Sitting of 10 July 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  WESTMINSTER ABBEY BILL [Lords]
  As amended, considered; to be read the Third time.
DUNDEE HARBOUR ORDER CONFIRMATION BILL (By Order)
  DUNDEE PORT AUTHORITY ORDER CONFIRMATION BILL (By Order)
  Considered; to be read the Third time upon Tuesday next.
ORAL ANSWERS TO QUESTIONS
  NATIONAL FINANCE

    Spending Departments (Sub-programme Costs)
    Mr. Ridleyasked the Chancellor of the Exchequer if he will introduce a system whereby spending Departments report to him monthly whether each sub-programme is costing more or less than budget.
    The Chief Secretary to the Treasury (Mr. Joel Barnett): Under the Public Expenditure Survey system Departments already report changes in public expenditure estimates by sub-programme as they become known.
    Mr. Ridley: Does the Chief Secretary agree that, in these times of galloping inflation, annual accounting is not good enough and that Peter Vinter's suggestion that there should be monthly reporting would allow the Government at least to
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    know to what extent public expenditure was out of control?
    Mr. Barnett: I shall not go too deeply into the hon. Gentleman's supplementary question. As I indicated in my first answer, we are already receiving every month a considerable amount of information.

    Public Expenditure Control
    Mr. MacGregorasked the Chancellor of the Exchequer if he will make a statement on the progress of his investigation into the possibility of setting cash limits for public expenditure.
    Mr. Hurdasked the Chancellor of the Exchequer whether he will make a statement on the progress made towards achieving a more effective control of public expenditure, for example by imposing cash limits on each sector.
    Mr. Joel Barnett: My right hon. Friend said in his statement on 1st July that cash limits would be fixed for wage bills in the public sector. The Government will employ the system of cash limits more generally as a means of controlling public expenditure in the short term. The intention is that in appropriate cases the existing system of control in real terms should be reinforced by cash ceilings on expenditure in the year ahead.
    Mr. MacGregor: Does the Chief Secretary agree that it is essential to include strict cash limits on local authority expenditure, over and above the rate support grant, if we are to ensure that this control is adhered to? Will he guarantee that this will be included in the system to be announced?
    Secondly, to avoid the danger of public bodies saying to his right hon. Friend the Chancellor at the end of a 10-month period "We have run up against our ceiling on cash limits. You must accept that either there will need to be further subsidies or there will be no services" will he ensure that there is a proper monitoring system throughout the year of the expenditure and of the cash limits, accountable to Parliament as well as to Ministers, so that this danger can be overcome and warning signals can be given?
    Mr. Barnett: On local authority expenditure, I am sure the hon. Member appreciates that it would be as well to

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    wait for the White Paper tomorrow. On the monitoring system, we are constantly looking at the best way to improve this system. I shall certainly take note of what the hon. Gentleman has said.
    Mr. Heffer: Do not cash limits mean that there will be cuts in public expenditure? These are taking place now. Is my right hon. Friend aware that this is not acceptable to many Labour Members?
    Mr. Barnett: I do not think my hon. Friend appreciates that cash limits are another means of controlling public expenditure. Excessive public sector wages, of course, must inevitably have an effect on public expenditure.
    Mr. Hurd: Does the Chief Secretary accept that the Consolidated Fund figures published yesterday have strengthened the fear of people who believe that public expenditure is still out of control? Does he propose to publish, for each part of the public sector, the cash limits which are now to be imposed? Is not that the only way of reassuring people on this vital point, which is far more important than what the right hon. Gentleman proposes to do in the private sector?
    Mr. Barnett: The figures published yesterday can be very misleading. It would be quite wrong to draw conclusions from figures for so short a period. I am sure the hon. Member will recognise that it is not helpful to draw such conclusions.
    Sir G. Howe: Will the Chief Secretary accept that Conservative Members welcome the Government's recognition of the need to impose cash limits as a means of controlling public expenditure? Will he assure the House that the proposal to fix limits for wage bills in the public sector will not only fulfil the Chancellor's pledge to prevent the growth of subsidies or borrowing but will prevent the excess costs of wage settlements being loaded on to the public through increases in prices and charges? In other words, will he so apply the sysem as to prevent a recurrence of what appears to be happening in the Post Office?
    Mr. Barnett: The right hon. and learned Gentleman has made precisely the same point as my hon. Friend made the other week. I am sure that the right hon. and learned Gentleman will be able to wait patiently for the White Paper tomorrow.
    Mr. Michael Lathamasked the Chancellor of the Exchequer whether he will now announce further proposals for the control of public expenditure.
    Mr. Lawsonasked the Chancellor of the Exchequer what progress he has made towards a more effective method of controlling public expenditure, in particular by the imposition of cash limits; and whether he will make a statement.
    Mr. Joel Barnett: I would refer the hon. Members to the answer that would have been given earlier today to similar Questions by the hon. Members for Norfolk, South (Mr. MacGregor) and Mid-Oxon (Mr. Hurd).
    Sir G. Howe: On a point of order. Mr. Speaker—
    Mr. Speaker: Order. I did not hear what the right hon. Gentleman said.
    Mr. Barnett: I would have been referring to the Question that I would have answered earlier if it had not been for your ruling, Mr. Speaker.
    Sir G. Howe rose—
    Mr. Speaker: Order. I have not prevented the right hon. Gentleman from answering any Questions.
    Mr. Barnett: The Questions that were answered were asked by the hon. Members for Norfolk, South and Mid-Oxon.
    Sir G. Howe: On a point of order, Mr. Speaker. I am not questioning your ruling, but if Ministers at the Dispatch Box are to be protected in some way from answering certain Questions that would have been put to them when they come to Questions that are legitimately being put to them, is it not treating the House with contempt and frivolity that they should be answered in the way the Chief Secretary has answered them? Cannot he now be required to answer the Question seriously with the gravity which should attach to it?
    Mr. Barnett: In reply to the point raised by the right hon. and learned Member for Surrey, East (Sir G. Howe), may I say that I have no wish for protection to be offered. I should have been more than delighted to answer all the previous Questions. This Question' I answered with Question No. 3.
    Mr. Speaker: Order. The right hon. Gentleman did answer Question No. 3.
    Mr. Latham: May I now ask my supplementary question, Mr. Speaker? Do the Government attach more importance to controlling capital expenditure on construction work or reducing unemployment in the building industry?
    Mr. Barnett: We pay attention to all these matters. We intend to ensure that unemployment is brought down, and the way to ensure that it is brought down quickly is by bringing down the rate of inflation.
    Mr. Lawson: Without revealing anything in the White Paper, does the right hon. Gentleman agree that public expenditure as a proportion of gross domestic product has increased, is increasing and ought to be diminished?
    Mr. Barnett: I agree that the growth of public expenditure must be restrained if we are to find the resources for new investment and to repay the very large debt which we have at present.
    Mr. Biffen: Does the enormous increase in the Consolidated Fund expenditure for the first quarter of the current year relative to the corresponding period a year ago fall in line with the expectations of the Chief Secretary, and is it consistent with a public sector borrowing requirement no greater than that indicated at the time of the Budget?
    Mr. Barnett: As I said earlier, it is far too early to draw conclusions from those figures during the course of a year. I am sure that the hon. Gentleman, with his great knowledge of these matters, will understand that.
    Mr. Cronin: Does my right hon. Friend agree that the massive and drastic cuts in public expenditure recommended by Opposition Members would not only enormously increase unemployment but, as they would not have effect for 18 months, would have no real relevance to the present economic situation?
    Mr. Barnett: I agree with much that my hon. Friend has said.
    Mr. Lane: To help in countering inflation, will the right hon. Gentleman clear up one area of confusion before tomorrow? Does he accept that if the Gov-
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    ernment's incomes policy is to succeed the primary responsibility must rest on the Government to persuade and compel wage and salary earners to observe the 10 per cent. limit, and that there can be no question of the Government sheltering behind employers?
    Mr. Barnett: I am sure that the hon. Gentleman has been reading Press reports about the contents of the White Paper to be published tomorrow. Being the patient man he is, I know that he will be able to wait until then to find out what it contains.
    Mr. David Howell: With prices likely to rise at least 20 per cent. to 25 per cent. this year, if the cash limits on public spending are to be applied at 10 per cent. will the Chief Secretary make clear to his hon. Friends—some of whom are confused, including some of his right hon. Friends—that this must necessarily mean major cuts in all public spending programmes? Will he give us an assurance that the details of those cuts will be set out in the White Paper tomorrow?
    Mr. Barnett: The hon. Gentleman must wait until the White Paper is published.
    Mr. Rost: How can the Government's declared intention of controlling public expenditure be taken seriously unless the Government abandon the irrelevant nationalisation programmes?
    Mr. Barnett: I simply do not agree with the hon. Gentleman that they are irrelevant.

    Inflation
    Mr. Gouldasked the Chancellor of the Exchequer whether he will make a further statement on his plans for reducing the rate of inflation.
    Mr. Teddy Taylorasked the Chancellor of the Exchequer if he will make a further statement on his plans to reduce the level of inflation.
    Mr. George Gardinerasked the Chancellor of the Exchequer by what means he proposes to halve the rate of inflation in the coming year.
    Mr. Jesselasked the Chancellor of the Exchequer if he will announce measures before the end of July to reduce inflation.
    Mr. Wrigglesworthasked the Chancellor of the Exchequer what further steps he intends to take to control inflation.
    Mr. Rostasked the Chancellor of the Exchequer when he expects to announce measures to deal with inflation.
    Mr. Moateasked the Chancellor of the Exchequer what progress he has made in preparing new measures to deal with inflation; and if he will make a statement.
    Mr. Joel Barnett: I must ask hon. Members to await publication of the White Paper.
    Mr. Speaker: In view of the fact that there is to be a statement tomorrow, I hope that I shall be allowed to go on to the next Question.
    Later—
    Sir G. Howe: On a point of order, Mr. Speaker. I appreciate, of course, the difficulties facing the Chancellor—
    Mr. Speaker: Order. I am sorry to interrupt the right hon. and learned Gentleman but may I ask whether this is a point of order arising out of Questions?
    Sir G. Howe: It is, Mr. Speaker. I appreciate the difficulties facing the Chancellor. We know that a statement is promised for tomorrow. I wonder whether you would agree to reconsider your suggestion that Government Ministers should not be exposed to questioning on any of the many Questions on the Order Paper about their plans for combating inflation.
    Mr. Gould: Further to that point of order, Mr. Speaker. Is it not a harsh doctrine that the rights of back benchers should be curtailed in this way because of the imminence of a White Paper? Many of us feel that it is still not too late to try to influence right hon. and hon. Gentlemen concerning the contents of the White Paper. That is precisely the reason why we placed such Questions on the Order Paper.
    Mr. Speaker: The Chair has some rights. The Select Committee which deal with Questions entrusted the Chair with this discretion. I am told that there is to be a statement tomorrow. There should be ample time for hon. Members to put
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    questions then. There are 45 Questions tabled to the Chancellor today. I must be allowed to decide whether the House goes on.
    Mr. Heffer: Further to that point of order, Mr. Speaker. I accept your point that the Chair has rights, as I am sure does every other hon. Member, but back benchers have rights as well. The Chair's duty is surely to ensure that the rights of back benchers are upheld. If my hon. Friends feel that, even at this late stage, they can influence the White Paper, surely they have the right to seek to do so.
    Mr. Speaker: If they think or believe that, it must be a triumph of optimism over experience.
    Sir G. Howe: Further to that point of order, Mr. Speaker. If the Chancellor is still closeted with his colleagues and is discussing this matter, surely it is not too late or insensible for hon. Members to request you to reconsider your decision, which deprives back benchers of the chance to influence what may be contained in the White Paper.
    Mr. Speaker: In my view there are plenty of other Questions on which hon. Members can put forward their views. I must be entitled to exercise my discretion, which was specifically preserved by the Select Committee which considered this matter.
    Later—
    Mr. Gardiner: On a point of order, Mr. Speaker. It arises from your ruling earlier this afternoon, which was quite different from the point of order put to you by my right hon. and learned Friend the Member for Surrey, East (Sir G. Howe). The situation, as the House will recall, was that a number of back benchers on both sides, who a fortnight ago correctly anticipated the situation in which the Government would find themselves and therefore put down Questions on measures to curtail inflation, were blocked from putting Questions to Treasury Ministers in anticipation of the statement which is promised for tomorrow. In protecting the rights of back benchers, would not it be equitable if those back benchers who had their Questions to Treasury Ministers blocked in anticipation of a statement tomorrow were well placed to catch your eye, Mr. Speaker, in putting

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    supplementary questions when the statement is made?
    Mr. Speaker: I think that is a very relevant and pertinent point of order and I shall watch carefully to see how many of them are here tomorrow.
    Mr. Maxwell-Hyslop: On a point of order, Mr. Speaker. Since the Treasury Bench promised the statement that is to be made tomorrow within a week of Monday last week, surely the Table Office should have allowed the Question which it blocked for today on the ground that the statement was promised for two days earlier.
    Mr. Speaker: That is a recondite point into which I shall not go now.
    Mr. Laneasked the Chancellor of the Exchequer whether he will make a further statement on his latest plans for combating inflation.
    Mr. Goldingasked the Chancellor of the Exchequer what steps he now intends to take to combat inflation.
    Mr. Joel Barnett: I would refer the hon. Members to the reply which was given earlier today to my hon. Friend the Member for Southampton, Test (Mr. Gould)—but it was not given because he was not here.
    Several hon. Members rose—
    Mr. Speaker: I am afraid that I must stand by my previous decision.
    Mr. Skinnerasked the Chancellor of the Exchequer what is the current rate of inflation; and if he will make a statement.
    Mr. Joel Barnett: The index of retail prices for all items for 13th May 1975 showed an increase of 25 per cent. on May 1974.
    Mr. Skinner: I wonder whether my right hon. and very intelligent and sharp Friend would pay some attention to the recent statement he made about conquering inflation and thereby reducing unemployment. Would he not agree that there have been many examples, including some recent ones in West Germany, which indicate that a reduced rate of inflation has of itself increased unemployment—the exact opposite of what my right hon. Friend has said previously and many times this afternoon? Will he also express
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    some sympathy with those of us here who, along with him, fought tooth and nail when we were in opposition against all forms of incomes policy, who marched through the Lobby with him and who now refuse to stand on our heads and do the opposite because we are in power?
    Mr. Barnett: I have great sympathy with my intelligent and sympathetic Friend. I am sure he will recognise that there is no way in which we can solve our problems unless we reduce the rate of inflation. That is what we are doing and that is what will be made clear in the White Paper tomorrow.
    Mr. Kenneth Lewis: Has the right hon. Gentleman noticed that the Post Office is promising swingeing increases in prices to the general public in a few weeks' time? Has he checked to find out whether it will do this without cutting back on its expenses, its staffing and so on before passing this on to the public, to increase inflation even more?
    Mr. Barnett: I cannot understand the hon. Gentleman. I am sure that he, like many of his hon. Friends, is opposed to the idea of subsidies in these industries. That is what is being done. At the same time we are making certain that all our attention is given to cutting costs wherever possible.
    Mr. Pardoe: Will the right hon. Gentleman state the rate of inflation by the Chancellor's own patent mathematics on the basis of which he arrived at an 8½ per cent. rate nine months ago, at the time of the last General Election? Will he give us the figures for the past three months at an annual rate? Will he also say whether in tomorrow's White Paper there will he a public apology to those of us who said that the rate of inflation nine months ago was 20 per cent?
    Mr. Barnett: I am sorry that the hon. Gentleman is so sensitive that he needs apologies all the time. I am sure he will be able to restrain his impatience until he reads the White Paper tomorrow.

    Value Added Tax (Multi Rates)
    Mr. Biggs-Davisonasked the Chancellor of the Exchequer whether he will make a statement about the working of multi-rate VAT.
    The Financial Secretary to the Treasury (Mr. Robert Sheldon): The transition has gone reasonably well and I should like to thank those in the trades affected for the way in which they have co-operated.
    Mr. Biggs-Davison: Has the Minister any idea of the trouble, difficulty and expense which has been placed upon businesses as a result of multi-rate VAT? In the light of experience, does he not think that a single rate was better? Is he prepared to hear representations from Epping Forest traders on the issue?
    Mr. Sheldon: I am always pleased to listen to any representations. I must remind the hon. Gentleman that the problems in the retail trade are nothing like the problems that existed when VAT was first introduced. I also remind the hon. Gentleman that out of the nine member countries in the Community we were the only one without multi-rate VAT in operation.

    Mortgage Interest (Tax Relief)
    Mr. McCrindleasked the Chancellor of the Exchequer what recent representations he has received on tax relief on mortgage interest payments.
    Mr. Robert Sheldon: Representations have been received on several aspects of this relief. As the hon. Member will know, the relief was discussed on 26th June in Standing Committee on Clause 27 of the Finance Bill.
    Mr. McCrindle: Is the Minister still able today to give a categoric assurance to the millions of people buying their homes on mortgage and the thousands budgeting to do so to the effect that the Government have no intention of withdrawing the tax relief on the interest content of mortgages, upon which so many of them rely?
    Mr. Sheldon: The position is quite clear. Mortgage relief stands. We have discussed it recently and we have no intention at present of changing it.
    Mr. Beith: What is the Government's justification for continuing relief on the higher rates of tax, which represents a subsidy towards higher rate taxpayers who can take on large mortgages?
    Mr. Sheldon: This is another matter. I would remind the hon. Gentleman that
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    the Labour Party was instrumental in bringing about a limit on the extent of the mortgage. This limit, we believe, is realistic and those with ordinary-priced houses have been helped. Although we do not make changes to take account of inflation, these are matters that are obviously kept under review.

    Scottish Trades Union Congress
    Mr. Canavanasked the Chancellor of the Exchequer when he next plans to meet the STUC.
    Mr. Joel Barnett: My right hon. Friend has contact with representatives of the STUC at various times, and it has many opportunities of making its views known to him. But he has at present no plan to meet the STUC.
    Mr. Canavan: Will my right hon. Friend tell Scottish workers and their families, many of whom are obliged to struggle along on wages less than one-tenth of the Chancellor's salary, why the Chancellor considers wage increases to be the major cause of inflation when over the past five years the precentage of gross national product taken up by wages has increased by less than 1 per cent.? Will my right hon. Friend also urge the Chancellor to introduce a price freeze to shield lower-paid workers from wage restrictions caused by collaboration between the Treasury and the CBI?
    Mr. Barnett: Whatever may have been the situation in the past five years, I doubt whether anyone would disagree with the fact that in the past 12 months wage inflation has been one of the major causes of price inflation.
    Mr. Heffer: No.
    Mr. Biffen: No.
    Mr. Barnett: That is my view. I am sorry if my hon. Friend disagrees. May I say to my hon. Friend that tight control on prices without wage restraint is the sheer, certain way of creating massive bankruptcies and the loss of thousands of jobs.
    Mr. Teddy Taylor: Is the right hon. Gentleman aware of the serious concern among Scottish trade unionists about the shortage of police manpower in our Scottish cities? Can he give us today a clear and categoric assurance that the

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    Chancellor's statement tomorrow will not prevent the police pay settlement, recently agreed with the Police Council, from being honoured on 1st September?
    Mr. Barnett: The hon. Gentleman will not have to wait too long to see what is in the White Paper.
    Mr. Grimond: While I agree, contrary to some hon. Members, with the analysis made by the right hon. Gentleman, may I ask whether in drawing up his proposals for tomorrow the Chancellor will bear very much in mind the regional differences in the country and the entirely different economic circumstances as well as, in some places, great problems with labour?
    Mr. Barnett: All these matters will be taken into account.
    Mr. David Howell: The hon. Member for West Stirlingshire (Mr. Canavan) spoke of wage restriction and, as the Chief Secretary knows, the Chancellor spoke about a cash ceiling on pay in the public sector. May we have an indication of when these will commence? Will it be from 1st August with other pay norms, or from the next financial year? If so, how will that affect the Chief Secretary's figure of a £3 billion to £4 billion increase in public sector pay in the current year?
    Mr. Barnett: I know that the hon. Member is a patient man. He will not have to wait too long. He will have all the answers tomorrow.

    Industrial Investment
    Mr. Hooleyasked the Chancellor of the Exchequer what further steps he proposes to take to stimulate industrial investment.
    Mr. Joel Barnett: The best way of encouraging investment is to get the rate of inflation down, and in our discussions with representatives of the management side of industry my right hon. Friend has emphasised that the Government will expect companies to seize the opportunity to invest as we bring inflation under control.
    Mr. Hooley: Is not my right hon. Friend being somewhat naive in supposing that we will get investment merely by bringing down inflation? Does he agree
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    that there have been periods of no inflation, gross inflation and moderate inflation and investment has still not taken place? Docs he further agree that the question of industrial investment is far more fundamentally important to the economy of the country than inflation?
    Mr. Barnett: It is a fact that one of the major reasons why companies do not invest is the uncertainty created by high rates of inflation. It is that uncertainty that causes a fall in investment. [Interruption]. There is no point in directing investment if the investment does not produce goods than can be sold.
    Sir John Hall: Would not the Chief Secretary agree that we already have some of the best investment incentives in the world? Would he not further agree that with present production capacity under-utilised and likely to be further under-utilised in the coming months, any investment incentives given in addition to the existing ones should be directed towards growth industries?
    Mr. Barnett: Investment incentives are already at a pretty high level. The important consideration is that during the next 12 months it should be clear to industry that the opportunities for investment are there. We have done a great deal to provide finance for industry to creat that investment.
    Mr. Heffer: Will my right hon. Friend forgive me, because I am a personal friend of his—
    Mr. Russell Kerr: You were.
    Mr. Heffer: Would not my right hon. Friend agree that he is talking absolute nonsense? Is he aware that we had three and a half years of a Tory Government with the then Prime Minister trailing the country to CBI lunches and everywhere else saying "Look, we have given you all the incentives you need. Please invest in industry." Industry did not invest. That argument is absolute rubbish.
    Mr. Barnett: May I tell my personal friend that I would not dare to accuse him of talking nonsense, even if he does so from time to time. I have constantly said that investment incentives of all kinds would not of themselves be sufficient to create the necessary increase in

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    manufacturing investment. What is needed is the right climate.
    Mr. Pardoe: Is the right hon. Gentleman aware that in the opinion of many British business men it is the lack of continuity between one Government and another over major economic policies and aims which is undermining investment intentions? Will he give reasons why investment has been so much higher in West Germany, where there is continuity of Government policy from one Government to another, than in the United Kingdom?
    Mr. Barnett: I could give the hon. Gentleman a great many reasons why investment in West Germany is higher than ours, but it would take far too long to answer now. I doubt whether it has anything to do specifically with continuity. It has to do with bad policies throughout the years.
    Mr. Cormack: Does the right hon. Gentleman agree that the greatest incentive to investment will be provided if the Government drop their threats of nationalisation and that this will create a climate of certainty for which industry is waiting?
    Mr. Barnett: No, Sir.
    Mr. Cronin: Does my right hon. Friend agree that the best stimulus for investment, both private and public, is confidence among the business community, both overseas and at home? Does he agree that the Chancellor's statement last week was the best stimulus to that confidence that there has been for a long time, and that that confidence will continue only if the Chancellor's new policy is rigidly enforced?
    Mr. Barnett: I entirely agree with my hon. Friend's sensible statement.
    Mr. Nott: Does the Chief Secretary agree that the greatest possible disincentive to industrial investment at this time would be a tightening of price controls, and that if the public sector pre-empts major proportion of our national financial resources it will be impossible for them to be available to the private sector?
    Mr. Barnett: If the hon. Gentleman is saying that there should not be any kind
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    of price controls, I disagree with him. As to how much there will be, I am sure he will be able to wait until tomorrow.

    Business Expenses
    Mr. Brittanasked the Chancellor of the Exchequer whether he is satisfied with the law relating to the treatment for tax purposes of business expenses.
    Mr. Robert Sheldon: I should be grateful if the hon. Gentleman would tell me what aspects of the tax law he has in mind, and I shall gladly look into them.
    Mr. Brittan: Is it not a wholly unacceptable anomaly that unions have been able to obtain tax-free allowances in respect of meals taken by their members while away on their jobs while the self-employed have to pay tax on them? Is it not an even more unacceptable anomaly that trade union officials such as Mr. Scargill can be provided with large Volvo cars and pay no tax on the benefit which they receive?
    Mr. Sheldon: The Government are looking into the taxation of certain benefits in kind. The hon. Gentleman will be aware of the incredible anomalies which exist throughout the whole of the private sector whereby large benefits are being obtained and the due rate of tax is not paid on them.
    Mr. Tinn: Does my hon. Friend agree that it is a far more grievous anomaly that ordinary working people are not allowed to charge against their tax the cost of travel to work, in contrast to self-employed and business people generally who are allowed tax concessions?
    Mr. Sheldon: This has been looked at frequently in the past. A concession of that kind has not been possible because of the amount that it would involve and the repercussions which would result. We are aware of the anomalies involved in the taxation of benefits in kind, some of which my hon. Friend referred to, and the matter is being examined at present.
    Sir G. Howe: Does the Minister accept that one of the most powerful pressures towards the achievement of legitimate expenses for tax purposes arises from the extremely high and recently increased marginal rates of taxation? As long as there is a Government which is obsessed by the pursuit of egalitarianism at all

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    times and in all circumstances, it will be impossible to restore sanity to the tax system and promote economic growth.
    Mr. Sheldon: The right hon. and learned Gentleman is entitled to his point of view. But these problems were with us long before the rates of tax attained their current levels. I suspect that they will remain with us irrespective of what happens to the levels of taxation.

    Value Added Tax (Building Materials)
    Sir David Rentonasked the Chancellor of the Exchequer whether he is aware that VAT is being charged on building materials used to extend, improve or build village and other halls for public or charitable uses in cases where the work is being done by voluntary labour; and whether he will reconsider the charging of VAT in such cases.
    Mr. Robert Sheldon: Yes, Sir. Under Schedule 4, Group 8, to the Finance Act 1972, supplies of building materials and certain other goods are zero rated when, and only when, they are supplied by a trader who is registered for VAT purposes in connection with supplies of zero-rated building construction or alteration work. However, it is sometimes possible under the law as it stands for bodies of the kind mentioned by the right hon. and learned Member so to arrange their affairs that they can benefit from zero rating. It is not possible to generalise as each case must be considered individually. I suggest that the right hon. and learned Member might let me have details of any particular case he has in mind.
    Sir David Renton: When there would be such obvious justice in not charging VAT on people who are providing voluntary labour for public purposes, why must those who are concerned with this play a cat-and-mouse game with the Customs and Excise? Can the Minister simplify the procedure and draw attention to the advantages which can be obtained, and make those advantages easily available?
    Mr. Sheldon: I agree with a great deal of what the right hon. and learned Gentleman says, but these anomalies were inherent in the original legislation. We intend to improve that as we go along.
    Mr. Powell: Will the Minister consider whether the self-built provisions in this respect in the previous Finance Act can be extended in the manner suggested by my right hon. and learned Friend?
    Mr. Sheldon: Those matters will obviously form part of any consideration of the kind which I have outlined.
    Dr. M. S. Miller: As the Government have indicated that it was never the intention to impose VAT on that kind of labour, why do they not make exceptions in cases such as those mentioned by the right hon. and learned Gentleman and also in other cases of VAT on do-it-yourself houses, and make them retrospective to the time when the tax was brought in, which was not very long ago?
    Mr. Sheldon: It is not for me to say what was the intention of the previous Government in bringing in the legislation which they introduced. Certainly it is our intention to reduce the anomalies as they come to light.
    Mr. Cormack: Is the Minister aware that it is not only village halls which suffer, as was pointed out by my right hon. and learned Friend? Many village churches are also suffering, as the devoted efforts of congregations to raise money are being considerably hampered by the imposition of VAT on the restoration of historic buildings.
    Mr. Sheldon: I understand those points. I think that there are a number of cases where assistance can be given. If the hon. Gentleman will write to me about specific cases, I shall gladly look into them.

    Value Added Tax (Collection)
    Mr. Freudasked the Chancellor of the Exchequer what recent representations have been received in respect of VAT collection by small businesses.
    Mr. Robert Sheldon: We have received representations that some form of payment should be made to small businesses to compensate them for the cost of collecting VAT, but I am afraid it is not possible to meet that request.
    Mr. Freud: Is the Financial Secretary aware of the fact that my constituents are sick and tired of VAT forms, and having to act as unpaid tax collectors for the

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    Government, and would like some financial assistance to compensate them for the hours spent completing their VAT returns?
    Mr. Sheldon: Although we have received representations, the position is as it was when the legislation was introduced in 1972. We drew attention to the problems which would be caused by that legislation. That has proved to be the fact. As time goes on we hope to be able, by means of schemes and such like, to reduce the incidence and the burden upon the traders concerned.
    Mr. Townsend: Will the Financial Secretary consider raising the level at which employers start paying VAT, bearing in mind the high rate of inflation?
    Mr. Sheldon: This matter is under review, but it must be remembered that the level at which firms become registrable for VAT is high compared with the level which operates in other Community countries. That factor is not directly involved here but it is nevertheless one of which we have to take some account.
    Sir G. Howe: Does not the Minister recognise what is manifest, namely, that the problems of collecting VAT have already been greatly increased by the introduction of the multi-rate structure? Will he give a pledge that the Government will take no further steps down that road?
    Mr. Sheldon: The Conservative Government, to which the right hon. and learned Gentleman belonged, introduced VAT as a broad-based, comprehensive tax, free from anomalies. It never was that and it is never likely to be. We have improved it in some ways. In difficult circumstances we have produced £300 million extra revenue which is necessary to reduce the borrowing requirement, and we make no apology for so doing.

    Coinage
    Mr. Liptonasked the Chancellor of the Exchequer whether he will now simplify the coinage by withdrawing from circulation the old sixpenny piece and the present halfpenny.
    Mr Joel Barnett: No early decision on the 2½p coin is likely; the position is being kept under review. There is no
    732
    intention whatever of abolishing the ½p coin.
    Mr. Lipton: Is my right hon. Friend aware that the sixpenny piece has become unnecessary? If it were called in the Government would make a profit, because most people use the sixpenny piece for necklaces and bracelets. In addition, the ½p coin has become useless.
    Mr. Barnett: I am afraid that I do not agree with my hon. Friend. The facts do not bear out what he says. The 2½p coin is still found useful by many people, particularly elderly people.
    Mr. Kenneth Lewis: Is the right hon. Gentleman aware that the Government will be renowned, among other things, for the complete demise of the old "tanner" that used to buy so much? Now it buys nothing, not even an ice cream. The right hon. Gentleman might as well do away with it because the Government's inflation has eroded its value.
    Mr. Barnett: If it only gives an opportunity for the hon. Gentleman to ask what he considers to be funny questions, it is of some value.
    Mr. Jessel: What would be the cost of abolishing all the parking meters throughout the country to allow for the abolition of the sixpence?
    Mr. Barnett: I need notice of that question.

    Savings (Index-linked Schemes)
    Mr Neubertasked the Chancellor of the Exchequer what are the latest figures for contributions to the two index-linked personal savings schemes; and what plans he has for the introduction of further such schemes.
    Mr. Joel Barnett: In the period to 21st June 1975, net sales of the index-linked national savings certificate are estimated at just over £45 million. Save As You Earn—third issue—commenced on 1st July 1975 and a highly provisional estimate of monthly inflow from contracts accepted so far is £0·5 million. On the second part of the Question, I would refer the hon. Member to the reply by my right hon. Friend the Paymaster-General to my hon. Friend the Member for Preston, North (Mr. Atkins) on 8th May.—{Vol. 891, c. 513.]
    Mr. Neubert: Does the Minister accept that the opportunity to invest in inflation-proof schemes is an act of belated social justice to millions of people who have seen their savings irreversibly damaged during the recent rapid rise in the rate of inflation? Will he make recompense to many of them by easing up on his vindictive attacks on the principle of savings embodied in the capital transfer tax and the wealth tax?
    Mr. Barnett: The hon. Gentleman has put his supplementary question at the wrong time, because National Savings are rising very well at present. I am sure he will be delighted to hear that. As to what he called "belated social justice", I am sure he will pay due attention to the fact that the scheme was introduced by a Labour Government and not by a Conservative Government.
    Mr. Nott: Is the Chief Secretary confident that a further extension of index-linked schemes—which are welcome to savers—will not cause a diversion of funds away from deposits with building societies, leading to a rise in the mortgage interest rate?
    Mr. Barnett: We are, indeed, aware of those problems. That is precisely why we introduced the scheme in this limited way.

    International Monetary Fund
    Mr. Tim Rentonasked the Chancellor of the Exchequer whether he is proposing to meet with the International Monetary Fund for discussions on Great Britain's economy.
    Mr. Joel Barnett: No, Sir.
    Mr. Renton: When the Chancellor next meets the IMF, which if the Tribune Group has its way may be sooner than expected, will he explain to the IMF why, having deceived the nation last autumn by saying that inflation was running at a rate of 8·4 per cent., he should now carry any credibility when he says that he will have the rate of inflation down to 10 per cent. by next year?
    Mr. Barnett: I think that my right hon. Friend will have credibility when the people at home and abroad see the White Paper tomorrow.
    Mr. Heffer: Will my right hon. Friend give an assurance that the conditions that
    734
    would be laid down by the IMF if we went to it for a loan will not in any case be applied by the Government if they do not go to the IMF for a loan?
    Mr. Barnett: I am sure my hon. Friend recognises that we have a better chance of avoiding having to go to the IMF if he and everyone else on our side and on the Opposition side support the proposals which are due to come out in the White Paper tomorrow.

    Personal Income
    Mr. Costainasked the Chancellor of the Exchequer what income is now necessary to give a married man with two children the equivalent purchasing power, after tax, of an income in 1970 of £2,500 a year on the basis (a) that the whole income is earned, (b) that the whole of the income is from investments and (c) that half the income is earned and half from investments.
    Mr. Robert Sheldon: On the basis of the latest information about the retail price index, and assuming that the children are both aged under 11, the figures are:

    (a) £4,710 where the income is all earned;

    (b) £4,900 where the income is wholly from investments and

    (c) £4,620 where half the income is earned and half is from investments.

    Mr. Costain: Do not these figures show why there is a need to bring pressure for wage rises? Would we not reduce inflation more quickly if the Government were to face the situation and took account in their proposals of the effect of inflation.
    Mr. Sheldon: The hon. Gentleman is wrong. In order to take account of inflation it has been necessary to increase the tax rates. My right hon. Friend the Chancellor of the Exchequer, both in his Budget Statement and after, pointed out that it would be necessary to increase taxes to allow for the inflation that had been induced.
    Mr. Adley: What conclusions does the hon. Gentleman draw, bearing in mind what he has just said, from the American experience of reducing taxation and inflation simultaneously?
    Mr. Sheldon: One can run into many problems if one tries to compare two

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    different economies at two different phases in the way the hon. Gentleman is trying to do. We recognise the problems that we face, and they will be dealt with in the statement tomorrow.

    TUC AND CBI (MEETING)
    Mr. Beithasked the Prime Minister when he next expects to meet the TUC and the CBI.
    Mr. Ashleyasked the Prime Minister when he next intends to meet the CBI and the TUC.
    Mr. Atkinsonasked the Prime Minister when next he intends to meet the CBI.
    The Prime Minister (Mr. Harold Wilson): Later this afternoon, Sir.
    Mr. Beith: Does the Prime Minister agree that even if the TUC General Council agreed unanimously to a voluntary policy on pay, it would not have the power to ensure compliance with it? Does he recognise that the people of this country face a reduction in their standard of living over the next months and that if they are to accept this they must have the confidence that a statutory policy will ensure that all bear the sacrifice equally?
    The Prime Minister: My right hon. Friend the Chancellor of the Exchequer and I have frequently stressed that what is important is not only the guidelines, or whatever the right phrase is, but also compliance. On the latter part of the hon. Gentleman's question, I would advise him to wait for the statement I make in the House tomorrow and the White Paper supporting that statement.
    Mr. Ashley: is my right hon. Friend aware that the bedrock of any effective economic policy is the consent of the Trades Union Congress? As he has been effective in securing that consent, he therefore deserves the congratulations of the whole House. However, as it would be fatuous to pretend that a minority of mavericks does not exist, is my right hon. Friend aware that reserve statutory powers are vital to protect the interests of the trade unionists, whose word is their bond and who are realistic enough to recognise that if this policy is smashed
    736
    the living standards of all trade unionists will be smashed?
    The Prime Minister: I am sure my hon. Friend will be prepared to wait another day to see what the White Paper has to say about the question to which he has referred. I agree with him entirely that it was worth while spending the time which was needed to obtain that extremely forward-looking statement by the TUC yesterday, which goes much further than the TUC has ever gone in peace time or in war time on these matters. [Interruption.] Although Conservative Members may laugh, this is essential to secure a successful attack on inflation.
    Mr. Speaker: Mr. Baker.
    Mr. Baker: Does the Prime Minister agree—
    Mr. Blaker rose—
    Mr. Speaker: Order. It may be that there are too many "Ls" about, but there was not one there.
    Mr. Baker: Thank you, Mr. Speaker. Does the Prime Minister appreciate that if the system of pay research for the Civil Service continues during this statutory policy, civil servants will be able to catch up retrospectively? If this breach of the statutory policy occurs, will he, as Minister for the Civil Service and, therefore, the employer in this case, bear the same sanctions as other rogue employers?
    The Prime Minister: Although recognising the deep solicitude which the hon. Gentleman always shows for my well-being in every way, I must still ask him to wait for the White Paper tomorrow. I do not envisage the likelihood of any kind of sanctions being applied to the administration of the Civil Service, about which he is so worried.
    Mr. Atkinson: Does my right hon. Friend recollect the time when he came to the House and explained that it was necessary to relax the application of the Price Code because it was creating serious difficulties in industry by way of cash flow problems? Will he, therefore, confirm that when he meets the CBI this afternoon he will explain why it is the Government's intention to go ahead with a much more severe restraint on prices

    737
    when it was not so long ago proved to the Government by the CBI, apparently, that continuation along that road was not possible?
    The Prime Minister: What I shall explain to the CBI is the relevance, so far as it affects the CBI and its members, of the general line of the proposals we shall be making—though anything I say to the TUC or the CBI this afternoon will be governed by the prior requirements of the statement to be made to the House tomorrow, and it is to the House that this statement should be made.
    Mr. Blaker: Does the Prime Minister recall that the Secretary of State for Employment said in the BBC "Newsday" programme on 16th September last that any Government who introduced a statutory wage policy in any form whatever would not have him as a member of it?
    The Prime Minister: Now I understand, Mr. Speaker, why you wanted to get the "L" out of it when the hon. Gentleman rose earlier.
    My right hon. Friend and I have made clear that what we have said all along in these matters refers to criminal sanctions against workers. The hon. Gentleman will no doubt be waiting, with his usual degree of patience, for the White Paper tomorrow dealing with this question.
    Mr. Ashton: When the Prime Minister meets the CBI later, will he disregard the speculative Press reports about the Labour Government providing money for strike breaking? Will he resist introducing any policies which would give employers powers to break strikes by their unions against pay policies? Will he tell the CBI that the Labour Party insists that this is just not on?
    The Prime Minister: What will be in the White Paper is what will be in the White Paper, on this and all other matters. I ask my hon. Friend to wait. I am sure that we shall have his comments quite quickly after the White Paper is published.
    Mrs. Thatcher: Is the Prime Minister aware that hon. Members have found it very difficult to get any information about what has been going on during this eight-or nine-day period, and that it would
    738
    have been very much more for the convenience of the House if the White Paper had been published and the statement had been made today, when more hon. Members are present? As we learn today for the first time that the Prime Minister is to make the statement tomorrow, will he also give us some other information about when the Boyle Report is to be published and who will make the statement on that?
    The Prime Minister: Yes, Sir. I myself join the right hon. Lady in regretting that it was not possible to make the statement today. She has been very patient on this over the last week or two. But she will know from her own experience the great importance of proceeding in agreement, as we have succeeded in doing, with the TUC. The TUC's General Council took place yesterday. It was right to take full account of the implications of the TUC's decisions in the White Paper. I wish that it could have been presented today, which is a more normal day, or that we could have waited until Monday. I think it is for the greater convenience of the House, which will wish, of course, to debate the White Paper, that we get it out before the weekend so that right hon. and hon. Members in all parts of the House can study it. I think that it would be the general practice in this case—it has been in the past, under successive Governments—that the Prime Minister makes the statement.
    As regards the Boyle Report, a statement will be made early next week. As I indicated to the House last week, I cannot at this stage say who will be making it. I should think it will probably be the Leader of the House, who normally deals with these questions.
    Mr. Faulds: Does the Prime Minister realise that the great majority of the country will support the toughest measures necessary to get the country through? Does he agree that any hon. Members who cannot support these necessary measures should stand down and put themselves to the electorate, whereupon we might well be shot of the rot of them?
    The Prime Minister: Even my hon. Friend's unrivalled diction seems to have got into trouble as well. I think he meant "the lot", and not "rot", as he said. [Interruption.] Well, obviously I cannot speak for what right hon. and hon.

    739
    Members of the Opposition will say because we have not heard their policies on these questions. When my hon. Friend, who I know will wait—
    Mr. Skinner: You want to say something about Andrew Faulds' presence for a start. He is never here.
    The Prime Minister: From my own experience in answering Questions, I know that that is certainly not the case. But my hon. Friend the Member for Warley, East (Mr. Faulds) will be waiting for the White Paper tomorrow, I know. I believe he will find that it has the right degree of what he called toughness. I hope that when he reads it he will also agree that what is important is not toughness for the sake of toughness; it must be effective and workable, and that is what we are aiming at.
    Later—
    Mr. Faulds: On a point of order, Mr. Speaker. Can you tell me what comeback an hon. Member has to accusations such as were made earlier this afternoon by my hon. Friend the beast for Bolsover—[Interruption]—since most of us on the Government side spend every day of the week in the interests of our constituents rather than plotting in the Tea Room and in the House against the Government?
    Mr. Skinner rose—
    Mr. Speaker: Order. There are some occasions when my wig falls conveniently over my ears. I did not hear the exact description the hon. Member applied to his hon. Friend the Member for Bolsover (Mr. Skinner), nor did I hear his hon. Friend say anything about him, so there is nothing for me to rule upon.
    Mr. Skinner: In relation to the last point of order made by the hon. Member for Warley, East (Mr. Faulds), perhaps you would convey to him, Mr. Speaker, that one of the ways in which he could get round the matter would be by writing expensive articles for The Times explaining what he wants to say. Perhaps the hon. Member might also assist in the matter, smashing the next incomes policy in the process, by getting more money than he did for the last one.
    Mr. Speaker: Order. This sounds very much like a Tea Room argument.

    THE BORDERS
    Mr. David Steelasked the Prime Minister if he will pay an official visit to the Border.
    The Prime Minister: As the House knows, I was in Scotland on Tuesday in connection with the State visit of the King of Sweden. I have no immediate plans for a further visit to Scotland but hope to be there later in the year.
    Mr. Steel: If and when the Prime Minister comes to the Borders, as I hope he will, is he aware that he will find an area which produces a very high level of exports and has a very low level of industrial disputes but which, sadly, has below the national level of income? For that reason, may I ask the right hon. Gentleman whether he is aware that my constituents are very concerned that the Government should take really effective measures to control inflation? What assurance can the right hon. Gentleman give them that the Government will act resolutely, take the necessary powers and not be found guilty of cowardice in the face of their friends?
    The Prime Minister: I think the hon. Gentleman will be able to judge that, and I hope that with his customary fairness he will be able to give full support to the White Paper when he reads it. I am aware of the problems in the area he has described, including, of course, a lot of anxiety on the textile and clothing question, which he has raised previously.
    Concerning Scotland as a whole, while unemployment is still far too high, the ratio of unemployment between Scotland —this is true of the Borders, too—and south of the border is at its lowest-ever level since figures were collected and has been falling rapidly as a ratio over the past few months.

