to what is happening in this instance. When I looked at Erskine May and the Companion, I realised that the actual occasion on which the Message is sent
1112
is not the business of this House. It is sufficient that the Message came from another place, and in order to establish good relations it ought to be accepted without question. That point of view I entirely accept.
I would, however, put it to the Leader of the House that the point I made earlier when he moved the adjournment of the House has some validity. If, in fact, there is extensive alteration to the Bill it may be that some noble Lords who might have wished to speak on the Second Reading of this Bill but did not do so, will want to do so when the Bill comes back in its revised form. Should that be the case, I hope very much that by consultation through the usual channels with the Opposition the opportunity will be provided. It seems to me that that could be done without much dislocation of our procedure. If the Committee stage is to be taken on Monday, it could be preceded by a short period for continuation of the debate, if any Members of this House wish to put their names down.
There is only one other point that I should like to make. When at an earlier stage I raised the issue without having done any homework, I referred to the independence of the House. The noble Lord, Lord Byers, who I regret is not here, thought I was flattering him. I would never in my life have been guilty of such a misjudgment, though I have known him for a long time. I have always held that there should be a Second Chamber, because I have a profound distrust of any man, whether he sits on either a Front Bench or a Back Bench of this House or another place, who says one thing and does something else.
The noble Lord, Lord Carrington, and the noble Lord, Lord Byers, have both said that this place exists for two main reasons; first, as a revising Chamber, and, secondly, as a delaying Chamber. I have always regarded this House as a class instrument and I still do. It will follow the book as long as it suits. On July 25, 1972, there was a classic example of when the delaying powers of this House should have been exercised, not necessarily for a very long time, but to give time to consult the British people. But that opportunity was not taken, because it did not suit the Conservative Party or the Liberal Party. They voted

1113
together in the same Lobby on July 26, and I hold the view—and for the rest of my life I shall continue to argue it—that a legislative instrument that behaves as the Conservative Party behaved on that occasion should have its head chopped off, and I hope to be around when that happens.
LORD HAILSHAM OF SAINT MARYLEBONE: My Lords, just before the noble Lord replies perhaps he would confirm these two points, the only points which seem to me to be of importance. The first point is that this House is not bound by precedent as is another place. I I could develop that for historical reasons, but it is important that we should remember that we are masters of our procedure and we are not bound by precedent. The second point is that no power on earth except the House itself could stop anybody from speaking tomorrow, or whenever the debate is resumed, whatever anyone might say as to its desirability, unless the Motion was moved that the noble Lord be no longer heard. One is very seldom tempted to do that, although there have been moments recently when I have been tempted.
LORD SHEPHERD: My Lords, I am very grateful for what has been said. In reply to the noble and learned Lord, Lord Hailsham of Saint Marylebone, on the Motion that the noble Lord be no longer heard, perhaps I might say that I have heard it moved only once in your Lordships' House. It was done by the noble and learned Lord, Lord Hailsham of Saint Marylebone, when he was Leader of the House, and if I may say so, he did it with complete and utter justification. The noble Lord concerned, who then sat on the Front Bench opposite, certainly went deliberately about the matter in order that the Motion should be put. But fortunately your Lordships' House does not require that Motion more than once in ten or fifteen years.
I am grateful for what was said by the noble Lord, Lord Windlesham, and the noble Baroness, Lady Seear. I think we should respond to the request of the House of Commons and I believe that that is the mood of your Lordships' House. In regard to what my noble friend Lord Wigg has said, clearly, having spoken on this Motion, he is now free to speak
1114
to-morrow when I hope the Bill will be returned. There may be some procedural difficulty—if the Bill is so changed—for other noble Lords who have already spoken and, therefore, under our Standing Orders have exercised their only right to speak. But as the noble and learned Lord himself has said, we are master of our own House. We have our Rules and we nearly always keep to our Rules. If we do depart from them then I think it is for the benefit of the House, but very quickly we are reminded that we have broken the Rules and we come back to order. Clearly, however, if we have difficulties to-morrow, I have no doubt at all that the ingenuity that has already been displayed this afternoon in regard to this matter will be available to us and we shall be able to deal with the situation.
My Lords, this is not an automatic response to another place. They have sent a Message to us, and in the interests of good relations between the Houses we should accept it. But let us be quite clear that this House is master of its own House. This Bill is before us, it belongs to us at this present moment, but in the interests of good relations, as I mentioned before, we should now accede to the request of another place.
On Question, Motion agreed to, and Bill returned to the Commons accordingly.

NORTHERN IRELAND BILL
Brought from the Commons; read 1a, and to be printed.
POLICING OF AIRPORTS BILL
Brought from the Commons; read 1a, and to be printed.
RAILWAYS BILL
Brought from the Commons; read 1a, and to be printed.
BRITISH TRANSPORT DOCKS BILL
The Queen's consent signified and Bill reported from the Select Committee with Amendments.
RIVER WEAR BARRAGE BILL [H.L.]
The Queen's consent signified and Bill reported with Amendments.

STATUTORY INSTRUMENTS
Fourteenth Report from the Joint Committee, made on certain Statutory Instruments and the following Instruments which require affirmative approval:
Draft Counter Inflation (Abolition of Pay Board) Order 1974,
Draft European Communities (Definition of Treaties) Order 1974,
Legal Aid and Assistance (Financial Conditions) Regulations 1974,
Legal Aid (Financial Conditions) Regulations 1974;
the said Report to be printed.

OLD LONDON ROAD, HYTHE, BURIAL GROUND BILL
Returned from the Commons with the Amendments agreed to.

LAND TENURE REFORM (SCOTLAND) BILL [H.L.]
Returned from the Commons agreed to with Amendments.

1968

1969

1970

1971

1972

Basic foodstuffs

Percentage of GNP

2·33

2·37

2·45

2·30

2·35

Percentage of National Income

2·58

2·64

2·73

2·57

2·64

Agricultural fertilisers

Percentage of GNP

0·1l

0·09

0·08

0·08

0·08

Percentage of National Income

0·13

0·10

0·09

0·09

0·09

Animal feedingstuffs

0·58

0·57

0·61

0·53

0·49

Percentage of National Income

0·65

0·64

0·68

0·60

0·55

It is not the practice to publish forecasts of future expenditure.

BRITISH AIRPORTS AUTHORITY (LONGFORD RIVER) BILL [H.L.]
Returned from the Commons agreed to with Amendments; the said Amendments considered and agreed to.
  TRANSFER OF TENANCIES
  TRANSFER OF TENANCIES
  FOODSTUFFS AND AGRICULTURAL IMPORTS
  FOODSTUFFS AND AGRICULTURAL IMPORTS