    SECRETARY OF STATE FOR THE ENVIRONMENT (SPEECH)
    Mr. Peter Morrisonasked the Prime Minister whether the public speech by the Secretary of State for the Environment at Brighton on 25th June on expenditure levels represents Government policy.
    The Prime Minister: Yes, Sir.
    Mr. Peter Morrison: What would be the Prime Minister's attitude to councillors who increase wages and salaries above the 10 per cent. norm? Will he support them just as he supported the Clay Cross councillors?
    The Prime Minister: The hon. Member will, I hope, await the White Paper tomorrow, because in the attack on inflation the question of local authority employment is obviously important. Local authority employment has increased considerably over recent years, under successive Governments, and of course inflation affects them particularly hard because they are so labour-intensive and have a high employment ratio. The hon. Gentleman will recognise that these are problems which must be tackled. I hope that he will approve what is suggested in the White Paper.
    Mr. Heffer: If my right hon. Friend should go to the Borders, Brighton or anywhere else, would he care to explain to the electorate how it was that in the election manifesto of the Labour Party in October last year we said that we would not introduce any forms of legislation to deal with incomes? If to-tomorrow the White Paper indicates a back-up or any other type of system which means legislation would he then explain how this fits in with our manifesto policy? Would he also explain to the electorate whether during the election campaign my hon. Friends and his hon. Friends in the Government were knaves or fools?
    The Prime Minister: My hon. Friend also will be awaiting the publication of the White Paper with anxiety. With his knowledge of the manifesto—and I think my knowledge is equal to his—he will remember that the important and key section of the manifesto said that the Government's highest priority would be the attack on inflation. [Interruption.] I think my hon. Friend was referring to the October manifesto. Even with his highly developed critical faculties, I think that he will feel that what we are proposing is of the highest relevance to that. Some of the other things he quotes or purports to quote from the manifesto are not exactly as he quotes them.
    Mr. Charles Morrison: Given that in local government and in nearly every industry there are agreed wage levels, but
    742
    given also that regrettably there is bound to be considerable unemployment in the near future among school leavers, would the right hon. Gentleman say that it was better that schools leavers should remain unemployed or would he advise employers to employ them below agreed wage levels?
    The Prime Minister: No, Sir, I do not give that advice. I agree with the hon. Gentleman that unemployment is a very serious problem which arises for school leavers at this time, as it did three or four years ago. He will again, I think, —I am sorry to have to give this answer once again—find it interesting to see what we say on this matter in the White Paper.
    Mr. Kilroy-Silk: If the TUC are voluntarily to restrain wages, will the Prime Minister say in what way the Government will control the incomes of those who are not members of or affiliated to the TUC, and in particular will he give an assurance to the House that this policy will not result in an expense account bonanza?
    The Prime Minister: This Question refers to Brighton, and I am glad to be able to tell my hon. Friend that I shall be visiting his constituency tomorrow—the part that used to be in my own. [An HON. MEMBER: "Is that a promise or a threat?"] As far as they are concerned, it is a promise. They seem to like having me in Kirkby. My hon. Friend will, I am sure, also be prepared to wait for the White Paper, which will have been published by the time I arrive in his constituency.

NORTHERN IRELAND
Mr. Neaveasked the Secretary of State for Northern Ireland whether he will make a statement about the admitted resumption of violence by the Provisional IRA.
The Secretary of State for Northern Ireland (Mr. Merlyn Rees): A number of acts of violence have occurred this year in Northern Ireland, and for some of these the Provisional IRA has claimed involvement, such as the serious bombings in Belfast on 2nd and 8th April and the killing of Police Constable Gray in Londonderry on 10th May.
At about 4 p.m. yesterday after six men entered the offices in Crown Buildings,

743
Strand Road. They held up staff and planted three devices which exploded some half an hour later. There were no casualties, but a fire was started which caused extensive damage to the building. Shortly afterwards, a statement was issued to the Press which purported to come from the Provisional IRA in Londonderry. This claimed that the attack was the work of the Provisionals and that it was in response to Army activities in the city to which objection was apparently taken.
The police are fully investigating the incident with a view to bringing those responsible before the courts. I must make it clear that the allegations used in the Provisionals' statement as an excuse for the attack contained nothing of substance and could not in any circumstances justify what had happened.
I have also made it clear in this House, on 14th January and on a number of subsequent occasions, that the level of activity of the security forces will be related to the level of violence. The nature of violence in Northern Ireland has changed in recent months, and much of it now occurs within or between factions, but the response of the security forces must depend upon the facts of the security situation.
Every effort will be made to bring to justice through the courts those responsible for crimes of violence. The House will know that between 1st January and 10th July 64 people have been charged with murder, 60 with attempted murder, 233 with firearms offences and 54 with other security offences. Up to 7th July 179 travelling gunmen have been arrested. The Government are concerned with the reality of the cease-fire and not with any stated intentions. Accordingly, my policy on detention remains that future releases will be related to the developing security situation.
Mr. Neave: In thanking the Secretary of State for that statement, may I ask if he will assure the House that the security forces are prepared for any new threat that may be arising in the present circumstances, and also that the Army will be ready to arrest the known terrorists, from whatever source, who are wanted on criminal charges? Will he, in view of what he says about the change in the
744
nature of violence, agree that the Provisional IRA violence is being resumed, and that the three Londonderry bombs should now persuade him to think again about continuing his policy of release of terrorists from detention, about which we on the Conservative side have consistently expressed grave concern over the last few months?
Mr. Rees: The security forces are always ready. They have arrested people, or I should not have been able to give the figures I gave just now.
In regard to releases, I have to follow the law as it is. I cannot treat people in detention as prisoners of war who can be held until the end of the campaign. I am prepared to look at each individual case and to make a judgment about the possible return to terrorism in each individual case.
Mr. Powell: Does the right hon. Gentleman recognise that events of this kind underline the importance of the Government's giving no colour by their words or actions to any suggestion that there have been reciprocal understandings or undertakings between the Government and the Provisional IRA?
Mr. Rees: Yes, Sir, and I have made it abundantly clear. The only way that this gets around is by constant repetition. I am prepared to repeat that there is no agreement.
Mr. Fitt: Would not my right hon. Friend agree that the majority of incidents which have taken place since January of this year have, in fact, been carried out by so-called Loyalist elements in Northern Ireland, and that the vast increase in assassinations, levelled particularly against the Roman Catholic community in Northern Ireland, has had nothing at all to do with whatever arrangements have been made between the British Government and the Provisional IRA, about which we all have considerable suspicion. Would he not agree that it is totally unfair to keep men in internment and detention without trial and to relate their detention to current acts of violence when they may be completely opposed to acts of violence on the part of the IRA?
Mr. Rees: There has been a large amount of violence, and a large part —not

745
by any means all of it—has been committed by the Provisional IRA. My hon. Friend is right in thinking that the majority of shootings since the turn of the year have come from the Loyalist side. That is a fact.
With regard to the nature of the violence, I also tell the House that a disturbing feature on the Republican side arises with the growth of violence by the IRSP, which is a new development in recent months.
Concerning detention, I have to take into account the reason why men were originally locked up—largely by me—and it is a difficult judgment to make. But in regard to those whom I know and feel would organise violence and get involved in violence, I have a duty to the security forces and to the people of Northern Ireland to judge matters in the light of the general nature of the security situation.
Mr. Steen: Will the right hon. Gentleman impress upon the Home Secretary the need to call for a report, as a matter of urgency, into the alleged Irish political implications behind the gun battle fought on Merseyside in the early hours of this morning in which a detective sergeant was shot and critically injured?
Mr. Rees: I am sure that my right hon. Friend will note what the hon. Gentleman said.
Mr. Flannery: Will my right hon. Friend take it from me that, although in reply to a Question from me he said that I had the English disease and that I wanted short cuts to the solution of the Northern Ireland problem, it would be an under-estimation of the deep underlying political struggle going on there to attribute every event there to faction fighting? Does not my right hon. Friend agree that political solutions are the only answer and that this melancholy list of gaolings and arrests does not in the long run supply any answers to the problems of Northern Ireland?
Mr. Rees: All that I say to my hon. Friend is that there are no short cuts to the solution in Northern Ireland. That is absolutely certain. Secondly, it is important to look at the nature of the violence. The violence is not only from the Provisional IRA, bestial as is the
746
killing of Police Constable Gray. There must be a political solution, of course, and if there were a political solution available, it would have to arise in Northern Ireland. In the months that I have been there, I have learned that the political solution goes hand in hand with dealing with gangsterism, murder and the like which are only remotely connected with politics, and only then because people call it politics. But it is not.
Mr. Beith: Will the Secretary of State confirm that it would be wrong to suggest that people interned without trial in Northern Ireland should be regarded as hostages? By the same token, will the right hon. Gentleman make it clear that the cease-fire confers no immunity from the proper conduct of the law by the security forces, whether that involves the IRA or anyone else? Does not the right hon. Gentleman agree that the most effective condemnation of this renewal of activity should be delivered by everyone in both communities?
Mr. Rees: There is no immunity, and the figures of arrests which I have given show that. But the hon. Gentleman is right. Condemnation by people in Northern Ireland is worth more than any condemnation that I or anyone else on this side of the water could make. It must emerge in Northern Ireland, and it is to the credit of right hon. and hon. Members on both sides of the House who live and work in Northern Ireland that they have come out against violence. It is of great advantage when it comes from what is, in effect, their side of the fence. It is of very great value.
Mr. Michael McNair-Wilson: Is the right hon. Gentleman now satisfied with the incident centres, and can he say whether they played any part in the bombs in Belfast, in the killing of Police Constable Gray or in the most recent bombs in Londonderry? If they did not, can he suggest why it is that the Provisional IRA continues with them if it is prepared to use gratuitous violence in this way?
Mr. Rees: I do not quite understand the hon. Gentleman. The incident centres could have played no part in the bombs. In terms of inquiries to find out who was responsible, they have played a valuable part.
Mr. Wm. Ross: Will the Secretary of State confirm that this is not the first attack carried out on bank buildings in Londonderry? I was assured alter the last attack that security had been tightened up. If that is so, how did the IRA penetrate the defences of this building? Will the right hon. Gentleman confirm, secondly, the harassment by troops about which people have complained was the arrest of two people for throwing stones in the Creggan and the searching of one farm. Does he understand that law-abidding citizens in Londonderry think that there is not nearly enough police activity in this area? Will he confirm, finally, in order to assure the House and my constituents, that there is no hold-back in investigations into the murder of Constable Gray because of fear of IRA retaliation, in view of arrests which might be made.
Mr. Rees: That last question was asked interrogatively, but I hope that it will not be taken as evidence of knowledge which the hon. Gentleman has. The killing of Police Constable Gray was dastardly. No one is holding back. It is a matter of getting evidence and finding out what is going on. That is true of every case in Northern Ireland, from whatever side it comes. Apparently the criticism, if that is the right word, was of harassment. Bombings have taken place in bank buildings before. The hon. Gentleman will know the number of people—not only police and army personnel—who are engaged in the protection of buildings. Sadly, it is all too easy to blow up buildings in Northern Ireland, as people who have visited the area know too well.
Several hon. Members rose—
Mr. Speaker: Order. We must move on. Mrs. Thatcher. Business Question.

BUSINESS OF THE HOUSE
Mrs. Thatcher: Will the Leader of the House be good enough to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Edward Short): Yes, Sir. The business for next week will be as follows:
MONDAY 14TH JULY—Supply [27th Allotted Day]: There will be a debate on the Problems of the Agriculture Industry, on a motion for the Adjournment of the House.
Remaining stages of the Northern Ireland (Emergency Provisions) (Amendment) Bill.
Motion on the Appropriation (No. 2) (Northern Ireland) Order.
TUESDAY 15TH JULY—Supply [28th Allotted Day]: Until about seven o'clock, there will be a debate on the Conference on Security and Co-operation in Europe, on a motion for the Adjournment of the House, and afterwards a debate on an Opposition motion on the Post Office.
Consideration of Lords Amendments to the Coal Industry Bill.
Remaining stages of the Safety of Sports Grounds Bill [Lords].
WEDNESDAY 16TH JULY and THURSDAY 17TH JULY—Remaining stages of the Finance (No. 2) Bill.
FRIDAY 18TH JULY—Second Reading of the Policyholders Protection Bill [Lords].
Proceedings on the Salmon and Freshwater Fisheries Bill [Lords], which is a consolidation measure.
Motion on the Civil Aviation (Air Travel Organisers' Licensing) (Reserve Fund) Regulations.
MONDAY 21sT JULY—Opening of the debate on anti-inflation measures.
Mrs. Thatcher: As, judging by the statement by the Chancellor of the Exchequer last Tuesday, it looks as though the economic measures will be implemented either by orders or by legislation—or both—can the right hon. Gentleman say when these will be published?
Secondly, it looks as though we shall be rather busy in the remaining part of the Session. In view of that, is there likely to be time for debates on such matters as the Bullock Report the Finer Report, the broadcasting of our proceedings and various other subjects which normally would have arisen?
Mr. Short: As for the economic measures, I confirm that there will be a Bill. I am not sure when it will be

749
published. Certainly it will be at the earliest possible moment.
I am afraid that it will not be possible to debate the Bullock and Finer Reports before the Summer Recess—
Mr. Cormack: Shame.
Mr. Short: As for the right hon. Lady's question about the broadcasting of our proceedings, I remind her that the House agreed that, after the experiment, the Services Committee should submit a report to the House. The Services Committee will prepare that report and submit it, but I am afraid that it will not be ready before the Summer Recess. I hope, however, that it will be possible to debate it during the spill-over period in the autumn.
Mr. Whitehead: Can my right hon. Friend comment on Press reports today that Government sources have asked the broadcasters to return tomorrow? Is that because of the exciting nature of our proceedings next week, and was any reference made to the Services Committee?
Mr. Short: No, Sir. We did not ask them to return. We inquired about the present state of play of their apparatus, but I understand that they have removed the wires, so that it will not be possible to continue the experiment.
Mr. Geoffrey Finsberg: May I remind the right hon. Gentleman that he has on more than three occasions said that he would tell the Home Secretary that the House would like a statement on the Maxwell Stamp Report? Can the right hon. Gentleman say whether that is likely to come next week, or can he put pressure on his right hon. Friend?
Mr. Short: I am afraid that it will not be next week. But I shall make further inquiries and write to the hon. Gentleman about it.
Mr. Jay: Has my right hon. Friend noticed that, in the debate last Friday on EEC secondary legislation, the House was again prevented from reaching a decision? As this makes nonsense of undertakings that we have been given about parliamentary control of this legislation, may we be assured that in future the
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House will be able to reach decisions one way or the other?
Mr. Short: Certainly we hope very shortly to be able to find time to debate the report of the Select Committee on Procedure on this matter.
Mr. Cyril Smith: Will the right hon. Gentleman say how long it would take to get the wires back again? Is it possible for the Government to arrange for the economic debates that are promised a week on Monday to be broadcast? Further, when are we to have a statement on textiles? Many of us are waiting for such a statement.
Mr. Short: Taking the hon. Gentleman's last point first, I said last week that a statement would be made in the near future, and that will take place. The statement will contain a package of measures to help the clothing, textile and footwear industries. On the hon. Gentleman's first point, I understand that it will take two weeks to reinstate the installation.
Mr. Buchan: Did I hear my right hon. Friend aright? Did he refer to a Bill in relation to the anti-inflation package? Are we to go through the experience that we had in 1967 and 1970? Will he bear in mind that for some of us this is not where we came in but where we began, to go out?
Mr. Short: First, my hon. Friend heard me aright. On his second point, I repeat what I said on Tuesday—namely, the Government are hopeful that we shall be able to reach agreement on a voluntary incomes policy.
Mr. Heffer: Why a Bill?
Mr. Kershaw: Is it not wasting our time next week to spend two days debating the Finance Bill in view of the fact that legislation that may well overturn it will be introduced the following week?
Mr. Short: The hon. Gentleman had better wait to see what it is.
Mr. James Johnson: Last week we had an excellent debate on the state of the fishing industry, and there was no dissension on the need to make a statement at the earliest moment on financial aid. Bearing in mind that the industry is waiting for a statement, when is a statement to be made?
Mr. Short: I shall pass on my hon. Friend's request to my right hon. Friend the Minister of Agriculture, Fisheries and Food.
Mr. Rifkind: Does the Leader of the House appreciate that the legislation on divorce in Scotland has now completed its stages in another place and that it will shortly come before this House? Will the right hon. Gentleman give an assurance that this urgent reform will be given time in the House this Session or, at the very least, that time will be provided very early after the Summer Recess so that full consideration can be given to this measure?
Mr. Short: There is only one more day for Private Members' Bills—namely, on Friday of this week. I agree that this very important and necessary legislation, but I am afraid that it has little chance of reaching the statute book in the present Session.
Mr. Heffer: Further to the point raised by my hon. Friend the Member for Renfrewshire, West (Mr. Buchan), will my right hon. Friend indicate to the House why, if there is hope of getting a voluntary agreement with the TUC, it is necessary to bring in a Bill? This is surely totally unnecessary. I cannot understand why the Government are saying in advance that there will be a Bill when we are trying to negotiate a voluntary agreement with the TUC.
Mr. Short: If my hon. Friend is in his place tomorrow morning, as I am sure he will be—
Mr. Heffer: Yes, I will be.
Mr. Short:—he will understand exactly why this is being done. He will see that there is no conflict whatever between the two things that I have said.
Mr. Cormack: May I once again revert to the Finer Report. I suggest to the right hon. Gentleman that it is totally shameful that this report is not to be debated before the recess in view of the assurances that the right hon. Gentleman has given in previous weeks. Will the right hon. Gentleman think again about this matter? Whilst he is thinking about it, will be tell us when the Summer Recess is to fall? Further, will he promise us a statement on the abandon-
752
ment of the ludicrously expensive new parliamentary building project before that date?
Mr. Short: Working backwards, I hope that it will be possible to make a statement on the new parliamentary building perhaps next week or in the near future. As regards the Summer Recess, it will be some time in the summer but I cannot give a precise date. On the hon. Gentleman's first point, the only assurance I have ever given him is that I shall try to arrange a debate in the present Session, and I shall honour that promise.
Mr. Madden: In view of the crisis in the textile industry and the uncertainty about jobs in all sections of that industry, I press my right hon. Friend to say when this further important statement is to be made. Is it possible for the statement to be made next week?
Mr. Short: I hope that it will be possible to make the statement next week. I shall try to ensure that it is made next week. In addition to what will be in the statement, the EEC has now reached agreement under the multi-fibre arrangement with India and Pakistan, and restraint on Taiwan will be applied very soon. We are pressing on vigorously with the other outstanding negotiations. We have also given consideration to further requests from the industry to invoke Article 3 of the MFA, as have other member States. I hope that the full statement will be made next week.
Mr. Biffen: I revert to the point raised by the hon. Members for Renfrewshire, West (Mr. Buchan) and Liverpool, Walton (Mr. Heller). Will the right hon. Gentleman confirm that as a result of tomorow's statement we shall be receiving in due course not only a new price code, to provide the statutory back-up to control employers, but also a Bill to deal with the separate statutory considerations in the package?
Mr. Short: I cannot anticipate what will be in the statement tomorrow. If the hon. Gentleman is here he will hear what is in the statement.
Mr. Lee: If my right hon. Friend cannot state what is to be in the statement tomorrow, will he say how much time will be provided for the anti-inflation debate? I believe that my right hon. Friend referred to the first day on next Monday

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week, but how many more days will there be after that?
Mr. Short: I promised an extended debate and there will certainly be a second day.
Mr. Costain: In view of the uncertainty that now exists over the Channel Tunnel workings, will the Leader of the House undertake to ensure that the Cairncross Report will be presented to the House and that we shall have a statement from the Secretary of State for the Environment to clear up the uncertainty?
Mr. Short: I cannot promise that the report will be debated but I shall direct the attention of my right hon. Friend to what the hon. Gentleman has said.
Mr. Kilroy-Silk: Does my right hon. Friend not agree that there are many Bills before the House and many other Bills that should be before us, although not necessarily the one to which he has just referred, that are crucial to the nation's future? Will my right hon. Friend seriously consider, in view of the many complaints we hear from the Opposition about the lack of time to debate important subjects, extending the Session through August into September in the knowledge that his hon. Friends are prepared to stay to see the Bills on the statute book?
Mr. Short: That suggestion might commend itself to the hon. Gentleman with his fifteen-year programme, but I doubt whether it would commend itself to all hon. Members.
Mr. Blaker: I welcome the fact that the House is to debate the European Security Conference, but that is only one aspect of foreign affairs. Will the right hon. Gentleman give us an assurance that the House will have the usual full day on foreign affairs before we rise for the Summer Recess?
Mr. Short: I shall bear that in mind, but I cannot give any undertaking at the moment.
Mr. Greville Janner: Is my right hon. Friend aware of the great relief that will be felt in the Midlands and in other areas which depend on the hosiery and footwear industries, areas which are suffering grave unemployment, given the prospect
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of a full statement? That also applies to to the textile industry, of course. Is my right hon. Friend also aware that a statement will not take the place of a debate as we are inevitably restricted to fairly short questions and to a limited number of questions? Will my right hon. Friend assure the House that there will be a debate on these vital industries before the House rises for the Summer Recess?
Mr. Short: I regret that I cannot promise a debate, but I shall bear in mind what my hon. and learned Friend says. I am sure that my hon. and learned Friend, and the textile industry generally, will be gratified by the package of measures to be announced shortly.
Mr. Steen: May I draw my right hon. Friend's attention to Early Day Motion No. 487 relating to the discrimination that is shown against school nurses?
[That this House draws attention to the inequitable and anomalous situation whereby school health service nurses without the one-year Health Visitor's Certificate have been downgraded in status in comparison with those who possess such a certificate and receive up to £1,098 per annum less in salary than the latter, in spite of the fact that there is no difference in their duties and responsibilities and even though they may have other qualifications such as SRN, RFN, CNB and SCN as well as possessing invaluable experience for periods of up to 30 years in the National Health Service; and calls upon the Secretary of State for Social Services to take urgent steps to ensure that all those school health service nurses who perform the same tasks are paid the same rate for the job.]
Further, may I draw my right hon. Friend's attention to Early Day Motion No. 550 relating to discrimination against nurses in chest clinics?
[That this House draws attention to the serious situation whereby tuberculosis nurses in chest clinics without the one-year Health Visitor's Certificate have been downgraded in status in comparison with those who possess such a certificate and receive up to £1,098 per annum less in salary than the latter, in spite of the fact that there is no difference in their duties and responsibilities and even though they may have other qualifications such as SRN, RFN, CNB and SCN

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as well as possessing invaluable experience for periods of up to 30 years in the National Health Service; and calls upon the Secretary of State for Social Services to take urgent steps to ensure that all those tuberculosis nurses who perform the same tasks are paid the same rate for the job, particularly having regard to the dangers of contracting tuberculosis inherent in their work.]
Discrimination is shown against nurses who do not have the health visitor's certificate. Is my right hon. Friend aware that in view of the Minister's response last Tuesday, it seems that help is needed by him to energise the Government info some positive action? Will he promise the House a day's debate on this important issue before we rise for the Summer Recess?
Mr. Short: I agree that this is a very important subject. I do not know whether I can energise my right hon. Friend the Secretary of State for Social Services, but I shall have a go.
Mr. Leslie Huckfield: I appreciate the difficulties of my right hon. Friend, but does he understand that many of us would like to debate the Government's anti-inflation proposals as soon as possible? Why cannot we have a debate on the White Paper next week?
Mr. Short: I think that the House and the country will want time to study the proposals in the White Paper. It is a fairly long document and it contains a good deal of detail. I think that everyone will want some time to think over the details.
Mr. Peyton: I acknowledge the forthcoming attitude of the right hon. Gentleman in offering a second day for the economic debate. That is very much appreciated. Of course, it is Government time.
Secondly, may I put to him that some of the remarks that he made about there being no conflict between the need for a Bill and a voluntary policy would at least appear to indicate that the Government's decisions have already been made? [HON. MEMBERS: "Does it matter?"] Yes. It does matter. It is quite intolerable that the announcement of decisions should be put off until tomorrow instead of being made today.
Mr. Short: I am sure that the House will want a White Paper when the statement is made, and that will be available tomorrow. This is perfectly reasonable and fair.
Mr. Nicholas Winterton: Has the Lord President yet received a report on the first debate upstairs in the Standing Committee on Regional Affairs? If he has, I am sure he will be interested to know that I, for one, feel that it was a thoroughly unsatisfactory experiment. Will the right hon. Gentleman assure us that time will be found for a debate on regional affairs on the Floor of the House? Will he also accept from me, as a family man, that the remarks of his hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk) about extending the Session through August into September were thoroughly unsatisfactory and that perhaps the right hon. Gentleman should consider resuming the Session much later in October or November, to allow us to get to know our children again?
Mr. Short: Certainly I have a great deal of sympathy with the hon. Gentleman on the last few words of his supplementary. On his point about the Committee on Regional Affairs, as I have said throughout, it is an experiment. I understand that the Committee on the North West was not all that successful in the view of some hon. Members. We shall see how the next one goes. It is too early yet to evaluate this experiment.
Mr. Adley: Is the Lord President aware that, thanks largely to the Government's hopelessly congested programme, the Select Committee on Expenditure was called to meet this afternoon at 2.30 to deal with important and controversial amendments at a time when Questions to the Chancellor of the Exchequer were followed by Prime Minister's Questions? Will the Lord President take note of what he and his Government are doing to this House and this country? Does he not agree that the Government are creating legislative diarrhoea but that the House of Commons is getting constipation as a result?
Mr. Short: There are a great many Members on Committees and a great number of Committees, but I have done research into this and I am sure the hon. Gentleman will be interested to hear

757
that they are fewer than they were at one point during the period of the last Government.
Mr. Adley: Is the right hon. Gentleman referring to Committees or hon. Members on Committees?
Mr. Short: The total number of Committees is today fewer than it was at one point during the hon. Gentleman's own Government.
Mr. Michael Latham: If the Lord President cannot find time for us to debate on the Floor of the House the problems of the East Midlands, particularly affecting footwear and textiles, as he said in answer to his hon. and learned Friend the Member for Leicester, West (Mr. Janner), would he consider referring that subject to the Committee on Regional Affairs?
Mr. Short: That is a very useful suggestion. I will look into it.

QUESTION OF PRIVILEGE
Mr. Torney: I should like to raise with you, Mr. Speaker, a matter affecting rights which I submit could constitute a contempt of the House.
In an exercise conducted by the magazine New Scientist with the full knowledge of my hon. Friend the Member for Hemel Hempstead (Mr. Corbett), my room in the House was fitted with a bugging device and my conversations were recorded, including a telephone conversation that I had with the Ministry of Agriculture—not the Minister—in my capacity as a Member.
This was done without my knowledge or consent, and the bugging device was left lying in the room after I had left it. The room is used by other hon. Members. I assume that my hon. Friend is prepared to take responsibility for all that occurred, including the smuggling of these devices into the building, past the security control.
I do not want to exaggerate the importance of the incident, which has the appearance of a practical joke that went wrong, but it seems to me that it has a wider significance and should be brought to the attention of the House.
Mr. Corbett: Further to that point of order, Mr. Speaker. The event to which my hon. Friend has drawn attention was conducted as a serious exercise for a serious purpose, in which both my hon. Friend and I have jointly taken an interest. However, on reflection I realise that this exercise, for which I take full responsibility, was not wholly wise, and I should, therefore, like to apologise to my hon. Friend, to my hon. Friends who are associated with him and to the whole House.
Mr. Cohen: As one of the Members referred to in the comments by my hon. Friend the Member for Bradford, South (Mr. Torney), as one of the Members who share the office with him and as I was actually involved doing constituency work during the time this operation was, without my knowledge, taking place, I wish to express the same concern and to support my hon. Friend in the concern that he has expressed to the House.
It is right that this should be brought to the notice of the House. It is the kind of thing one would not expect from colleagues, but in the light of what has been said and the apology that has been expressed by my hon. Friend the Member for Hemel Hempstead (Mr. Corbett), it may well be that, the matter having been raised, he realises the difficult situation in which he could have placed other hon. Members. Possibly in the light of that my hon. Friend the Member for Bradford, South may decide not to pursue the matter further, but that is a matter the House itself must decide.
Mr. Torney: In view of the expression of regret by my hon. Friend the Member for Hemel Hempstead, I am quite happy to leave the matter where it is.
Sir J. Langford-Holt: This goes slightly wider. I understand that this matter has been referred to the periodical mentioned and that a report is to appear on it in that periodical. Can we be assured that if what appears in the periodical seems, from that point on, to raise a question of privilege there is nothing to prevent any hon. Member raising the matter again?
Mr. Speaker: That is a hypothetical question. I must see what appears in the periodical and will then rule if need

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be. But in all the circumstances, in view of what has been said and the apology that has been tendered, perhaps the House will leave it where it is.

QUESTION OF PRIVILEGE
  STATUTORY INSTRUMENTS
  Ordered, That the draft Medicines (Feeding Stuffs Additives) Order 1975 be referred to a Standing Committee on Statutory Instruments.—[Mr. Edward Short.]
ORDERS OF THE DAY
  SUPPLY
  [26TH ALLOTTED DAY]—considered.

  EDUCATION
  4.10 p.m.
  Mr. James Boyden: I beg to move,
  That this House takes note of the Third Report from the Expenditure Committee in Session 1973–74 (House of Commons Paper No. 96) on Postgraduate Education, and the Third Report from the Expenditure Committee in the last Parliament (House of Commons Paper (1974) No. 306) on Educational Maintenance Allowances.
  These reports have three things in common. First, both areas are relatively unexplored in Parliament. The Second relates to the Department of Education and Science, which, although it has had the reports for a very considerable time, has made no observations on them, which must be a very severe stricture on the Department. The third element, more pleasant, is that the hon. Member for Banbury (Mr. Marten), despite his other arduous duties, has found time to chair both Committees and to produce excellent reports. I am sure the House would wish to put on record that it is grateful to him and his members for the very thorough work that has been done and the most interesting recommendations that they make which I am sure will be taken note of in due course.
  The only other surviving hon. Member of the hon. Gentleman's Committee was the hon. Member for Plymouth, Drake (Miss Fookes) who is chairman of the equivalent of the Education Committee of the Expenditure Committee and is engaged on another report as well. Perhaps, Mr. Speaker, the hon. Lady will catch your eye later in the debate. It should also go on record that Sir Henry d'Avigdor-Goldsmid was chairman of the main Expenditure Committee when this report on postgraduate education was approved.
  I should like to make some general remarks aboupt the old Estimates Committee and the present Expenditure Committee, with particular reference to university education. Over the years the Estimates Comittee has had considerable in

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  fluence on the improvement of the public accountability of universities. The universities have always been rather touchy about interference with academic freedom. Speaking as one who has taken an interest in these matters for over a quarter of a century, I believe that the degree of public control, in the best interests of the ratepayer, has improved and increased and has in no way affected the academic rights of universities or their teaching.
  This is the English way to do things. There are still in universities people who are over-sensitive about Parliament interesting itself in postgraduate education and in other higher education subjects. The fact that the Department of Education and Science has made no observations on the report perhaps can be overcome today by some observations from the Minister, which may partially satisfy the House.
  There is a defect in the organisation of the Department in that there appears to be no Under-Secretary of State who is responsible for watching Expenditure Committee and other Committee reports, for reporting to the Permanent Secretary, and for bringing these matters to the attention of Ministers. I know that Ministers are responsible for their Departments and that constitutionally blame must rest on Ministers, but I believe that there is a defect in the Department's organisation. It is surprising that the Permanent Secretary has not appointed somebody to undertake this work because other Departments are much more sensitive to the activities of the Expenditure Committee. I know that the Ministry of Defence has been active in this sphere and we shall be discussing its work a little later. Furthermore, the Home Office has been quick and sensitive in answering the observations of the Expenditure Committee. I hope that hon. Lady the Under-Secretary of State for Education and Science will convey to her right hon. Friend the Secretary of State for Education and Science and to the Permanent Secretary the displeasure of the House that our recommendations have not been the subject of any departmental observations.
  Another thread running through these reports is that considerable social injustice to remains in respect of the methods of awards to postgraduates, and there is
  762
  an anomalous position in regard to maintenance allowances at the younger end of the scale. The Third Report for the Expenditure Committee on postgraduate education says in paragraph 75:
  "Is it socially just that, when only just over 10 per cent. of young people are able to enjoy full-time higher education at all, more than one-quarer of the public expenditure on universities should be devoted to the postgraduate education of a small minority, a little more than 2 per cent. of the age-group?"
  A similar quotation from the Trades Union Congress on the matter of educational maintenance allowances makes the same point on the matter of social injustice in a memorandum submitted to the Expenditure Committee:
  "… it is held to be a responsibility of the Secretary of State for Education and Science to ensure that local education authorities provide a system of adequate maintenance allowances to assist children in lower-income homes to continue their full-time education without undue hardship to their families; and to encourage parents to approve their children's staying on at school."
  I am sure the Minister will agree with the TUC when it refers to
  "… a massive waste of ability resulting from the unduly high proportion of manual workers' children leaving school at the earliest age they legally could."
  One of the avenues of improving the situation is to take note of what the Committee said about maintenance allowances. If they look at the table on maintenance allowance in Appendix 1, hon. Members will see that it throws up an extraordinary variation between the generosity of authorities and the number of children for whom allowances have been provided. That table alone is proof that the Department should take considerable note of the Committee's recommendation.
  One problem about which we should be concerned is the fact that the growth of postgraduate education, both in universities and polytechnics, is practically uncontrolled. The statistics of control are certainly lacking. The will and resolution to control from the centre is missing—and it is no small sum of money. It can be seen that a figure of £78 million out of £344 million is spent on postgraduate education—about a quarter. The details of this defective control are set out in paragraphs 55 and 56 of the Third Report and I hope that the hon. Member for Banbury will elaborate on that matter a little later.

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  Let me summarise the situation by saying that there are no separate accounts for postgraduate education in universities. There is no information available on the cost, discipline by discipline, in further education. The information on part-time students is inadequate, and when the statistics are issued I am sure they will show that there is very little control in policy terms. It is relatively easy to collect statistics and it is necessary to have those statistics when deciding policy.
  The Committee puts its finger on an important point in higher education policy when it challenges the view that postgraduate education provided in the universities and polytechnics is meeting the nation's economic and social needs. The staggering fact emerges that 60 per cent. of postgraduate students who obtain higher degrees go immediately, without any work experience, into universities, schools or research. In other words, practically two-thirds of postgraduate students with higher degrees return to the areas of activity from which they came. The Committee makes a strong case for the argument that, instead of allowing students to decide the subjects in postgraduate education, there should be a much greater national effort in the universities and polytechnics to have some influence on the decisions which the nation requires in its employment of postgraduates.
  There is a good deal of evidence in paragraph 80 on the reception given to postgraduates in industry. I should declare an interest since I have a few shares in ICI, which are not of a considerable value. It is true to say that the firm of ICI was particularly good to Durham University. Postgraduate students were brought into research being carried out by ICI at Billingham. This was made clear by the Chairman of the Durham College Council. That part of industry is in no way hostile to prostgraduate work in universities, and its view is that, rather than merely obtaining qualified postgraduates with degree, it is far more concerned with obtaining the best brains. It seeks the best brainpower rather than relying on the possession of PhDs. There is a great deal of evidence that some parts of industry are highly critical of the present postgraduate system.
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  There is a further paragraph in the Expenditure Committee's Third Report dealing with the Civil Service. It emphasises that in examining the statistics there was no necessary connection between students with PhDs from universities being any better in their work in Government Departments than were other people without such qualifications. The probability is that much better use could be made of our resources in the postgraduate field, and the Committee makes a number of recommendations on a whole range of matters. One of the main points is that students should go out into the world and get some experience and then come back to postgraduate work. I have always maintained that this would have a very good effect on the educational system. Graduates should be able to leave universities, do a substantial amount of work and then get their postgraduate degree. This would also be of great value to the nation. The Committee says:
  "Our concern is that the number of postgraduate students should be geared much more closely to demand".
  The Committee recommends that students should gain experience before doing postgraduate work. I thought that it had always been accepted, although I am out of date in this matter, that there should be more courses supplied, particularly by universities and polytechnics, based on the experience of students, in order to bring them up to date in their subjects. There was a great deal more of this in university extra-mural departments when I was a director of extra-mural studies. I hope that it is continuing, although no evidence was produced to the Committee that it is. I hope that the Under-Secretary will tell us that this system still flourishes.
  The Committee was particularly critical of the haphazard way in which postgraduate courses have grown up in the local education authority sector. The Committee says in paragraph 142:
  "nor is there any effective planning machinery for post-graduate education among the local education authorities themselves."
  The Department of Education and Science has admitted to the Committee that there is no way of controlling the number of postgraduates in polytechnics. The Under-Secretary should take considerable note of what the Committee says on fees paid to universities and polytechnics on behalf of postgraduate students,

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  the question of student maintenance, and loans for postgraduate students as well as the question of control and of gaining adequate information to see that the policy of the Department, when worked out, is effective in the postgraduate field.
  I turn now to the report on educational maintenance allowances by the sub-committee of which the hon. Member for Banbury was chairman. This was one of the short investigations I asked sub-committees to carry out. Since it was obvious that the Parliament was to be a short one, I hoped that the sub-committees would produce their reports in that short time. They did so, and did it very well. The hon. Member for Manchester, Gorton (Mr. Marks) was a member of that sub-Committee and made a notable contribution to its work.
  Once again, there is the same theme in its report as there was in the report on postgraduate allowances. There was practically no departmental control and, as Appendix 1 of the report shows, the whole situation is full of anomalies. The Department had no information of detailed arrangements in each area and the sub-Committee said that 1971 was the last date for which it had full information. I understand from the report that the Government is looking at this matter. The hon. Member for Durham, North-West (Mr. Armstrong), a neighbouring constituency of my own, was Under-Secretary at the Department until recently and had responsibility for looking into this question. So far, nothing has been reported to the Committee, although the Secretary of State said on 26th March this year, in reply to a letter I sent him:
  "In my letter of 20th February, I said that I hoped to provide a reply to the Third Report from the Expenditure Committee on educational maintenance allowances by Easter. I am sorry not to have achieved this timetable, but I will arrange for a White Paper to be published as soon as practicable".
  I do not know whether he can produce it by tomorrow, but anyway there is the promise.
  The Secretary of State went on to say:
  "I think I should say at this stage, however, that the issues to which the report gives rise are too complex to enable any new system to be introduced by September 1975."
  I think the Committee would agree with that now, but at the time it thought there might have been a brisker rate of progress. This is not new ground. I
  766
  remember asking Questions and making speeches on the Weaver Report of 1957 which was a landmark in educational maintenance allowance provision and which the Expenditure Committee accepted as a basis for further development. I looked up some of my Questions of 1961 and 1962, and the present Secretary of State can take some comfort from the fact that Lord Boyle and Lord Eccles gave exactly the same sort of replies as those we are now getting from the Department. They were reluctant, they said, to interfere with the local education authorities but would look at the particular points I had raised. They are still looking.
  The considerable number of people who gave evidence to the Committee wanted the anomalies corrected. Every witness decried the unfairness of the present system. They wanted the allowances made mandatory and the method of assessment clarified. They wanted the various factors in the allowance clarified so that parents and students knew exactly where they stood. They wanted to ensure that the system did what it was originally intended to do under the Education Act 1944 and did not stop the children of poor parents staying on at school. They made the point, which some people might consider minor but which I rate as extremely important, that all should know to what they are entitled and to see that the constitution of the allowances, when available, should be made known to everyone. A number of detailed suggestions were made, including writing to parents and advertising on local radio stations.
  We are very grateful for the opportunity to debate these matters. The Committees have produced important reports which are well worth studying. I hope that the Under-Secretary's speech will be constructive and that she will give us a firm assurance that, within a short time we shall have the observations which will make our work worth while.
  4.28 p.m.
  Mr. Neil Marten: I thank the hon. Member for Bishop Auckland (Mr. Boyden) for his kind remarks about the sub-committee. The one drawback in these debates is the fact that members of the Committee tend to speak—and they are the last people who ought to

  767
  speak. They have had their say in the document. I see teachers and others interested in this subject waiting to speak, so I will keep my remarks brief. It has all been said in the report.
  When I was asked by Mr. Harold Macmillan to become one of his junior Ministers in 1962, I was summoned to that room behind the Chair and he asked whether I would be the junior Minister for Aviation. I replied, "Well, Prime Minister, I will do anything if it will be of help to the country, but I know nothing about aviation." He looked me in the eyes, slapped me on the knee and said, "Just the chap." I think he meant that I would not go into the Ministry with any pre-conceived ideas about flying.
  A similar situation existed with this Committee. I went in as a fairly ill-educated person by ordinary standards of schooling and academic achievement. I knew very little about education, but I learned a lot and it was a tremendous experience.
  I am only sorry that the hon. Member for Lewisham, West (Mr Price), who was a member of the sub-committee which produced the second report and whose idea it was that we should do educational maintenance allowances, is put in baulk today and cannot speak because he is acting as PPS to that Ministry. I retired as chairman in February last year and took on, not better, but equally interesting matters as a member of the Select Committee scrutinising European legislation, which has a certain important function to fulfil in this House. I should like to thank the Clerk to our sub-committee for his invaluable services and also our adviser, Professor Gareth Williams who is now at Lancaster University, who was invaluable in the help he gave us in these reports. I should also like to thank our colleagues in the House who were on the Committee and who did so much.
  With such reports as these, I never expect instant action. I think the value of them is in the influence they have on the thinking which takes place in the Department. The Department thinks through the comments, will gradually move on and in five or seven years the recommendations in the report are
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  accepted. Nevertheless, by now we should have had the ministerial observations. It is about 18 months since we produced the report, and we have had no reply. I am glad that the Under-Secretary today has just arrived in the Department because I shall not have to accuse her—I have worked with her on such remote subjects as Anguilla—of dereliction of duty and so forth. I hope that she will go back into that Ministry after the debate and stir it up.
  When I was in the Ministry of Aviation, if we had a report from a Select Committee it went all round the Department, and although it might have sat in the Minster's in-tray, which is where the delay occurred, I can assure the House from my experience that an 18 months' delay is absolutely ridiculous. I believe that it is treating the House with contempt. The Ministry should at least have produced a holding reply. It is incredible that we should be having a debate without the Ministry's views being expressed. This is a shocking performance and one wonders whether it is not done purposely, whether the Ministry is shelving the reports because its recommendations are inconvenient.
  I support what the hon. Member for Bishop Auckland said about statistics. Those we had to use in making our judgments for our recommendations were about three years out of date, and that is inexcusable. I hope that the new Minister will stir up the Ministry and the University Grants Committee and encourage them to become slightly modern and get on with producing up-to-date statistics. I do not see how any Ministry or the UGC can hope to monitor expenditure on public funds unless they have up-to-date statistics. It is extremely difficult for the Expenditure Committee to deal with subjects if it does not have up-to-date facts and figures. I always felt that the Committee was trying to catch a snake by the tail and that the tail was always slipping away simply because one was saddled with out-of-date statistics. This is symptomatic of the whole attitude towards expenditure on education, particularly higher education.
  As the report shows, there has been no real costing of postgraduate education in the light of the public money spent. One gets the sense, perhaps wrongly,

  769
  that the higher education area is a cosy rather cosseted area, and that it is practically indecent to ask the people involved how they spend their money and how it is apportioned. We had a slight feeling that even to do so was to interfere in the higher realms of education, and anyway, who were we as Members of Parliament to interfere in this most esoteric area of education? Our job as Members of Parliament is to try to relate the costs to the benefits derived from the expenditure of public money, and that is impossible without the facts and figures. I do not know how the Ministry and the UGC can take decisions on how to spend public money against this appalling background.
  In our first report we recommended certain improvements, and I should like to know what the Ministry has done since receiving that report to initiate improvements in statistics. Perhaps the Under-Secretary will tell us whether the Ministry has implemented, not necessarily the greater policy matters, but this purely practical point of improving statistics.
  I come to the postgraduate side where we gained the impression that too many students drifted on from university to postgraduate education simply to avoid facing the big outside world. They preferred the cosy and protected atmosphere of university life to earning a living. I had always held postgraduates in awe. I had always thought they were more intelligent and better educated than I, and I was always terrified to sit next to one at dinner. I always felt that I had to think rather hard what to say. When we saw the industrialists, the people in commerce, and the representatives of the Civil Service, they said, with one or two exceptions, that they were not particularly interested in postgraduates but would much prefer to take a graduate with a good degree, get him into the firm and mould him to their requirements and, if necessary, let him go back for a postgraduate course if that was justified and if he wanted to do it.
  Mr. Clement Freud: Does the hon. Member not agree that the cosiness for which people go into a postgraduate course is a factor only for those who do a one-year course and in no way applies to those on two-year courses?
  Mr. Marten: I would not necessarily agree with that, but we closed the report 18 months ago and therefore perhaps all the evidence we received is not fresh in my memory. I believe the consideration applies equally to two-year courses, but one must take exceptions for the teaching and medical professions where people proceed with postgraduate courses almost of necessity.
  Industry, commerce and the Civil Service do not find a lot of use for these people, and thus it is all the more important that we looked at the subject in depth. What follows is that we should also encourage students when they have their degree to go out into the world before coming back to do a postgraduate course. These post-experience students, as they are called, would benefit greatly. The course would be much more valuable to them after such an experience. I believe they would also acquire more purpose in doing their courses if they had sampled the reality of life in one sphere or another.
  We felt that a person with a postgraduate course paid for by the State was perhaps, theoretically anyhow, getting some benefit in the form perhaps of a better salary or a better job as a result of that course. Industry did not seem to agree with that point of view, but we wondered why the State should pay everything to enable someone to get that extra march on colleagues who leave after they have their degrees. We thought it would be a good idea to introduce a loan system, not to pay for education as such but to pay for the maintenance of the postgraduate student while he was doing his postgraduate course. This system operates in many countries.
  I accompanied the hon. Member for Waltham Forest (Mr. Deakins) who is now Under-Secretary of State for Trade to Canada and America. We looked into the question of loans, among other aspects of postgraduate education. In Canada we were told that all students use loans for their university education. As far as I can recollect, we were told that the loans were nearly all paid back by the students out of their earned income within five years of leaving their university. Moreover, there was a less than 5 per cent. rate of default in repayment. Default meant not failing to pay it back but a slight hiccup in the regular repayments.

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  We visited Yale University in America. This university has a very equitable system. The whole term intake received loans, and I think I am right in saying that when the students left the university they repaid the loans at the rate of 0·3 per cent. of their gross earnings. Therefore, whether a student became a successful Wall Street stock-broker or a successful parish priest, he still paid 0·3 per cent. of whatever his gross earnings were back into the pool, and over a period of 30 years he repaid the whole of the loan. However, if the term did very well and was very successful it was repaid earlier. I do not think it is much to ask people to pay that amount from their income. It does not matter if a person is poor because the same percentage goes back.
  I ask the Ministry to set up an inquiry to examine this matter in much greater depth and to come up with a sensible solution. Now is the time to do it. When there is an economic crisis and we want to save money, how better can we do so than by asking the postgraduates to test their motivation by backing themselves and taking a loan to pay for their maintenance during their postgraduate course. I see nothing wrong with that at all.
  We recommend that some form of advisory committee should be set up to study and to monitor the whole range of postgraduate education and to keep it under review. We have gleaned the firm impression that many people did not know what was going on and what was the extent of postgraduate education. Such a committee would prove very useful.
  We saw no reason why overseas students from developed countries should not pay the full going rate for education at our universities, and equally we should do the same at their universities. There is a distinction to be drawn when it comes to students from the developing countries because obviously they could come to our universities through scholarships on the aid budget. We could help particularly our friends in the Commonwealth. This appealed to all Members of the committee.
  I turn briefly to the report dealing with educational maintenance allowances. I find the lack of comment from the Government on what was a very simple and short report most curious. Many people
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  did not know what educational maintenance allowances were. Many journalists who wrote about them did not understand that such allowances have been in existence since 1945. I have in my possession a cutting from the Daily Express and the Sunday Express commenting on our report when it was published. I think that the Daily Express must have sent along their assistant racing correspondent because the article reads:
  "MPs urge State pocket money as classroom 'bribe'".
  The writer of that article did not know that this had been going on since 1945. The same point was picked up in the Sunday Express by some woman—I imagine she is a woman—called Anne Edwards. I had never heard of her and I hope that I shall never hear of her again. The article said:
  "Did you see the idiot suggestion last week that children who stay on at school after 16 should be given an allowance out of the ratepayers' money to spend as they please?
  It is the most cockeyed idea yet, and dangerously silly at that."
  It is described as
  "soul-sapping State nannying around."
  Had she read the report, about which she was writing so unintelligently, she would have realised that it was only for the poorer children in the community and the people who, for example, are entitled to free school meals. However, she did not get as far as that. She merely read what her assistant racing correspondent wrote four days previously.
  The EMA should be recalculated every year. There is no reason why the poorest families who need this money should suffer by a delay in the recalculation of approximately four or five years. All Members of the Committee felt very strongly about that point.
  I agree that parents and pupils should be informed of their rights under the EMA scheme. We understood that many people did not know them and that children might have left school after the official school leaving age merely because they did not know that they were entitled to this assistance.
  The other provocative point we made was that when the allowance was calculated and given, one-third should go to the pupil and two-thirds to the parents for, as it were, household expenses. We felt that such an arrangement was right for these days. EMA's were first thought

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  of in 1945 but since then many changes have taken place. Children mature earlier and at the age of 16 there is no reason why they should not look after one-third of this relatively small allowance and use it to buy their own clothes and other items covered by the EMA. In the old days it was the parents who bought the clothes but now I do not see why children should not get one-third of this allowance and buy their own clothes. Such a system would also teach them how to look after money. If they spent it too quickly certainly there would be no more from the same source.
  We also made the point that if a person chose to stay on after school leaving age and was drawing an educational maintenance allowance, but was not trying hard in his studies, he could be thrown out after consultation with the headmaster, the parents, the school governors or whoever, on the grounds of lack of effort. In other words, he cannot stay on at school, draw the allowance automatically and then put his feet up and not do any work. That is a fair system when dealing with State money.
  Mr. John Ovenden: Will the hon. Gentleman make clear that he is proposing that the same standards should apply to every student, irrespective of whether he is in receipt of an educational maintenance allowance or not? I hope that there is no proposal that students in receipt of EMAs should be subjected to a test which is not imposed upon other students?
  Mr. Marten: The test is in the Weaver Report. That report gives the right to the children who get free school meals. There is the same sort of basis of assessment.
  Mr. Ovenden: The point I was trying to make was that the hon. Gentleman was suggesting that a test should be applied to students in receipt of educational maintenance allowances, concerning their effort in school and whether they were benefiting from the educational opportunity. I was asking him to make clear that he was not proposing that a special test should be applied to those students, but to all students whether in receipt of EMAs or not. They should all be subjected to the same test concerning whether they were benefiting from continued education.
  Mr. Marten: That would be an excellent idea. Students in receipt of grants who were not working properly and who were putting their feet up and slacking, should come under the microscope, and if they are shown to be slacking why should the grant not be withdrawn? I see no objection to that. It is an interesting subject to debate and I hope that the hon. Member for Gravesend (Mr. Ovenden) will catch Mr. Speaker's eye and make that point.
  I hope that these reports will be found useful when they are read in the Department. I know that people outside the Department who have read them have found them interesting although they do not necessarily agree with them. I trust that when they are read in the Department they will have some influence and help shift educational policy along these lines in the years to come.
  Several Hon. Members rose—
  Mr. Deputy Speaker (Mr. Oscar Murton): Order. Before I call the next hon. Member it would, perhaps, be appropriate for me to remind the House that there are 120 minutes available for debate and 12 hon. Members who desire to take part.
  4.52 p.m.
  Mr. John Ovenden: I take this opportunity of welcoming the report of the Expenditure Committee dealing with educational maintenance allowances. In a debate such as this I shall not have the opportunity to deal with both reports so I shall concentrate on that one. I hope that the Under-Secretary will be able to give us some indication that the Government intend to take urgent action to give effect to the recommendations in this report.
  An adequate system of maintenance allowances for older pupils is vital to ensure that we have equality of opportunity in our educational system. The wider opportunities which that system is increasingly offering are worthless to a child whose family is too poor to enable the child to stay on at school beyond the minimum leaving age. Plans for comprehensive education, the expansion of nursery education, the establishment of educational priority areas, on which all Governments have been working, play a vital rôle in improving the educational

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  chances of children from poor homes. But, all of these measures are of little use if, when the crunch comes, the child has to leave school because the family budget dictates that he must find a job.
  It is now 18 years since the Weaver Committee reported and recommended radical changes to the system of educational maintenance allowances. It recommended the introduction of a realistic scale of allowances. It must be a source of bitter disappointment to all of us that after that length of time no Government have yet seen fit to make the necessary finance available to give effect to those proposals or to instruct local educational authorities to do so.
  That failure has damaged the educational chances of thousands of children who have been shown quite clearly that without an effective system of educational maintenance awards our system of free education is still too expensive for them to enjoy. The present system, as the Expenditure Committee has made clear, is a jungle. Different rates of allowances and different scales are operated on a completely arbitrary basis throughout the country by individual authorities. In some cases the allowance depends not on a sensible assessment of parental need but upon where the pupil has the good fortune, or in many cases the misfortune, to live. Most authorities have only one thing in common and that is that their educational maintenance grants are totally inadequate and show a degree of meanness.
  The majority still operate a level of allowance less than half of that which would be operated if the Weaver Committee report had been implemented. My own educational authority is by no means the worst and in mentioning it I do not seek to pillory it. I mention it because it is fairly typical. To qualify for the present maximum maintenance allowance, which is £3·17 a week, a family must effectively be living below supplementary benefit level.
  Even in September, when new scales of allowances and parental income are introduced, the maximum allowance goes up by only 10p a week. The level of income necessary to qualify for the full increase will still be below the supplementary benefit rates to be introduced in
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  November. No account is taken in the assessment of parental needs of rent payments, for example. Many authorities are guilty of this omission. Strangely enough, in Kent, mortgage interest is taken into account. The additional income allowance given to larger families is totally unrealistic. The extra income allowed is about £1·50 a week per child. That has remained unchanged year after year.
  The scheme operated by Kent and many other southern counties means that even a family with four children can qualify for an award—not the maximum award—only if the income of that family is below £36 a week. The failure of most local authorities adequately to raise the income scales to deal with inflation has meant that many of the families qualifying for the allowance have received less and less money each year while the cost of keeping their children at school has risen.
  This has occurred because most authorities, instead of uprating every point on the income scale, as they should on any reasonable analysis, have relied upon adding one sum to every point of the scale. For example, to quote again from my local authority area, in this academic year a family with two children whose income last September was about £25 a week was eligible for the educational maintenance allowance of £1·25 a week. To compensate for the effects of inflation alone that family now needs an income of £31 a week. If it does earn that amount this September, despite the increases in the needs allowances and despite the increase in the awards, the educational maintenance allowance for which it will be eligible will be only 25p a week—despite the fact that the costs of keeping a child at school has probably risen by 25 per cent. or more during the past year.
  Large numbers of families with children who wish to remain at school are being forced either with suffering a decline in their living standard or the prospect of making their children leave school. What we desperately need, and what this report makes clear, is a nationally determined scale of allowances based on a national scale of parental income. It should be a scale fairly linked to inflation.

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  Apart from the wide variations in scales of parental income and allowances the greatest scandal of all must be the enormous variation throughout the country in the proportion of pupils who receive maintenance grants. The last survey, published in this report, shows that that figure varied from one in six pupils in the relevant age group in some areas to less than one in 150 in others. In my own area it is one in three. That position cannot be explained away by national variations in income. Not only does it seem that there are wide variations in the scale of allowances but there is also a failure on the part of many local authorities to make parents aware of their rights. Sometimes that is due to poor administration. I suspect that in many cases it is more of an intentional effort by the local authorities to save money upon these allowances.
  There is one area in which I would take issue with the Public Accounts Committee. The Committee recommends that there should be more publicity in respect of these allowances. I welcome that. But the Committee suggests that the publicity should be carried out by the local authorities. I suggest that if we are to have a system of national awards on a nationally agreed scale there is no reason why that publicity campaign cannot be carried out at a national level through national newspapers and television.
  It should be remembered that a large number of people do not read local newspapers and that a large number of poorer families do not buy them. They rely upon the television for their information. I see no reason why the Government should not institute a national publicity campaign. There is no justification for leaving the task in the hands of local authorities, many of whom have a vested interest in seeing that the minimum number of parents claim those allowances. We have already waited too long for a radical overhaul of this system. I urge the Government to delay no longer. Every year that goes by thousands of children are being deprived of their right to full education. That makes a mockery of our commitment to equality of opportunity.
  There is one final point, which I attempted to raise during the speech of the hon. Member for Banbury (Mr. Marten). There is a suggestion that those students in receipt of educational main-
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  tenance allowances should be excluded from school if it can be demonstrated that they are making insufficient effort or are not benefiting from continuing education.
  I do not believe that two sets of standards should be applied to pupils in schools—that one set of standards should be applied to those from the poorer families, who are in receipt of educational maintenance allowances, and another standard applied to children from wealthier homes. I do not accept that it is justifiable for a child from a comfortable home to refuse to take proper advantage of his educational opportunities but that a sanction should be imposed upon the child from a poorer family, who is singled out. I accept that I may have misunderstood the statement made by the Committee. It is rather vague. I should like the chairman of the Committee to make it clear that it is not suggested that double standards should be imposed upon pupils in schools.
  Mr. Boyden: The report says that there should be an adequate sanction in relation to allowances against anyone in voluntary education. It does not make a distinction between one and another.
  Mr. Ovenden: I am grateful for that assurance. I hope that that point will be taken into account by the Department when it brings forward the necessary measures and that there will be no discrimination of the type which I have mentioned.
  5.1 p.m.
  Mr. David Lane: I join in the tributes paid to the work of our colleagues on the Expenditure Committee in producing these two reports.
  Starting with a word about Select Committee reports generally, I am convinced that the response of Governments has been too little and too slow. I am not referring to this case alone. I have always been an enthusiastic advocate of the development of the Select Committee system as a means of greater parliamentary scrutiny. These new arrangements will succeed only if we develop better procedures for the discussion of Select Committee or Sub-Committee reports and for extracting a response from the Government. This is one of the most important problems which should be considered in

  779
  the review of procedure during the autumn which the Leader of the House has announced.
  I should like to concentrate on the report dealing with postgraduate education. As regards educational maintenance allowances, I agree with much that was said by the hon. Member for Bishop Auckland (Mr. Boyden) and the hon. Member for Gravesend (Mr. Ovenden). It is necessary to make the maximum use of talent which is permitted by our financial resources. I hope that the Government will respond quickly and positively to the recommendations.
  The report on postgraduate education covers a wide ground. It puts forward a varied spread of recommendations, most of which are soundly argued and persuasive, although I have reservations about a number of them. May I dwell on a few important points? Looking first at the structure of higher and further education, are we to continue indefinitely with the binary system? Can the Minister give us any indication of the Government's intentions on this fundamental matter? We should like to know that they have not entirely brushed it under the carpet.
  Secondly, I turn to the financing arrangements for postgraduate education. I endorse what the report says—this was underlined by my hon. Friend the Member for Banbury (Mr. Marten)—about the great inadequacy of information today. Paragraph 55 of the report records the astonishment of the Committee at finding what little information was available, especially about costs. It is essential that we have a much closer analysis of the costs of postgraduate education than has been available so far. The Committee has done a great service in drawing attention to that aspect. I hope that there will be an immediate response from the Government.
  Can the Minister say something, too, about the Government's thinking on the continuance or otherwise of the quin-quennial system for university finance? Is this still the best system? In the light of the experience of the past few years, have the Government given it any further thought? If so, do they propose to shift to a "rolling quinquennium"?
  Reference has been made to the financing of students in postgraduate education.
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  There is too great a discrepancy between the fees charged to home and overseas students. I was interested to read the recommendation in the report about the restructuring of the grant system. The idea of loans for postgraduates certainly needs further thought. I do not believe that this is a suitable arrangement for undergraduate students, although it may prove to be suitable for postgraduates.
  Thirdly, the heart of the report is the section dealing with the pattern of postgraduate education. In recent years a brake has been put on the rate of expansion of postgraduate work. What course should we follow in the next five or 10 years? I would warn against too drastic a change or clamp-down in this area of education. I quote words which the Secretary General of the Faculties at Cambridge University recently wrote to me:
  "The postgraduate students are of course the spring from which the entire educational effort of the nation is continually refreshed."
  Indeed, postgraduate work is an essention component of a university community, and it should not be regarded solely in terms of preparation for an academic career or a response to some formulated manpower requirement. It is a stimulus to education, to learning and to research, which are vital activities for any civilised country.
  Having said that about postgraduate work generally, however, we must give weight to the conclusions of our colleagues who have been into this subject in considerable depth. One clear message which comes out of the report is the amount of waste in the present situation. Our colleagues advocate a radical reorientation of postgraduate work. They draw attention to the cost to society as a whole and to the risks of misemployment or underemployment of postgraduates when they have finished their courses. In paragraphs 103–4 they discuss the problem of student motivation and they also record the dissatisfaction of industry with the present position.
  The main suggestion in the report is that we must give more weight in future to society's needs and less to student demand. It also advocates a shift from pre-experience to post-experience research study.
  More recently we have had the speeches of Lord Crowther-Hunt, the Minister of

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  State, about manpower planning. Here I react with some caution to what the Minister of State said. There are risks of great misjudgment if we go all the way down the road to which he seems to point. I should like to quote a sentence from the evidence recently sent on behalf of Cambridge University to the study group of the Committee of Vice-Chancellors and Principals:
  "Attempts at matching 'highly qualified manpower' output to some expression of need have not been entirely successful over the past 25 years. There are a number of examples of considerable wastage of resources as a result of such attempts."
  Possibly the present system errs too much on the side of freedom, with too little guidance being given today. But we must be careful not to push the pendulum too far in the other direction of centralised control.
  Mr. Marten: In the previous report we dealt with the manpower commission, the rolling quinquennium and the binary system. All those points were put to the previous Conservative Government, of which my hon. Friend and I were members. That Government did not approve those points.
  Mr. Lane: I am being strictly nonparty political. I am grateful to my hon. Friend for reminding me of these other aspects of past history.
  I plead with the Government that there should be ample freedom retained for the institutions concerned—the universities and the polytechnics—with a key rôle continuing to be played by the research councils. I welcome the consultation now in progress by the Committee of Vice-Chancellors and Principals with the universities, so that their considered views on all the suggestions contained in the report will soon emerge.
  In any follow-up to this report we must seek to achieve closer co-operation between the various institutions, and particularly between the academic world as a whole and industry. I hope the Government will not ignore the recommendation made in paragraph 96 of the report about industrial liaison officers. We have in Cambridge an exciting new example of that sort of co-operation in the recent opening of the Trinity College science park. It illustrates the advantage of flexibility and variety in this whole area of work between the universities and
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  industry. We have to beware of over-rigid thinking and categorising. We have to recognise that changes are occurring all the time in any case, with or without the stimulus of this report. For instance, there is the thought now being given in Cambridge to a one-year's taught Master's degree for some postgraduate students. My general view on the main message of the report is that we should not go too far or too fast in the direction that the Select Commitee urges.
  As a background to the debate, I want to urge the Government to show a much more sympathetic attitude towards the universities in general. During this Session of Parliament we have rightly spent a lot of time discussing standards in schools. We have spent too little time on standards in higher and further education, particularly in universities. The Government appear to show—not only in education—a prejudice against excellence. It will take more than a denial or two in a speech by the Minister of State to repair the damage that has been done, especially by some ill-considered remarks of the former Secretary of State. The House will remember, too, the difficulties that arose over the university teachers' pay claim. In passing, with an eye on tomorrow's announcement and bearing in mind all that has happened before, I appeal to the Government to ensure that university teachers are not caught up in a new 10 per cent. trap.
  The universities continue to make an important contribution to the world reputation of Britain. It is sadly true today that there are not many areas of our national life in which we can say that this country is second to none. One area in which Britain continues to excel is university education, and universities need all possible encouragement from the Government and understanding from the public. Too much of what the public read about the universities is sensational. Those of us who know them fairly well, without claiming that they are without fault, remain full of admiration for what they are attempting to do.
  Month by month I discover more of the overseas links and of the world reputation enjoyed by the university in my constituency. What is true of Cambridge University is true of many others. In a phrase recently used by my hon.

  783
  Friend the Member for Chelmsford (Mr. St. John-Stevas), the universities are the "crown of our educational system". They provide us with cultural and critical centres which are essential to our progress as a nation. Cambridge intends to remain a major centre of research.
  Universities are going through a period of consolidation. To put it mildly, they are reconciled to a further time of stringency. I ask the Government to pay careful attention over the whole area of universities, and not least in postgraduate education, to the special problems of "steady-state" universities at a time like this, when financial resources are extremely limited and those universities are following a policy of very little further expansion.
  To quote just one sentence from the report in 1974 on the long-term development of Cambridge University bearing on the problems of steady-state universities:
  "The academic vitality of a university is reflected in the ease with which it can take up new and promising lines of research from which new developments in teaching often emerge."
  I hope that the finding of resources for new lines is not overlooked by the Government in their dealings with the universities during the next two or three years. Whatever the slow-down in the growth of spending on education that may now be unavoidable, the essential quality of universities should not be put at risk. I appeal to Ministers to keep this in mind as they review the future of post graduate education.
  I hope that the Government will respond positively and promptly to many of the recommendations in this report. Some of them could be carried out quickly and without great expense, but the report raises a large number of difficult issues and complex questions. I wonder whether the time has not come for a fundamental review of all post-school education, drawing together the many issues over the whole range. I hope to hear something from both Front Benches on this subject. Such a review would surely be timely. Meanwhile it is urgent that the Government should take all possible steps to restore the confidence within the universities which their
  784
  own words and actions have so much damaged.
  5.16 p.m.
  Mr. Geoff Edge: Like the hon. Member for Cambridge (Mr. Lane) I wish to concentrate on the report on postgraduate education, which I welcome. For a long time postgraduate education has grown without any rationale. It has just grown, rather like Topsy, with no one having a close look at it. What is true of postgraduate education is true of universities in general. I say that having spent virtually the whole of my working life in the university world before coming into the House. I have mixed feelings about the report. With some of it I very much agree, but other parts I regard as plain silly.
  There are three distinct functions which are subsumed in the title "Higher Education": first, training for a job outside the university or teaching world; secondly, the provision of non-vocational further education courses which do not have a career objective in view; thirdly, the training of people whose vocation is research and not university teaching.
  On the question of training people for jobs outside, the report suggests that there should be a major expansion of vocational courses and it recommends an increase in the number of those courses. They should be short courses which people should be able to undertake during different stages of their careers.
  For far too long those of us who have been involved in postgraduate education have ignored the need to train people for jobs. We have left that either to industry or to planning departments, which is not good enough. We should have attempted to liaise with the planning departments, the Civil Service and industry to produce short vocational courses to fit students with a general degree into a particular career.
  We need post-experience courses. In any profession or occupation one can become quickly out of date. In lower education, for example, excellent work is already done by Department of Education and Science inspectors in retraining teachers. Because of a change in my discipline during my career I had to go back to learning 0 and A level mathematics, which was a bitter but necessary experience. What applies to me applies to

  785
  many other people, particularly in a world where the use of statistics, and a knowledge of research and development methods and operational research are skills which people who were trained even 10 years ago will not have. They should have the opportunity of going back to university, taking a short course and learning the new skills that they need to pursue their existing job effectively.
  Part of this work could be done by the Open University which is already beginning to co-ordinate research and retraining activities for people who believe that some revamping of their profession skills is necessary. This could be done by post-experience courses which are self-financing. I do not see why people who want to retrain should not be self-financing. It could also be done by liaising with universities in other parts of the country and providing tuition for individual students. I should like to see that rôle expanded. It has not been expanded very much at present due to a shortage of finance, but it is a major new area in which the Open University could play a large part.
  There is a rôle for non-vocational courses to play in broadening the educational experience of everyone in our community. I spent four years working for the Open University, one of the major objectives of which was to provide education in its broadest sense, not necessarily for people who wanted a degree or a qualification at the end of the course but for those who wanted to broaden their intellectual horizons and who got sheer enjoyment out of learning new ideas and encountering new areas of knowledge. This should also be the aim of the universities. However, in a time of economic stringency this must surely be the lowest of the postgraduate priorities—something it would be nice to have but which is not absolutely essential.
  There are those whose vocation is research. One of the things I rather regret about the report is that it does not make a clear distinction between people being trained to do research and those being trained for university teaching.
  I am sure that amongst the worst centres of educational method in this country are the universities. Indeed, when I moved from Leicester University to the Open University and had to think about
  786
  educational teaching methods for the first time, I realised that scarcely before had the idea of teaching entered into any discussions in any of the senior common rooms I had encountered in the four universities with which I had been concerned. Those people had been engaged upon research and did not take seriously the job of how to communicate ideas to students.
  There is a great need to insist that the universities train their staff to teach. To have an inadequate lecture inadequately prepared is not good enough. We must definitely change this and insist that all university staff go through a full period of training in how to teach. This is not a reflection on their capacity to do research. There are people who are excellent researchers who would be quite incapable of communicating to any group of people. The skills need not necessarily go together. Quite often they do not go together at all.
  The people whom we need to train to do research are those who deserve training which is more than slapdash. Certainly many of those whom I saw enter into research were given no training in research techniques, no instruction on the basic area of research which they were about to tackle and no real instructions about solving problems. By and large I understand that the science departments are better than the social sciences and the arts departments. Quite often in an arts or a social sciences department someone would take a first degree. He would then begin the first day of his research work and his supervisor would say "This is the general area you want to research. Go and get on with it". That person would waste perhaps a year trying to find the appropriate research techniques and defining the problems precisely.
  One of the reasons why many postgraduates do not complete their courses in the allotted time period and why many of them do not manage to write up a PhD in two years is not that the work could not be done in that time but that much of the first year is wasted to a lack of basic training in how to do research, what questions to pose and what instrumentation to acquire. This needs a major change. We could cope with far more postgraduates with much less effort if we thought about the matter seriously.

  787
  In addition, we should encourage groups of research students grouped around some academics who specialise in one area. There is a critical intellectual mass. When there is a group of five or nine people bouncing ideas off each other who are engaged in parallel and complementary lines of research, they are far more likely collectively to produce real advances and ideas which ultimately can be useful in industry and in the management of our economy than if an isolated individual works alone. In the sciences the economic costs of this are very considerable. For example, if a department is concerned with questions of lubrication it will need specialised equipment. If a pool of research students will need to use that equipment, clearly we must make the maximum use of the capital investment in equipment which is absolutely necessary.
  The isolated student and the isolated researcher are not a cost-effective way of doing research either from the researcher's point of view or from our point of view as a nation in getting the best results out of the people we send into research in the first place.
  The other point that concerns me—and I do not think that the report makes enough of this—is that we need to look far more seriously at the whole question of research policy. We have the research councils. I have been most concerned with the Social Science Research Council, but there has been no effective debate about what research policy should be between different disciplines. There is no major attempt to identify the key areas into which research should be directed. There are one or two exceptions.
  People have been encouraged to carry out research into the relationship between sociology and the law, the boundary line between the legal profession and the social process. This is an interesting development but it is nowhere near adequate. Indeed, the disbursement of postgraduate awards, as one can see from any glance at the Social Science Research Council's newsletter, is related almost entirely to student demand. We find, for example, that there are massive numbers of students who are encouraged to go off and study social anthropology. I have nothing against that. However, in many cases more students are encouraged to
  788
  do that than to study economics or econometrics. If we were to plan our skilled resources effectively this would be seen to be a nonsense. There needs to be far greater debate about the relative volume of expenditure to be shared between the different research councils.
  We need to examine the sort of research returns we can obtain from a given input of money. This will vary. Science research and research in engineering is inevitably more expensive, but we need to discover what we are getting in terms of reports, research and trained manpower, of which we can make use.
  The advisory council suggestion in the report is very important as a vehicle for co-ordinating research policy as a whole. We can no longer afford postgraduate research to continue in the haphazard way it has done hitherto. I should like a clear statement from the Government about their research policy, what they want to achieve in five years and so on. This should be annually reviewed in relation to national needs.
  I turn to the parts of the report with which I disagree. I shall deal with them fairly quickly. First, I am opposed to the idea of postgraduate students being paid loans because this, I understand, is based upon the assumption that postgraduate students earn higher incomes as a result of doing postgraduate work. I do not believe that there is statistical evidence to justify that case. Certainly there is a case for examination, but postgraduate students do not earn higher incomes and would not easily be able to repay the loans which they receive. I believe that this would be a real disincentive to some students who have a great deal to contribute to our society.
  Secondly, the whole idea that research helps to equip someone for university teaching is an absolute nonsense. The quicker we get away from that idea the better.
  Thirdly, the assumption that a misemployed Ph.D is a waste of money is perhaps false. In every university there are exceptionally able people who carry out a research programme with the assistance of research students. There may be some students who will merely help an FRS in biology or physics to advance a programme of research and

  789
  will do no major research after that. Nevertheless, it is still a useful application of public money for the student to have taken part in that critical research mass—that major research effort.
  Finally, there is the suggestion that pre-experienced students should be excluded from research altogether. I believe that there is some case for encouraging people to break off after a first degree, to go out and look at the world and to think what they really want to do with their lives. It is very easy to drift from one university course to another. But the option should be open. There are some students who would lose the intellectual impetus to do research if they were compelled to leave the university world for a year. In my experience, there are a number of students like that.
  In general terms, I welcome this look at postgraduate education. I should like to see the Expenditure Committee having a close look at the university world as well, because I do not think that the cost effectiveness there is nearly as good as it might be. Perhaps the Expenditure Committee will be encouraged to do that in the future.
  In general terms, I think that this particular report is a useful statement. I hope that the Government will now get down to thinking very seriously about postgraduate policy and will come back to the House with a definite policy on postgraduate research and definite suggestions.
  5.31 p.m.
  Mr. Clement Freud: I shall abide by Mr. Deputy Speaker's request to be brief, Mr. Speaker, because indeed, when we are discussing reports based on information which is so appallingly out of date, it would be a mistake to be anything but brief.
  The House owes gratitude to the Expenditure Committee for the time and effort which has gone into the presentation of this excellent report. We are today, on 10th July, discussing the Expenditure Committee's report published at the end of 1973, and the Committee's investigation dealt with papers which were then two years old, although the most up-to-date statistics on postgraduate education at the universities in
  790
  general have been published this very week. In the interim, we have had two General Elections. I have actually taken part in three elections if that is of interest to anyone. We have also had two changes in the incumbents of the Secretary of State's office at Elizabeth House.
  The Expenditure Committee was rightly worried on the point of the senior official of the DES who said that they would see what could be done to improve the situation of speeding up statistical information. Two years later, there is no evidence of any improvement. I urge the Secretary of State and the Minister to turn their attention to this with the least possible delay.
  I also share the Expenditure Committee's concern that no one seems to be able to apportion the real cost of postgraduate education. This causes a great deal of jealousy in other sectors of education. It is certainly a lot more difficult to obtain authorisation for a nursery school project than it is, for instance, for a university to institute a new research scheme into the breakfast habits of Tynesiders or why holiday makers go by caravan.
  There is a suspicion that for many people postgraduate education is a journey along the path of least resistance. That is a point which was made by the hon. Member for Banbury (Mr. Marten) very properly. It is putting off the evil day when the education and training for which the country has paid a great deal of money is put into commercial or industrial application to repay the country.
  I know this sort of thing very well, because after my time in the Army, I did, in one insane moment in 1946, apply for a permanent commission. I did not do this in any way because I wanted to spend the rest of my life in the Army. I did it because it was more comfortable. I did it because I had not, up to that time, ever had to buy my own clothes. I had a battledress and a service dress. This is a very similar case, in which having had 13 years in primary and secondary education followed by three years in tertiary education, the world outside seems a difficult place, and the attraction of staying on for another year in the cocoon of a university seems more attractive than it is; such agoraphobia costs the country a great deal of money.

  791
  It seems very right that there should be the most careful scrutiny of those who are going in for a one-year postgraduate course. I am personally doubtful as to the overriding benefits of an MA as opposed to a BA. I do not think that it opens the doors to any more lucrative employment. In many cases, it simply clutters up the attendance at a university.
  The University Grants Commite calculated that, until recently, the cost of providing one postgraduate place in the arts and social studies was equivalent to the cost of two undergraduate places, and that the cost of a science postgraduate place was equivalent to the cost of three undergraduate places. There is no more accurate calculation that has been published. However, I should like to ask the Minister this question: are we to assume that such comparisons are too embarrassing for current usage, or is it the case that those charged with an admittedly difficult task have given up the attempt?
  What comes over loud and clear in the report on postgraduates is that there is an appalling dearth of statistics. Tertiary education is one of the things on which the country spends a vast amount of money. I would question the wisdom of such expenditure without realistic and contemporary statistics to show that we are getting value for money. This came over clearly in the report of the Committee, and it cannot be stressed often enough. We need more statistics, we need faster statistics and we need a great deal of information.
  In my constituency, at the Isle of Ely College of Further Education, I am consulted almost weekly by people who feel that the foreign students are a drain on the educational resources of this country. I am also consulted by the foreign students who feel that the amounts of money they have to pay for their courses are making this country rich and fat. It would be very nice to have sufficient information in order to tell one or other side that they are right or that they are wrong.
  I should like to touch briefly on the educational maintenance allowance. I think that any Member of my party would look at this and say, "Oh for the tax credit system which we on these benches have advocated so consistently".
  792
  [Interruption.] And which Members on other benches have advocated from time to time, abandoned, and come back to. We have been steadfast as ever. I pause—in case anyone would like to show mirth as is their wont when confronted with the truth. And if hon. Members look back they will find that I was speaking the total truth.
  What is important is contained in paragraph 3 of the report, which says,
  "In education, the years from 16 to 18 are the bridge between compulsory school and preparation for a career. It is an excellent national investment to ensure that all with the will to cross that bridge should be able to do so."
  In view of this—and I think everyone, on all sides of the House, would agree—it seems scandalous that here again we have a discretionary situation. This is one of the 44 means-tested benefits about which so many people have spoken so often. If we as a nation are to invest in educating the youth of this country, surely adequate publicity must be given to the project, and care exercised to see that the investment benefits the right people.
  I am delighted with the Secretary of State's announcement that the raising of the school leaving age will now be lowered to allow the exit from school of those who have passed their examinations in June. It is one of the things I have advocated and on which I have sought on two occasions to bring in a Private Member's Bill. But, I wonder—and I take the point made by the hon. Member for Gravesend (Mr. Ovendm) who raised the matter and who asked how the educational assessment would be made—whether any student who stays on after the examinations at the age of 16 would not, by his faith in staying on at a school in which there was no curriculum for him, manifest his suitability for extra years of secondary education.
  My plea is quite simple. Let us advertise the fact that EMAs exist, and let us not make them discretionary. Let us have them for those who want them, and for those who have been persuaded by their teachers that they need them. This seems to me to be the most valuable job of educationalists. If there were a tax credit system the problem would not crop up. As there is not, and as we have EMAs available, let us advertise their availability and convince as many 16

  793
  year-olds as would benefit from more education that they are available, and that they will be given without humiliating researches into their eligibility.
  5.41 p.m.
  The Under-Secretary of State for Education and Science (Miss Joan Lestor): It might be useful if I intervene at this stage in the debate. This has been a debate of very high calibre and I do not want to speak for too long because I know that many hon. Members want to speak. But it would not be right if I did not try to deal with some of the points already raised and to make some general comments on the whole context of the report.
  I should like to congratulate the chairman of the committee and all those who sat on it for the production of a report which has been of a very high standard. It is useful and thought-provoking and deserves a great deal of consideration.
  I share the regret of the hon. Member for Banbury (Mr. Marten) and others who have expressed their concern at the Government's delay in making their views known on this report. There are certain difficulties about this. The hon. Member for Banbury was kind enough to exclude me personally from the responsibility, which is that of my Department. I want to see that the job is done properly and that the various points made in the report, and by the various bodies commenting on the report, are given due consideration, because there are no simple, straightforward answers to some of the questions raised.
  I accept in principle the need to ensure that pupils and students in the age groups that we are now discussing, and their families, receive the support they need to take full advantage of their educational opportunities. This is very important indeed. A new approach, in our view, can be studied properly only in the wider context of family support through the social services—perhaps, in particular, in the relationship between educational benefits and the Government's new child benefit scheme. This the Government intend to do, and we shall reply to the Committee's report in the form of a White Paper as soon as we possibly can. I cannot give a date for that, for the reasons I have stated, but I take the point that the House wants the Government's
  794
  views on this. I shall try to indicate some of our thoughts as I go along, but it may not be as quick as all of us would wish to see.
  I should like now to make one or two brief comments on some of the matters raised on which I can give an answer. The hon. Member for Banbury and other hon. Members spoke in particular about educational maintenance allowances and the publication of the report of the inquiry on this matter. This inquiry was carried out by my Department and the Welsh Office, in collaboration with the Mertopolitan authorities and County Councils Associations and the Welsh Joint Education Committee. It did not extend to Scotland, as I believe hon. Members are aware, because there are different arrangements there.
  The inquiry was part of the continuing consultation between the Departments and the local authorities on the arrangements for financial assistance to the 16–18 year olds. It was not intended that it should form the basis of a formal publication. However, subject to the agreement of the local authority associations, I shall consider how the results of the inquiry can best be brought to the attention of the House, because I believe that it would serve a very useful service in the context of what we are discussing today.
  On the question of statistics—a point made several times with a great deal of validity—the Department has been developing new statistical systems based on individual student records, which will provide improved information on postgraduates. Delays in the publication of these statistics are being reduced. The new system will also facilitate the production of tabulations for particular purposes and should be completed in 1975–76. I take the point—I think we are all aware of it—that one cannot base anything on statistics which are inevitably three or four years out of date. Therefore moves are now afoot to try to deal with those points. I shall keep the matter very much in mind.
  This has been a most interesting debate, and one in which hon. Members have made clear their concern and deep interest in the matters which are the subject of the report. I cannot give a detailed analysis of the Government's view on this,

  795
  as I said earlier. It is true that the recommendations of this report cover not only my Department but all sorts of bodies working in the postgraduate field. Many of these bodies have already been prompted to comment on the report, and their comments will be taken into account when the Government are in a position fully to make their views known.
  I should like to confine most of my remarks to two or three specific issues, and also to draw the attention of the House to a number of special studies recently completed, or which are being carried out, in the field of postgraduate education. These were not necessarily a result of the Expenditure Committee's Report, but the conclusions of these studies will clearly have to be taken into account in considering what action is finally taken on the report.
  The Vice-Chancellors' Committee set up in November 1974 a working group on postgraduate education, with wide-ranging terms of reference. It will report later this year. Another study is being made on university tuition fees by a working party set up jointly by the Vice-Chancellors' Committee and the UGC. Its report will come out later this year.
  The Expenditure Committee's Report has been carefully considered by the research councils, both individually and in the advisory board for the research councils. They have provided their detailed observations, and we shall be taking them into account when in due course we reply to the report. Moreover, the Science Research Council has responded by establishing its own separate review of policy in the fields for which it is responsible. I understand that the report of its working party is now ready and will be published next month.
  The Expenditure Committee should be very pleased that its report is being taken very seriously. Aspects on which the report touches are gaining support, and a large number of bodies are interested in it. It is right, in a matter of this kind where responsibility is widely diffused, for the Government to collect and consider all their views before giving their final pronouncement.
  Against this background I should like to say one or two things about the main message of the report, which all hon.
  796
  Members who spoke had also received. Some of the recommendations do not fully reflect the nature of the general criticism made in the report, but I want to comment on two or three of the main recommendations.
  The report makes three main criticisms of the present system. It finds, first, that the rate and pattern of growth in postgraduate education has been insufficiently controlled. It uses the term "uncontrolled rate of growth". Second, it proposes that postgraduate education should be
  "shaped not by student demand alone, but principally by the needs of the economy and of society as a whole".
  This point has already been referred to by hon. Members in this debate—with much more emphasis being given to post-experience courses.
  Third, it proposes that the system of students' support should be radically changed
  "to encourage the reshaping of postgraduate education".
  There is a great deal in the report's account of the purposes of postgraduate education with which the Government, and the various bodies to which I have referred, would not disagree. It is this Government's policy, as it has been of successive Governments, that whereas, in undergraduate education, places are provided for those who are willing, and qualified, to take them up, at the postgraduate level provision is much more limited. It is limited by the Department in the quinquennial settlement, by the UGC in its allocations to the universities, and by the judgment each university makes of its own priorities.
  The amount of finance available to support students in particular fields is a further limitation.
  Although this may result in a slower response to external changes than the report thought desirable, I do not think that overall it can or should be regarded as an "uncontrolled" system, particularly since detailed control is exercised over the scale and pattern of courses for which student awards are available from the central award-making bodies, whose students comprise one-third of the total.
  The next point concerns the system's responsiveness to the needs of society and

  797
  the economy. Here, there is a fundamental problem, the importance of which we all recognise but which I think the Committee perhaps under-rated. It is how to combine a sufficient level of responsiveness to social need with a proper regard for personal and institutional autonomy. The Government accept that social need is one of the main factors to be taken into account. But the established system of dual support for university postgraduate education, which the Committee wished should be retained—that is, support by the University Grants Committee on the one hand, and by the research councils on the other—specifically provides, through the research council finance element, a measure of gearing to currently perceived social need. Research councils support one-third of the total postgraduate students, and their policies in regard to overall numbers and distribution between subjects, as well as the nature and content of the training being given, draw extensively on the advice of employers, in industry as well as in the universities and government, about future needs. This is a complex problem which perhaps we should be looking at in much greater detail.
  This brings me to the next point—the radical restructuring of the system of student support which the report advocates. It is here that I find the report difficult to follow, because it is clear that, even if one were to accept the proposition that some tightening up of the overall effectiveness of the system of control would be desirable, there are a good many ways of achieving that; and one would want to be very certain that the method chosen did not involve unacceptable disadvantages.
  I do not think members of the Committee would claim that they had offered a fully worked out solution. They have sketched out a possible approach, and it is a very radical one, calling for much more rigorous central control than we have now. But we have to consider very carefully before we contemplated any move to a system which would put substantially more control over course provision into the hand of the central bodies. We also have to consider whether the change would be compatible with the existing pattern of control over the rest of the higher education system, or whether it would have repercussions on,
  798
  for instance, the UGC's relations with the universities.
  I should like to turn now to a separate point on which the report focuses attention, and that is postgraduate provision in the polytechnics. Here, it has to be recognised that the polytechnics have always been intended to offer a comprehensive range of higher education provision, with a big stake in education below degree level. It is true that the number and proportion of their students on degree courses is growing—this is to be welcomed—but it is not in their nature to operate at postgraduate level on the scale fully comparable with that of the universities.
  There is a further restraint on their postgraduate activity in the prescription that the polytechnics are intended to be chiefly teaching institutions with a limited involvement in research.
  The Science Research Council and the Social Science Research Council both published useful reports on their support of research and training in polytechnics at about the time the Expenditure Committee reported. The number of polytechnic staff on the SRC's boards and committees—which the Expenditure Committee criticised—has continued to rise gradually: the forthcoming Annual Report of the Council will show 18, compared with five mentioned in paragraph 137 of the Expenditure Committee Report: for the SSRC, the figure is 11.
  However, in relation to the polytechnics I do not want to speak only of research. As the Committee's report fully recognises, taught courses are a key element of postgraduate provision. This is something which the polytechnics should certainly also offer. Again, I would not want to say for all institutions just what should be the balance between postgraduate and other courses, or what proportion of postgraduate provision should be in the form of short or longer courses. But I want to confirm the value of the service which the polytechnics are giving in many fields.
  Let me say, as something of general application wherever universities and polytechnics are engaged in similar activities, that we attach the greatest importance to collaboration across the "binary line". This is especially necessary in times of economic difficulty, and

  799
  I commend all the efforts that are being made, most of them rightly and properly between pairs and groups of institutions, to promote collaboration.
  I turn now to the Expenditure Committee's report on Educational Maintenance Allowances in the 16–18 years age group. It is now some 10 months since the Committee's Report became available. But this is an extremely complex subject which cannot be tackled on a narrow front. It is tied up very closely with developments in the general field of social benefits. In particular, the child benefit scheme may be of direct relevance. For this reason, we consider it essential to wait until we can see the final form of the Child Benefit Bill now before the House.
  But let me say now that the Government welcome the Committee's interest in the subject of educational maintenance allowances, and have a great deal of sympathy with and support for many of the views expressed in the report and by hon. Members who have taken part in this debate.
  Some of the report's recommendations have already been acted upon. In November 1974, the local authority associations issued guidance to their members advising them that assistance given to full-time students under 19 on non-advanced courses should be equivalent to that which the student would have received had he remained at school. This would include, of course, the equivalent of educational maintenance allowance in appropriate cases, as well as taking into account such elements as the cost of books and subsidised meals.
  I have said that we are in sympathy with the Committee on many points. We are well aware of the defects in the present system. But the Weaver Report, to which my hon. Friend the Member for Gravesend (Mr. Ovenden) referred, came out quite a long time ago. It could be described as the forerunner of this report and, indeed, the Committee based many of its findings on those recommendations. But it would not be surprising if, in the years which have elapsed since its publication, some of its relevance had been lost.
  The Expenditure Committee's main conclusion, that the present arrangements
  800
  should be replaced by a nationally prescribed, all-embracing, system of allowances at mandatory levels of payment, is one which now requires very careful examination on an altogether different basis, and this we want to do.
  Meanwhile, those receiving the allowances are not being penalised. When the Committee met, the Department was about to carry out, with the co-operation of the local authorities, an inquiry designed to update the information on educational maintenance allowances collected in 1971. This shows that the scale of allowances has more than kept pace. The Committee noted that in the spring term of 1970 the average award was £72 a year. By the autumn term of 1974, this figure had increased to £ 127—a rise of 76 per cent. compared with a rise of some 54 per cent. in the cost of living over the same period.
  Mr. Ovenden: The figures which my hon. Friend has just given do not take account of the number of people who may now be excluded from receiving allowances because the scales have not kept up with inflation. These figures relate only to people who are still eligible to receive allowances.
  Miss Lestor: That is a valid point, because they would be ruled out in the process of inflation. I shall look into this and write to my hon. Friend giving him some elaboration of that. I think that that would probably be the best way to do it.
  In any event, there could be no question of replacing the present discretionary arrangements by a mandatory scheme, which would require legislation, in the present financial situation. The aggregation of all existing educational benefits available in the age group concerned, the proposed method of assessing net income, the national scale for defining need and the proposals for standardising the graduation of the maintenance element in accordance with income are all matters which would have a significant effect on public expenditure. Apart from those inescapable financial considerations which we all regret, the Government are not persuaded that the Committee has found the right answers to all the problems involved.
  There have been considerable changes in the pattern of social benefits since the

  801
  Weaver Report. Much greater account is now taken of parental income and the number of dependent children. I am not claiming that the arrangements are perfect, but the present social benefit provisions do much more than in the past and have the effect of stabilising over a wide range of earnings the net available resources of the parent. There is already interaction between these benefits and the various educational benefits administered by local education authorities. As a result, some parents already find, in certain circumstances, that a rise in wages brings with it a loss of benefits greater than their gain in earnings.
  That so-called poverty trap could well be aggravated if entitlement were, as the Committee suggests, based on the free school meals remission scheme. It is by no means certain that uniform arrangements for educational maintenance and other educational benefits could necessarily meet the needs of low income families. A great deal of research in that area is needed.
  Looking further, beyond the immediate effect of the Committee's proposals, there are more fundamental conceptual problems which it is important to try to resolve. We must ask ourselves what are the factors nowadays that require cash grants to be paid to enable young people to remain in education. No such grants are available before the school leaving age—and that age has twice been raised since the war—thus arbitrarily removing two-year groups of pupils from eligibility for such allowances.
  Are we discussing basic family support, or some substitute for the wage which young people might otherwise have been earning, or, in a more general educational sense, some kind of additional incentive to encourage them to remain in full-time education? To put it another way, if the domestic maintenance of families in need is already catered for through social security arrangements, and if local education authorities have duties and powers to provide meals, clothing, and other facilities for pupils, what is the gap in these combined arrangements that makes additional help necessary?
  There are no simple or straightforward answers to these questions, but the Government accept in principle the need to ensure that pupils and students in these age groups, and their families, receive the
  802
  support that they need in order to take full advantage of full educational opportunities. A new approach can be studied properly only in a wider context of family support through the social services. That is what the Government intend to do.
  6.5 p.m.
  Dr. Keith Hampson: In my turn I thank the Expenditure Committee and the members of the sub-committee for a valuable report. The Opposition regard this as an important topic. I hope the House will forgive me for having somewhat extended remarks to make about the report. The Opposition felt that only one speaker should perform from their Front Bench.
  This has been a constructive debate which will be refreshing for education. I hope that we can always conduct our debates on education in a wider context outside the party boundaries, which have so often befogged such matters as secondary selection and reorganisation. However, I think it necessary to say that the remarks of the Under-Secretary of State were stodgy and unimaginative. I use those words in a non-controversial way as they were the very words used by the hon. Member for Lewisham, East (Mr. Moyle) when, as the spokesman for the Opposition, he wound up the debate on the First Report from the sub-committee of the Expenditure Committee. We certainly have not advanced from that stage, with no printed observations at all.
  That hon. Gentleman also said that the 16-year-old school leavers presented the toughest and most neglected problem. That problem is now faced by a Labour Government. It seems that it is a problem that has today received rather sketchy treatment from the Government.
  I think that we must accept the principle behind the report as regards EMAs. Clearly parents should be relieved from poverty if their children wish to continue in the educational system. Of course, I can understand the embarrassment of the Government in not wanting to take action. The mandatory policy which the report recommends would cause problems for local authorities at a time when they are in great difficulty.
  I think moreover that the Government are right to delay, given the changes in social security ideas. This was always

  803
  likely under the Conservative proposals for tax credits. Those ideas were partly adopted by the Government in the Child Benefit Bill. That clearly has a great significance in the whole business. In the meantime, before the Bill becomes law—it will not be enacted until April 1977—what will happen to EMAs? Will they be updated, given that inflation is now running wild beyond 20 per cent.? What will be done to ensure that they are known to exist so that pupils and parents can claim them? I also think that a possible move this year at least as an emergency measure—this is a matter that the report emphasises—is the extension of this sort of help, and particularly for disadvantaged children, into the further education sector.
  This year we shall see the greatest crisis since the depression for school leavers. If we consider the collapse in the job opportunities now coming before the local careers officers, the situation is staggering. We are now in the position where in most parts of the country there is only 30 per cent. of the vacancies that existed last year. In places such as Yorkshire the figure is only 25 per cent. What will happen to the school leavers?
  Last week, the Manpower Commission proposed 7,000 new places using some of the £50 million allocated to help re-train the unemployed. There is, however, a job for the Department of Education and Science.
  I regret very much that every time we approach the Department about the problems of school leavers we are pushed over to the Department of Employment. Surely the DES has a rôle to play. It is important that we try to find ways of encouraging people when they leave school not to go on the dole. Nor must we force them to stay on at school if it is clear that they will hate the experience. We should encourage school leavers to continue into the further education sector and to enjoy the benefits that many of the courses offer. Such courses would be available to them if there was only some form of financial help. At the moment, it is all a mess.
  It is the Government's duty to sort out this area of mess. The Child Benefit Bill could make the situation even worse. We are in the position where under the
  804
  Bill the awards and the allowances will go to the parents of all children, including the first child. However, under the definition in the Bill a parent could be a girl of 16 or 14—in other words, a person still at school. Such a girl could be claiming the new benefits, or eligible for EMAs. That leads us to the conclusion that the whole matter needs to be considered and sorted out. I hope that the hon. Lady was implying that in her remarks.
  There are certain other anomalies depending on whether the 16–19 age group attends a school or a college—for example, in tax and family allowances, unemployment benefits and industrial training grants. The whole thing is not an interaction, as I believe the hon. Lady said, but a jungle, through which it is hard for this age group to find its way The Department must get to grips with the situation. There is a need for emergency action to be taken now.
  The main report is, of course, concerned with postgraduate education. When the report appeared there was a pretty hostile Press. The Times Higher Educational Supplement of January 1974 reported that there was the ominous ring of cash registers about it. We are now in a different climate. Most of the evidence that reached the Committee came from the era of the 1960s, the era of the great educational explosion. At that time attitudes were geared to the fact that there was plenty of money and that education was a jolly good thing. It was clear that the AUT and the NUS took the view that while wanting more in one area they should also have more in other areas.
  With the climate that we have now, and the difficulties for the forseeable future, so horrendous are our economic problems that we shall have these difficulties to face over the next five years or so. It is up to us to say that the educational world, like everybody else, will have to accept the restraint that there will have to be. Education is the second largest consumer of public expenditure and the educational world will have to share that restraint. It is extraordinary that this debate comes immediately prior to a statement on public expenditure and a most important meeting of the Vice-Chancellor's Committee which is to debate

  805
  the whole field of postgraduate education, among other things.
  There is, however, much that is valuable in the report. It raises some essential questions which Governments seem not to ask. We are certainly going to be in an era of "steady state" not of steady growth, and clearly the Expenditure Committee's narrow function, to get value for money, has relevance. It is there to see whether money is being wasted or could be applied in a better way; and in the present context that makes sense.
  Where do we start? We must start not so much on the quantitative side, in this or any other field of education, because as far as I am concerned, given the change in the economic situation, the era of quantitative change is ended. We concentrate on qualitative measures. That is the essence of the Opposition's whole approach on all sectors of education from our desire to monitor the situation in the primary schools and in the secondary schools, to standards, and the qualitative nature of our post-school education.
  Looking at the last 20 years of financial explosion in education, in most areas the school sector and the higher sector have moved into new buildings. There are still bad patches but some £7,000 million went into building; so if there is now to be a cut, that should primarily be in building so that the quality of service, and the servicing of the buildings is not prejudiced, even if those buildings must be put to higher productive use. Coming down to figures, however, with the state of affairs we have, and when we are spending these gigantic sums—and this Is the second biggest spending Department—it is really appalling that we do not know where the money is going, what return we are getting on it, or even whether the information is up to date.
  I welcome the Minister's partial acceptance that there was to be a change and that certain improvements have been made. Answers to some of my Questions indicate that there are interesting developments in connection with OECD's Centre for Research Innovation, but we need to know more in particular about the whole costing techniques of the DES. Replying to my queries, the former Secretary of State wrote that
  806
  "clearly much more needs to be done on the subject before it would be safe to take account of relative costings in our forward planning".
  He was referring to marginal costs.
  For a Secretary of State in 1975 to have admitted that we are just working out the figures on a sensible basis is amazing. Marginal costs are crucial. Polytechnic places, for example, may not be cheaper. There were some interesting papers on this in the report. We need to know whether the Government believe that there is validity in the LSE report on marginal costs for postgraduate students as against the marginal cost of undergraduates. It said that additional postgraduate places cost three times as much in the arts, science over three times as much and mathematics four and a half times as much as undergraduate places. I would like the Minister to say whether that is so, because we have here an area where, if so, we must scrutinise what is done, since this area spends over one-quarter of the whole budget, and the figures seem to be growing. Last year the DES and the research councils spent £17 million on maintenance against £10 million in 1970.
  This year the proportion of postgraduates to the whole student body in our system is well beyond that in any other country. Taking straightforward figures coming from the University Grants Committee, 18·6 per cent. of the student body are postgraduates. In the United States it is only 17·7 per cent., Canada 13·3 per cent., Japan 3 per cent., Spain 1 per cent. and Sweden 8 per cent. Those are the OECD figures which encompass more than university places; on an equivalent basis, we have 28 per cent. as postgraduate students, a very high proportion.
  Are we getting a good return? Is the money going to the right places? The report raises fundamental questions and the Minister has not said much on it, but I hope that the Department is getting to grips with it because we cannot go much further until we have decided how much money should go to the University Research Councils, how much to industry, or into special centres, as suggested by the Report, with a concentration of research—the so-called centres of excellence.
  Dr. Jeremy Bray: Would the hon. Gentleman put his remarks into perspective by pointing out that in the case of the United States and Japan the number of undergraduates they have is vastly greater than the number in this country?
  Dr. Hampson: Certainly, I accept that. Nevertheless, we have to know the relative costs. It is a fundamental question to ask. How are we to get the kind of results we might want and through what incentives? Surely the Government have the scope to try to influence the situation through the research councils and other institutions, possibly by tax incentive proposals. How have the Government reached the conclusion that if the staff per student ratio is raised to one in 10, £30 million is saved? How much research will be lost? We do not know the basis for the thinking of the Department or the Minister. This is a fundamental criticism, echoed by OECD, of the way the Department functions and its procedures, on which the hon. Member for Bishop Auckland dwelt.
  Is the balance right between pure and applied research; in which institution should each be best undertaken? Possibly, we are arguing that industry needs more PhDs but is that a right assumption? One can be as academic in science and technology as in the arts and humanities. We may not in fact be lacking in technological ideas so much as in the ability to convert them for the market. So there is the field of management training and the more technical higher courses which possibly need development against other courses.
  We have also to ask what is university research for? Is it to stimulate good teaching? Is it to train researchers and university staff, or to obtain the research results we want? Is it the atmosphere that is important? One finds in other countries interesting developments here which we should bear in mind. I am not saying that we are necessarily wrong, but often those who discuss this assume that what we do in this country is the norm and should remain the norm. When Japan looked at its system in 1971 it came to the conclusion that there was possibly a need to change its advanced courses and to set up, in one sense, the centres of excellence the report suggests, to take a concentration of research, as
  808
  well as special graduate schools for the shorter courses of one or two years separate from that.
  We need to consider all these matters. I doubt whether we or anybody, certainly not the Ministers, particularly those who have just come into office, will have looked at the whole perspective. It is clearly essential to do so if we are to change either along the lines of this report or along any other lines. It is a question of making the best use of the money available. It is always assumed that teaching and research go together, but that is not inevitable. Speaking as a former university lecturer, I believe that many of the shorter postgraduate courses which have proliferated are taken by students who do not really know where they are going and do not get, at the end, a qualification which will improve their employment prospects.
  I speak from experience only in arts subjects. The situation may be different in other areas, and the proportion of students who take courses in the arts and humanities is relatively small. On the research side the approach of the Committee is somewhat questionable—namely, that research is only for the training of university staff. It could be argued that if there were quality PhDs industry could cope with them and they would be a success in industry. It might not be so much a problem of the nature of the PhD as of industry. The evidence of the Association of University Teachers was that British industry did not respond to higher research qualifications in the same way as did the authorities in Japan, France and Germany. The Government must create a stimulus or incentive which will cause industry to respond more fully and not be so suspicious.
  When we look at the figures for part-time courses, we find that about half of the students are undertaking vocational courses in science, medicine and technology and only 19 per cent. are undertaking other vocational programmes, 18 per cent. teacher training, and only 17 per cent. arts courses. The balance needs to be examined with this in mind. I believe that graduates should be required to take taught courses to have a job qualification as a prerequisite to employment, as for example, do teachers. Obviously, however, the report mentions an important matter regarding more part-time post-experience courses.

  809
  We also need to ensure that there are short instructional courses or courses with a topping-up element, possibly of only a month's duration, because it is these courses in which industry is really interested. There appears already to be a good deal of growth in that respect.
  It is very difficult to know in advance whether a piece of research is socially desirable or helpful to the national economy. Many of the products of research are not "useful", but much research which is of industrial use often emerges accidentally in the process of pure research. It sometimes takes years before any real benefit is seen. Possibly some cost-benefit analysis can be undertaken in this respect, but so far such an exercise has not been undertaken and the Department has never offered to assist in this respect. Therefore, we should not merely indulge in a "knocking" operation and say "We must make sweeping cuts where there seems no industrial relevance, no matter where they may fall".
  There should, however, be a readjustment of the balance in the one- or two-year courses, and we should examine the nature and function of research courses. We need to pursue the subject of relationships with industry and should consider the appointment of more liaison officers to promote a contractual relationship between industry and higher education. If we are to be caught in an economic squeeze, it is important that some of these high-powered departments which have well-qualified staff undertake this work, so that they are not kept short of money. I believe that people in our best universities should be able to rely on the fact that in the next year or so they should be able to undertake contract work. We should not be afraid of going abroad for contracts—for example, we should accept work from the oil nations.
  I should like to deal with the situation of the overseas student. The growth of the number of overseas students has been marked and this is causing some concern. There is a very large number of overseas students in some of the best university courses. To take one example, of 1,500 postgraduate students at Imperial College, 748 are overseas students and 770 United Kingdom students. I was told that the proportion of United Kingdom
  810
  students as against overseas students has dropped considerably over a period of three years. We must remember that the cost of a science place in a university is £320 per student, that the cost of a medicine place is £3,400 and that arts places cost £1,800. Therefore there is a large gulf to be bridged.
  I do not believe the report is correct to say that fees should be abolished for United Kingdom students and raised for overseas students. This suggestion will cause awkwardness and possibly embarrassment. I should like to see all fees at the university at a realistic level. It may not be possible to establish the full cost. How does one discover the cost to be attributed to overheads, administration, capital and recurrent costs? However, we could fix a realistic fee. It would then be a matter for argument as to whether the matter should be governed by grants or loans or by foreign Governments, or perhaps in the case of foreign students by the Ministry of Overseas Development. At least we should then know the true costs. Furtheremore, the students themselves would have this information and the climate would be much healthier.
  In regard to polytechnics we need to look carefully at the pooling system. There is more to a polytechnic than research, but much of the activity in further education is being squeezed out—for example, such matters as part-time work and night work. This is possibly due to the financial constraints in the pooling system in respect of the non-higher students, and the matter of status may come into the picture. That is an important aspect which must be considered.
  The Department now appears to be thinking across these various fronts. I hope that none of us will indulge in mere "knocking" of the universities. There is a great deal of thinking taking place in the universities. We appreciate that the Christopherson Committee is concerned about these matters. The universities have been pioneers in the operation of cash limits and, unfortunately, they have suffered acutely. It is only in recent years that there have been special supplementations to cope with inflation. The universities were badly hit following the 1972 quinquennial review. They were geared to an inflation

  811
  of 12 per cent. and eventually the actual rate was 28 per cent. The universities are worried that the bad third year situation might be taken as a basis for the fourth year figure.
  The universities are being asked to make cuts in their staffing ratios and also in postgraduate work. They are asked to take such action on top of being hit by inflation following the quinquennial settlement. Consequently, the situation for the universities is serious. Furthermore, they have also reduced their unit costs.
  The report of the Expenditure Committee draws attention to the fact that we are living in times of great change and uncertainty. The assumptions of the 1960s are no longer with us. Indeed, the economic situation of the 1960s will not be with us for a long time to come and the expectations of students have changed. Because of that situation, and also following attitudinal surveys in the Department about sixth-form views, a great deal of research is being undertaken. It is essential that there is an open public debate about these matters—not within the Department of Education and Science and not subject to criticism in OECD about procedures, but in a much wider framework. We must also examine the position of the CNAA, and of the relevance of the Central Commission proposed in the First Report of the Expenditure Committee. We must thrash out the relationship of polytechnics and universities and also examine where the new colleges of education fit into the present system. We should beware of producing unwanted liberal arts degrees when we should be going in for specialised vocational work. Have we thought out this matter fully?
  In the light of all these changes, I should like to ask the Under-Secretary of State whether she will set up a Royal Commission to examine the entire post-school situation so that all these matters can be sensibly and rationally argued by experts. Such a body should be balanced and not university-dominated. It should be representative of the whole body of experience. It should not be a body which merely takes minutes and wastes years. If such a body is set up it will be the first time that this topic has been fully examined. The Robbins
  812
  Committee reported only on universities and a narrow field of higher education. That was ten years ago when the world was different. Even the statistical basis then used was out of date as ours is now.
  The universities have given good value for money. It is important that we should dispel their fears that Whitehall is more hostile to them than ever. In seeking changes in postgraduate education we must recognise that they can be achieved through research councils or through other means within the system. This should be done through the university system.
  We have heard a great deal about central control, but how far can one go before control becomes dangerous? Rather than bypassing the UGC, as the Minister of State has seemed to be suggesting, we should use it, because it is trusted, and exercise influence through it and revamped research councils to make changes in the nature and methods of postgraduate courses.
  With the proviso that we must always remember that it is people that are going through the system—they are not units coming off the end of a production line that must be geared to the national interest. I welcome the initiative taken by the Expenditure Committee and only hope that the Department and the Ministers will move faster to deal with some of the problems we have pointed out than they have moved so far.
  Mr. Deputy Speaker (Mr. George Thomas): Five hon. Members wish to speak in what is left of the limited time the House expected to take for this debate. I hope that that will be borne in mind.
  6.31 p.m.
  Mr. Martin Flannery: The hon. Member for Ripon (Dr. Hampson) has spoken at considerable length in this short debate. Education is a vast panorama and our main aim must be to democratise it.
  The Expenditure Committee's Report on Educational Maintenance Allowances is short but very important and many educationalists will be watching this debate. It deals with young people from poorer families who want further education. There is no nobler aim. I can assure the hon. Member for Banbury (Mr. Marten), who said there was a battery of teachers

  813
  wanting to speak, that one can be a teacher in a particular aspect of education and not know a great deal about other aspects, especially those parts of secondary education in which many young people require money to continue learning. This is one of the most overdue subjects for attention and it becomes increasingly important as unemployment among young people increases.
  We would all agree that the 16–18 age range is the bridge between compulsory education and preparation for a career. The maintenance allowances are a splendid national investment because they enable young people to go on to further education. In the past, the young people from poorer families who most needed this education have not been able to take advantage of it.
  There are wide variations between the size of allowances granted by local authorities and the scale of parental income on which they are payable. This demands rationalisation and it is good to see that the Committee recommends that there should be a single educational allowance. This is a long overdue reform.
  The Committee points out the very low rate of take-up of these allowances, and this is one of the symptoms of poverty. In 1971, only 28,000 young people were given allowances and the total cost was only £1½ million. It is a sad reflection on our society that such a tiny amount of money was spent on such an important aspect of education. Families must know to what they are entitled. When I was a teacher in a primary school, I found that many families, often the most independent and proud, did not know about free school meals and clothing allowances and were very loath to take up these allowances although they were entitled to them. Allowances should be mandatory and administered by local education authorities with the same criterion as that for free school meals.
  The aim of the allowances, as defined by the Education Act 1944 and the Weaver Report, is to enable pupils to stay at school and to take full advantage of the educational opportunities open to them without undergoing hardship or causing hardship to their parents.
  I share the view of my union, the National Union of Teachers, that every
  814
  young person has the right to education after 16 if he wishes it. It is the duty of the State to see that every advantage is given to such people. There should be an initial mandatory grant irrespective of parents' income. The NUT called for this development in its evidence to the Committee, and I notice that the National Union of Students, which deals more intimately with young people, their aspirations and wishes, differs from the report to some extent, good and welcome though the report is.
  After the mandatory grant, further grants should be based on need. I am pleased to see the recommendation that grants should be paid in advance and in a lump sum and that the part relating to pocket money, clothing and travel should be paid to the pupil. That recognises the reality that young people want money to spend as they see fit. I remember that when I was a student I had far less money than my friends who were working. When we went out at weekends I felt I spent the tiny contribution from my parents and my brothers in one night while my friends who were working had much more money.
  I agree with the National Executive of the Socialist Education Association that young people in further education are entitled to a wage. Young people working for examinations are among the most hard-worked people in our community. In many cases, they are worked far too hard. They work hard all day, have lots of homework and often go to bed shortly after finishing this work at home. They work as hard as anybody. Although the report does not recommend it, I would like to see young people paid a wage for the hard work they do in their place of learning.
  Most young people agree with their parents to pay them a proportion of their earnings. I think young people in education would come to a similar arrangement. If we do not accept that, we are saying that the young people at work are better than those in places of learning. We trust young people at work, and we should trust those who are learning. This is an aspect of democracy that has been much neglected.
  The problem of letting people know their entitlement to various grants will be solved by writing to the parents when

  815
  the children are about 14½ years old. This is a good move. We should ensure national as well as local publicity so that people know their entitlements. This decision is indeed good news.
  I want to mention a problem which is bound to increase in times of unemployment and financial stringency. It concerns those young people who leave school and fail to get a job and have to go on social security. Many of them want to be re-entranced into education, and this aspect must be examined. When they go back into education, having obtained social security benefit because they are out of work, will that social security be taken away from them at some point? This is something which must be examined so that young people who, through no fault of their own, are out of work will be able to re-enter education in the further education sector and know that the money that they were receiving will continue.
  We owe a debt to the people who have furnished us with this report. As far as it goes—and I have tried to point out some aspects where I would like it to go further—it is a good report. It is an advance which must be welcomed, which must contribute to the cause of education, and by so doing it contributes to the cause of all our community. We must therefore welcome it and see that it is implemented in September.
  6.42 p.m.
  Miss Janet Fookes: Bearing in mind your strictures, Mr. Deputy Speaker, about the need for brevity I shall confine my remarks to the report on postgraduate education and not deal with educational maintenance allowances, although I served on the Committee which produced both reports. I have been deeply disappointed by the delay in receiving any Government observations on the report, especially in view of the length of time it has been published. Delay is a kind word. I would regard the Ministry's approach as distinctly dilatory. I am not sure that there is not a special in-tray in the DES marked "mañana" into which is put anything which is a nuisance.
  The report comes at a time when public expenditure is being more closely scrutinised than ever before. Its con-
  816
  clusions are even more relevant now than they were when the report was produced in late 1973. I share the concern expressed about the lack of information about the costs of postgraduate education. This aspect gave us a distinct surprise, indeed a shock, when we first undertook our researches into this field of education. The University Grants Committee apparently felt that it did not matter for its purposes, but if one has to make any assessment or proper judgment of the value of postgraduate education one must have a proper basis of cost, and that is simply not available.
  When we were drawing up the report we could make only a guesstimate that the annual recurring costs were probably about £78 million for the year 1971–72, and that this was probably less than a quarter of the total amount spent on universities. This of course applies only to universities. The position is just as obscure, if not more obscure, over the polytechnics.
  We soon discovered also that postgraduate education covered a wide range of activities, and I am not sure that this would be generally appreciated by the public who probably think only in terms of the research student hammering away until he gets his higher degree in the shape of a PhD. There are the "taught" courses leading to the masters' degree, and these we divided again into courses with a definite vocational bent and those with no vocational content. Finally, there are the short courses of probably less than a year's duration and not leading to any particular qualification.
  As a result of all our investigations, we came to certain conclusions which are striking and which were unpopular with the education Press. I do not think one would expect any report suggesting that value for money was not being obtained to be a popular report. We said,
  "At the heart of our proposals lies the conviction that too many talented young graduates find themselves slipping into postgraduate work for no clear reason.'
  That is the central theme of our report. It is an easy way of putting off earning a living, and that is true in many but not all cases.
  Dr. Bray: On a point of order. Is it not rather unsatisfactory that we have been

  817
  without a Minister on the Front Bench for some 20 minutes?
  Mr. Deputy Speaker: I expect that we shall manage to survive, but that is not my responsibility.
  Miss Fookes: I was glad that the hon. Member intervened because I was just thinking along the same lines. However, having had the benefit of the Minister's remarks, I am not sure that any of us was any the wiser and therefore it matters less that she is not with us at the moment.
  We looked carefully at the conclusions of the employers about the use they wished to give to postgraduates, and the results were quite startling. As we said in the report, we found that ICI witnesses said,
  "'We would feel that we are cutting ourselves off from an appreciable proportion of the best brains if we did not set out to recruit Ph.D.'s in chemistry, whether or not their staying for a Ph.D. has done them any good'".
  In other words, they were after a share of the best brains but it did not matter so much to them whether those best brains had received postgraduate training or not. That situation would apply when one might have imagined postgraduate training to be valid and necessary. Again, the Department of Education and Science witnesses, reporting on many discussions they had had with the CBI, came to the conclusion that as far as industry was concerned,
  "'if they can get the best brains without the higher degree, unless they want a higher degree for a specific purpose, they are content to get someone with a first degree'."
  The unit for Manpower Studies in the Department of Employment said,
  "'an increasing number of postgraduates, especially Ph.D.'s, are applying for jobs for which employers require only a first degree"'
  I quote these comments as an indication of the general feeling amongst employers about the use or otherwise of postgraduate qualifications. I find this, as did the Committee, highly disturbing because it suggests that a great deal of public money is going into the training of these people without any specific benefit being obtained in employment terms.
  Students themselves were often disappointed. We gathered that many research students wanted university posts
  818
  and only one in eight at that time was successful in obtaining them. The others therefore had to be content with something less. We concluded that whilst postgraduate studies would need to be continued for a variety of reasons, there should be a far greater emphasis on training being undertaken in a period of employment when the students concerned acqured a far better idea of what they needed and would probably be better motivated and far more mature in their outlook.
  At the moment the bulk of these courses are end-on from the first degree. This means that people with no experience of the outside world have gone from school to university to the first degree and then to work for the postgraduate qualification.
  We suggested two possible ways in which this radical change could be implemented. First, we thought that the University Grants Committee could itself limit the numbers by quotas or whatever means it chose, but the responsibility would fall upon that body. Secondly, we thought that we might exclude, to a large extent, all full-time students immediately after they had taken their first degree. We recognised that this was a very drastic change and that it might well meet with considerable opposition. However, I believe that these possibilities should be seriously studied by the Government, and if they cannot swallow them whole, at the very least they should make a move in this direction by encouraging this trend.
  The evidence we had from employers certainly showed that they thought that it was more useful to undertake specialist training after students had been in employment for some time. What is more, they felt that far greater use could be made of short courses. In this connection I was interested to hear the comments made by the hon. Member for the Isle of Ely (Mr. Freud), who suggested that the short courses were less useful. In my view probably short courses geared to a specific and definite purpose would be far more valuable than the longer ones.
  I should like to turn to the financing system that we have suggested, because this, too, was highly controversial. We believed that a distinction should be

  819
  made between the tuition fees that a student is asked to pay at present and maintenance. We came to the opposite conclusion from that of my hon. Friend the Member for Ripon (Dr. Hampson) who believed that tuition fees should be put up to a realistic level. We took the view that tuition fees, covering the educational side, should be done away with—they are only a token sum at present—and that far higher regard should be paid to the maintenance of students.
  We believed that there should be a uniform system of grants to maintain students, but this does not appertain at present. Because of lack of time I shall not elaborate on this subject, but there are some students who under the present system do very well but there are others who get precious little, or indeed nothing at all, and have to finance themselves in some other way. We took the view that the amount of grant available for supporting the student should be distributed on a uniform basis, according to a set formula, and that as this would probably not be enough in itself a loan should be given for topping up purposes.
  We made a special study of loans. As the hon. Member for Banbury (Mr. Marten)—the then chairman of the Committee—pointed out, we did indeed distribute ourselves in various countries to see how different systems operated. I went to the Netherlands and to Germany. When we all returned to this country we pooled our ideas.
  Quite clearly a loan system on its own would impose all kinds of burdens, but we thought that there was great merit in looking more closely—even more closely than we were able to do—at loans on a topping up basis. I hope that the Government will consider this suggestion because it offers a means of helping students without placing a greater burden on the public purse which, at present, we cannot afford and are unlikely to be able to afford in the future.
  I turn to overseas students, of whom there are a large number. The figures in the report go back to 1970–71 when there were approximately 11,000 in full-time studentships. That figure represented then about one-quarter of all full-time students. At that time they were being asked to pay only £250 per annum
  820
  —again only a token sum. In our view it would be far better if they were to pay the full economic cost when this has been worked out. We were up against the difficulty that because of lack of information we did not know precisely what this was. We could offer scholarships to students from overseas, where this was though to be worthwhile, but we felt that the cost should be borne by the overseas aid section of our public expenditure. In that way a distinction would be made.
  At present we are subsidising overseas students without knowing precisely what is involved. I do not think that any member of the Committee wanted to see generosity towards overseas students drying up—at any rate those from the developing countries—but we thought it was an important principle of public expenditure that we should know precisely where it was going and why, so that we could make rational decisions. Indeed, I think it is the whole tenor of the report of the Expenditure Committee on postgraduate education that we should have the necessary information on which to make rational and considered judgments. At a time when public expenditure is being squeezed the present situation is simply not good enough.
  I hope that the Government will take on board some, if not all, of the proposals of the Expenditure Committee and that we shall, at the very least, have some answer to the points that we have made.
  6.56 p.m.
  Mr. John Garrett: I welcome the report on postgraduate education and congratulate the members of the Committee on their work. It is clear from the report that the whole area of postgraduate education is one in which a variety of policies have grown up in an unco-ordinated way, leading to anomalies and inefficiencies. The report illustrates them and has made useful comments.
  However, in one respect there is an element of superficiality about the report. In spite of the mass of evidence that the Committee took and the papers that it produced in support of its recommendations, it is right to say that it could have carried out a much more careful analysis of a crucial point concerning public policy. This is not the fault of the Committee but arises from the lack of resources devoted to Committees of the House

  821
  There must be something wrong with a situation in which the Public Accounts Committee is supported by 400 investigatory staff but has terms of reference which are 110 years old and totally outdated, while Expenditure Committees have the right terms of reference but virtually no staff. That is something that is quite wrong about our organisation of the Committees of the House. I cannot understand how the House can ever develop effective investigatory Committees until they have the research support they require. Without Committees supported in this way, the executive will continue to dominate the legislature—as it does here—without any significant countervailing power in the hands of the House.
  To illustrate the point, I shall briefly discuss an important aspect of public policy which the Committee touched upon and then left. Paragraph 67 of the report states:
  "Throughout the past decade, postgraduate numbers have been largely determined by demand from newly graduated students, constrained only by the student's need to find…a means of maintaining himself".
  It then quite logically says:
  "However, the benefits to society which accrue from having a body of highly trained specialists depend ultimately on the skills acquired and the use made of them. Our evidence shows that, at present, these relate predominantly to teaching and research. We do not accept that postgraduate education should be mainly a means of training more teachers and more researchers."
  It concludes:
  "We think that postgraduate education should be shaped, not by student demand alone, but principally by the needs of economy and of society as a whole".
  The report then deals principally with administrative arrangements, rationalisation and the courses available. It shows no evidence of having considered what are the needs of the economy and society or, perhaps even more important, of having satisfied itself that the machinery exists in government to quantify those needs. I realise that the report was written in the heady laissez faire days of late 1973.
  The Committee would have served us well if it had given us guidelines on how to answer the key question of what are the needs of our economy and society for skills which can be acquired only by postgraduate studies. Do the Govern-
  822
  ment have the ability to answer that question?
  Mr. Marten: I think that that would have gone beyond our remit. It is something that we could not possibly have done in a small Committee. It is for the Government to do.
  Mr. Garrett: I disagree. I think that that is a legitimate question for an Expenditure Committee to deal with. Remember that I asked for guidelines on how to decide what are the needs of our society for which postgraduate experience was essential. I believe that there are some.
  My experience in management and in the Civil Service leads me to the conclusion that there is a crucial need for certain vocational skills at the post-experience level which can be acquired only by postgraduate study. This need springs from the narrowness and specialisation of most undergraduate courses and from the increasing technical complexity of the management of large public and private organisations.
  There seems to be a need for much increased postgraduate management education, not only in industry but in the health service, education and the social services. Middle managers in the health service, for example, who more often than not are graduates and are in charge of a staff of several thousand with millions of pounds to spend, are often grossly undertrained for the work they do in personnel management, operational research and budgetary control.
  Secondly, the increasing technical complexity of management in all kinds of organisations has led to the need for new sub-professions of crucial importance. There is the need for the engineer-accountant, the main trained in chemistry or physics and marketing, the agriculturist, the surveyor trained in computing or the project manager. Management now needs the multi-disciplinary man with a good first degree and then vocational education.
  The French Civil Service is a model for our Civil Service in this kind of approach. American postgraduate business schools have been providing such education for the past 50 years. I am not sure that there is a need for any management education at undergraduate

  823
  level. All management education should perhaps be done at the post-experience level.
  I agree with the Committee's proposal that the emphasis should be shifted to post-experience studies. I support its recommendation for the expansion of short postgraduate courses in technological subjects. I believe that these recommendations should be set in the context of national manpower planning involving the analysis of national need—probably by the Manpower Services Commission because the Department of Education and Science is not an interventionist body of that type—the identification of gaps between present and potential need, present provisions in key postgraduate skills and the establishment of specific programmes to meet those needs.
  That does not mean the direction of students. Rather does it mean the making of places available on the basis of some kind of plan, some kind of systematic analysis of the kind of postgraduate skills we need or of the skilled shortages in our industry and public services at key points which are too serious to be left as they are or to the free play of market forces. The report must be set in the context of a requirement for manpower planning on a national scale. I wish that it had made observations on the systems required to identify, plan and meet the national need.
  7.5 p.m.
  Dr. Jeremy Bray: I am conscious that we have passed seven o'clock by which time we should be starting another debate. I am grateful to you, Mr. Deputy Speaker, for your understanding of the importance of this report. I wish to speak briefly on the postgraduate education report and to welcome the measured response which the Under-Secretary gave to it. May I say that I entirely understand the reasons for her unavoidable absence a few moments ago.
  I congratulate the sub-committee on its robust common sense in handling the report. I enormously liked the style of the hon. Member for Banbury (Mr. Marten) and his boldness in tackling this hornets' nest of vested interest. I agree with the recommendations about financial control, the unification of student grants, the re-
  824
  search potential of polytechnics and warnings about the dangers of elitism.
  But I must refer to the underlying purposes of postgraduate education, with which, for understandable reasons, the Committee did not deal but which, if the House were to leave out of consideration, would give a somewhat unbalanced view of the attitude of this House to the world of higher education. I refer first to the continuance of what Asa Briggs described in evidence to the Committee as the intellectual development of the student and secondly to the pursuit of scientific discovery. I would not ask for more money but for more understanding of the basic purposes of postgraduate education.
  The arguments which the Committee put forward, looking at the administrative structure of postgraduate education, led it to recommend a reduction in the number of pre-experience postgraduate students. There were a lot of associated recommendations such as short-term courses, post-experience courses, and so on.
  I am a terrible example of the folly of pre-experience postgraduate education, a drop-out from the educational world, in that I was one of those 25 per cent. who somehow leapt out of the system into the outer world. I now spend my time, as do other hon. Members, maintaining paving stones, moving bus stops, chasing social security claims for constituents, and all the other activities for which PhDs are so well qualified.
  I wish to look a little at the process of intellectual development which is the key to the role of postgraduate studies. Postgraduate study is qualitatively different from undergraduate study. It is a different kind of activity. The undergraduate is absorbing knowledge. He is walking along well-trodden paths. He is dealing with a polished corpus of knowledge and his achievement is measured. The postgraduate student is asking questions to which no one knows whether there is an answer. He is working in wild, uncharted country. He is dealing with the frayed ends of incomplete argument and he is enjoying the exuberance of discovery and the enormous frustrations of the barren slog of much scientific research.
  As a job qualification, postgraduate education may rank low. It has never been a meal ticket in the way the PhD

  825
  is in the United States. But the Committee was rather limited in the treatment of the evidence it took on the value of postgraduate education in other employment. It so happens that some of the witnesses who gave evidence to the Committee are old friends of mine—Jack Lofthouse of ICI, my old boss, and Peter Hall, an old friend from Ferranti days. I understand their attitudes, but I believe that had they been questioned in certain ways they would have brought out a rather different view of the role of postgraduate education at its best and certainly scientific research at its best in the wider areas with which they were concerned.
  The view I would put is that postgraduate research is a valuable tool which must be digested and used together with a great deal of experience of the outside world. Reference has been made to the techniques needed. Hon. Members have spoken of the mathematical background needed for studies in economics and social sciences and so on. But a great deal of this can only be absorbed, not in three years of undergraduate study, or in one or two years of deliberately taught instruction at postgraduate level. It must come from practical experience of tackling research problems in the hard, disciplined, but rewarding activity in which postgraduate students are engaged.
  In the sphere of intellectual development there is the enormous stimulus that young, likely, bright minds bring to their teachers and to the world of ideas. I remember Lord Blackett, the eminent scientist, who at the end of his life felt that he wanted to go back to university rather than continue in public service or the administrative concerns of the Royal Society. It was the stimulus of young minds which he found so refreshing.
  The other purpose of postgraduate education is the development and the pursuit of the methods of scientific discovery. There was a revolution in the methods of research during the 1950s which our culture has not yet absorbed. It had something to do with scale, with logic, with scientific method, with scope and its relation to application. That was seen more clearly in Cambridge, Massachusetts than in Cambridge, England. Its development is traced most
  826
  obviously in technology and in the progression from the Manhattan project through Polaris to Apollo. There have been similar developments in economics, social sciences, urban development and information systems, for example.
  The structure of defining objectives, of looking at the tools we have available to meet those objectives, the theory by which we can use the tools to work towards objectives, the building of models, the seeking of evidence, the carryout of experiments, the testing and appreciation of errors, the search for falsification and the self-criticism which goes with that, implementation, tentative at first, but building up, the observation of performance, the monitoring of results leading back to the reformulation of objectives, the reappraisal of tools—that is the logic of scientific investigation which people attribute widely to Karl Popper and which has not been absorbed into the administrative structures of our society. The great problems of our society such as the attack on poverty, the administration of housing, the maintenance of full employment and economic growth, the way to deal with delinquency, are the system problems of our society.
  We require an inquiring, scientific attitude. We need a moral commitment, and it is not only research and research experience which is required. But we need a permeation of the attack on the problems of modern society by the robustness, objectivity, and the exposure to the test of experience which is the characteristic of good research. Any activity which fosters that and which seeks to spread those qualities within our society should not be lightly brushed aside. The Committee would not wish its report to be construed as a criticism to those objectives of postgraduate education.
  There is a danger that if we cut back in this area we shall not be in the same ball park as other societies. I do not refer only to the United States. I mean Germany, France and Japan, which have expanded and integrated their postgraduate studies with their total economic activity.
  The most distressing remark in the report came from the Civil Service Department, which said:
  "Apart from basic intellectual horsepower the other qualities required of an administrator

  827
  are not necessarily to be found in the good research worker."
  If we require basic intellectual horsepower, we get basic intellectual horses. The Civil Service knows very well that it must attract and hold the aggressive, critical and constructive characteristics of good scientific research.
  I am not afraid of unashamedly advocating the merits of expansion of scientific research in relation to our national resources and the proper role of scientific research in postgraduate education, because of a possible emergence of a threat of a new and horrible élitism. The process of free scientific inquiry is the natural ally of the democratic spirit. This report is one evidence of that. It took a Select Committee of Parliament to tackle this important area. I would also cite the experience of the House with the Industry Bill. The House of Commons, acting against the advice of Ministers, took the step of giving access to the machinery by which economic policy is made. That was an affirmation of the values of objective research and appraisal, which I think is evidence enough of the natural alliance which exists to the objectives which we on this side of the House seek in a socially just society, and the aims of the educational activities in the universities with which this report is concerned.
  Question put and agreed to
  Resolved,
  That this House takes note of the Third Report from the Expenditure Committee in Session 1973–74 (House of Commons Paper No. 96) on Postgraduate Education, and the Third Report from the Expenditure Committee in the last Parliament (House of Commons Paper (1974) No. 306) on Educational Maintenance Allowances.

POLICE
7.16 p.m.
Mr. James Boyden: I beg to move,
That this House takes note of the Seventh Report from the Expenditure Committee in the last Parliament (House of Commons Paper (1974) No. 310) on Police Recruitment and Wastage, and of the relevant Government observations (Command Paper No. 6016).
I take this opportunity to thank the Committee, its Chairman, my hon. Friend the Member for Newham, North-West (Mr. Lewis), and my hon. Friend the
828
Member for Wallsend (Mr. Garrett), who on occasion deputised for the Chairman, for the report.
There is a major difference between the Expenditure Committee's reception of the ministerial comments on this report and that mentioned in the last debate. The Home Office was most constructive and reasonably speedy in replying to the comments of the Committee.
This was a Committee of the short Parliament. It was obvious that a long Committee report, of the type which is fairly customary concerning expenditure, would have been caught short by an election. This Committee responded to my request to make a brief report on a subject which it could encompass in a short time and about which it could produce firm and sensible suggestions. I believe that the House and the Expenditure Committee would agree that that job has been carried out admirably. There was much more co-operation from the Home Office about this matter than there was concerning education.
In one sense the recommendation of the Committee that pay was at the root of many evils has been overtaken by events. The central theme of the Committee was that wastage and inability to recruit were largely caused by the difference between the rewards to the police and those outside.
The pay award which was agreed on 4th June, but which will not come into effect until 1st September, will go a considerable way to meet the criticisms about the pay and conditions of the police. I do not suppose that it will go the whole way. I read the Police Federation magazine, from which I gather that the police would like a little more. It will be interesting to hear from the Secretary of State how far he thinks that the present pay award will alleviate the conditions to which the Committee referred. The Committee is grateful for the fact that the Home Secretary will speak in this debate and bring the observations of his Department up to date.
I should also like to thank the Civil Service Department for bringing me up to date with a letter, which was not produced as evidence before the Expenditure Committee, from the Department commenting on some of the major issues which the Committee raised and saying

829
how the Department viewed developments since the Committee reported.
The key to the report is money. I quote one sentence:
"The shortage of manpower remains by far the most serious problem confronting the Metropolitan Police."
In a lesser degree it also confronts other police forces.
At the time of the report the Metropolitan Police Force was 20 per cent. below establishment and the force was kept together largely by excessive overtime. The Committee discovered that this over-stretching was extending to other areas which had never experienced it before, and Suffolk was mentioned particularly. The Home Office letter to which I have referred states that since the Committee's report, unrelated to the pay award, there have been improvements in the level of recruitment. The improvement started at the end of 1974 and has continued into this year. The rate of wastage too, I am told, has recently shown a significant decline. The increase in recruitment is apparently not consistent throughout the country and there are still serious deficiencies in the large conurbations.
The central issue to which the Committee drew attention is undermanning, which causes difficulties in the Metropolitan Police area and the large conurbations. Undermanning still continues, and probably even after the pay award it will still cause difficulty.
The Committee recommended that the establishment for the police throughout the country should be revised more frequently. Although recruitment is not affected greatly by that, the Committee thought that that matter should be attended to. The Home Office in replying to that recommendation rather brushed it aside by saying that various improvements had been made in the establishments procedure. I am not convinced by that because, for example, in the Metropolitan area the establishment has not been revised for 10 years. I hope that the Home Secretary will agree that there is room for improvement here.
The Committee rightly said that the difficulties of the job were just as much a disincentive to recruitment and a cause
830
of wastage as anything else. The Committee put it simply, saying that there was more crime, more traffic and even more complicated tasks to do and, as a result, the police had to work irregular hours, had their leave cancelled and suffered the most unsocial of all social conditions. The more the policemen suffered from these unsocial conditions, the more likely they were to leave the force. The Committee had nothing very constructive to say about that. The report is a short one and it would perhaps be asking too much of the Committee to expect it to delve into these problems. I am sure that the Home Office has these problems in front of it all the time, and I shall be interested to hear whether there are any new thoughts on how they can be resolved.
The Committee was undoubtedly of the opinion that pay was at the centre of the difficulties. I was struck forcefully by the way in which a constable's pay has declined relatively since the war. Prewar, the pay of a constable was 62s. 6d. a week, compared with the average industrial wage of 48s. a week. At the time of the report a constable received £26 a week compared with the average industrial wage of £46 a week.
One incentive to joining the police force and similar professions is the good pension conditions at the end of service. The recent increase in pay will put a constable on first appointment in the provinces on a salary of £2,400 a year, compared with £1,862 at present. The total percentage increase of the recent settlement is almost 30 per cent. To that extent part of the report is out of date, and I am sure the House will be delighted that that is so.
The Committee made several comments on allowances and pensions. The Home Office reply seems to suggest that pension percentages and arrangements should be left alone. The Committee wanted an inducement for policemen to stay on in the service for the maximum time of 30 years. Serious difficulties have been caused by experienced policemen leaving the service before the expiration of 30 years, getting entitlement to pension but not giving maximum service. I should like to know whether the Home Office has any more thoughts on that matter other than those contained in its observations on the report.

831
A most important item is the provision of housing for retiring policemen. Paragraph 14 of the report contains this sentence:
"We consider that the provision of a generous housing allowance (including practical help in the form of favourable mortgage rates for young officers wishing to purchase houses) is essential."
The Home Office observations state that the Police Advisory Working Party is studying this item. From my experience in the Army I consider that satisfactory housing provision is crucial. When I was an Army Minister I visited regiments and talked to the wives and families and housing was one of the most important matters to them. They worried about what would happen when they went out into the cold world, which entailed a change in the children's education, re-equipment with furniture and the provision of a house.
The Ministry of Defence has an elaborate system which provides favourable mortgage terms. I wonder whether the Home Office should not join the Ministry of Defence in stressing to local authorities and the new town corporations the need to make adequate housing provision for police and Service men when they come out of service. The local authorities in my area are fairly good about this, but it is still a great worry to the serving man and to the policeman.
On recruitment, on certain minor matters the Committee considered that there should be changes. One matter which was discussed was the time taken to embody a man from the time when he first applies to become a constable to when he actually gets on duty. That takes two months or so, and the Home Office observations suggest that it is difficult to cut down that period. Once a man is recruited, every effort should be made to get him quickly on to the job. People are much more impatient now than they used to be and actually working on the job is important to them. I should like to know how many potential policemen are lost because of the time lag between the initial recruitment and actually starting work.
The Committee also said that there were insufficient funds available for advertising and public relations concerned with recruitment. The Committee suggested that the Ministry of Defence had
832
experience of this which might be useful to the police. The observations suggest that heavy expenditure on advertising would not be justifiable, but I should like to be assured that this matter will be given the maximum attention.
The observations reject the recommendation that there should be a special adviser on recruitment. Again, I call on my experience in the Ministry of Defence. Perhaps the Ministry of Defence was a little more humble than the Home Office. When a somewhat intractable problem arose the Ministry of Defence would appoint an outside specialist to solve it. For example, on the employment of ex-Service people and on housing, outsiders would be appointed who could look at the Services objectively. They often produced interesting suggestions and original ideas. I am sure that the right hon. Member for Chesham and Amersham (Mr. Gilmour) will bear me out on that.
The committee wished that the recruitment age could be reduced and considerable attention devoted to the encouragement of cadets. I am told that as a result of the reduction of the minimum age to 18½ and the various other efforts that have been made, about 900 additional constables were recruited by the end of June. This was due to the change of regulations in relation to cadets. The letter I have says that the interest which the measures to publicise this change raised suggest that it may have succeeded in its main object of increasing the attractions of a police career to the 18-year-old school leaver.
There is no better place for a young man who wants an active life than the Army, the Air Force and the Navy, and there is no better place to start than the junior colleges and apprentice colleges. Although I do not know much about police training, I suspect that it is equally as good and that once a young man becomes a cadet he has a good foundation for becoming an efficient police officer.
There were two matters about which the observations were rather negative in relation to the Committee's report. The Committee wanted to see more cadets in the police force. Probably the Home Office does also. However, the Committee's proposal that there should be extra increments for academic qualifications does not meet with favour either by

833
the Home Office or the police. I can well remember the jealousies and difficulties when a graduate policeman got quick promotion. This obviously causes so much difficulty that it would be unpopular to return to that state.
The Committee's idea that the time spent in university should be rewarded by adequate pay in the force perhaps needs further examination.
The observations of the Home Office are quite silent on special constables. The Committee thought that there should be a bounty for special constables, rather like there is in the Territorial Army. It did not draw attention to the fact that the regular police force is not very keen on specials. However, this is an area on which the Home Secretary might comment, because the observations did not do so.
I have not had time to cover the whole of the Committee's report. I had hoped that the Chairman of the Committee would have been present to comment on it. I believe that I have given a faithful summary of the main views of the Committee, which were that the police should be better paid—because this was the key to recruitment and wastage—and that shortage of manpower was the key to the whole situation. Any other supplementary steps, in addition to pay, which could be devised and which would go to the roots of this shortage of manpower and the difficulties of recruitment and wastage would be very welcome.
I end as I began by thanking the Committee for doing its work. I hope that the report will commend itself to the House.
7.34 p.m.
Mr. Edward Gardner: The country, which is now concerned about the growth of inflation, should be equally distressed by the growth of crime. As the Home Secretary is aware, last year was indeed a record for the criminal. There were more crimes committed in this country than ever before. Indeed, the number of crimes recorded increased by 221,145 to a record 1,264,959. It is against this sombre statistic that we debate tonight the problem of police recruitment and wastage.
The difficulties of police recruitment and wastage, as I am sure the Home Secretary would agree, are clearly not the
834
same throughout the country. For example, provincial forces have doubled their numbers since 1921, but this is not so in the case of the Metropolitan Police or in other police forces which are responsible for some of our large cities and towns. Perhaps London is the most disturbing example of the absence of the required numbers of police officers. Clearly there is a reason for this, and there are grounds for some strong concern about the absence of approximately 5,600 officers who are now required to fill the vacancies which we are experiencing in the London Metropolitan Police.
If we go back to 1921 and examine what happened in the crime statistics then the figures are, indeed, somewhat revealing. For example, in 1921 in the Metropolitan Police area there were 56 robberies. I understand that last year there were 3,151. In 1921 there were 3,723 burglaries and last year in the same area there were 86,378. With those figures displaying as they do the phenomenal, and, I would suggest, somewhat frightening, rise in those two specific crimes, apart from the rise generally in the crime figures, we have to contend with the fact that today the Metropolitan Police have 800 men fewer than they had in 1921. The number of men in the Metropolitan Police force today is 20 per cent. below the number that was regarded as the notional establishment for the Metropolitan force 20 years ago. Indictable crime in the Metropolitan Police area has increased about 20 times above its level in 1921.
How has it come about that we still have serious shortages in places such as London? Why cannot we recruit the police officers? Is it all a question of pay? Has it something to do with the conditions of service, or do we have to look at the realities and say that there are areas in London where it cannot be a great pleasure to work as a policeman, compared with other areas of the country where the lot of a policeman is very much happier.
The dangers that accompany the duties of a police officer every day of his life, the danger of physical injury and, indeed, the danger, in some extreme cases, of death when on duty in this city are, no doubt, a deterrent to many people. One out of seven London police officers each

835
year has to be treated for assaults which are committed against him while he is carrying out his duties.
Although I do not have precise figures, I feel some confidence in putting before the House, as a matter of criticism, the fact that when many of the criminals who carry out these assaults on police officers are brought before magistrates, too often they are let off with no more than a fine or a light punishment. In looking at the sources of discontent which undoubtedly affect the police force today in areas such as the Metropolitan Police area I have no doubt that the way in which some courts deal with criminals who have caused injury to police officers while the officers have been carrying out their duty is one of the reasons why there is a reluctance, among some, to volunteer for police service in London.
One thing is quite clear. That is that if it were not for the efficiency, the sense of duty, the energetic pursuit of the criminal and a determination to preserve law and put down crime that is being displayed daily by members of the police force in this city—and in other parts of the country—certainly London would soon be in danger of acquiring the same sort of morbid and alarming reputation that a city such as New York, for example, has.
I am delighted to know that what I and many people in this country regard as one of the most despicable and disturbing crimes, which goes under the title of "mugging", is not apparently increasing in London. I believe that in 1972 there were about 129 cases of mugging every month, and that now the number has levelled out to about 100 a month.
This is a matter for congratulation, but at the same time it must be borne in mind that the need for extra police in the Metropolitan Police area is all too easily perceived when one understands that there are about 800 square miles in the central area which have to be patrolled by the police. By dividing up the men available in uniform for patrols on the street one can appreciate that there cannot at any one time, unless they are called there for a particular purpose, be more than three or four uniformed police, officers to the square mile.
836
I should like to bring to the attention of the Home Secretary the fact that about six weeks ago—I should not like to give a more definite identification than that, for reasons which will become obvious—I went out to a party in London. One of our colleagues, who happens to sit on the Opposition side of the House, was also there. I noticed that he had part of his face covered with plaster. I said to him "What has been happening to you?" He said "I have been mugged". I said, "Where did it happen?" He said "It was about 20 past 11 at night as we were coming away from the Haymarket". "On foot?" I asked. He said "No, in a motor car. We were coming down from a car park. My wife was in the passenger seat. When we were driving away two men ran up to us and banged on the window on the driver's side of the car. I drove off. They ran after me. I was held up by a taxi. They then threw a bottle through the window and assaulted me with their fists." As a result of that, he had to go into hospital for treatment.
I mention that because these cases of mugging which are very nasty and very frightening, do not always come to public attention. Indeed, that one I have mentioned never saw any light in the Press. Whether that is a good or a bad thing I know not, but there is no doubt that crimes of this kind can and do take place in parts of London which are regarded as safe.
On the other hand, I should like to pay a tribute to the Metropolitan Police in relation to an experience which I had personally only a few weeks ago. I was in my home early in the morning. Going past the front door, which was closed, I saw the letter-box flap suddenly lift up, just gently and slowly. There was no knock on the door, so I opened the front door. Standing there was a villainous looking man who looked a little embarrassed when he saw me. I asked "What do you want?" He said that he was a window cleaner. He looked one of the most frightening window cleaners I have ever seen. I went to my wife, who was in another room, and said to her "There is a fellow here who says that he is a window cleaner and wants to clean our windows". She said "That is very odd, because someone who was in the flat yesterday saw a man on the roof, and when she questioned him he said that he was

837
a window cleaner sizing up the cost of cleaning the windows."
I contacted the police immediately and told them that outside my home there was a man who did not look to me like an ambitious window cleaner who wanted to clean my windows, and I said that I thought that the police ought to make inquiries. They said "Say no more. We will send the police there."
Nothing else happened immediately, but as I went out about half an hour later I saw that the road outside was jammed with police cars, tracker dogs and all sorts of equipment, with the exception of the fire brigade. On the roof, about 100 feet up, were a tracker dog and a police officer who had just caught the man—or a man—who was alleged to have gone into the flat next to mine and emptied the place and taken all of the stuff up on to the roof. All that was done in about 10 minutes, and I think that it was an admirable example of the way to deal with crime.
Finally, however, if we want—as we must have—a proper recruitment to police forces in London or elsewhere, I believe that the only way we can achieve this with certainty is to pay the people who have to take on the ugly side of police life a proper salary and, if need be, a salary which measures the unpleasantness of the tasks which they have to perform.
The London differentials over the provincial forces are about £340 a year at present. I beg to doubt whether those differentials are enough. The fact that we still have vacancies for 5,600 men in the London metropolitan area seems to indicate that they are not enough. I ask the Home Secretary to consider this particular way of ensuring that we have the right number of policemen in the right places at the right time as a possible way of solving our problem.
7.49 p.m.
Mr. Eldon Griffiths: In rising to comment on this matter, I ought to declare an interest. As the House and the Secretary of State know well, I am an adviser to the Police Federation.
I am very glad that my hon. and learned Friend the Member for South
838
Fylde (Mr. Gardner) should have commended to the Home Secretary the need to pay the police properly, and I shall come to that matter shortly.
This debate takes place in the context of a quite alarming increase in both the volume and complexity of crime and other threats to the public order. I do not think that anything could better illustrate the complexity of the tasks now confronting the police than the story we have been reading in recent days about the so-called Jackal. This gentleman is reported to be a Venezuelan, who was educated in Moscow before studying economics in Britain, and who is now believed to be in the Lebanon. In searching for him the police of two nations have sought two ladies, one of them a British secretary born in South Africa, who is accused of meeting the Jackal at the Invalides air terminal in Paris, and the other a French lady in whose flat the police discovered an amazing stock of weapons, including American grenades, stolen from a depot in Germany, of the same type as those used in the attack by Japanese terrorists of the "Red Army" on the French Embassy in The Hague. That illustrates the complexity of the task which now often confronts the police.
I spoke as well of the volume of crime and other threats to public order, and nothing could better document that than the report, with which the Home Secretary is very much familiar, issued this week by Her Majesty's Chief Inspector of Constabulary. There is no need for me to do anything other than select from that report just these few sentences which illustrate my point perfectly adequately. The Chief Inspector says on page 1 that:
"This has been an arduous and difficult year for the police service … The resilience of all' of those who are committed to the maintenance of law and order has been severely tested by increased crime, senseless vandalism and to an increasing extent, the challenge and menace of politically motivated terrorism."
The statistics which appear in this report —I shall not weary the House by quoting them—document those statements more than eloquently, and I know that the Minister, whose care for the police is well known, fully appreciates the challenge which they and our civilised society now, confront.

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I wish to take only two points from the Seventh Report from the Expenditure Committee. Paragraph 3 refers to
"the chronic malaise of the undermanning of police forces generally throughout England and Wales, more particularly in the conurbations".
I do not particularly admire the grammar of the Committee in composing that particular sentence, but I am bound to agree that the figures speak for themselves.
Greater Manchester is short of more than 1,000 police officers. West Yorkshire is short of more than 700. The West Midlands has a deficiency of more than 18 per cent. on its establishment—a shortage of 1,132 men and 57 women officers. Worse of all, as my hon. Friend has suggested, is the position in the great City of London. The Metropolitan force, with its authorised establishment of just under 26,000 men, actually had on its strength, at the time the Home Office commented upon the Seventh Report, only 20,127 officers—a shortage of more than 5,000. This is against a background in London where crime is growing, where traffic is increasing, and where violence is increasing.
I am sure that I shall carry the Home Secretary with me when I say that these figures, by any measure, are quite unsatisfactory. Indeed, they might be described as verging upon the irresponsible, for with a shortage of so many men it is virtually impossible for the police in our conurbations to provide to the citizen that usual protection of his property and his person which is his right in a free society.
But that is not the whole of it. The Committee very properly ask whether the establishments themselves are adequate. They say, in paragraph 9,
"We confess to a feeling of misgivings about the determination of establishments."
They can say that again. They conclude in paragraph 10 that it is
"unsatisfactory that there is no clear explanation how an establishment is in practice decided."
Turning to the comments of the Home Office on these conclusions, I am bound to say that, understanding, as I do, the difficulties of arriving at formulae which will fit all the circumstances of all the different forces in this country, the Home Office comments on this matter seem to me to be woolly, vague and quite unconvincing. I agree with the hon. Member for Bishop Auckland (Mr. Boyden) when
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he says that this particular portion of his report seems to have been dealt with very sketchily by Home Office officials. I hope that the Home Secretary, when he replies, will feel it possible to comment upon the point about establishments.
With regard to pay, I congratulate the Committee on their discerning judgment, where they say, particularly in paragraph 14, that
"recognition must be given to the abnormality and the exacting nature of a police officer's life and that the rates of allowance which appear to us very low should take generous account of this incontrovertible factor."
The Home Secretary and I have from time to time discussed pay in many places, and no doubt we shall continue to do so. In the comments made by his Department on the Committee's report there is a total of twelve lines on page 3 devoted to the question of pay. In my view, this is an extraordinarily short comment by the Home Office when one considers that just over 51 lines are devoted to the question of university graduates and some 42 lines to the question of recruitment propaganda. Pay is the heart of the matter, and I believe that the observations made by the Home Office on the Committee's report are once again quite inadequate.
The position now is that an agreement was reached for an increase in police pay. It was signed and sealed on 4th June. It is not yet delivered. I want to put the House in the picture, if I may, by saying—in, I hope, moderate and measured terms—that that award was not greeted with universal acclamation within the police service. There was some talk of industrial action. I do not believe that that was very serious. There was anger and dismay. These feelings reached a point where the chairman and secretary of the Police Federation waited upon the Home Secretary—who is always generous in receiving them—and told him of the total dissatisfaction of the service with the outcome of those pay negotiations. They told him that some members were resigning from the Federation as their only way of protest. They told him, too, that the Joint Central Committee came very close to losing the confidence of some of its elected branch board representatives in the country.
I know that the Home Secretary appreciates fully the points which were

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made to him. We now confront what could be a new situation. We are about to hear what is contained in the White Paper. It would be wrong for me or for the House to press the Home Secretary on this matter tonight. I say only to him, in words with which he may be familiar, that it is the clear understanding of the entire police service of the United Kingdom that the recent pay agreement on 4th June will be implemented as agreed. That is the understanding of members of the police force, and I hope that it will be so.
I conclude by drawing attention to an advertisement which appeared in the Sunday newspapers last weekend. It is an advertisement which encourages men to do
"… a great job in Britain's police."
I hope that many people will respond to the advertisement, because they are needed. However, the advertisement goes on:
"You start at £2,400 per annum",
and it adds that there is more to come, There is then an asterisk, and beside it are the words:
"These are the new pay rates effective on September 1st."
The advertisement has been published throughout the United Kingdom, and it reinforces the point which I hope have left with the House that an agreement signed and sealed on 4th June must now be delivered.
8.1 p.m.
Mr. Ian Gilmour: I am sure we are all grateful to the Expenditure Committee, especially to those members of the Sub-Committee who produced the report. We are even more grateful to the hon. Member for Bishop Auckland (Mr. Boyden) for the way he introduced it. Certainly my own experience in the Ministry of Defence bears out his remarks on that subject.
Many organisations claim to be undermanned, overworked and underpaid, including the House of Commons. Whatever may be the truth about that, however, certainly it is true of the police force, and at a time of grave manpower shortage, as my hon. and learned Friend the Member for South Fylde (Mr. Gardner) and my hon. Friend the
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Member for Bury St. Edmunds (Mr. Griffiths) pointed out, we see crime rising fast. Hon. Members will have doubtless read today some of the report of Her Majesty's Chief Inspector of Constabulary. On page 23 the Chief Inspector points to the record rise in crime last year. There was a 21 per cent. rise in recorded offences. In the first quarter of 1975 there was another rise of 6 per cent. in the number of offences compared with 1974.
At a time when the police find it difficult to recruit and, what is more important, difficult to keep the officers whom they have, crime is still increasing sharply, and perhaps it is not surprising that whereas in 1973 42 per cent. of all crimes were cleared up, in 1974 the percentage dropped to 39. These figures are slightly different from those given in the Chief Inspector's report. It may be that that is because, for some reason, he does not include the Metropolitan District. But the difference between the percentages is the same. I am not sure why the figures are different.
If we expect our police force to solve the growing crime problem, we must provide it with the manpower and the facilities with which to do it. It is to the benefit of the whole of society to have an efficient, effective, well-respected and contented police force. It is gratifying that there has been an increase of just over 1,100 in the strength of the police. However, everyone will agree that that is nothing like enough. We have heard the figures. We are short of 13,000 police officers in England and Wales, and some police stations are unable to cope even with the inquiries that they get, with the result that quite often people have to wait a long time before their problems can be dealt with. From time to time we hear stories of people having to wait two hours to collect something like a recovered stolen bicycle simply because the police station is so undermanned. Obviously such delays not only cause frustration to the public but also lower the morale of the police.
As we know, the problem is greatest in London. As Sir Robert Mark said in his report for 1974,
"The persistent problem of shortage of manpower continued to loom large, affecting all areas of our activity in myriad ways. … Once again the main problem facing the force has been shortage of manpower. … The

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downward trend in strength has continued while commitments have increased."
As Sir Robert said, while police strength has been down, we as a Parliament have been asking the police to do more. If we expect them to do more, we must also make sure that their numbers are up to establishment.
My hon. and learned Friend the Member for South Fylde drew a comparison between now and 1921, and it is a very disturbing one. We have 600 fewer policemen in London today than we had in 1921, whereas the crime rate today is more than 20 times greater. It seems crazy that when more crimes are being committed in London we have many fewer policemen to deal with them. The shortage in the Metropolitan area is nearly 6,000 men, which is a 21 per cent. shortage in manpower. What is more, that figure is based on establishment numbers which themselves may be inadequate and have been unchanged for 10 years or more.
Such a shortage of men can mean only that the police can no longer cope properly with the growing number of crimes being committed. Many crimes will not get the attention they deserve and many criminals will go undetected, however hard the police work. If this goes on for long, the obvious likely result will be that the more criminals who go undetected, the more crimes we will have in the future. This will lead to growing frustration and resentment throughout society.
But it is not only recruitment that is important. We must also concentrate on keeping the good policemen whom we have. It is not surprising that we lost nearly 6,000 men from the force last year, more than 1,600 of them from London, when we remember the ever-growing pressures on policemen in present-day society. Because of manpower shortages, many policemen find themselves doing a great deal of overtime, especially at weekends. Whatever else may be said about the growing number of demonstrations that we see in London, they mean to many policemen merely another lost weekend and to many of their wives having to spend another day wondering whether their husbands will come back safely.
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Again I quote the Commissioner of Police. He said:
"I am concerned about the increase in recent years in the number of serious injuries suffered by officers assaulted while on duty, not only from the welfare point of view, but also in relation to the depletion of strength at a time when the force is increasingly hard pressed to meet its commitments."
In the Metropolitan District alone, two men go sick every three days after being assaulted. Sometimes their injuries are incurred during demonstrations yet, as Sir Robert points out, the penalties for these crimes are still far from satisfactory.
Obviously this is an extremely difficult moment to be discussing any matter relating to pay, as my hon. Friend the Member for Bury St. Edmunds, with his special position, pointed out. But it is right to make the usual comment that the basic pay of policemen should compare well with that of other occupations. Unfortunately this is not so.
The hon. Member for Bishop Auckland drew some penetrating comparisons between the present-day position and the position before the war. The recent police review, as my hon. Friend the Member for Bury St. Edmunds said, was not universally well received, although it may have done some good. Unfortunately most policemen still feel that their basic salary is too low. Like my hon. Friend, I do not wish to try to press the Home Secretary to make any definitive statement tonight, but I associate myself with what my hon. Friend said. If the Government were to go back on the agreement now, there would be enormous resentment and frustration and a great deal of damage would be done. I hope that that is not contemplated.
If we are to preserve the morale of the police and if we are to increase recruitment, the police must be paid the proper rate for the job. If they are not paid that rate, they will leave and morale will suffer. If we are to recruit more police into the Metropolitan force and to stop others from leaving, we must pay them, as my hon. and learned Friend the Member for South Fylde said, a reasonable London allowance. Life is obviously very much quieter and easier for a policeman and everyone else outside the large cities. It is not surprising that many police find it easier to go elsewhere.

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Obviously we welcome the London allowance, but why is it so very much less than the London allowance that was given to the civil servants last year? It has been calculated that the £410 London allowance for the civil servants should be increased this year to cover the rising cost of living and working in London. The police have a housing allowance, but there needs to be a larger London allowance to attract more recruitment.
Will the Home Secretary consider the possibility of supporting a two-tier allowance, one tier for London and another for our other large cities which have similar but not quite such great problems? It may be that there should be an increase in the allowance for those working in the large cities and an even larger one for London. Such measures could help recruit more police officers and help to retain the officers we already have.
Thirdly, we might help improve recruitment by making better facilities available to enable police officers to buy their own homes. The hon. Member for Bishop Auckland suggested that some of the Home Office comments have been complacent. I shall be politer and say that the comment on the rent allowance seems to be unduly bland. I read it twice, and to me it conveys no information at all. The Home Secretary may be able to tell us what, if anything, has been done about enabling police officers to buy their own houses.
Of course police pay is important, but that is not the only problem. The police force must attract high-calibre recruits, and that can be done only if the reputation of the force is good. As Sir Robert Mark has so rightly said:
"We can only attract the kind of people we want by raising our reputation for integrity and effectiveness".
I am in no doubt that the reputation of the police at present stands very high indeed in the minds of the public, and deservedly. Nevertheless, we must do all we can to help them.
Is there any scope for raising the age at which men can join the force? Would it be possible for forces that are nearly adequately recruited to help the Metropolitan force and some of the forces in the large cities which are presently undermanned? That could be done by providing that recruits outside the large city
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areas should first serve two or three years in the Metropolitan force or in a large city force. As well as helping the manpower of the less-well-off police forces, such a scheme would provide valuable experience for the officers concerned.
We all agree that the police force is overstretched and cannot keep pace, despite the heroic efforts of the police to meet the ever-growing needs of society. At a time when crime seems inexorably to be growing, at a time when we see international and national terrorism growing, with car and letter bombs being planted in our cities, at a time when extremists are intent on creating social disorder as we saw in Red Lion Square, and at a time when certain Left-wing members of the Labour Party are encouraging and giving aid to those who break the law, as with the Shrewsbury pickets and at Clay Cross, the Government must surely make every effort to increase the police force to its full strength. In the present circumstances it is folly to have a weakened police force. It is unfair to the public and, above all, it is deeply damaging to the country.
Mr. Deputy Speaker (Sir Myer Galpern): Mr. Secretary Jenkins—
Mr. Robin Maxwell-Hyslop: On a point of order, Mr. Deputy Speaker. Would it not be for the greater convenience of the House if the Secretary of State for the Home Department saved his intervention until the conclusion of the debate so that he might comment on all the points that are made? Or is another Minister hoping to catch your eye at the end of the debate?
Mr. Deputy Speaker: The Chair has no control over the time at which a Minister may choose to intervene. I do not think that it will in any way detract from the nature of the debate if the Secretary of State intervenes now.
8.17 p.m.
The Secretary of State for the Home Department (Mr. Roy Jenkins): I do not wish in any way to inconvenience the House by the time of my intervention. To intervene at this stage, following the speech of the right hon. Member for Chesham and Amersham (Mr. Gilmour), would be in accordance with the normal

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practice in debates of this sort although there is nothing absolute about the matter. I take full responsibility for the time of my intervention. It was indicated to me that a Government statement now rather than at the end of the debate might be welcome. I hope that the hon. Member for Tiverton (Mr. Maxwell-Hyslop) will agree that no time is perfect and that this is probably not much more inconvenient a time than any other time.
I welcome the fact that we are having this debate on the Seventh Report from the Expenditure Committee. We have, of course, been dealing with the specific problems of recruitment and wastage. The last time we had a police debate was in December of last year. It was a more wide-ranging debate, as it dealt with the whole range of police problems. It took place at a rather similar time of day and at a similar time of the week. I regret to say that there was a rather similar attendance. This debate is more narrowly based, but I thank the Commitee for its careful and analytical report. I also thank my hon. Friend the Member for Bishop Auckland (Mr. Boyden) for the understanding and penetrating way in which he dealt with the matters before us. That was particularly striking as my hon. Friend was not directly in charge of the sub-committee. I think that he showed a great appreciation of the problems involved in the police service.
I listened with great care to what my hon. Friend said, as indeed I did to the three hon. Members who have spoken so far. The hon. and learned Member for South Fylde (Mr. Gardner) was perhaps a little more anecdotal and a little less analytical, but extremely vividly anecdotal in the best traditions of the Bar. The hon. and learned Gentleman illustrated some of the problems which confront us and the police in a way which held the attention of the House. The hon. Member for Bury St. Edmunds (Mr. Griffiths), who has great knowledge of these subjects from his professional connection with the police, of which we are all aware and which is very valued, spoke with interest and restraint on a number of matters. The right hon. Member for Chesham and Amersham, from the Opposition Front Bench, raised a number of wider-ranging issues and real problems
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which confront the police, of which we are all very much aware at present.
The Government's detailed observations on the report were published in April this year and met, as we have heard, with a somewhat mixed reception, which is inevitable. But one is glad to be in the position, which is not always the case with Governments when debating reports of this kind, that we have supplied and published observations and answers on all the points, on some even more adequately than on others, no doubt.
In this short debate it would not be sensible for me to try to deal with every point. I will try to pick out a number of issues, some of which seem important to me, some of which I judge, from earlier comments, to be important to the House. First, I will try to deal with the facts of the basic manning position. Clearly, there is a very serious problem about police manning, although at the same time we must remember, as I am sure is familiar to every hon. Member taking part in this debate, that it is sometimes overlooked perhaps by those who follow police matters closely that in the 10-year period 1964 to 1974 the actual strength of the police service increased by just over 21 per cent. from 80,390 to 102,086, a very substantial increase in strength. One would not say that it is sufficient or ideally distributed throughout the country, but certainly the police force today is 20,000 bigger than it was 10 years ago, and we would be in great difficulty were it not.
Recruitment in 1974 was higher than in any year since 1967, and—something I have just noticed—1967 was the last previous year in which I was Home Secretary; but that is entirely coincidental. Certainly, the next fact, wastage of 5,959, also very high, is totally coincidental. In the first five months of this year, however, there has been an improvement on the 1974 position, because there was a further net gain of 1,478—this is recruitment with wastage taken into account—compared with a gain of 1,520 during the whole of 1974. In other words, the improvement in strength in the first five months of this year was almost the same as that during the whole of 1974.
Metropolitan strength is not doing as well as we would wish. It rose by 77 in the first five months of 1975, although

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that was better than the recent past. In his annual report for 1974, Her Majesty's Chief Inspector of Constabulary said the picture is not a happy one. I would tell the right hon. Member for Chesham and Amersham that the reason for the apparent discrepancy in the figures is that the Chief Inspector does not cover the Metropolitan force, over which I am the police authority. He inspects the other force and is, in a sense, my link with the other force. Therefore, he reports on the position in England and Wales less the Metropolitan police district.
If we look more closely at the figures for the last 12 months, we see that recruitment rose sharply towards the end of last year and has continued at a high rate. Recruitment in the first three months of this year is half as high again as it was at the beginning of 1974. In London the improvement began to show rather later, but there were signs of it beginning to gather real momentum in London in April and May.
Mr. Maxwell-Hyslop: Has not the increase in recruitment been of about the same order and form as the increase in unemployment, and is it not probable that the two phenomena are interlinked?
Mr. Jenkins: It is obviously the case—and history and our recent experience show this—that police recruitment is rather easier at times when there is a slack labour market than when there is a tight labour market. I am not sure whether the correlation is quite as close as the hon. Gentleman suggests. In any case, we are primarily concerned this evening with the strength of the police rather than with the causes for it. I agree that one could not entirely exclude the labour market as a factor. Nobody wishes to see unemployment so as to strengthen the police force in that way. It is not a direct question of people becoming unemployed and going into the police force because standards of recruitment still are, and should be, very strict.
As the House will recognise, it is important not only to have a strong police force but to improve the calibre of those within the service, and it would be wrong to suggest in any way that the police force is a receptacle from this point of view. But clearly the possibility of recruitment into a public service depends to some extent on the state of the labour
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market. There has been a significant improvement during this period and I very much hope that it will continue.
Cadet strength is another useful indication of the way things are going. At 30th September, 1974 it was 5,474, a record figure, and evidence so far suggests that there will be again a good intake this year. These are quite good results, but there is a continuing need not only to keep a close eye on recruitment but to reduce wastage, an aspect to which the Expenditure Committee rightly gave a good deal of attention. We now know that the total wastage in the first quarter of this year was some 20 per cent. below the 1974 rate, so that we have had an improvement in both recruitment and wastage during that period.
Both premature wastage and retirement before the age limit have decreased Retirement on age grounds went up slightly, and I hope that this means that more officers are deciding to stay on rather than take an early pension. But, as many hon. Members will know, the decision on the counting of war service for pension, which was rightly taken—and there would certainly have been resentment in the police service had it not been taken—is bound temporarily to increase wastage a little. But, even allowing for that, the present outlook is encouraging.
Mr. W. R. Rees-Davies: On this question of wastage, have the Chief Inspector and the Home Office done any survey inquiring into the cause of the, wastage which has occurred? Most officers leaving the service are willing to give the reasons why they are doing so, and it would be of the greatest benefit in seeing what could be done to prevent future wastage.
Mr. Jenkins: We are certainly doing that in an endeavour to analyse this problem and to keep as close an eye as possible on it. I am not sure that it is susceptible to quite such a straightforward approach as the hon. and learned Gentleman suggests. Most officers probably leave from a mixture of motives and one could not tabulate these and say that this or that is the cause. We regard this as important in trying to understand why people leave the service in an effort to see whether it is possible, within one's powers, to prevent them from doing so.

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Sometimes they leave for reasons which we regret and sometimes they leave for reasons not entirely regrettable, though the latter are a very small minority. But in any service there are bound to be people who find that it does not suit them or that they do not suit the service. But recent wastage has been rather beyond that.
My hon. Friend the Member for Bishop Auckland referred to the effect on manpower of reducing the minimum age for entry. That was one of the Committee's recommendations, and indeed a recommendation to which we have given practical effect. Originally I was attracted—as indeed was the Committee—by recruitment at age 18 rather than 18½, but 18½ is the age which we have now established and which came into effect on 27th June. The problem previously for many young people leaving school between 18 and 19 was that they were unwilling to wait until their 19th birthday before joining the police, or to join the cadet service. We do not know precisely how great an effect the change will have, but it was accompanied by active publicity, and there was a good response from l8-year-olds and schools career advisers.
One reason why the working group of the Police Advisory Board which considered this question did not recommend a reduction in the age limit of 18 was that it would have meant a fundamental reorganisation of the cadet training scheme. There was no point in making the police service attractive to those between 18 and 19 if at the same time the cadet service, an important source of recruits, was seriously disrupted. I think that by selecting the age of 18½ we have got the matter about right. I hope that there will be a further gain to the regular police of cadets between 18½ and 19. This is likely to result in a gain of 900 cadets.
The Committee also recommended that the scope of the activities of the national campaign for police recruitment should be extended. The pressing and present need to control expenditure rules out any great increase in expenditure, but there is much that we can and should do. In the first place, even if the present increase in recruitment is maintained, we shall still have to ensure a steady flow of good quality recruits to replace ordinary losses. The national campaign does not seek
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merely to advertise. A great deal of work is undertaken in providing recruiting aids, such as literature and equipment for local forces which would otherwise be beyond their resources. For example, a new colour film intended for use in schools about the police as a career, entitled "Challenge for a Lifetime", has been produced and has been worth while and successful.
The Committee did not consider separately the question of the recruitment of women, but the marked increase in the number of women police officers recently is very satisfactory from a number of points of view. Over the past year the number of women police has risen by over 10 per cent. from 4,467 to 4,999. In the Metropolitan Police District the growth has been even faster —over 20 per cent. up, from 638 to 799. I very much welcome the awareness which the service is showing—freely, voluntarily, and indeed enthusiastically —towards the full contribution women can make, not only in those areas traditionally reserved for women officers but in a whole range of police activities.
The recruitment of coloured people to the police is another matter to which I attach great importance. It is essential that the police service should be as representative as possible of society in general. For this reason I fully support every effort made to increase the proportion of black and Asian recruits to police forces. Although it is true that the number of such officers who are at present serving is still small—the figure at the end of May amounted to 111—I believe that chief officers of police share my view and are making the greatest efforts to increase the numbers. We must ensure that this increase continues. I regard it as one of the functions of the national recruitment campaign to present to potential recruits in the coloured communities the facts about a police career. We must also make sure that their advisers—careers masters, parents or youth leaders—are fully aware that the police service welcomes and needs good recruits as much from that source as from any other.
The hon. Member for Bury St. Edmunds complained about the number of lines in the report devoted to pay. He implied that we had devoted a great deal more space to university recruits and to one or two other matters. On the

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other hand, my hon. Friend the Member for Bishop Auckland argued that we had not said enough in the report about university recruits. It is clear that what we said about pay has been overtaken by the settlement reached in June. It would not be rewarding for the House had we extended the report to take in the position as it was before the new settlement was reached.
At a meeting of the Police Council on 4th June, agreement was reached on new pay scales for all ranks up to and including chief superintendent. Under that agreement, the basic starting pay of a constable will be £2,400 a year and that of a long-serving constable will be £3,402. This starting figure is very different from the £26 a week mentioned by my hon. Friend the Member for Bishop Auckland. It is much more like £48 a week. When account is taken of rent allowances, which are effectively tax-free, the average basic pay of a married constable under this agreement is likely to be between £3,000 and £4,000 a year, depending on length of service. In London, there is an additional payment of more than £300 and of course none of these figures includes overtime payments.
The right hon. Member for Chesham and Amersham seemed to suggest that the London differential was not big enough. There has been advocacy of a bigger differential and one can clearly see a case for it, but this question has never been exclusively one of generosity on the part of employing authorities. It has also been one of preserving what the service regards as a fair balance. We have made a considerable improvement, which I welcome. For the first time, in the course of the last year, we got the Federation to agree that the differential should be quite substantially increased. Even then, we had a little difficulty in making it pensionable. We had to wait for the matter to be discussed at the Federation's conference. I approved of this because I think that these matters ought to be discussed fully. It produced a happy outcome, the corner was turned and the allowance is now pensionable. There are therefore issues apart from money, important though that is in the present economic climate, that have to be considered when dealing with the question
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of differentials in London and other undermanned conurbations.
Mr. Eldon Griffiths: I am not being entirely frivolous. There are many mansions in the police service, just as there are in the Government.
Mr. Jenkins: I take note of the hon. Gentleman's comments. The new pay scales, as well as reflecting an improvement at all levels, are also designed to correct a number of long-standing anomalies in the pay structure, particularly the anomaly identified by the Committee under which a superintendent, on promotion, was faced with a loss of earnings because he could earn overtime as a chief inspector, but not as a superintendent. I am glad that the Police Council has been able to find a substantial solution to the problem this year.
There has been criticism in the debate of our reply to the Committee on the question of establishments. The establishment of the Metropolitan Police District has not been reviewed for more than 10 years, but there would not be a great deal of practical point in increasing the establishment, even if it were thought right to do so, while we are so significantly below it at present. I was interested in the comparisons made by the hon. and learned Gentleman for South Fylde with the situation in 1921. What emerged clearly from this was that the establishment was somewhat lower, but the actual number of police in the Metropolitan force was almost exactly the same—if anything marginally higher —in 1921. The number of police throughout the country is substantially greater today than in 1921.
On the whole I would think that if there were to be an up-dating of establishments it would probably relate more to the Metropolitan Police District and one or two other districts which are below establishment than it would to areas which are close to or almost up to establishment. Therefore I do not think it would have any very significant effect on recruitment of police officers or the total numbers.
A number of complex factors are necessarily involved in this subject The numbers of police in the Metropolitan Police District are no more than they were in

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1921—although the deficiency from establishment is still very great—and the numbers are not great in relation to the proportion of crime, although the numbers of police in the Metropolitan area are very much greater in relation to the population than elsewhere in the country. However, that is a common feature of capital cities or even of a great metropolis such as New York, which is not nominally a capital city. I do not suggest for a moment that this means that there are too many police in London. I merely say that complex factors must be borne in mind in considering this issue.
Mr. Maxwell-Hyslop: What is the purpose of an establishment? If the Home Secretary had a flat tyre on his car and did not have a foot pump he surely would not wish to use a pressure gauge which registered the pressure which should be in the tyre just because he had not got a footpump to blow the tyre up? Should not the establishment of the Metropolitan force record what the level should be? The fact that the Home Secretary cannot recruit up to that level does not invalidate the need for an accurate measure which shows the difference between strength and establishment. The Home Secretary has said that because he cannot recruit up to the establishment there should be a bogus establishment, and that no useful purpose is served by having an accurate indication of what the strength should be.
Mr. Jenkins: The hon. Member took an extremely long time to make his point with a long-drawn-out motoring metaphor. I am glad to say that we have got away from the practice of using foot-pumps to inflate the tyres of Metropolitan police force cars.
We could spend a lot of time discussing theoretical establishments. There is a certain validity in what the hon. Member said, but I do not think that establishments generally are below what they should be. In certain areas they have not been reviewed very recently and they should be reviewed in due course. However, I would not think that is of an immense priority today. It is a theoretical exercise which could make no practical difference to the number of policemen on the ground, which is what we are most concerned about. That, however, is not a
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reason for not doing a review in the future when it is desirable.
Mr. Rees-Davies: I go along with the Home Secretary on that point. I do not think he can have theoretical establishments. There is no real yardstick. However, the right hon. Gentleman has omitted to mention certain things. Take the question of finger print experts. They are being lost to the force all the time and they are not being replaced. Take the company fraud squad which needs older men. There is no yardstick to enable men to come into the force and work in the squad as accountants because there is no means of paying them a higher rate. Take the university graduates with better academic qualifications. The Home Secretary cannot get them because he cannot pay them a higher starting rate at the age of 21 or 22 which would reflect their qualifications. Those are three examples of where recruitment is needed within the police force, particularly in London, but for which there is no provision at the present time.
Mr. Jenkins: The hon. and learned Member for Thanet, West (Mr. Rees-Davies) will not expect me to go in immense detail into the three points he has made, because if I do I shall be speaking for a long time. However, I shall certainly consider the matter.
I remember in 1966–67 making a considerable effort with university graduates. We set up a special working party which went into this matter and did what it could. This is a fairly intractable problem. I do not say that it is a hopeless problem but it is not one that can be easily solved either from the point of view of being able to get large numbers of graduates to join the force or from the point of view of deciding upon a basis which is fair to other members of the force. We must have regard to this as well as to the recruitment of graduates. We must have an incentive scheme for graduates which will be generally acceptable.
It would not be desirable, from the point of view of the efficiency or the morale of the police, to have a scheme which produced, perhaps, a small number of ex-graduates—and graduates are not always of the highest quality—at the price of alienating a considerable number of other policemen. I have always

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made it clear that I should like more graduates in the police force but on a basis that is agreeable and acceptable to the police generally and not on the basis or getting graduates at any cost, without worrying about the effect on the rest of the service.
I turn to housing. A different point of view was taken by the right hon. Member for Chesham and Amersham from that of my hon. Friend the Member for Bishop Auckland. My hon. Friend was primarily concerned with the position of somebody who was nearing the end of his period of service and living in a police house. With the current inflation in house prices such a person would have great difficulty in buying a house.
However, I thought that the right hon. Gentleman was more concerned with serving policemen, perhaps young policemen, who had just got married and wanted to buy houses. It is the case that serving police officers are more interested in and more successful in buying their own accommodation. Some time ago the provision of police accommodation such as police fiats was an advantage for a force, particularly in London. Police accommodation has become increasingly unpopular because people wish to buy houses when they are relatively young. I do not suggest that the problem that the right hon. Gentleman outlined does not exist. It is a diminishing problem, however, because more people are moving into their own houses.
The accommodation problem of police are not wholly comparable with those of Service people serving abroad or in a variety of remote places in this country. When such people retire they have to move into accommodation of their own which they have not previously had, or if they have been serving in Germany or somewhere else abroad they may go to a different part of that country to retire. Most police officers, when they retire, stay in the area in which they have lived for the latter part of their lives. Increasingly they have already bought their own houses.
In an increasingly imperfect world we depend to a great extent on a strong and effective police service. I believe that we are lucky in our police service in this country. Shortage of manpower is often disguised from the public by the resource and experience of our police
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officers. We cannot expect them to carry more than their fair load for too long. If we do, greater wastage will only exacerbate the problems. I am sure that the whole House will join me in thanking the Committee for its report.
Mr. Eldon Griffiths: Before the Secretary of State reaches his final sentence, may I raise one point? I have listened carefully to his reiteration of the improved pay scales which will be available as a result of the June award. I understood the point that the right hon. Gentleman was making. However, I should like his assurance that the newspaper advertisement to which I drew his attention and which is, I understand, to be repeated next Sunday, will not be a cause for myself or anyone else to complain to the Advertising Standards Authority that that particular insertion is misleading.
Mr. Jenkins: The hon. Gentleman put his point with great restraint during his speech. I have described the settlement agreed on 4th June. I would rather not add anything to that at present, except to say that I appreciate and understand what he said and why he wished to press the matter further. It is better left there for the time being.
If I may return to what I am afraid was only too obviously my peroration, the point I was making was that if we allow the police to carry too great a workload for too long we shall get into a vicious spiral with greater wastage exacerbating the problem. We are grateful to the Committee and to my hon. Friend the Member for Bishop Auckland for his opening speech. The whole House will join me in hoping that the measures which the Government have taken and will continue to take will maintain the strength and effectiveness of the police, which continues to be the branch of the public service which deservedly stands very high, possibly highest of all, in the public esteem.
8.51 p.m.
Mr. A. J. Beith: I endorse what has been said by those who have so far taken part in the debate in thanking the hon. Member for Bishop Auckland (Mr. Boyden) and his colleagues for preparing the report. I thank the hon. Member for introducing it. His colleagues appear to have left him to

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carry the flag alone. He has shown himself well equipped to do so. The paradox is that we are debating the report almost exactly a year after it was produced. The Government took nine months to make their observations and we have allowed a year to elapse.
The delay is rather like that in the pay negotiations which stretched out for such an interminable period. It has, perhaps, added a little to the feeling that the police had and to some extent still have that the problems they face have not been accorded sufficient recognition. I hope that today's debate will go some way to dispel that feeling.
The sixth paragraph of the report indicates the serious manpower position in the police force. Thankfully, events have overtaken that paragraph and, indeed, the Government's response to it. The position described there showed a slight increase in the shortfall figure, 21 per cent. as against 20 per cent. Even that figure has been overtaken. There have been improvements in the area that I represent, in the Northumbria police force.
We cannot ignore the point, made during an intervention in the Home Secretary's speech, that there is a fairly clear relationship between unemployment and improvements in recruitment to the police force. This is particularly noticeable in an area with a high rate of unemployment such as the North-East which has traditionally supplied policemen to many other areas because of inadequate employment in their home area. The same is true of the Armed Forces. We have sent many Service men into the Armed Forces. The extent to which we have done so has owed something to the lack of alternative employment in our area, and we must all hope that unemployment will not be a permanent factor in the situation.
We must also bear in mind that the police must always be in a position to select recruits. The Home Secretary referred to the need to maintain high standards. It is vital that recruitment should be at a level which allows selection. There is no suggestion in recent events that the response of the police to recruitment difficulties has been to lower entry standards. I refer not to height standards or such things but to more
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important qualities. It is of the greatest importance that that should not happen and that the police should always be able to select from a high standard of potential recruits.
The issue of pay looms large in the debate. This has been an exceedingly frustrating year for the police. The deferment until September of a rise which many policemen thought inadequate has greatly worried them. It is inevitable that questions should have been raised in the debate about the effect of the economic measures and whether the September settlement will be delivered in September. We understand the position of the Home Secretary. I hope he will bear in mind that it is possible that any announcements made on pay in general may not clarify the situation. The general announcement in the course of tomorrow's discussions, for example, may still leave the police uncertain where they stand. I hope that the Government will not allow that uncertainty to go on any longer than is absolutely necessary and that if it is necessary to make a specific announcement tomorrow from the Home Office, it will be done so that the police will be left in no doubt. Many hon. Members are deeply concerned that the police should receive what has been signed and sealed.
Hon. Members know of the feelings which have been expressed to them by their constituents. I quote one letter from a policeman in my constituency. He wrote:
"we were awarded increases around 15 per "per cent. to 20 per cent,"
from the review in September 1974,
"plus, as I understand it, a promise of any independent review into police pay and conditions, the result of which would be added to the September 1974 award and back-dated to that date. The review was promised before March 1975. After successive delays the memorandum, dated 24th April 1975, appeared. The apparent recommended increase in pay is beyond my wildest expectations, even though inflation will soon catch up again, but it has apparently been dismissed out of hand by the Official Side, who expect us to wait until September 1975. Do they realise what they are doing? I cannot afford to wait that long. Promises will not pay my bills.
Many officers have already left the Police Service for better paid jobs in industry or with private security firms. Many more officers, myself included, have patiently awaited the outcome of the prolonged review, hoping for a decent increase and considering the long

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wait worth it as it was to be back-dated, but nevertheless quietly making plans to get out if it did not come up to expectations. I do not wish to leave the Police Service. I enjoy my job despite its shortcomings, but job satisfaction will not feed, clothe and house my wife and children. If this review decision is not honoured quickly Britain will find itself virtually without a Police Service."
That is strong language, but it is language which expresses a widely-held feeling in the police service. I hope that the Home Secretary will take it fully into account. He cannot avoid—nor can we —the general context of economic policy within which any police pay settlement must be judged. No doubt the official side thought that it was doing just that when it refused to accept the idea of restoring the policeman's pre-1939 status or something like it.
The hon. Member for Bishop Auckland referred in his opening remarks to the figures and the relative position of the police before the war. The Committee said it was evident that the police had fallen behind the advantageous position which they had in the past. The official side countered that by saying that no group of workers had a prescriptive right to an enhanced status in the wages league. I fully endorse that statement. Nobody has any prescriptive right to any status in the wages league. Indeed, if we had applied that principle more successfully and more widely, and done something to dismantle some of the automatic differentials built into our pay structure, our present situation would he less serious than it is. We have assumed far too many prescriptive rights over the years. If the police claim for special consideration were based on a prescriptive right, I should reject it out of hand. It is not based on such a right. It is based on a well-founded case as a result of the distinctive features of their job.
The Home Secretary will have heard at the Police Federation conference the expression "the most dangerous job in the country" used from the platform. The job involves danger and a high degree of personal responsibility, and it requires a wide range of qualities and abilities. In addition there is the domestic disruption and limitation which is imposed upon the policeman and his family, the isolation which he inevitably experiences in any community, the degree
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to which he cannot be in the same position as any other member of the community and the fact that he does not enjoy the recourse to industrial action which is enjoyed by other groups of workers. Added together, these represent a clear reason for special status.
It is on that rather than on any prescriptive right that many of us feel that there was some sense in the pre-war situation. It is not because we desire to preserve that which was there simply for the sake of preservation but is rather because we believe that the policeman has this special claim that we wish to press his case tonight. Some of the features to which I have referred, especially the danger of the job and the qualities required, are even more strongly apparent now than they were in the prewar period.
There are two features in the report which were not dealt with in the Government's response. One of them is the special constables. The report discussed the ambivalent status nowadays of special constables, but the Government have not responded to that invitation. I think that the Committee was probably chary of making too definite a recommendation but was inviting the Home Office to think again about the role of special constables and about whether we should enlarge the Special Constabulary. The Committee did make the bounty recommendation and proposed consultation with the Police Federation.
We know that there are differences of view about special constables. There is a fear that the special constable may be used as a means of undermining the case for adequate establishment and adequate remuneration, but most of us believe that the Special Constabulary is a highly desirable part-time back-up to the police. It is a way in which the police and the community can be further enmeshed together and we should like to see further building on the rather limited foundations that remain of the Special Constabulary.
Mr. Roy Jenkins: There is a Police Advisory Board working party which is looking at the whole position of special constables. It was previously looked at —not in such a comprehensive way—in 1967. The special bounty was considered and rejected. The working party is con-

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sidering the whole role of the special constable. We are not neglecting it.
Mr. Beith: I take the point that the Home Secretary may not wish to argue about that while the inquiry is taking place.
Another area in which discussions are taking place is the complaints procedure. That is another subject which is raised by the report but on which the Government have made no specific response in the document before us.
I strongly advocate and support the introduction of an entirely independent element in the police complaints procedure. At the same time I recognise the fears of policemen and the Police Federation and the concern which they feel about malicious and defamatory complaints. I am the last to underestimate the difficulty caused to an individual policeman by the extent to which maliciously motivated complaints can lead to the blackening of his character, and his concern at the limited redress he has against such complaints.
There now seems to be a breed of "professional complainer" criminal. There is amongst the criminal fraternity a group of people who are prepared to exploit every machinery and device, not because they have a well-founded complaint but because it is another way of trying to get back at the system, or to get their own back, and to pursue their criminal activities even when convicted and serving a sentence. None of that takes away the desirability of such an independent element.
My view is that the sooner we introduce such an element and the sooner we succeed in getting it into being, the better will be the position of the police. The existence of an adequate complaints machinery in which the public can have confidence will help to reveal the extent to which complaints against the police can be malicious and unfounded and can lead to the blackening of character for which there is no basis. The independent element can work to the benefit of the policeman as well as of the public.
The Home Secretary may even now be considering the suggestion that the Police Federation should be able to use its funds in aid of policemen against whom mali-
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cious complaints are made. The Police Federation is in considerable difficulty because it cannot use its funds in support of a policeman who wants to take legal action to protect himself against a malicious complaint. However, none of this undermines the need for such an independent element in the complaints procedure.
Mention has been made of the recruitment of graduates to the police force and various other kinds of specialist recruitment. At a former university teacher I would be diffident in advancing the claims of university graduates to make a special contribution to make to the police force.
However, there is another equally important point. If over the years the police do not increase their graduate intake they will become less representative of society as a whole, because as more and more people have entered universities in recent years, and as more and more university graduates are found in the population at large, there is a danger that the police may find themselves unrepresentative of and isolated from some groups in the community, not least the students themselves with whom recent graduates in particular would have more contact and more fellow feeling. That alone is a particularly strong reason why the police should be encouraged gradually to find ways of taking more university graduates into the force.
I have always felt that one of the advantages of the police in many communities was the strong bond, the common background and the similar educational experience of the policeman with those around him. I would hate to have a police force which was at the other extreme—a police force dominated by graduates, who are a minority within society. At the same time the police will become unrepresentative and lose their contact with the community if they do not have within their ranks a reasonable proportion of those who pass through our universities.
The police are the front-line defence of the values of our community. We depend on their competence and their courage, and on the extent to which they are able to embody the very values they are defending in the way they go about their work. I never cease to admire the extent to which they achieve all this. It

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is an exacting task and one for which they need a fair return and our determined support—not our uncritical support or a support which is not prepared to face problems when they arise, but the genuine and constructive support of the community for which they do so much.
9.07 p.m.
Mr. Robin Maxwell-Hyslop: I believe that the Home Secretary could have demonstrated a little more the support for the police force to which the hon. Member for Berwick-upon-Tweed (Mr. Beith) has referred if he had troubled to sit through a debate on this subject lasting less than three hours and which has so far taken less than two hours. However, apparently the call of dinner is stronger than his interest in these matters.
The Home Secretary ended a speech, in which he said virtually nothing, by observing:
"I hope that the House will join me in hoping that the measures that the Government are taking".
Our job in this House is not to hope. It is to do our best to ensure that the Government take the measures which are necessary. They must not sit back and simply hope.
In so far as the Home Secretary said anything at all in the intervention which he made early on in the debate, he admitted quite clearly that he does not believe either that police establishments are realistic or that there is any useful purpose in their being realistic. He said so in so many words. The purpose of having a realistic establishment is that the gap between the actual strength and the establishment is then the measure of the need to recruit. The Select Committee showed its concern both about the unrealistic nature of the establishments and the apparent absence of any criteria on which they were based. The Home Secretary has done nothing whatever, either in the White Paper, which was in response to the Committee's observations, or in his speech to rectify that situation.
In one of his other infelicitous observations tonight the right hon. Gentleman said that shortage of manpower is concealed from the public by the skill and resource of police officers. It is concealed from the public by bogus estab-
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lishments. If proper establishments were published and known and if the gap between them and the actual strength was known by Parliament and the public, we might take action to close at any rate part of that gap, and in a way that action simply is not being taken at present.
It is absurd for the Home Office to go to the trouble of publishing the document called
"Police Recruitment and Wastage—Observations on the Seventh Report from the Expenditure Committee",
covering the entire back page, Table VI, with
"Monthly Return of Strength and Vacancies at 31st December 1974"
and ending with a column entitled "Percentage Deficiency", when the Home Office admits that it is a meaningless observation because the establishments from which the actual strength is subtracted to arrive at the vacancies, which are then turned into a percentage deficiency, are themselves meaningless.
It is this sort of juggling with figures which causes immense ill feeling and frustration within our police forces, and it is positively misleading to the public and to Parliament, which ought to be doing something to ameliorate the problem. Problems are more easily ameliorated if there is a basis of accurate information than if there is an absence of accurate information—which is the position today.
I have previously drawn the analogy between a tyre pressure gauge and an establishment. A tyre pressure gauge is supposed to measure the pressure that is actually in the tyre, not what one would like it to be. In the same way, if one has a very considerable gap between what one is able to recruit with the existing inducements and conditions of service and what one needs, one does not serve any useful purpose—in fact one perpetrates a disservice—by using a deliberately inaccurate measure to conceal that gap.
The hon. Member for Bewick-uponTweed mentioned the complaints system as it exists, which is more than the Home Secretary did, either in his speech or in his response to paragraph 45 of the Committee's report, which urged upon the Home Office the need to expedite its report.
At present police officers have no effective redress against those who use the

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complaints machinery not to make unfounded complaints—unfounded complaints can be made in perfectly good faith—but to make complaints which are not only unfounded but malicious. It is no good saying that the law of defamation provides the safeguard to the police officer concerned. One cannot get legal aid in order to prosecute an action for defamation, and no police officer could do so from his own resources.
Some chief constables believe that the offence of malicious libel can be prosecuted only with the consent of the Attorney-General. This is not so, as the recent report on the law of defamation showed, and yet for some reason chief officers of police never, to the best of my knowledge, use the law of malicious libel, the criminal law of libel, to punish those who quite deliberately use the complaints procedure against police officers maliciously as opposed to mistakenly.
That is why there is now on the Order Paper a motion in the names of some of my hon. Friends and myself calling upon the Home Secretary to ensure that in any new complaints procedure he introduces there should be provision so that those who make complaints which are not only unfounded but also malicious are prosecuted. That, I think, is a protection to which the police officer and his family are entitled, because a police officer and his family are all under very considerable strain during the period when disciplinary complaints are under investigation. It may be a number of weeks before they are completed, and this is a considerable strain, even when the officer knows in his heart that the complaints are completely unfounded and malicious.
There must be two sides to every coin of this kind. The introduction of an independent element into the complaints procedure would surely be the ideal occasion for equipping such a tribunal with the power to prosecute for malicious complaints—and, indeed, not only the power but the duty to do so.
If one talks to any policeman he will make it clear that money is not the only consideration. There is such a thing as job satisfaction, and over the last decade this has reduced dangerously for a number of reasons. One is the discrepancy between what the authorised establish-
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ment ought to be and the actual strength. This results in quite excessive working of overtime. Worse than that, it results in the complete unpredictability of time off. The frequent cancellation of a policeman's time off and the disruption which that brings into his personal life and that of his family are not compensated for by giving time off in lieu at some unspecified and unpredictable date in the future.
If people are to make use of their recreational time they need to be able to plan ahead, and this is something that policemen cannot do. There is often financial loss involved in the cancellation of plans, where a railway ticket has been bought in advance, for instance, under the 17-day concession, and it has to be cancelled because of a change in duty rosters resulting from the fact that many policemen are required for duty at a demonstration, a football match, a golf tournament or something of that nature. The disruption caused to the personal life of the police officers concerned seems to pass quite unnoticed by the public. This is another reason why it is not good enough to say that we can live with bogus establishments because police officers can be persuaded to work overtime.
Overtime is and can be excessive, and then it becomes a very real evil. But there is another loss of job satisfaction, and this has followed the proliferation—some would say the needless proliferation —of senior ranks which has now deprived constables and sergeants of much of the personal responsibility they used to have and the interest in their job that used to come from the responsibilities which have now been withdrawn from them.
There are now inspectors and chief inspectors doing work which was previously done by sergeants, or even by individual constables. That does not lead to job satisfaction. It leads to frustration and boredom. It also, incidentally, leads to a diversion of funds, because a higher proportion has to be allocated to the salaries of the inflated number of senior ranks, leaving less, within a given financial limit, for the remuneration of the constables and sergeants. With this proliferation of senior ranks has come a doubling up of senior officers, as it were, watching other senior officers instead of doing a job which needs that rank specifically to do it, as was the case in the past.

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Of course there is a limit to expenditure, and in times of national financial difficulty—which seem, alarmingly almost always to be with us—there is a total limit to expenditure. But in many of the letters I have had over the past few years, complaining about the rate burden, from those who are worst hit—often the elderly living on fixed incomes —there is very often one exception to the complaint. My correspondents say that if there was a small increase in the rates to enable the areas in which they live to be effectively policed—to see men actually on the beat—they would feel that they were having real value for money, and they would be prepared to make the necessary sacrifice. They want to feel secure in their own homes and in their persons when going about on their lawful occasions. They make that the specific and only exception to their plea for economies in local government expenditure and the national taxation burden. I have received too many letters to this effect to regard it as the quirk of one or two people. It is a view which covers all walks of life from people who are feeling the pinch as a result of local government expenditure.
It is a pity that apparently the Home Secretary is disinterested in all these points. I say "apparently" because he made no reference to them in the speech he made before leaving the Chamber. The occasions are rare when this House has the opportunity to make a positive contribution to improving the working conditions of those in the police force upon whom we all depend. It is sad that the Home Secretary could not bring himself to join us just for three hours in the course of this debate.
9.21 p.m.
Mr. W. R. Rees-Davies: It appears that I have the privilege and pleasure of summing up this debate, a lot which falls to me because of the absence of the Home Secretary and no doubt because of other attractive business of the evening.
I rise to draw attention to some causes and matters which go rather wider than those which have been raised in the debate so far. I speak from a deep knowledge of the causes which I am laying before the House and of the reasons why certain police officers are
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leaving the force. I shall go on to suggest how it would be quite easy to recruit quite a high quality of police officer into the service.
My hon. Friend the Member for Bury St. Edmunds (Mr. Griffiths) represents in this House the Police Federation. He does a very effective job. However, the views which I express are not those of the Police Federation in general. They are the views of a wide spectrum, mainly of detectives in the police force and of those who serve in the higher ranks of the force. They have told me the reasons why they have left the force, where they have left it, and the reasons which prompt them to want slightly different methods.
I agree strongly with those who assert that police pay is by no means the main factor in the malaise in certain quarters of the force. That is not the position. The position is that a great many members of the force are much more concerned with the satisfaction of the job, with the housing that they get, with the allowances that they ought to receive, and with the assistance that they get in the work which they do.
I take first the position of the Criminal Investigation Department of the Metropolitan Police and of those in the CID in the country generally. The main burden of dealing with serious crime rests upon those men. We are still bound by certain light requirements. The sub-committee under the chairmanship of the hon. Member for Bishop Auckland (Mr. Boyden) put a series of questions to Sir John Hill, the Chief Inspector of Constabulary. Sir John was asked about the height regulations:
"Supposing a chap came along who was 5 ft. 7½ in. and who was a good chap. Do you feel you could accept him?"
Sir John replied:
"Yes, but again you may hear from the Police Federation that 5 ft. 8 in. is the lowest height acceptable. When it is converted into the metric scale it is a little less than 5 ft. 8 in. … I am not saying that chief officers never take anyone who is just a fraction under that."
The questioner then said:
"I was recently at a dinner which Nipper Reid of the Yard attended. He seemed to me to be about 5 ft. 3 in. in height. He is one of the most distinguished men in the Police Service, but he is not very tall. I do not think size is very important."

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Mr. Baker replied:
"Chief Officers have discretion to recruit under the recruiting limit if they feel a person has special qualities."
The questioner said:
"What with Kung Fu and all the rest of it, you can have a small chap but a good policeman."
Sir John then said:
"We are changing our attitude to this, but the Police Federation takes the view that there ought to be this height restriction. The physical element of police work probably suggests that a man should not be less than the average height of the population in general terms."
The problem has arisen because the country will not recognise, the Police Federation will not recognise and the chief inspectors of constabulary will not recognise that what is well known within the police force by every detective is that there are two types of animal in the police force. First, there is the policeman who undertakes general police work brilliantly and effectively. These include, if I may say so, a great many guardsmen with whom I had the pleasure of serving in the Welsh Guards. At one time all the members of one company were members of the Cardiff City Police Force.
That sort of policeman is handling so ably what is perhaps the most difficult problem that the police face today—namely, law and order. They are facing the very real problems caused by the terrorists and the political gangsters who form the ranks of the regular political terrorists. That is one of the most difficult tasks that the police face. As the Commissioner rightly says, it is an exceptionally difficult task because the magistrates will not impose the right penalties upon the regular agitators.
All the problems that I have mentioned fall upon that part of the police force which is so ably represented in the Police Federation—namely, the rank and file of the force throughout the country. They certainly need to have a height qualification. They certainly need to be fit fellows. They certainly are at physical risk in many of the jobs that they undertake. As my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop) has rightly said, they are the policeman the ratepayers want to see on the ground throughout the country.
However, someone someday has to talk, as I intend to talk very briefly, about the
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rôle of the detective. The detective can be a tiny man like Nipper Reid. He may be a Cockney or he may be a highly skilled graduate from Oxford or Cambridge University of the highest calibre. I have spoken in several universities on police recruitment over recent years and I have found that many people would be willing to go into the force provided that they could go into the detective force. They are perfectly prepared to undergo six to 12 months in the general force, but they want to know as a fact that they are being recruited as a detective.
I hold the view that the day must come when we shall have a national CID in regional areas. By that I do not mean a national police force but a criminal investigation department dealing with serious crime which will come under the overall strategy of the Home Secretary, I believe that it will operate in regional areas with the regional crime squads, which have recently been developed and extended, so as to obtain the maximum co-operation in serious crime. It will work in conjunction with the local provincial forces. Of course, those forces would continue to have their small CID network liaising with the regional areas of the national CID.
I put that view to three previous Home Secretaries and it was taken up by all three. They each found it an attractive idea, but in each case it was knocked on the head by the chief inspectors of constabulary. I had wanted to ask the Home Secretary whether he has given serious consideration to that idea.
If we want recruitment of quality to beat serious crime we must recruit in every possible direction. The university graduate is one of them, but it is no good saying that he must come in at the same financial rate as is paid to a young police constable coming from perhaps a secondary school, because he will not do it. He does not want to come in at 19, 22 or 23. There must be an opportunity for graduates who want to come into the force, and if they do, they will want to become detectives. They are the people with Sherlock Holmes minds. One hopes that they will come in because of their superior intellect, their acute powers of observation and their desire to make the same type of career as in the officer class—but not in all cases.

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At the same time we want to be able to recruit those who are older but who have a particular ambition and desire to become a detective. There is no reason why they should not do so. If I may give one example from my own wide experience, I have seen many cases, including the largest, of company fraud regularly in recent years. That offence is greatly increasing in this country. City frauds and company frauds are seriously on the increase. To deal with them there is a totally inadequate number of detectives, and their case load is far too heavy. One problem is that they have no people with sufficient accountancy knowledge to be able to investigate that class of fraud. That requires the recruitment of men from 35 to 40 or even 50 years of age. It requires the recruitment of such people not just as experts on the side but as members of the police force on the specialist side. The Home Office must make it possible for those people to be recruited.
There is huge wastage at present on the scientific side. As fast as fingerprint experts are trained over three years, just so fast do they leave and go to another job. Also, it is necessary to have people working in the various aspects of forensic science, fibre experts and experts on blood and other things. It is even more necessary to develop and create a forensic science side, which can be of considerable advantage. Those people must be brought in as young people or those in later life, and there should be a mass recruitment campaign to entice in at all levels those needed to assist the police force.
That is the right approach, and it needs at an early stage consideration by a compassionate Home Secretary who would have the sense to recognise that there are those who want to come into the force and be a detective without being on the beat. I quite accept that they may have to do a short period of training but, having done that, they should be able to go ahead and negotiate a salary scale. That approach would deal much better with recruitment.
Before concluding, may I deal with wastage. It is quite easy to find out the causes of wastage, which last year was immense. That was the year when there was the big attack by the Commissioner
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in London on corruption in the police force. As a result of the work he did so effectively, that corruption has been very much reduced. The police officers who were "bent", to use the common phrase, were got rid of in large measure and many of the problems, which dated back over many years, particularly in the pornography trade and the sleazy clubs of the West End, to name just two fields in which corruption has long been rife, were to a large extent disposed of—and what a good thing that is!
It was said by those who did this task that it was done by the uniformed police, and that those engaged in that form of corruption were mainly not in the uniformed police but in criminal investigation—and to some extent, I am sorry to say, that is true. That does not mean that the rest of the Criminal Investigation Department has to be tarred with the same brush as that which applies to a few wrongdoers.
On the question of recruitment, we have to face the fact that there will be a few people who are "bent". The incident in question had an unfortunate effect on morale in the force. It would be very undesirable if police officers had to leave the force because they did not want to be associated with somebody whom they thought to be dishonest. I know that that happened in one or two cases, and I can give chapter and verse if required.
Let me cite, for example, the situation in Rochester Row police station. I know for a fact that two Rochester Row detectives had a caseload of 12 criminal cases and 14 cases respectively, including the burglary and theft of valuable silver and jewellery in the Westminster area. How could they possibly undertake that work load? The situation was impossible. The most they could do was to undertake two or three cases at any one time. They were carrying out the work of six detectives and they just could not cope. Such a situation leads to great job dissatisfaction. Even when officers work 16 hours a day, as they often do, they still cannot handle a case load of that nature.
I believe that we must do all we can to recruit more detectives. A detective requires natural skills of observation and various thought processes to enable him

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to undertake the task. There are a variety of reasons why men leave the force. They may not be receiving enough assistance, and many of them find themselves having to undertake a great deal of unnecessary paper work. Another reason for staff leaving the police force is that their tax allowances are inadequate. At a time when it is difficult to pay police officers more, it is not so difficult to examine their allowances. The same applies to House of Commons pay. Although there may be difficulties in increasing hon. Members' salaries, it may not be so difficult to obtain an increase in the allowances for our secretaries.
I hope that encouragement will be given, as outlined in the report, to enable police officers to purchase their own houses. Furthermore, I hope that rent allowances, particularly in the London area, are reviewed to see whether they are adequate. There is also the question of uniform allowance and plain-clothes allowance. A figure of £75 for clothing for a plain clothes officer and £60 for a constable is not a great deal in this modern age.
We should also consider the question of detective duty and expenses allowance. It is difficult today for a detective in a large city to cope because the allowances in respect of a detective's personal expenditure do not appear to be adequate. Motor car allowances are paid in some cases, and perhaps that matter also can be re-examined. Perhaps the authorities will also review the allowances made to officers who find it necessary to buy information to counter cases of serious crime.
It is seldom that hon. Members get an opportunity to discuss the police force. When we discuss these matters it usually develops into a debate between the Home Secretary and my hon. Friend the Member for Bury St. Edmunds speaking on behalf of the Police Federation. There is nothing wrong with the general view of the federation, which represents the
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rank and file of the force, but let us not believe that it represents the only view in the police force—because it does not.
The views that I am expressing are not my own. As a barrister, I am speaking from a brief. I have a fairly long experience of knowing and mixing with many detectives of all kinds from ail parts of the country, both retired and serving.
In my own county of Kent, crime is still increasing and there is an inadequacy of good detectives. The county has not been able to contain serious crime and the police are getting very little assistance from local people over local problems such as the vandalism in some towns, for example Margate and Ramsgate. So much could be done by local people if they came forward to help the police. I am pleased to see the increase in the number of chief constables in London and elsewhere.
I hope that the Home Secretary will consider all these matters and realise that we rely on any Government, whatever their political complexion, to look dispassionately at the problems of the police and to recognise that, although pay is important, the police must have the support they need. They need help with their housing and rent allowances and they must have reasonable caseloads. The people of the country must understand that the police force is not just the man on the beat; it is the co-ordination of many activities. If we can provide for the contentment of the police force, they will gain ever greater respect in the country and we shall perhaps be able to deal with some of the unruly violence, political agitators and law and order problems that we have and also reduce the instances of serious crime.
Question put and agreed to.
Resolved,
That this House takes note of the Seventh Report from the Expenditure Committee in the last Parliament (House of Commons Paper (1974) No. 310) on Police Recruitment and Wastage, and of the relevant Government observations (Command Paper No. 6016).

PRE-PACKED FOODS (METRICATION)
9.42 p.m.
The Minister of State, Department of Prices and Consumer Protection (Mr. Alan Williams): I beg to move,
That the Weights and Measures Act 1963 (Dried Vegetables) Order 1975, a draft of which was laid before this House on 24th June, be approved.
Mr. Deputy Speaker (Sir Myer Galpern): I take it the Minister agrees that with this motion we should also discuss the following:
That the Weights and Measures Act 1963 (Flour and Flour Products) Order 1975, a draft of which was laid before this House on 24th June, be approved.
That the Weights and Measures Act 1963 (Cereal Breakfast Foods and Oat Products) Order 1975, a draft of which was laid before this House on 24th June, be approved.
Mr. Williams: I would not dream of opposing such a suggestion, Mr. Deputy Speaker. I am sure it will be to the benefit of your night's rest and that of us all if we deal with the orders in the way you suggest. I am sure it will facilitate the proceedings of this packed House which is agog with excitement.
I am happy to see the hon. Lady for Gloucester (Mrs. Oppenheim) here to support us in the measures we are putting forward because the policy of metrication has been pursued by both parties. It was initiated in the middle 1960s and received active support from both sides. The hon. Lady will be fully aware of the intentions of the orders because similar measures were passed by her own party in Government in relation to pasta and salt. At present, the pre-packed products referred to in the orders can only be sold in prescribed imperial quantities. The purpose of the orders is to permit their sale in pre-packed metric quantities. This will be a facility for the industries. It will be up to the industries to decide the rate at which they introduce the new packets. The orders cover flour and flour products, dried vegetables, such as lentils and split peas, and breakfast cereals in a flake form and those made from oats.
The hon. Lady will be fully aware that Section 54(2) of the 1963 Act requires us to consult parties or persons who might be substantially affected by such regula-
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tions, and we have carried out consultations with 80 to 90 such bodies in the manufacturing, retail, wholesale and enforcement authority sectors. She will also recollect that it is the industries themselves which want this metrication programme. They are waiting for Parliament to give its approval. The new packs, as the hon. Lady will recollect from previous discussions on metrication measures, will hold approximately 10 per cent. more than the imperial packs which eventually they will replace, but we have had assurances from the industries concerned that when it comes to adjusting costs to reflect this extra quantity the adjustments will be confined to those that are necessary simply to reflect the quantity change. The extra 10 per cent. of quantity should be matched by an extra 10 per cent. in price so that, in unit pricing terms a consumer will find no change as a result of metrication.
The dangers and hazards which surrounded us with the switch of coinage to a decimal system are less likely to occur in metrication simply because, instead of everything being changed overnight, we are moving product by product. It is much easier for the Price Commission, the Metrication Board, the enforcement officers and the Government to supervise the change-over that takes place.
We have provided that 125 grammes will be the lowest prescribed quantity under each of these orders. That is slightly larger than the existing equivalent of 4 oz, but the exemptions which we permit will allow smaller quantities to be marketed because it might well be that pensioners and people living alone may want to purchase even less than 125 grammes. I checked to see whether there had been representations from the consumer bodies that there should be lower prescribed quantities, but no such representations were received. The consumer bodies consulted—it was a large range of bodies and I will gladly supply the hon. Lady with a list if she wishes to see it—agreed that the lower range would not be disadvantageous to pensioners, lower-income groups and single-person households.
The sizes recommended here largely reflect today's trading pattern and, therefore, do not represent much of a change

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in what will appear on the shelves in the shops. In all cases we have introduced an upper limit of 10 kg. My appreciation of the hon. Lady's arithmetical capacities matches my appreciation of her political capacities, and I therefore know that she will instantly tell me that 10 kg. is the equivalent of 22 lb. A pack of more than 22 lb. is likely to be a commercial size, and therefore the regulations cover all the sizes which are likely to appear in retail distribution.
We also hope that the range of sizes chosen will facilitate comparisons within the range in terms of value for money. On various occasions we have made representations that such comparisons should be possible, and we hope that this range will help in that respect.
The Metrication Board will be giving advance publicity to the change and its implications, and the industry has been willing to accept the suggestion that it should give general information about metrication on the packets in the hope of helping not only with the change-over but in the general process of metrication.
We shall be introducing under the Weights and Measures Act new marking regulations which I hope to place before the House shortly. They will require the metric measure to be printed on all prepackages. In addition, those which are metric will carry the measures in capitals on the metric pack to help people identify them during the change-over period.
There are numerous illusions about the metrication process, but certain fears are quite unwarranted. For example, many fear that a process of metrication will inevitably mean the compulsory loss of a pint of beer. This is a change which frankly I should regard as taking place over my dead body. My right hon. Friend the Prime Minister, from the conversations that I have recently had with him, also seems to have a similar dedication to our traditional pint of beer. He shares the view that its disappearance would be a quite unnecessary change.
There are certain matters about which I should remind the House and the public. Metric units have been legal in the United Kingdom since 1897. We are not introducing a new system. We are switching from a mixed system to a
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uniform system. Secondly, on examination of the total spectrum of industrial and commercial activities we find that the programme is largely completed. Most of it has been done without any parliamentary action whatsoever, because as the use of metric measures was already legal much of our industry voluntarily undertook these changes in the last decade or since the start of the change in 1965.
Action is needed about prescribed quantity goods. The hon. Member for Gloucester is fully aware of the legal barrier that these present to the change to metrication. I have indicated that the Conservative administration introduced measures concerning pasta and salt. Last year we introduced measures for sugar.
I am sorry that I appear to have completed the majority of my speech just as the House is filling up. I had not realised that I could attract such a good audience.
The hon. Member for Gloucester will also be aware of the wastefulness of running an imperial and a metric system side by side, because for industry it means two production runs; industry will need an imperial system for domestic production and a metric production line for exports. Equally, the House will bear in mind the educational advantages that were anticipated with the switch to metrication. These educational advantages are to some extent being undermined by the fact that metrication has taken longer than envisaged at its introduction. Many schools have already switched to metrication. My own children are learning their mysterious arithmetic in metric form. The degree of communication between us has markedly diminished, to my great relief, because I cannot do the arithmetic in either form. However, it gives me an excuse for not offering to assist. Educationally there is an advantage to be derived. That advantage is to some extent not being fully realised because the process is taking longer than we originally thought.
It is important to remember that we must avoid confusing consumers. In the past we have all made complaints about the difficulty that is experienced when packs stand side by side which are not identical but are similar and, therefore, may not always be clearly distinguishable visually. This often makes price comparison by the shopper difficult. It is important, if we

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are to avoid this confusion of imperial pack alongside metric pack, that we complete the process of metrication.
From April 1978 under the EEC Treaty requirements we have to stop any discrimination against metric packs in this country. Irrespective of whether we have completed our process of metrication, we shall have to be willing to accept metric packs from the Continent in competition. I am sure that the hon. Lady will realise the confusion that this could cause oil the shelves unless we made the necessary adjustments. It is for this reason that I assume that the hon. Lady, whose party played an important part in the development of the metrication programme, will be giving me her usual unstinting support. It is also necessary to switch to metric units to preserve the prescribed quantity system since under the existing Weights and Measures Act that system is based purely on the imperial system.
May I finally, in this exciting and stimulating debate, put a wider perspective on our discussion. It has to be remembered that 143 countries are already using metric units or in the process of going metric. There are only five countries—Brunei, Burma, Liberia, Yemen Arab Republic and Yemen People's Democratic Republic—which are not. While we very much value all of our trade with those countries, I see a certain balance of advantage in getting on equal terms with the 143 countries that are metric and taking our chances with the other five.
It has to be borne in mind that 99 per cent. of our exports go to those countries which are using the metric system or are in the process of converting to it. Even some of the old Commonwealth countries—Australia, New Zealand, South Africa, Republic of Ireland—which take 14 per cent. of our exports, started metrication after us and are now further advanced. The United States takes 12 per cent. of our exports. It has introduced an Education Bill setting aside 40 million dollars simply for education in metric measures. That Bill states:
"The metric system will be the system of weights and measures in the United States."
It is clear that the progress of world events makes it inevitable that we as an exporting country will have to complete the metrication process.
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We want to complete that process as quickly as possible. For that reason I hope that we can rely on a non-partisan approach to this issue. I am sure that the hon. Members for Gloucester and Kingston-upon-Thames (Mr. Lamont) are here to pledge their whole-hearted and unstinting support for the Government. We are having discussions with various sectors of the food industry on the final stages. We recognise that it may be necessary, as a last resort, to take powers to ensure that there is an orderly completion of the metric process. That may mean amending Section (10) (10). Should that become necessary the Government will do it. I know that that will be with the full approval of Conservative Members.
9.59 p.m.
Mrs. Sally Oppenheim: I have been dismayed to think that I might have misled the Minister of State by nodding in reply to my hon. Friend the Member for Kingston-upon-Thames (Mr. Lamont) sitting beside me. I hope that the Minister does not think that I was nodding in support of these orders. The fact that he misinterpreted my nod is support for the old saying, "A nod is as good as a wink to a blind man." Far from expressing whole-hearted support for these orders, I would like to express great apprehension about one of them and a good deal of disappointment and concern about the others.
We have had a wide-ranging speech from the Minister. It might have been thought that we were moving near to M-Day instead of discussing statutory instruments for prescribed quantities which merely permit items to be sold in metric or imperial weights. It does not make it a statutory obligation. This is far from being a total metrication debate.
I thought that the hon. Gentleman showed considerable gallantry in trying to share the honours between his party and mine on metrication. Indeed, I have rarely known him so generous as on this occasion. As he was so generous, I think that it would be fair to say that the country was committed to metrication by a Labour Government completely outside the context of our membership of the European Communities. I do not think that I can accept his generous accolade to the Conservative Party for its support of these measures.

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I understand the Minister wanting this debate as there has been almost unrelieved stagnation in terms of consumer protection in his Department. I should have thought that by this time his Department of Consumer Protection was a department of consumer rejection.
I wish to discuss the question of the prescribed imperial quantities mentioned in these orders. He and I have debated on many other occasions the importance of prescribed quantities to consumer protection and how much more helpful they are than unit pricing, where appropriate. However, these orders still mention irregular quantities—I refer to the imperial quantities—such as 12 oz. We have had arguments about how confusing it is when a 12 oz. jar of jam is placed besides a 1 lb. jar of jam, both having the same size or shape. I am most concerned about the statutory instruments which deals with prescribed quantities for cereals.
The departmental Press release on these orders speaks of a date by which it is expected that metrication will have taken over completely. That date is 1st November 1975, which is not very far off. At a time when consumers are struggling with the worst level of inflation they have ever faced, they must cope with the added confusion of metric quantities of breakfast cereals. If the Minister of State believes that breakfast cereals are not an important or significant part of family expenditure, I disagree. They are a significant proportion of the expenditure of a family with three children. A larger proportion of the family expenditure is spent on cereals than on butter, tea, flour and cheese—all of which the Secretary of State thinks are of such importance that they must be subsidised. This commodity is heavily weighted in the family shopping list. I refer to families with below and up to average earnings, about which there may be confusion.
Although the imperial alternatives offered are unsatisfactory, if we stuck to those they would be more satisfactory than the existing imperial measures. I looked at various packets of cereals today. To my consternation and horror I saw a variety of well-known cereals packed in boxes weighing 1-lb, 1-lb 6 oz, 5½oz, 12 oz and 15 oz.
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The Minister of State has a marvellous opportunity to improve greatly the situation—instead of which he improves the situation marginally in the case of imperial weights. The introduction of metrication in November against a background of high inflation is not an act of consumer protection.
The situation is even more worrying when we consider the metric weights which will be presented to the consumers. Why is there to be a weight of 375 g.? That is not a prescribed quantity which is of interest or use to the consumers. There is the 1 lb weight against 500 g. The Minister mentioned arithmetical prowess. He will know that 1 lb is 453 g. There will be a fair amount of confusion.
I am interested to see that certain very small packs are exempt from the prescribed quantities. I remember using miniature packs of cereals in my shopping basket in the 1970 General Election campaign to illustrate how much less the pound would buy if a Labour Government came to power. I am delighted to see that the Minister of State has included in this order not 2 oz. but ½ oz. packs, which will no doubt enable me in the next General Election campaign to demonstrate even more clearly what has happened to the purchasing power of the pound.
Will the Minister of State make clear whether the timetable date of 1st November 1975 for cereals is permissive, or whether he expects to have amended the Weights and Measures Act so that there will no longer be an imperial alternative available by that date?
The flour order is more acceptable because it comes in a good deal later, in July 1977, although, once again, it provides confusing prescribed metric quantities for consumers. The usual quantities in which flour is sold are 1 lb. and 3 lb. bags. There is to be a 1·5 kg. bag, which is not equivalent to a 3 lb. bag, and I am not sure whether there will be a 500 g. bag as equivalent to the 1 lb. bag. What mystifies me is that cornflour is to be packed in quantities of 375 g. and 750 g., whereas it is currently sold in 1 lb. packs. I know of no such packs in the weights prescribed.
The date for the coming into operation of the dried vegetables order is 1st April

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1976. I am sure that even the Minister of State would not claim that his Government will be on top of inflation by then. There will once again be confusion in an area of family expenditure which is extremely common if not as important as breakfast cereals.
The Minister of State referred to similar orders introduced by a Conservative Government for pasta and salt. Pasta and salt are small items in family expenditure compared with the foods covered by the three statutory instruments we are considering tonight.
A little over a year ago when we considered similar statutory instruments introduced by the hon. Gentleman dealing with wine and dentifrice, he professed to have a certain amount of criticism of the orders, yet a year later he has produced no improvement in the prescribed quantities. There may be a question of liaison with the EEC on imperial quantities. If there is, will the Minister of State tell the House whether our interests have been put forward in the relevant committees, whether representation has been made about weights which are unfamiliar in this country and what representations will be made in future?
The Minister of State said that by 1978 we shall not be able to prevent prepacked food from the EEC coming into this country in metric packs, but my latest advice is that prepacked foods imported from the EEC amount to approximately 10 per cent. of all the prepacked food sold in this country, which is largely Danish butter and bacon, which have nothing to do with these orders.
Although the Opposition will not oppose the orders, I hope that it will be noted by the House that it is unsatisfactory that we should be forced into a shotgun wedding with orders of this sort fairly late on a Thursday night when many hon. Members who may have wished to speak in the debate and feel strongly about the matter may already have left for their constituencies. I hope that when the hon. Gentleman seeks to amend the Weights and Measures Act the debate will be on the Floor of the House in daylight, so that hon. and right hon. Members who feel strongly on this subject may participate.
10.9 p.m.
Mr. Alan Williams: The hon. Member for Gloucester (Mrs. Oppenheim) resorts, as usual, to colourful and flambuoyant language in the use of the word "shotgun" to describe our present matrimonial relationship. All I was trying to do in complimenting the Opposition on the part they played in taking the country further forward with metrication was to indicate that I thought they would be consistent on this issue.
Having listened to the hon. Lady, I do not know whether the Opposition will be consistent, because I am not sure even now whether her complaint is that we were too slow, which is what I gathered it was in relation to certain products because she wants us to do more in relation to wine etc., or whether we were too quick because she does not want us to do it in relation to other products. However, I have long since recognised the difficulties of completely satisfying the hon. Lady's consumer demands. I wish that she would make them a little more consistent.
Mrs. Sally Oppenheim: I am grateful to the Minister for allowing me to clarify my position. I should like him to be more rapid in introducing consumer protection measures and less rapid in the metrication of cereals.
Mr. Williams: Does not the hon. Lady realise—she will have heard the point I made in my speech, and I was as placatory, friendly and clear as I possibly could be, although I recognise my clarity deficiency at this time of night—that these are matters of consumer protection because of the problems that will arise under the EEC requirements when access to this country of metric packs becomes applicable?
The hon. Lady mentioned certain products and said that only certain percentages were coming on to the market. This is because at present our prescribed quantity regulations, which are based on imperial measures, make it impossible for other EEC producers to sell their goods in this country. I am sure the hon. Lady will recollect that it was illegal, although we and the weights and measures officers turned a blind eye to it, during the sugar famine to sell metric sugar packs in this country. In that instance the absence of any such provision in relation to

887
metric quantities acted as an inhibition on our capacity to deal with the scarcity situation.
The hon. Lady's conclusions about where the balance of consumer protection lies are somewhat suspect and open to challenge. She also made the point that this is an unfortunate time at which to have a debate. I am surprised that she tried to bounce that argument. She will know very well that in relation to the proceedings of the House of Commons this is a fairly early hour of the evening. I can understand that she is probably ranting a little because she missed an Adjournment debate on doorstep selling a couple of weeks ago which took place at the same time. I appreciate that she probably had commitments that took her away. However, if hon. Members felt as strongly as she suggests on the question of metrication, I should have thought that, with the intense campaigning spirit that the hon. Lady is attributing to them, even a small proportion of them, might have found it possible to attend and challenge the views of either Front Bench. However, this does not seem to have been the situation.
The hon. Lady referred to the equivalent of the 12-oz. pack of cornflour. I understand that these sizes were included specifically at the request of the industry, with the consumers' agreement, during the consultative process. Therefore, consumers were made aware of this and I understand that no objection was taken to it.
The hon. Lady then referred to my Department's Press hand-out. I am delighted that she read it. I only wish she had read it more closely, because it does not say "on 1st November". It says "from 1st November". The timetable is from 1st November 1975. This is the stage at which the industry will start its production programme. The actual change-over as far as the shops are concerned will take considerably longer because the packs will work their way into the shops towards the middle of next year.
I congratulate the hon. Lady on the ingenuity with which she managed to drag the question of inflation into the discussion on metrication. However, on the basis of her arguments it seems that
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there is never an appropriate time to go metric although her own party is committed to going metric. Therefore, 1st November is a permissive date. We are not telling industry that it must go metric from 1st November. This is a date from which, on our understanding of the industry's plans—because the major producers say that there is very little conversion problem concerning machinery—the major producers envisage that they will be able to start the production.
Mrs. Sally Oppenheim: On a point of clarification, I wonder whether the Minister can tell the House whether this means that he does not propose to amend the Weights and Measures Act to exclude imperial alternatives before that date.
Mr. Williams: I do not see that we shall have much opportunity before that date, with respect to the hon. Lady. I am glad to know that she is eager to see such a measure brought forward. Therefore, I shall consult her fully, if it is necessary to do that, in the hope that we can ensure its speedy passage through the House in a non-controversial atmosphere. But the House is about to go into its Summer Recess, and the hon. Lady knows that we shall not be returning until some time in October. There will then be the changeover between the two Sessions and the debates on the Queen's Speech. Therefore, I should not have thought that there was the remotest possibility of that particular piece of legislation being enacted prior to 1st November.
However, in view of the hon. Lady's enthusiasm for it, I shall certainly draw to the attention of my right hon. Friend the Lord President the possibility that, with the hon. Lady's support, we may be able to enact it soon after 1st November. It is a possibility which I am certainly willing to investigate.
The hon. Lady made her statutory political point about being committed to metrication by a Labour Government. She will, of course, recollect the debate in the House when her right hon. and learned Friend the present Shadow Chancellor of the Exchequer, who was then the Minister responsible for consumer protection, and his Under-Secretary, who has now retired to other activities on lowlier benches, were both arguing the case for metrication, against their back benchers. It was clearly their Government's policy.

889
I can understand that the comfort of the shoulder-blade sitting where the hon. Lady is may indicate that she has to be a little more circumspect than perhaps she would be were she in government. However, I should have thought that she might realise that it may in her interests as well that we complete the process as rapidly as possible.
As regards the suggestion of a problem of stagnation of consumer protection, I find that proposition too ludicrous, as well as being too far outside the realms of this debate, for me to follow. I recollect the 193 clauses of the Consumer Credit Bill, now the Act, which I took through within a matter of months of coming into Government.
Mr. Deputy Speaker (Mr. George Thomas): Order. The hon. Gentleman himself reminded the House that it is quite outside the scope of the orders we are discussing at present, the scope of which is limited to the desirability or otherwise of the new requirements for the marking of the pre-packed foods concerned.
Mr. Williams: I would never have dreamed of mentioning it, Mr. Deputy Speaker, but I saw that you had taken over the Chair, and I well recollect our period in Opposition and in Government together and I thought that the well-established precedents of your own speeches in those days would allow me the same degree of latitude.
Mr. Deputy Speaker: Order. My past actions are never to be raised again.
Mr. Williams: In that case, Mr. Deputy Speaker, I stand duly admonished and I shall resist the temptaton to answer the vile political attack launched by the hon. Lady.
Finally, I remind the House that these orders are part of a process which both parties have pursued and which both parties have said is in the national interest. Hon. Members must bear in mind also
890
that they are part of the process of ensuring that the prescribed quantity protection, which the hon. Lady rightly values very highly, can be continued after the EEC requirements come into force.
Question put and agreed to.
Resolved,
That the Weights and Measures Act 1963 (Dried Vegetables) Order 1975, a draft of which was laid before this House on 24th June, be approved.
Resolved,
That the Weights and Measures Act 1963 (Flour and Flour Products) Order 1975, a draft of which was laid before this House on 24th June, be approved.—[Mr. Alan Williams.]
Resolved,
That the Weights and Measures Act 1963 (Cereal Breakfast Foods and Oat Products) Order 1975, a draft of which was laid before this House on 24th June, be approved.—[Mr. Alan Williams.]

PRE-PACKED FOODS (METRICATION)
  STATUTORY INSTRUMENTS
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (5) (Standing Committee on Statutory Instruments),
  BUILDING SOCIETIES
  That the Building Societies (Special Advances) Order 1975, a draft of which was laid before this House on 24th June, be approved.—[Mr John Ellis.]
  CUSTOMS AND EXCISE
  That the Customs Duties and Drawbacks (Revenue Duties) (Israel) Order 1975 (S.I., 1975, No. 1004), a copy of which was laid before this House on 18th June, be approved.—[Mr. John Ellis.]

  JUDGES
  That the Maximum Number of Judges Order 1975, a draft of which was laid before this House on 19th June, be approved.—[Mr. John Ellis.]
  Question agreed to.

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

G. B. BRITTON LIMITED, BALLYMENA
10.21 p.m.
Rev. Ian Paisley: It is a far cry from Ballymena to Westminster. Those of us who travel by British Airways at the present time find it much farther, and I am very happy tonight to have reached this debate just in time and no more. I am grateful to the hon. Lady the Member for Gloucester (Mrs. Oppenheim)—although I may not agree with the content of what she said—for keeping the House sitting a little longer so that I could arrive in time for this debate. I trust that the Minister, who will be replying on behalf of the Government, will also keep in mind the great difficulties at the airport in Belfast at the present time.
I am very glad that one of my colleagues from the other side of the House—the hon. Member for Kingswood (Mr. Walker),—will be participating in the debate so that the subject will be discussed across the Floor. I do not think that it is because he is the Second Church Commissioner that he is entering the debate, but simply because we have a common interest in this very vital matter.
Northern Ireland has a peculiar and terrible scourge that has been upon it since the foundation of the State. It is the scourge of unemployment, or compulsory idleness. Anyone who knows the demoralising effect of being unemployed can appreciate that it is the duty of every public representative in Northern Ireland at the present time, and also the duty of the Government, not only to attempt the great task of creating employment but also to seek to keep secure the jobs that Northern Ireland at present possesses.
I fully appreciate the efforts of the Minister, with whom I have been involved in many consultations and deputations, in helping us to defeat this scourge of unemployment in Northern Ireland at
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the present time. I wish him every success in his efforts. I am sure that I can say, on behalf of the rest of the United Ulster Unionists in this House, that we shall be happy at all times to help him. I am sure that all hon. Members from Northern Ireland—even those who do not frequent this Chamber too often—would also be with me in supporting his efforts to deal with this scourge of unemployment.
I am delighted to see that my hon. Friend the Member for Down, North (Mr. Kilfedder) has arrived. He had a similar experience to my own the other day, having had to be conveyed by fast car, breaking every regulation, in order to get us here just on time.
With regard to the G. B. Britton Ltd. factory in Ballymena, Ballymena has fortunately not the same average of unemployment as is general throughout the Province. My own constituency is rather a favoured one. I am not referring to its Member in this House, Mr. Deputy Speaker, having seen you smile. But we are fortunate in having only the same average of unemployment as the rest of the United Kingdom, whereas west of the Bann, as the Minister knows, there are some very black spots indeed, as there are in the southern parts of County Down. But if factories start closing in my area, and if the present trend continues, North Antrim would become a very bleak area indeed, and perhaps be brought down to the average or below the average. So it is essential that this House should be made aware of the position and that the Minister should have an opportunity to tell us exactly what he has in mind about the future of Britton's factory.
I want first to put to the right hon. Gentleman a series of questions. How long did the factory operate under its present management? What tenancy ageement did the firm have with the Ministry of Commerce in Northern Ireland, and what reliefs were given under that tenancy so that the company could operate its business? What grants of money, both direct and indirect, did the firm receive from his Ministry? What arrangements have been made for redundancy payments? How many people employed in the factory have been absorbed in other employment in the area?

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The tragedy of the closing of the factory is that for some months before the closure the employees were concerned about what was to take place. I am sure that the right hon. Gentleman will confirm that I was in touch with him personally about the serious concern expressed to me by the employees of the factory.
I want to put it on record that the workmanship of the firm's employees was second to none. It would even come up to the standards of those working in your part of the United Kingdom, Mr. Deputy Speaker. They did a very good job. There were very few industrial disputes, and those that there were were very minor in nature. In fact, the workmanship of those employees was of a standard to make Ulster people proud.
The Minister assured me that, according to the information that he had, all was well and the factory would continue. He said that the employees could be assured of that. Then, one morning, over the Tannoy system of the factory there came the announcement out of the blue that the factory was to close.
Hon. Members can appreciate how the employees felt about that sudden announcement of very bad news. The House will appreciate, too, how I felt as the Member for the area, having made inquiries of the Minister and having conveyed the assurances which I received to the employees.
The amazing feature of this story is that the Ministry of Commerce and the Minister had no prior knowledge from the firm, although it had a very good tenancy agreement from the Ministry and although under that agreement it was bound to notify the Ministry. What is more, any inquiries made by the Department beforehand produced assurances that all was well.
It is too late to try to salvage anything from an operation like this once the announcement is made that a factory is to close and the rundown has commenced.
Mr. James Kilfedder: I am sure that my hon. Friend will agree that actions of this kind can sour good industrial relations in Northern Ireland at a time when we have far better indus-
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trial relations than exist in the remainder of the United Kingdom.
Rev. Ian Paisley: I agree entirely with my hon. Friend. Of course, this did not lead to good relations between the firm and its employees. But the management was closing the factory, so it was not too perturbed about good relations.
I hope that the Minister will be able to give us some blink of light. I hope that the management will be able do something about employing those concerned in the future. Maybe it will not be possible to offer employment on the same scale, but employment on a smaller scale would be welcome. Of course, the Minister's job is made very difficult when the first he hears about this matter is a public announcement. We need the Minister to be on the ground floor. We need him to be in a position to talk about these problems before they come to a head, so that he can try to deal with them at an early stage. That is what we want to see happening in Northern Ireland.
I know that anyone engaged in commerce in Northern Ireland has a tremendous task. As the Minister knows, it is like a fireman trying to put out fires not with water but with oil. Of course, the fires blaze up far too brightly and too quickly. Those engaged in commerce have a colossal task. However, I trust that out of this difficulty a warning note will be sounded from the House. Management must pay attention to the fact that this is not the way that businesses have to be run down or closed. Employment must be regarded in human terms. We can discuss statistics and numbers, but behind those terms are human beings and life. Within that life there are hopes, aspirations and ambitions. When a person's employment is taken away from him a darkness is cast upon a life.
I am aware that there are great difficulties in the textile and shoe industries, but something must be done to prevent cheap imported footwear from coming into our country. That is essential. I am amazed that the management was importing cheap shoes, putting them into its boxes and undercutting its own manufactured article. How can it be that a person doing a good job of work for a company in the footwear industry can have a secure job when the market is

895
overloaded with cheap footwear coming from countries where there is nothing but practically sweated labour? I suggest to the Minister that the time has come for the Government to do something about these cheap imports.
10.33 p.m.
Mr. Terry Walker: I am pleased to take part in this debate. The problems of Britton of Ballymena are nearly the same as the problems of Britton of Kingswood in my constituency. When I had an Adjournment debate on 20th January I talked about the plight of the footwear industry in Kingswood and at Britton in particular. I underlined the crisis that faces Kingswood. At that time we were on short-time working and the factory at Brynmawr, South Wales, had been closed for production purposes. Since then we have had the closing of the Ballymena factory. In my constituency Britton has made over 200 people redundant.
Two things have been done by the Government since then, and they represent most welcome action. First, there has been an inquiry. Secondly, there has been an agreement reached with the COMECON countries for a 5 per cent. to 10 per cent. cut in their sales of men's leather-uppered footwear in 1975. Both those steps are welcome, but neither goes far enough. The inquiry will take at least 12 months. By that time most of the British footwear manufacturers will be in the grave difficulties that now face Britton. The workers will be on the dole. The steps taken as regards the COMECON countries are piecemeal because it must be realised by the Government that 50 per cent. of our imports of footwear comes from France and Italy and other countries within the Common Market. Imports from within the EEC countries and the Far East are rising even now. We need import controls if we are to protect our industry. I believe that if it was made clear to the EEC Commission that temporary measures were necessary there would be a fair chance of these being implemented.
Britton Ltd. is part of the Ward White Group of Northampton, and last year when I raised in my constituency the fact that the workers were on a four-day week I was castigated by the local managing
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director for scaremongering. I was told that everything was safe and there would be no redundancies. It was, I was told, a matter of playing for time. Nevertheless a few months later the same managing director made 200 men redundant. The company has not been honest or frank with the unions, the workers or the Government. It has given assurances to the Government. The Under-Secretary for Industry repeated in the House assurances which had come from the management in Kingswood that the jobs would be saved. The Brynmawr factory has been closed and now the same has happened at Ballymena. In Kingswood we have suffered 250 redundancies, and we are on the slippery slope again.
What can be done about this? Apart from the problems arising from the imports of footwear into the United Kingdom, it has recently been revealed that another potential danger faces the industry. It is the fact that uppers are being brought into the country from Brazil. They are being advertised by the company BSL Agencies—Brazil Shoe and Leather—and it is open to receive orders for leather uppers already cut and closed. I have seen invoices and samples of these uppers which are available to the industry, and it is obvious from the price quoted that they represent a nice source of unfair imports from a low-cost country.
The firm is capitalised by a Japanese company, and the manufacturing centre is in Brazil. The uppers are allowed to enter the United Kingdom completely duty free until it is considered that they do harm to the home industry. This must not be allowed to continue. We ask the Government to take action now to protect the people not only in Ballymena and Kingswood but in the whole of the British footwear manufacturing industry.
10.38 p.m.
The Minister of State, Northern Ireland Office (Mr. Stanley Orme): The Government welcome this debate. When we heard that the hon. Member for Antrim, North (Rev. Ian Paisley) was having difficulties getting here, we knew that he was tenacious enough even if he had to fly himself. I assured my officials in the House that he would he here, and sure enough he is.
This is a very difficult case. I thank the hon. Member for what he said about

897
what the Government and I as a Minister have sought to do about employment in Northern Ireland, not least in connection with this factory.
The Ballymena factory had its origin in the company of Wm. Clarke & Sons Ltd. Clarke's did a certain amount of cutting and closing of TUF uppers, and when it decided to close in 1958 the factory was leased to G. B. Britton. A new factory of 6,050 sq. ft. was built by the Department of Commerce for Britton's and has been extended on three occasions to its present size of 50,550 sq. ft. By 1966 the labour force had built up to a peak of 800 but earlier this year had dropped to 400–125 males. In 1973 the company was acquired by the Ward White Shoe Group.
I have been given the figure of a 21-year tenancy standard lease which was given to Britton's. The total of grants and extensions to the factory since 1959 has been £287,000. Normally we do not disclose details of grants of this nature, but I think it is right that they should be given on this occasion.
On 14th May the closure of the unit was announced without prior consultation with me or the Department of Commerce. The main reason given for the closure was that cheap imports had caused a sudden reduction of sales from 230,000 pairs a week to 160,000 pairs a week. On Friday 13th June 220 workers were made redundant.
My extreme displeasure at the way the closure took place was made known to the firm. This is not the way to deal with industry in 1975 and the hon. Member for Antrim, North is right to raise this matter as he has done tonight.
We had to try to take action to save the company. Several discussions were held with the firm, and a meeting was called at which the hon. Member for Antrim, North was present, together with Briton's managing director, trade union representatives, Department of Commerce officials, Members of Parliament, the Mayor of Ballymena, elected representatives of the town and myself.
The question of cheap imports was raised at the meeting, and I made direct representations to my noble Friend the Minister of State for Industry. The
898
Government was extremely concerned about cheap imports, both of footwear and textiles. It should be pointed out that some of these imports were being bought by Britton's. The numbers were limited, but some people may see a curious contradiction in this practice, which is also carried out by other firms.
Various schemes for saving jobs at Britton's were considered in great detail. Of the workers who had already gone, only 10 have found jobs elsewhere. In a frank exchange of views, we explored with the firms whether it could ease the situation and provide other employment by bringing other products to the plant at Ballymena so that it could be kept open. During the period when the factory was to have closed, the firm agreed to keep it open while negotiations went on. The Government assisted them. The firm is anxious to bring new products to Ballymena, and I hone it is successful. We will give every assistance we can, but it is not possible to keep the firm open in the interim period.
The difficulties arise in terms of the cost of the present product, and in consequence, unfortunately, the firm will have to close. But it is hoped if possible to bring in another product in the autumn. The firm could then be restarted, and the first choice would lie in the direction of previous employees of G. B. Britton. We hope to see the work force built up again.
The hon. Gentleman fairly said that Ballymena is not an area of high unemployment, and he referred to areas of Northern Ireland with a far higher level of unemployment. But, as he said, unemployment anywhere is bad, and, of course, I agree with him. It is bad for the person who finds himself out of work and bad for his family. Unfortunately, in the present economic climate the attempt to get investment into various areas and to create new factories is not an easy one. Obviously we must try to preserve the employment that already exists. My job at the moment in Northern Ireland—we dealt with this matter in the Northern Ireland Committee yesterday—is to try to maintain employment.
I think I have dealt with most of the points which have been raised—
Rev. Ian Paisley: Will the Minister deal with terms of redundancy?
Mr. Orme: There will be the normal redundancy payments. I shall examine the situation to see whether the payments are being properly implemented, and I am sure they are. I shall raise the matter with the manpower people in the Department to ensure that all these matters are followed through. The workers in the plant will receive the normal redundancy payments, and I shall try to expedite the matter, if it is at all possible.
The Government welcome this debate, and we thank the hon. Gentleman for
900
raising the subject. We have had the matter under active consideration. We hope that the proposals from G. B. Britton will create employment once again in the shoe industry in the autumn. In the meantime, we shall try to find fresh employment for the people concerned and continue our endeavours to attract employment to Northern Ireland, which needs it so desperately.
Question put and agreed to.
Adjourned accordingly at twelve minutes to Eleven o'clock.

  TUC AND CBI (MEETING)
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  SECRETARY OF STATE FOR THE ENVIRONMENT (SPEECH)
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Preamble
The House met at three of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Lord Bishop of Portsmouth.

AEROSPACE INDUSTRY AND ANTI-TANK MISSILES
Lord ORR-EWING: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what was the date when the Ministry of Defence (Army) laid down an operational requirement to the British aerospace industry for a successor to the small anti-tank missile Vigilant, and whether they can give an assurance that no further contracts will be placed with France for such a missile until the United Kingdom industry has been given a chance to present its case.
Lord WINTERBOTTOM: My Lords, the British Aircraft Corporation was commissioned to carry out experimental studies on a man-portable anti-tank weapon starting in January 1971 and a feasibility study started early in 1972. We have been in close touch with British industry throughout and no decision to adopt a foreign-designed weapon will be taken without full and careful consideration of all the implications.
Lord ORR-EWING: My Lords, while I am grateful to the Minister for the second part of that Answer, may I ask whether the Minister will bear in mind that we have already committed ourselves to spending over £100 million in buying Exorcet from the French, and does it make sense to finance the development and production of competitor weapons when the competitor nations are not really full Members of NATO? Does he understand the repercussions on Britain's aerospace industry, and the possibilities that sales overseas will be deeply injured
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if we decided to drop all the British missiles and to buy the French Milan?
Lord WINTERBOTTOM: My Lords, that is one of the considerations that I have mentioned. My right honourable friend the Secretary of State is fully aware of all the implications in this matter.
Lord ORR-EWING: My Lords, may I ask the noble Lord this final question: could we be assured that there will be no early announcement on this matter, when neither House is sitting and is therefore not in a position to debate such a very important issue?
Lord WINTERBOTTOM: My Lords, I can only transfer the noble Lord's comments to my right honourable friend the Secretary of State.
Lord MERRIVALE: My Lords, would the Minister agree that it is essential that we should co-operate fully with the French aerospace industry regarding joint ventures? While this may not be a joint venture, can he say whether discussions are going on with regard to the French buying projects from our aerospace industry?
Lord W1NTERBOTTOM: My Lords, that is another question.

CONSTITUTION OF ANGUILLA
3.8 p.m.
Lord REIGATE: 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 now completed the promised review of the Constitution of Anguilla.
The PARLIAMENTARY UNDERSECRETARY of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the review has been completed. The Anguillans accepted Her Majesty's Government's proposal that a new and separate Constitution should be provided for Anguilla giving a substantial measure of internal autonomy.
Lord REIGATE: My Lords, I thank the noble Lord for that very helpful reply. First, may I assume that this change

907
will be done by Order in Council? Secondly, may I ask him whether, before the Order in Council is published, the Government would consider setting out the proposals in a White Paper in which it would also be possible to show the attitude of Mr. Bradshaw and the Government of St. Kitts-Nevis, for whom this decision, although in my view a right one, is a very heavy blow to sustain?
Lord GORONWY-ROBERTS: My Lords, as the noble Lord has indicated, an Order in Council is being prepared. As to his suggestion for an explanatory document, I will bear that suggestion very much in mind.

MIDDLE EAST: EEC POLICY
Lord CHELWOOD: 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 what plans Her Majesty's Government now have for the United Kingdom to play a more active role in the search for a peace settlement in the Middle East in the light of the recent visits of the President in Office of the EEC Conference of Foreign Ministers to Arab countries and Israel; and whether the EEC favours a reconvening of the Geneva Peace Conference or the continuation of the present efforts by the United States to arrive at a peace formula step by step.
Lord GORONWY-ROBERTS: My Lords, we remain ready to play a constructive part in the search for peace, but so long as the prospects for progress through the United States initiative seem good we believe the Americans should continue to play the major role. As the Foreign and Commonwealth Secretary said in Rome on 3rd July, the Middle East is an issue on which we intend to strive for a unified approach by the Nine.
Lord CHELWOOD: My Lords, as the noble Lord knows, the Nine Community countries agreed in 1973 to speak with one voice in the search for a peace settlement in the Middle East involving Israel's withdrawal to the pre-Six Day War armistice lines and the recognition of
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Palestinian rights. Is that still the case? More specifically, are the Community countries individually, and as a whole, willing to underwrite any international guarantees that are necessary, including perhaps the policing of buffer zones in the second phase of the settlement?
Lord GORONWY-ROBERTS: My Lords, the noble Lord is quite right in stating that the December 1973 Statement from Copenhagen supported Resolution 242 and the subsequent Resolution 338, upholding the principles he has just mentioned. As to the Nine participating in any guarantee, presumably military, in support of a settlement, I think that it would be premature for me to pronounce on that suggestion. I would add that it is obviously a suggestion that will, among others, be carefully considered.
Lord JANNER: My Lords, in the course of the discussions which take place, will my noble friend appreciate that there are some people who put a different interpretation upon Resolution 242 from the one that the noble Lord is trying to enforce, that people believe that Resolution 242 meant what it said and, as the Government said at that time, that Israel should have satisfactory and secure boundaries?
Lord GORONWY-ROBERTS: My Lords, I do not think there is any serious diversity of opinion as to what Resolution 242 means. It means territorial withdrawal, security for Israel, and a recognition of the rights of refugees, and today we add to that, of course, the recognition of Palestinian rights.
Lord CARRINGTON: My Lords, would the noble Lord not agree, now that we are firmly in the EEC, that perhaps the most constructive thing the Government can do is to seek to get closer together on foreign policy?
Lord GORONWY-ROBERTS: My Lords, I very much agree, and that is the long-term intention of Her Majesty's Government. There are economic and social matters on which the Nine can increasingly co-operate. Obviously, there are the fields of disarmament and peace and foreign affairs generally, on which the Nine could very much co-operate increasingly to make an effective contribution. I therefore very much agree with the noble Lord.
Lord PARGITER: My Lords, would the noble Lord not agree that we would have some sympathy with Israel's idea that they should have a properly defensible line that does not depend so much on guarantees which may or may not be effective?
Lord GORONWY-ROBERTS: Yes, my Lords, and the phrase "secure boundaries" means just that.

TEXTILE IMPORTS
3.13 p.m.
Lord BARNBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are yet able to announce decisions on the appeal for short-term action to mitigate the destructive effects of excessive imports on the textile industry, as proposed to the Chancellor of the Duchy of Lancaster by the British Textile Confederation following recommendations by the Prime Minister.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, we are not yet able to announce the Government's further proposals to assist the textile industry. We intend to do so as soon as possible.
Lord BARNBY: My Lords, the Deputy Leader will understand that that is a disappointing Answer. Does he remember that only yesterday in his admirable speech he urged the importance of exports? Is he aware that, while exports depend on a substantial home market, at present consumption internally is running up to 50 per cent. of imports, though we have the capacity to produce ourselves and a substantial home market is essential? Is he aware that imports at their present rate are imperilling the employment of some 150,000 workers who are at present underemployed or unemployed, that the textile industry ranks very high among the export industries and that it is important to this industry that this decision should be forthcoming very quickly?
Lord BESWICK: My Lords, I have in this House in recent days spelt out the
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restrictions already imposed and the licensing system already in being, and I do not think we should underestimate what is being done. However, I recognise it is a disappointment that I am not able to make this additional statement, but I hope it will be made before too long.
Lord DERWENT: My Lords, is not this a wonderful improvement, four Questions in nine minutes?
Lord BARNBY: My Lords, it is the privilege of noble Lords in this House to follow up one supplementary question with another. May I ask the noble Deputy Leader whether he can give any indication if there is good progress simultaneously under the Multi-Fibre Agreement, which is another important matter on which action by the Government—not shortly or in the future but tomorrow—could be taken in regard to the employment of these people who are so hard-pressed in the textile industry?
Lord BESWICK: My Lords, the noble Lord will be aware that we are in agreement with other Member-States of the EEC on certain restrictions that should become effective from 1st January 1975. I hope more can be done, but I suggest that if the noble Lord will exercise a little patience—a matter of days—I may be able to tell him something more.
Lord HAWKE: My Lords, can the Minister say to what extent the underdeveloped countries have been able to take advantage of the privileges given them by the Lomé Convention to send more of their textile exports to the EEC rather than to this country?
Lord BESWICK: My Lords, there is a burden-sharing agreement to which we have subscribed. It is rather detailed and if the noble Lord would table a Question I will be glad to answer it.

SCOTTISH TRANSPORT GROUP (PORT ELLEN HARBOUR) ORDER CONFIRMATION BILL
Considered on Report.

LOCAL LAND CHARGES BILL [H.L.]
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, I have it in command from Her Majesty the Queen to

911
acquaint the House that Her Majesty, having been informed of the purport of the Local Land Charges Bill, has consented to place Her prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament, for the purposes of the Bill. On behalf of my noble and learned friend the Lord Chancellor, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Baroness Llewelyn-Davies of Hastoe.)
On Question, Bill read 3a, an Amendment (privilege) made; Bill passed, and sent to the Commons.

INDUSTRY BILL
3.18 p.m.
Lord BESWICK: My Lords, I am especially pleased to be able to introduce this Bill to this House. I hope we shall look at it, examine it and maybe criticise it, but always in a constructive spirit. Not since the 1945–50 Parliament has one Bill been so clouded with unnecessary controversy. I hope that in this House we can lift that cloud and see more clearly that this Bill is not designed to hit or hurt anybody. It is intended to help—to help industry and all who work in it. It will help by providing new investment; by securing a higher productivity on a given investment; by establishing a new pattern of co-operation between Government and industry and a pattern which more fruitfully involves the workforce at all levels. The Bill seeks to improve efficiency in individual units of industry, but it also aims to create, or help to create, an overall economic climate within which all useful industries in both public and private sectors can more readily develop.
We have discussed before in this House the post-war industrial performance of this country compared with competitors, and I doubt whether any of us deny the need for some action to regenerate sections of our industry. I have quoted figures before but if there are still those who say, "We were all right before—let things be ", let me give this series of figures relating to 1972—that is, before the explosion of oil prices, before the previous Administration had that argument with the miners and before the present Administration took over.
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In 1972 investment per employee at current prices was £759 in the United States of America, £623 in France. £537 in Germany, £364 in Italy, £599 in Japan. In the United Kingdom that same year it was £273. Or take another, and maybe even more significant, set of figures. In 1972, again, extra output per unit of new investment, taking Japan as 100, was 67 in the USA, 98 in France, 130 in Germany, 75 in Italy and in our country, 51. I know that all figures relating to economics must be accepted with caution but, making all allowances for strict non-comparability, it cannot be claimed that the market economy in this country has produced or can produce the result we want.
The policy behind this Bill reflects that fact. It is a policy to which much study has been given and to which the Government are clearly committed and which they set out clearly in two General Elections. Having said that, the Government have been, and are, willing to consider arguments advanced in debate and to make amendments to meet points that can be reconciled with policy.
The Government have already made such amendments to the Bill. A new clause has been introduced, Clause 8, to set clear boundaries to any involvement by the National Enterprise Board in newspapers and broadcasting. The NEB might indirectly acquire an interest in a media company as part of a larger acquisition, but it will be required to divest itself of the interest, unless this would clearly harm the media company. A second new clause, Clause 15, establishes that those affected by a vesting order will have an automatic right to arbitration on any dispute concerned with the vesting and compensation, and further amendments unambiguously provide for compensation to all those affected by a vesting order.
Important changes to the Bill relate to Clauses 22 to 25, dealing with the information disclosure powers. The basic principle remains unaltered: the Government should be able, where necessary, to require companies of particular importance to our manufacturing industry, to provide information to Government and to the companies' workforce about their plans in relation to matters central to their future development. The need for this reserve power is a basic principle

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behind this part of the Bill. The Government have, however, already made considerable changes to the specific provisions for the use of these powers, to take account of criticisms that have been advanced. These changes demonstrate clearly the Government's conviction that in such matters voluntary arrangements are much to be preferred and should be encouraged. Stemming from this, the amendments emphasise that the compulsory powers are only to be used when an opportunity has been given for voluntary action, and when the voluntary approach has proved ineffective.
Secondly, amendments were made which recognise that the Government and workers in a company may have interests in different categories of information, and in such cases the Minister is enabled to exercise his discretion about what information should be furnished to trade union representatives. In addition, a series of changes has been made to limit more precisely the scope of the powers. The purposes for which they may be used have been spelled out, the limitation to manufacturing industry has been made clearer, and the fact that the list of subjects set out in Clause 23(2) is a complete list of the matters on which information may be required removes any cause for doubt.
These changes are important: they underline the Government's desire for voluntary arrangements, and the Government's determination to confine the powers to reserve powers. They also indicate our willingness to meet criticism and to consider changes which will make the powers more practicable and more flexible.
May I now invite the House to consider the Bill as amended? The first major section—Clauses 1 to 9—provides for the establishment of the National Enterprise Board. In Clauses 10 to 15, the Bill provides for reserve powers to prevent key manufacturing industries from passing into unacceptable foreign control. In Clause 16, it provides for guarantees of the level of financial assistance for firms entering into planning agreements. Finally, after a series of miscellaneous provisions, it provides for reserve powers to obtain information from companies.
Taking the NEB first, this body will have five main functions. It will under
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take the role of the old Industrial Reorganisation Corporation to reorganise and rationalise industry, but only with the agreement and consent of the existing owners: the NEB has no compulsory powers not possessed by every other company in the land. In recent debates, noble Lords on all sides have acknowledged the good work of the Industrial Reorganisation Corporation and its sacrifice on the altar of Selsdon Man was deprecated by many noble Lords.
Secondly, the NEB will be a source of investment capital for private industry, particularly manufacturing industry. It will have borrowing powers of up to £1,000 million for this and other investment purposes. The investments will often be by way of equity capital; this is no different from the policy of a merchant bank. The NEB will often be faced with the prospect of high rewards at some risk, and it is right that the nation should participate in the rewards that come from the use of the NEB's capital.
Thirdly, the NEB will be able to develop completely new enterprises and participate in joint ventures with private firms. Public ownership will be extended into profitable areas, but in determining its priorities in this field, it will attach particular importance to moving into areas of high unemployment. Next, the NEB will act as a holding company for the State's interests in companies which are already wholly-owned by the Government, such as Rolls-Royce (1971), or in which there are substantial shareholdings, such as International Computers Limited. I feel it will be agreed that this method of holding and monitoring the managerial and financial expertise of the NEB will be invaluable.
Finally, the NEB will be responsible for promoting industrial democracy in the undertakings it controls, and I shall have something more to say on this theme. In carrying out these functions the NEB will apply its commercial judgment to ensure that the ventures which it supports are those whose viability can be assured. As Sir Don Ryder has said: "The NEB will not be a soft touch". There is no question of its financial discipline being undermined through support for uneconomic projects. Where the Board is required by the Government to

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give assistance to a company which it would not support of its own volition, it will be provided with compensation by the Government under the provisions of Clause 3 of the Bill. In that event, its accounts would show such projects separately.
I want to emphasise that the NEB will have no powers, apart from the provisions of the Companies Act 1948 which apply to all companies, of compulsory acquisition. The NEB is not exempt from any law and its companies will be bound by the Companies Acts and the fair trading legislation, and will comply with the rules of good practice, such as the City Code on Takeovers and Mergers, and the Stock Exchange Listing Regulations, where these are relevant. In particular, I should like to assure the noble Viscount, Lord Watkinson, who made representations to me on the matter, that the NEB will in no circumstances engage in "warehousing"—building up a major shareholding in secret by acting through a number of separate associates. The NEB will be subject, too, to the provision in the Companies Act 1967 which requires anyone securing a 10 per cent. equity holding to declare the fact. Upon the NEB will fall an especial responsibility of setting right the unsatisfactory position on investment and productivity to which I referred earlier.
My Lords, before leaving the NEB, and for the particular attention of noble Lords on the Liberal Benches, may I quote what was said by the late Lord Beveridge 30 years ago in his treatise on Full Employment in a Free Society. He said:
" We need now a great expansion of investment, that is to say of expenditure on means of production But this expansion of investment should take place steadily, not by fits and starts and with fluctuations, such as have marked private investment in the past. To ensure that, we must secure that investment whether in private industry or in public industry, is looked at and planned as a whole and expanded steadily. There is needed for this purpose, as an essential new organ, a National investment Board."
I do not think I can improve on that.
Lord BARNBY: My Lords, may I interrupt the noble Lord for a moment? Remembering that period well, I recall
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that the emphasis put by Sir William Beveridge was on the essential need of good profitability to encourage investment.
Lord BESWICK: Yes, my Lords. That is a point I made earlier in my speech. I turn now to the section of the Bill dealing with planning agreements. These agreements are offered by the Government as a basis for a new partnership between Government, management and workers. Our intention through the planning agreement system is to provide a forum within which there can be joint discussions about a company's strategic plans for a number of years ahead. These discussions will cover such issues as investment, employment, prices, product and processed development, productivity and matters of concern to consumers. They will also provide for an exchange of views about prospects for the sector of the economy concerned, for the national economy, and for world trade in which it will be for the Government to contribute views and forecasts. Although planning agreements are dealt with in a single clause of the Bill, this in no way reflects their potential importance. It reflects the fact that, again, planning agreements will be voluntary and will not be regulated by Statute.
Many of the larger companies which might be invited to conclude agreements already have a good working relationship with the Government, and I hope that they will see an advantage for them, for their workers, and for the nation, as well as for their shareholders, in seeking the closer partnership that planning agreements offer. For their part the Government will be concerned through planning agreements, not only to seek benefits for the national economy and for society as a whole, but to increase the effectiveness of British companies which of course all go to make up that society. This will come partly through the creative use of the powers provided under various Statutes to support desirable industrial investment and innovation, partly from the improvement in the quality of decision taken by Government in formulating their economic and sector policies that can follow from greater involvement in industry; and partly, and importantly, through the opportunity planning agreements afford for the workers to have a greater part in policy making.

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As I have said, planning agreements are to be voluntary, but the addition of Schedule 4 to the Bill in another place introduced an element of compulsion. In part, the purpose of this Schedule is, as I recognise, to give statutory effect to the undertakings which the Government gave in the White Paper on the Regeneration of British Industry to provide Government projections, and there has never been any question that the Government would not give effect to those undertakings. But the formulation of the Schedule in relation to this and other matters will require some amendment if it is to provide a practicable basis at an acceptable cost to industry and to the Exchequer.
My Lords, the last major section of the Bill deals with the provision of information to the Government and to workers through statutory powers. I emphasise that these powers are reserve powers and will not be used where voluntary arrangements have been made. Maybe there has not been complete understanding on this point. Perhaps the fault lies with the Government, but it should be made clear that the Secretary of State may not use his statutory powers where he finds, after consulting the company and its workers through their trade unions, that adequate arrangements exist.
Having said that, perhaps I might explain very briefly how these reserve powers would operate. First, the Minister is required to issue a preliminary notice to the company which would empower him, after an interval of at least three months, to invoke the powers if at the end of this period satisfactory voluntary arrangements did not exist. In issuing this preliminary notice he would lay a Statement before both Houses of Parliament. If satisfactory voluntary arrangements were reached, that would be the end of the matter.
If the Minister felt, after consulting both company and unions, that there was no alternative at the end of the preliminary period but to proceed formally under the Statute to require information to be provided, he must lay an order before both Houses of Parliament under the Negative Resolution procedure. The Minister, having received the information, would then decide on the extent to which it should be disclosed to workers through
918
their trade unions. Before coming to a final decision he must give an opportunity to both sides to make representations to him, and either party can require him, before taking a decision, to seek the advice of an independent committee, whose chairman would be legally qualified. If the Minister decided to overrule the advice of this committee by ordering the disclosure of information to the trade unions contrary to the committee's advice, he would again be required to lay an order before both Houses subject to the Negative Resolution procedure.
In these ways, a number of important safeguards have been incorporated in the Bill to guard against the disclosure of information which would cause substantial injury to companies. Proper Parliamentary control has also been provided. But should voluntary arrangements prove impossible, we have provided powers to enable the Government to require the provision of information for the purposes set out in Clause 20 of the Bill.
There have been criticisms of our proposals for planning agreements and the disclosure of information, on the grounds that they will damage industrial competitiveness. But let me remind the House that to a very considerable extent we are behind our main industrial rivals in the amount of information we pass on to workers and in the facilities they have for taking part in decision-making. Much was said yesterday by certain noble Lords about how much more competitive some of our European trading friends were. Yet in France, Belgium, Holland, West Germany and Sweden there are arrangements—either through legislation or through binding agreements between employers and employees—which allow for the disclosure of information to employees in stated policy areas.
These cover finance, company prospects, competitive position of companies, personnel and production matters, scientific research and major changes in location. In Sweden, for example, the employer must provide information in such a way that the works council can form sound ideas of the firm's financial situation and future prospects. Such information must include business prospects, profit and loss and results of the business. The works council, which is appointed by the trade unions, may appoint a committee which has the right

919
in principle to complete access to information in economic matters. Why should we fear catastrophe when prosperity reigns in Sweden?
I do not quote these as models; they are not. Nor do I say that we are all behind other countries. Some of our companies would compare with any in the world in their arrangements for consultations with workers. But across industry as a whole we have fallen behind, and I am therefore delighted to see that the Confederation of British Industry has been increasingly active in securing improved standards of performance, wholly in line with the tone which the noble Viscount, Lord Watkinson, has used in this House when he has addressed us. As many of your Lordships will know, it has recently prepared and circulated draft guidelines to firms, whose fundamental premise is that workers expect to receive information on a wide range of subjects affecting their firm, and which sets out some recommendations to company managements for achieving this.
My Lords, the argument that increasing the rights of workers will have adverse effects on industry is not a new one. Exactly 150 years ago, a Select Committee, reporting to another place in 1825 on the laws affecting combinations of workers, prophesised unadulterated doom if these rights were extended. That Select Committee said:
" If the spirit of dictation now manifested be suffered to prevail among the working classes, if the application of capital is to be controlled, and every improvement by machinery or otherwise, admitted or rejected at their discretion; the necessary consequence must be, that capital will be withdrawn or transported and the whole labouring population of the country confined to distress and misery …"
Viewed in the context of 150 years of history, is there anyone who would seriously suggest that such an attitude was defensible? Is it not possible that in another 150 years' time we shall equally condemn those who now seek to deny workers substantially greater powers of decision-making over their working environment and over their own employment prospects; indeed, over their whole livelihood and future? Moreover, this development of industrial democracy which we visualise is not simply justified on the score of justice to individuals; it
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is more than justified by the returns it can yield to our economy by way of increased productivity.
My Lords, I said at the start of my speech that I thought this Bill represented an historic step forward. I recall the Prime Minister saying it was the most significant change in economic thinking since Keynes. In the years to come, I believe we shall all recognise that this judgment is the right one. My Lords. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a. —(Lord Beswick.)
3.45 p.m.
Lord ABERDARE: My Lords, we are very grateful to the noble Lord, Lord Beswick, for having explained to us the provisions of this Bill. May I begin by declaring an interest in that I am a director of a small industrial company in the North-East of England. As the noble Lord acknowledged at the beginning of his speech, this is a highly controversial Bill. It took up a tremendous amount of time in another place; there were some 40 Sittings of the Committee; there was a complete change in the entire Ministerial team; and at the Report stage a number of Amendments were introduced to the Bill which the noble Lord has explained to us.
Lord BESWICK: My Lords, before the noble Lord perpetuates this myth, may I say that I am still there?
Lord ABERDARE: My Lords, I am delighted to know that the noble Lord is still there. I hope he is not there for very long. The point I am trying to make is that there have been many changes in this Bill, especially at the Report stage, and many changes affecting the clauses concerned with the disclosure of information which the noble Lord explained. They are very difficult and detailed changes and we had available to us the final printed copy of this Bill only on Tuesday. It really is very difficult for the Opposition to work effectively when this happens. As the noble Lord and other noble Lords on the Front Bench know, our task in Opposition is always difficult for we do not have a lot of help. When we do not have the proper time to consider a Bill it is even more difficult. But nothing is beyond the capacity of my noble friends and I

921
am sure that we shall have an excellent debate on this Second Reading.
The point that I want to make is that if we are to do what noble Lords would wish to do—that is, to consider this Bill constructively—we must have the proper time throughout the rest of the stages of the Bill. Then we are prepared to be constructive and hope, on the other side of the coin, that the Government will be flexible; for unless they are flexible there is no point in our being constructive. We dislike this Bill. We are totally opposed to the extension of the public sector of industry that is implicit in it and we do not believe that the proposals in the Bill are the right way to further our economic development. We are pledged to repeal it when we return to Office.
The Bill is intended to implement the proposals in the White Paper, The Regeneration of British Industry. Yet its proposals have been strongly criticised by the leaders of the industry that it is intended to regenerate and by the organisation that speaks for them, the CBI. Is this not an extraordinary way to go about regenerating industry by antagonising all those you seek to help? The Government are giving the impression that they are saying to industry, "You have failed the country. You do not know your business; so we, the Government, will set up our own industrial conglomerate to show you how it should be done." That industrial conglomerate is the National Enterprise Board. It has powers to buy control of profitable companies, subject only to the agreement of the Secretary of State; it has powers to set up new companies, wholly owned by itself; and it has powers to operate companies that are already in public ownership. For these purposes, it is given £700 million or, with the Treasury's consent, £1,000 million.
Lord BESWICK: My Lords, I am sorry to interrupt the noble Lord again, but this is important. He said it had power to acquire profitable companies only with the agreement of the Secretary of State. That is not correct. It must have the consent of the owners of those companies.
Lord ABERDARE: It has the powers to buy the shares of profitable companies for which it has £700 million at its disposal.My Lords, it will be a large,
922
amorphous, miscellaneous conglomerate, owning a mixture of totally unrelated companies, some previously nationalised, some lame ducks, some profitable, some acquired from the private sector and some specially established by the Board itself in competition with the private sector. It has been given no financial target, and it is seemingly free to throw its weight around as it pleases within the industrial scene. No wonder that it is viewed with anxiety and suspicion by private industry! We have been promised guidelines which we are told will modify our view about the National Enterprise Board, but the guidelines have not yet been seen, and the noble Lord did not mention anything about this in his speech. I specifically and urgently ask the noble Lord who is to wind up for the Government to give us an absolute assurance that these guidelines will be available to your Lordships before the Bill leaves your Lordships' House—in fact I hope at the Committee stage.
Why is it proposed to set up the National Enterprise Board? What are the Government's reasons for bringing this large, nationalised conglomerate into being? I am talking now of the economic reasons. I am discounting and ignoring for the moment any political reasons which may be behind the Bill, such as an extension of public ownership. The nub of the problem lies in paragraph 3 of the White Paper. I should like to quote two sentences from the White Paper. I think I am right in following on what the noble Lord, Lord Beswick, said. The White Paper says:
" In 1971 investment for each worker in British manufacturing industry was less than half that in France, Japan or the United States."
It goes on to say:
"In the last ten years the rate of direct investment by British firms overseas has more than doubled."
It is on the lack of investment that those who advocate this Bill, including the noble Lord, Lord Beswick, base their argument. I think we must look at the truth of this matter. There are one or two points which should be made.
In the first place, the real rate of growth of British economy per head has been faster on average since the end of the last war than at any time since the mid-

923
19th century. Secondly, it is true variations in rates of growth in different countries can been influenced by a large number of factors. This is shown, for example, in the transfer of labour from agriculture to industry which occurred in the 1950s and 1960s in France and West Germany. Then we have to take into account that our total investment, as a proportion of our gross national product, has been increasing and, in the case of manufacturing investment, has been broadly stable.
The noble Lord, Lord Beswick, gave us some figures for investment. I can quote some more. He said you can prove anything with figures, but these figures happen to come from his present colleague, Mr. Gerald Kaufman, the Parliamentary Under-Secretary of State at the Department of Industry. On 23rd June 1975 Mr. Kaufman said:
" The economists in the Department of Industry have undertaken a considerable amount of work comparing investment in manufacturing in the United Kingdom with that in other major industrial countries. They have concluded that in relation to manufacturing output and growth in the United Kingdom, manufacturing investment has not been low by general international standards."
The noble Lord went on to say:
" How can we maintain that a market economy can provide the necessary investment in the United Kingdom? "
I cannot see how he can argue that when he is comparing our figures with the figures for other countries such as France, Germany, Japan and the United States, who themselves operate a market economy. We have not been operating our market economy correctly, and the reason why there is insufficient investment lies in falling profitability in industry.
An interesting inquiry was conducted by the Investors' Chronicle. It was called "The City and Industry". It came to the conclusion that the record of industry over 20 years shows an alarming decline in real profitability, and that returns are now too low to stimulate substantial new investment in a period of heightened risk. This decline has been caused by a number of factors, in my opinion more political than economic. There is no lack of funds for investment in industry given an adequate level of profits, and there is no lack of will on the part of boards of
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directors given some assurance of a period of economic stability. But it is just that confidence in economic development free from political interference has been lacking. High taxation, controlled prices and dividends, spiralling inflation—that is no climate for encouraging investment. This Bill will only add to its burdens. Better and more stable industrial relations are also essential for sustained economic growth.
The trade union movement has a vital contribution to make towards a less desstructive situation in industry. Strikes, restrictive practices and overmanning are incompatible with economic growth. This Bill is not the right vehicle for this, but I doubt if some of its provisions will do very much to help. What we need to do is to learn the lessons from those countries with which the noble Lord has compared our performance, the industrial stability of France, West Germany and the United States of America. We should be aiming at taking industry out of politics, not discouraging the dialogue between industry and Government, which is essential and could well be increased, but letting industry get on with its job without constant legislative interference.
The National Enterprise Board is not the right solution. That is to move in the opposite direction towards more State control and the State-dominated economies prevalent in Eastern Europe. The history of nationalised industry in this country is not exactly reassuring, and we should remember, as was made clear in the debate yesterday, the private sector accounts for about 95 per cent. of the nation's exports. The one essential factor in an effort to improve our industrial performance is confidence. When I used to study very elementary economics I was taught that business confidence, and the lack of business confidence, were major factors in the so called trade cycle. We still have trade cycles, and confidence and lack of confidence are still major influences. The Bill, however, coupled with other Government actions, has caused the loss of confidence in industry, and to launch the National Enterprise Board in their midst is hardly the way to restore that confidence.
Let me make it clear that that is not what we desire. We want to see the maximum co-operation between the Government and industry, but we believe it

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is best encouraged by mainly voluntary methods rather than by direct State interference. When in certain circumstances shares in private enterprise are acquired by a Government Agency, they should be sold again as soon as is practicable and reasonable. In my opinion, a much better way forward to better national economic planning would have been to develop the use of the NEDC. It exists, it brings together Government, employers and unions; and it has a sector organisation in the "Little Neddies" that could be far more effective in sector planning than the direct planning agreements between individual firms and the Government which are envisaged in the Bill. It provides familiar machinery and it enjoys the support and good will of both sides of industry. It would have been far better to have built upon this established foundation than to scare off businessmen with talk of planning agreements and compulsory powers of disclosure.
We are firmly opposed to the provisions for compulsory disclosure contained in Clauses 22 to 26 of the Bill. We support the principle of disclosing information both to Ministers and to employees—and I stress "employees" whether they be members of trade unions or not—but in both cases the best results are more likely to be achieved by encouraging voluntary disclosure than by the whole panoply of legal requirements in this Bill. The type of information which is of use to a Minister for national economic planning is often quite different from that which is of use to the firm's employees. The sort of information that a Minister requires is often highly confidential. In many cases it has in the past been readily produced on a voluntary basis and there has been no leak between the firm and the Minister. But if that same information has to be given to the representatives of all the trade unions that may be interested in a particular firm, then confidentiality is bound to come into question. I am not seeking to cast any slur on members of trade unions, but the fact of the matter is that one company may deal with a very great number of trade unions and the more widely spread is information of this particular confidential nature, the greater the likelihood of leakage. Obviously the trade union representative to whom this information is divulged
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will not be doing his job unless he passes on the information to all his members.
Statutory requirements of this sort often have the reverse effect from that which they are designed to achieve. I very much doubt whether any firm has ever refused to divulge information requested by a Minister. This was put to the Government in another place and so far as I know was never denied. But now that they may be compelled to disclose information and the Minister may make such information available to trade unions, surely a firm may be more inclined to stick to the minimum disclosure which is required by law, with the result that they will disclose less than they would have done voluntarily before. The same is true of disclosure to employees. Again, we are entirely in favour of maximum disclosure of relevant company information to the employees. This is, after all, only good industrial relations and there are many firms where this already happens. But once make it statutory and specify that it should be divulged to a trade union or to a trade union representative, then you may get a far less satisfactory situation. Employees as a whole may suffer by being excluded from the process of information-giving, and the company may seek to restrict to a minimum the information given to trade unions. In other words, once again a trend in the wrong direction has been set in motion as a result of heavy-handed legislative provision.
The Bill has been recently amended, as the noble Lord told us, in respect of the disclosure of information but, with all its complications, it is the Secretary of State who in the final analysis decides. Admittedly, if he decides against the advice of his advisory committee, he has to make an Order subject to the Negative Resolution procedure; but such a procedure is not well suited to a decision of this sort and could be debated only with great difficulty and in ignorance of what the particular information was. Again and again over recent weeks we have heard Government spokesmen claiming that it is more democratic for decisions to be taken by the Secretary of State as he is answerable to Parliament. That may be true in general. It is true that he should be answerable in matters of policy, but it is surely equally true that

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the interpretation of the policy and the law should be left to judicial or quasi-judicial bodies. If the theory that it is more democratic for decisions to be taken by the Secretary of State because he is answerable to Parliament is carried to its logical conclusion, then I would suggest that the courts would become unnecessary. In the case of commercially sensitive information, I should have thought that an independent tribunal would have ensured justice and would have been greatly preferable to the elaborate machinery at present in the Bill, together with an advisory committee that can be overruled by a Minister.
As I said at the beginning, I believe that British industry has suffered, in comparison with its foreign competitors, from excessive Government interference and an unstable political situation. This Bill does nothing to improve that situation. It does exactly the opposite: it provides for increased Government interference and a further load of bureaucratic regulations. This is not the way to foster the confidence which is so necessary in industry; nor is it the way to encourage overseas firms to invest in this country. We shall seek to improve the Bill in detail, but it is a bad Bill and the only real remedy is to repeal it.
4.8 p.m.
Lord ROCHESTER: My Lords, we on these Benches thank the noble Lord, Lord Beswick, for his clear exposition of the purposes and provisions of this Bill. As we see it, this is really three Bills in one. There are the provisions relating to the National Enterprise Board; there are those concerning planning agreements; and, finally, there are those having to do with disclosure of information. We would much have preferred the Bill not to have sought to deal with all these matters at once. However, it does deal with them in that way, and so, if I may, I should like to deal with each section in turn.
I should also like to respond, so far as I can, to the lead given by the noble Lord, Lord Beswick, when he suggested that in this debate we should be as constructive as possible. Therefore let me begin by acknowledging that we feel there is a need for such as the recent British Leyland case to be handled in a rather bettter way than has occurred under the 1972
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Industry Act. We recognise that the National Enterprise Board could provide an orderly framework within which this could be done in future; but with the example of British Leyland fresh in our minds we feel that a statutory duty should be laid on the Board to prepare an inventory of the likely major needs of those firms and industries which are known, or thought, to be especially vulnerable. As we see it, this would afford some protection to Parliament from the process under which in the past Parliament has suddenly been told that it must vote almost overnight millions of pounds to help some ailing firm, otherwise hundreds of thousands of people would be thrown out of work.
We should also like the Board to be given the responsibility for administering the assistance provisions of the 1972 Act, and, in this way, to take that task away from Ministers and see that it is given to a body which is less political in its complexion. Perhaps the noble Lord who is to wind up the debate would be able to give us some indication of the Government's thinking on these points. Among the purposes and functions of the Board described in Clause 2 of the Bill there are some about which we have considerable reservations. There is the one which seeks to extend public ownership into profitable areas of manufacturing industry.
It is not only the powers themselves with which we are concerned, but the way in which those powers can be exercised. I realise that in Clauses 7 and 9 of the Bill financial limits are set on the powers of the Board for acquisition, but so far as I can see—and I am, of course, subject to correction on this—the first step towards the acquisition can be taken by the Government without any precise indication of purpose, without prior knowledge on the part of the firm concerned and without any rights for it to object. Management are rightly criticised when employees are inadequately informed or consulted, but I suggest that management are equally entitled to be consulted by the Government before such radical steps are put in train.
Another stated purpose of the Board is,
" the provision, maintenance or safeguarding of employment ".
That sounds fine and I noted what the noble Lord, Lord Beswick, had to say

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about the words of Lord Beveridge in the past. But if that employment is unproductive or brings with it no trading benefits, if it involves overmanning or the preservation of jobs simply for the sake of preserving jobs rather than creating new jobs and training people for those jobs, then it will conflict with another purpose of the Board which we would likely heartily to endorse; namely,
" the promotion …of industrial efficiency and international competitiveness ".
The question is whether the establishment of the National Enterprise Board in the form proposed in the Bill will in practice lead to an improvement in efficiency and in the competitiveness of British industry. Experience surely shows that nationally-owned undertakings and large miscellaneous conglomerates do not normally perform well in the matter of giving an adequate return on the capital invested, or in other ways. The Board combines the two undesirable characteristics. We should therefore like some consideration to be given to a more sectionalised or regionalised structure for the Board. I hope the noble Lord, Who is to wind up will comment on these aspects of the matter. So much for the National Enterprise Board.
May I turn now to the question of Planning Agreements. Clause 16 is devoted to these and it may be significant that in contrast to the treatment which Planning Agreements received in the White Paper they are dealt with in this Bill in only one clause. I have little to say about Planning Agreements as such. There must be many large companies who in recent years have voluntarily disclosed to the Government information in a planning connection. In the ordinary way I think this interchange might well develop into a Planning Agreement were it not for the provisions in the Bill concerning disclosure of information. It is to these that I should now like to turn.
I endorse what the noble Lord, Lord Aberdare, said just now, and would say that we on these Benches favour the disclosure by management to employees of the maximum amount of relevant information which is consistent with commercial security. But we have noted that, in Clauses 23 and 24 of the Bill—where a duty may be laid on a company to disclose information, first, to the Minister and, secondly, to representatives of rele
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vant trade unions—the information to be disclosed is in general the same in each case. Surely, my Lords, there is some confusion here. Why should it be thought that the information which is needed by the Government for the purposes of economic planning is the same as that required by trade union representatives for other purposes?
I know from my contact with industrialists, particularly those in international companies, that they are greatly and sincerely troubled on this score. They feel that an industrial undertaking which becomes a party to a Planning Agreement should not then be obliged to submit to mandatory further disclosure of information to other people. They also feel that the procedural arrangements for dealing with the matter—as outlined by the noble Lord, Lord Beswick, and appearing in Clause 25 and Schedule 5 to the Bill—will not adequately protect information that is commercially sensitive. It is surely true—and I noted what the noble Lord, Lord Beswick, had to say—that no other country handles its industry in quite the same way as is proposed in the disclosure clauses of this Bill. If it is passed, will not our business partners overseas, on whom such a large part of our trade depends, go in fear that the obligation of British companies to disclose information may also affect their business? Will this not damage our relationship with them and make it harder for new trading links to be forged in future?
Our view on these Benches is that, if the Government nevertheless persist with this part of the Bill and Ministers decide to serve a notice on a company to furnish information to representatives of relevant trade unions, the committee to which a reference may be made in certain circumstances by the company—composed, as the Government have in mind, of an employer, a trade unionist and a lawyer—should not merely advise the Minister (as is proposed in the Bill) but should itself take the decision in the case. I know that it has been suggested—and I am not quite sure whether that is what the noble Lord, Lord Aberdare, had in mind—that such a body should be composed of lawyers and act in a judicial capacity. We think that, in this very sensitive area, that would not be practicable. We think instead that it would be better for there to be an appeal committee.

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I do not want to develop this point further because it is a Committee point. Suffice it to say that by means of this decision-making appeal committee that we have in mind the Minister would be prevented from acting as judge in his own cause and Parliament would be prevented from acting inappropriately, as we see it, through the Negative Resolution procedure to which the noble Lord, Lord Beswick, referred as the final court of appeal.
If information disclosed to the Minister has ultimately to be passed on, then the question arises whether the legal rights to that information should belong, as is proposed in the Bill, to representatives of relevant trade unions who may, as I understand it, not even be employees of the company concerned, or, on the other hand, to employees or their representatives. We think that the information should be given in a quite clear-cut way to works councils; and at the Committee stage we propose to introduce an Amendment with that object in view. That is not to say that the information should be withheld from trade unions. It is rather to cover those companies in which trade unionists are in a minority or in some cases almost non-existent. In companies where there is a large trade union membership, employee representatives on works councils will themselves be trade union members. In the company for which I used to work they are now all shop stewards. That is fine. In such cases the information would therefore go to employees who were union members.
In earlier debates in this House I have made it plain that in my view 100 per cent. union membership is strongly to be encouraged. I adhere to that view. But the fact remains that there are many sections of British industry where union membership is small. We see no reason why in those cases employees or their representatives should be denied the legal right to that information. Before I leave this question of disclosure of information may I refer to the point which was made, indirectly I think, by the noble Lord, Lord Beswick, that in its original form there was in the Bill no obligation on the Government in turn to disclose information to companies with which they might make a planning agreement. That omission was remedied in Committee in
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another place, but at Report stage the Government sought to delete the relevant Schedule, now Schedule 4. I hope that the noble Lord who is to wind up this debate will find it possible to give us a categorical assurance that the Government will not in this House seek to reintroduce that Schedule.
Finally, I should like to soliloquise for a moment about the philosophy which it seems to me underlies at least part of this Bill. I am more than ever convinced —and the last few weeks have served to confirm this conviction in my mind—that if our national economic and industrial problems are to be solved the policies put forward by Government, any Government, must have the support of all Parties. If they do not, the next Government will reverse them and we shall be back where we started. The noble Lord, Lord Aberdare, says that if this Bill becomes law and the Conservatives are returned to Government it will be repealed. What better example could we find of what I am saying? I do not believe that this Bill satisfies the criterion to which I have just referred. And so far from being, as the Secretary of State put it in his peroration at Third Reading of the Bill in another place, a dynamic instrument for the regeneration of British industry, I think that for the reasons I have given it will fail in its purpose.
Of course, there is need in British industry today for better planning, more profitable investment, and improved productivity. But these desirable things will not in my view be brought about by means of legislation; they will be achieved only through the willing co-operation of management and employees. The Bill imposes quite a heavy burden on management as regards the provision of information, but no corresponding obligations are laid on trade unions. A sense of true partnership between management and employees is surely unlikely to result from an Act of Parliament which imposes on one party compulsion and on the other nothing at all.
In the same way, the Bill seems to ignore the substantial progress which has been made by a number of large companies in recent years in the matter of consulting with their employees. I know something about this matter at first hand and I fear that the Government's new approach may have the effect (I am sure

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it is unintended) of undermining what has been achieved in that respect. For example, the threat of compulsory disclosure to trade union representatives, without provision for any protection of confidential items thereafter, may well tend to inhibit the voluntary provision of information to employees. That can grow healthily only in an atmosphere of mutual trust and confidence. Like the noble Lord, Lord Aberdare, I am sorry to say that we do not feel that this Bill does anything to promote that atmosphere of trust and confidence. So, for the reasons I have tried to give, my Lords, we think that in many respects this is a bad Bill and we shall therefore initiate or support Amendments designed in the ways I have outlined to improve it.
4.28 p.m.
Lord PEDDIE: My Lords, I welcome this Bill and applaud the objectives that it sets out to achieve. When listening to the noble Lord, Lord Aberdare—I listened to him with great care and attention—I hoped that I should hear critical and at the same time constructive comment. But, instead of that, apart from opening with the statement that he disliked the Bill, which is understandable, he proceeded to introduce a series of strange contradictions. He applauded the principles the Bill contained so far as information was concerned, and agreed with the need for closer co-operation with the Government, yet he condemned the Bill. Then he went on to make the positive statement that he and his Party were pledged to repeal the Bill if they secured power. That is a pledge to repeal given before final consideration of the Bill has taken place. Before he has seen even the guidelines—and he criticised the fact that he had not had the opportunity of seeing them; and I join in that criticism—he makes a positive statement that his Party would repeal the Act. I suggest that that is an indication of utter political irresponsibility. I can only think—
Lord ABERDARE: My Lords, may I interrupt the noble Lord. He must realise that this Bill has been through another place and was considered in great detail there, and my Party have given their considered judgment on it, so I am not merely speaking for myself.
Lord PEDDIE: My Lords, the noble Lord places very little confidence in his
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own capacity and the capacity of his Party in this House to effect some variation in the Bill. I am really amazed at that, because I always thought that the noble Lord, Lord Aberdare, had tremendous confidence in this House and its capacity to make impartial judgment on Bills of this kind. But in finding some explanation for this statement, I can only speculate that he made it because he was quite convinced that there will be little prospect of ever implementing that pledge.
In opening my comments on this Bill, I anticipated that there will be no division of opinion on the seriousness of the economic situation today. I appreciate, of course, that there will be some variation in the views concerning the cause of the present economic situation. One can understand that and one can appreciate it. There is a recognition—or at least I thought there was—that inflation is a serious evil confronting the country and successive Governments have adopted a variety of plans to deal with the situation. I was amazed that the noble Lord, Lord Aberdare, seemed to be making out a case in order to justify his condemnation of the Bill; that is, that things were reasonably good in this country, that the attitude that was expressed by my noble friend in introducing the Bill was one of undue criticism of the economic situation today. I am amazed at that point of view, because I thought that there was general recognition that this country's record fell far short of what we would hope it might be. I speak with some measure of experience, with six long years at the Prices and Incomes Board where we had the opportunity to study in some detail the capacity of British industry to meet foreign challenge. There came the realisation that there was need and justification for tremendous Encouragement to secure greater efficiency.
We talk today about inflation. At the moment, the Government are busy, like previous Governments, considering a variety of measures, even gimmicks, to deal with the situation, but the answer to the problem of inflation is simple—so simple that nobody does anything about it. The answer is higher productivity; higher productivity not merely in terms of producing more goods but producing more goods at lower cost, developing a capacity to earn what we consume. My

935
support of this Bill is occasioned by the fact that I believe it makes at least some contribution towards bringing about a greater measure of efficiency within British industry.
It is accepted that Britain has a record of low investment. I do not think that can be challenged by anyone. It has been recognised that over the past decades —never mind years—Britain's relative position has steadily worsened in comparison with any other Western industrial nation. But, in addition to the seriousness of the situation with regard to capital investment—we may all be entitled to our different views as to why capital investment is low, and I shall not enter into those arguments now, but I shall enter into the argument concerning the deployment of existing capital—bad deployment of capital is a major factor bringing about inefficiency in the operation of British industry. Even in the days of "We never had it so good ", when the Party opposite was proudly proclaiming its great stimulus to industry, there were more Bingo halls going up than there were factories. That was a bad deployment of capital. For decades, British industry has been falling behind and I believe the major cause is our inability to adjust our economy to changing conditions.
I believe—and, again, it is a reason for my support of this Bill—that there is also a recognition on the part of industrialists of the need for Government intervention in certain areas. No one can reject the right—indeed, the dire need—to some measure of public intervention. Again, the Party opposite will recognise that the old philosophy of laissez-faire is now out of date; as dead as the dodo. Indeed, during the period of the Conservative Administration I read a Statement made in another place that their own direct subsidies to industry during their period of Office ran to the extent of £2 million a day. There is a recognition of the need for a mixed economy; I accept that and I believe that a form of mixed economy is right. But a mixed economy cannot be maintained unless there are in existence sound guidelines on which the industrial mixture can be maintained.
I have already mentioned the current state of the economy. What is it intended to do about that? To my mind, the Bill
936
has three basic elements. It provides a vehicle for effective and constructive cooperation between Government and industry. No one can deny the need for that. No one, regardless of his political prejudice, could possibly support a viewpoint that would deny the necessity for close co-operation between the Government and industry, and the instrument is provided in the National Enterprise Board. It is true that the real benefit that may flow from it will be determined by the quality of the people who are running it, and it will also be dependent to a large extent upon the guidelines. But no one can deny that the potential of such a Board is considerable. The objects are laudable. According to the Bill, they are to assist the economy, to promote industrial efficiency and international competitiveness, providing, maintaining or safeguarding employment in the United Kingdom.
So far as safeguarding employment is concerned, I should have preferred the words "generating employment". I hope the object is not expressed in terms of safeguarding jobs, because of necessity with a developing economy there must be a certain degree of mobility of labour. But if there be mobility of labour in the interests of industry, it is wrong to expect, as has been the case in the past, that it should be the worker who bears the full cost of those changes. At least, here we have an instrument whereby the mobility of labour could be encouraged without the present inevitable pressures upon labour itself.
Secondly, it seeks to encourage the flow of information. We have heard repeatedly of the necessity of improving the channels of communication between management and staff, and from long experience of 20 years as a director of one of the largest manufacturing and commercial wholesaling organisations in this country, I can say that we have found tremendous benefit from dealing not with one, two or three, but with more than 40 trade unions, constantly bringing them into consultation and giving them the maximum of information relative to the conduct of our business, and in our industrial record we compare favourably with any other organisation in this country.
My noble friend has already indicated that planning agreements of the character indicated here are already in existence in

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France, Italy, Japan and other countries, and have worked well. May I say this in supporting the general concept? The long-term strategy of industrial companies is of national significance. I would challenge noble Lords opposite to indicate any circumstances in which a large-scale company can embark upon long-term plans, unless it is in a position to secure the co-operation of either local authorities or Government. It is dependent upon public participation for roads, houses, education for training, telecommunications, and so on. Therefore, it is idle to talk about being able to get along without Government intervention in the development of agreements of this character.
But I agree that we need effective guidelines. I believe there will be a need for a greater measure of union commitment and union negotiation on these matters, maybe at the national level; but union participation must be at plant level. Of course, that is a problem we shall have to discuss at Committee stage. It is easy to say that we will have union participation, but in what way, at what level, and with what unions or group of unions? These are questions which might well be discussed at Committee stage. But I would remind the noble Lord opposite that they do not justify the complete condemnation of the Bill merely because we have not hammered out those guidelines.
My Lords, the Bill offers a prospect of far more co-ordinated development and better use of our capital assets. The capital assets of this country are not the sole property of some company in whose balance-sheet they may be recorded. In some measure, they are also the property and responsibility of the nation at large, and their ill use can be detrimental to the whole nation. Therefore the Government, in representing the people, have a right to proceed along those lines in order to make sure that we make the best use of such assets, and are justified in doing so.
I would utter one word of warning. Planning agreements must be concerned with long-range planning. I am sure that my trade union friends, with whom I have had negotiations in years past, will recognise that we must avoid the creation of another pay negotiation process within these planning agreements. I may also argue that these planning agreements need
938
Government co-operation. One can have a situation where manufacturers of, shall I say, television sets, having agreements for long-term development, suddenly find tremendous increases in VAT which completely distort the pattern of demand. In addition, we need greater co-ordination between Government Departments. I am informed that the operation of planning agreements in other countries has been most successful where there has been an effective exchange of long-term views, which have helped industry in obtaining greater knowledge of Government projections.
A great deal of the value of this Bill can be lost when it becomes an Act, if there is lack of co-ordination between one Government Department and another —the Treasury and those Departments of State which are concerned with the development of industry. But I am sure that those are points which will emerge in further discussion on this Bill. I am absolutely convinced that this Bill marks a really significant step forward in the determination of that form of association between industry on the one hand, and the people on the other, which can be for the benefit of both. Therefore, I give full support to the Bill.
4.45 p.m.
Lord ORR-EWING: My Lords, I am always glad to follow the noble Lord. Lord Peddle; I agree so often with so much that he says. Like him, I am in favour of a mixed economy; I think every realist is. I see the need for an efficient public sector and a very competitive and efficient private sector, but I do not go along with the Bill because I feel this is not the right time to further extend the public sector. We in this country have gone very much further than any other Western European country in the nationalisation process. Some 20 of our basic industries are nationalised. One has only to think of the performance of British Rail, of the steel industry, or of the announcement this morning by the Post Office of price increases, to realise that they are not by any means perfect. There is much work to be done within those industries already nationalised, without spreading this process any further. The tests one applies to business are profitability, return on capital and the like; but if you measure these tests against almost any one of our

939
nationalised industries, they fall very far short of the perfect on profitability, return on capital, manning, productivity, flexibility, or on the service they give to consumers or industry.
I was interested to hear the opening remarks of the noble Lord, Lord Beswick. His speech was made with his usual dedication and moderate approach. I was interested to hear that there will not be support for uneconomic companies. I hope this will be so, because one has only to look hack to see what happened to the Meriden motor-cycle outfit when they were offered a loan of £3·9 million of public money. It was stated at the time that this sum would not make it a viable operation, and now we have been told that a further loan of £15 million is necessary if they are to continue in business. So if this is to apply to the future, I can only say that it does not appear to have applied in the past under, I concede, not the present Industry Bill but the 1972 Industry Act. I am glad he said it, and I hope it will be endorsed. Perhaps we could write it into the Bill at a later stage so there is no question of transgressing that principle.
My Lords, I am also against further extension because, as the noble Lord, Lord Aberdare, said in his remarks, the National Enterprise Board will become an industrial conglomerate. About 15 or 20 years ago, these were glamorous bodies and were all the rage. I was always sceptical, as one who has grown up in the engineering industry, whether they made financial, economic and managerial sense, and now some of those doubts are coming home to roost. Clearly, industrial conglomerates are out of fashion, and this will be an industrial conglomerate.
I also condemn it because I do not know where these very talented people will come from who will man the National Enterprise Board. We are told that industry is short of talent and experience. Presumably they will come from industry, be taken away from industry, in order to pass judgments which apparently will be much wiser on where investments should be made, on what products should be produced, on what long-term research and development should be undertaken. This seems to be the snag. Industry is people. It is the judgment
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and leadership of these people and the integrity of the people in the new body which will count. We are short of the type of people needed. I would condemn it, therefore, on that further score.
My Lords, thirdly, I condemn it on size. This is the sort of body which will grow, like Topsy. I was one of those who supported the IRC. One of the reasons I did that was because it was a relatively small body, and if it made acquisitions to help a company get over a difficulty, it was obligated to sell the shares back to investors before it made other acquisitions. This seemed sensible, because one could help a company, then dispose of the shares and go on to acquire other companies, should they need assistance. But this is not so with this new body. It is going to grow and grow and grow. I think the one lesson of recent industrial events is that size does not make for efficiency and flexibility. In some companies with which I am concerned we have been at pains to break up our companies into autonomous units of about 600 people. That allows you a single layer of management, it allows you to keep in touch, and communications are much better. It allows you to control your finance and your plans with understanding and efficiency. I have a feeling that this great amorphous body will grow in size, and as it grows in size it will grow less and less flexible.
Lord BESWICK: My Lords, when the noble Lord breaks up these companies, to whom is the subsidiary company responsible?
Lord ORR-EWING: My Lords, to a holding company, normally; they report to a central holding company. The holding company in my case employs less than ten people, and they look after the group finance, budgets, and matters of that sort. They are still, of course, ultimately responsible to a holding group, but there are a very small number of people there. All the day-to-day decisions, the local budgets, the monitoring, are taken at the periphery. I think this is sensible. I do not want to develop this theory for too long, but I think it is not without interest that 600 has been a manageable unit size since Roman days; it was the size of the Roman battalion. Incidentally, it is the size of some of our more successful schools as well. Perhaps there is a lesson here to be applied to

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industry. I have a horrible feeling that this organisation is going to be all too big and therefore all too inefficient.
The noble Lord, Lord Beswick, went on to say that it was going to deal with the unsatisfactory position of productivity. I hope so, and good luck to it if it is going to do that. Certainly Governments have not been able to face up to this in the recent past. In the last few months we have seen Sir Monty Finniston desperately trying to shed 20.000 surplus people in our nationalised steel industry and not being allowed to do so. Apparently this body is going to be allowed to do so; it is going to be able to reduce overmanning, and, hope, the demarcation problems. I am afraid that I feel that this is an overstatement, that it may not in fact come into effect.
I am tremendously in favour—and my noble friends Lords Aberdare and Lord Watkinson have made the point so ably —of the maximum amount of participation and information between management and those on the factory floor, but I think we have to remember that a great many of the industrial companies in this country arc very small indeed; they are very important to the total wealth-creation of our country; they are the sub-contractors and the sub-sub-contractors to bigger firms. Many of these companies are not trade unionised at all; either they have no unionists or they have a handful. It seems to me unrealistic, in regard to the small and medium sized company, to lay down in an Act of Parliament that it should pass this information to a handful of trade unionists and not to the great majority of the firm. This seems to me to be a fault in the Bill which I hope will be put right.
I think the Bill was improved as it went through its long process in the House of Commons but again I find fault, even in its changed form, with some of the information which may have to be provided. It says in Clause 23—we will discuss it in detail later on—that information is to be provided on any intended disposal of assets. If one is trying to get rid of an uneconomic portion of one's business one does not want it known high, wide and handsome that it is uneconomic; one would have much less
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chance of selling it. It also says in the next phrase that you must announce intended acquisition of fixed capital assets which are going to be used. Equally, if you are trying to acquire a company which you hope will add to your strength and competitiveness, surely the last thing you want is to have it known that you are on the acquisition path; otherwise the price goes up and everything becomes more difficult.
Lastly, it says that knowledge of expenditure on research and development programmes should be made available. My Lords, I have been involved in high technology engineering all my industrial life. This is the one area which you really have to keep very close indeed to your chest. Nowadays, the period of gestation of a sophisticated product is often five years and may be seven or even ten. If you are making announcements on your research and development expenditure, that will become knowledge among your competitors all too quickly—and I may say that there is industrial espionage and the like and this may already become knowledge. I do not see why that information should be made available; it may be very detrimental to the business.
I was pleased to hear the noble Lord, Lord Beswick, say that the NEB will abide by the City Code. I think it is going to be very difficult to abide by the City Code. If you are going to provide that information to the trade unions, are you going to provide it also to all your shareholders? If not, you are giving privileged information to insiders—those working in the factory. Can we be sure that none of that information will filter across to those responsible for investing trade union pension funds? These invest very heavily in industrial undertakings. I admire the noble Lord's principle, but I hope he will look at this. Perhaps we could have the City Code written in, if this is to be the code by which the organisation will control iteself.
Then I turn to the question of fair competition. It is said that there is to he fair competition between the NEB and normal free enterprise. I think again it is going to be very difficult indeed—and I shall make a constructive suggestion later. When you are seeking finance —and I concede that it has to be on

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market terms if you are getting it from the National Enterprise Board—if you are becoming a Government firm, you have the Treasury standing behind you. Have we seen any instances of Government firms allowed to go bankrupt? If we have, they certainly do not come readily to my mind. More often one sees that pressure comes for Government orders, for defence orders to be put here, to be put there, to be put to Harland and Wolff, where unemployment was so serious. I feel that fair competition is going to be very difficult to achieve, both in finance and in Government orders. So if we are to set up an appeal tribunal of some sort—and the noble Lord, Lord Rochester, made this point concerning information—I should like to see it available to give advice not only on whether the information the Minister is seeking is justified but also whether the competition is fair. There must be some person to whom private industry can appeal when trying to compete with a Government organisation.
I take the view that for 16 months this Government, for reasons that we all understand in this House, have had to appease the trade union demands, particularly those from the more militant and difficult trade unions, and many of those in the nationalised industries. Now we are about to receive a package. I believe it was to be published tonight, then I heard it was Friday, and now I hear it is Monday. We are going to learn just what the nation is going to be asked to do in order to control inflation, an inflation which in this country is running at two to three times the rate of our competitors in Western Europe. The Government are going to need the support of people of all Parties and no Party in this House and in another place. I would ask them whether this measure—which I acknowledge has some good points in it, but which has some highly objectionable points—is really essential, in our desperate economic climate. Do we have to push ahead with this confrontation between Government and industry? If it is to go ahead, I hope it will be radically amended, so that we can give another place time to look at it again in the light of our present economic conditions and perhaps to make further changes and improvements.
4.59 p.m.
The Lord Bishop of WORCESTER: My Lords, I too, am grateful to the noble Lord, Lord Beswick, for his elucidation of this Bill, and indeed I am honoured to follow the noble Lord, Lord Orr-Ewing, after all that he has said. I find myself reflecting for a moment on the foundations of industry, on the fact that it rests very heavily on the ingenuity and initiatives in the nature of our indigenous workpeople, and on their responsibilities in smaller groups rather than larger. I reflect upon the fact that for years our industry has had very remarkable objectives beyond itself—of standards, of consumer needs, going out to meet the requirements of the Third World. It is not surprising, therefore, that when we are asked to consider a new Industry Bill there are very strong reactions. On the one side, this Bill could destroy the free enterprise system. On the other side, as was said by Len Murray himself, we urgently need a body along the lines of the National Enterprise Board to provide a public capability to assist in strengthening Britain's manufacturing industry.
So one turns to three issues, the first of which is the establishment of the National Enterprise Board. One has noted its constitution, its purposes and its functions. We note that there are certain restrictions on it, financial and otherwise. But I would ask one or two basic questions about the establishment of this Board. Can there be written into the Bill a reconciling of the conflicting purposes of maintaining and safeguarding employment on the one hand, and promoting industrial efficiency and international competitiveness on the other?
The National Enterprise Board has certain financial limits imposed upon it, but are there appropriate Parliamentary safeguards imposed upon its extensive freedoms? Do we want to create a situation where the ethical and social responsibilities of smaller or larger firms are replaced by cash flow? Is it not time that we looked not so much at prices and wages, but at values and services? Here I would endorse what the noble Lord, Lord Orr-Ewing, said about size. The purposes and functions of the Board have been mentioned, but it must be pointed out that the sum of money involved is small in relation to the known purposes. To regenerate industry, or to

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have a considerable impact on the 100 or 150 companies that have been named, would require a great deal more; as, for example, in the case of British Leyland. If the other purposes of the Board, such as the encouragement of industrial democracy, can be pursued only after the purchase of a financial stake in a company, it is reasonable to suggest that the development of these objectives will be very slow.
As regards the introduction of planning agreements, one would ask for certain questions to be considered. What are the conditions under which money will be allowed to flow? If accountability is to be increasingly towards the State, will this not seriously upset the balance of free initiatives within industry? These free initiatives produce any success that we know about. One could also ask whether the arrangements for planning agreements envisaged by the Bill, whereby companies with agreements obtain assistance at a guaranteed level, would lead to unfair competition? I have a feeling that there are real anxieties on that point. But let me say that one does not want to see a new Industry Bill founder, or be too dependent on guidelines.
Because money will flow to companies through this arrangement, it is necessary to bear in mind the mixed objectives of the Bill. For instance, a company has to take on board new social objectives, maintain employment, involve workers in its planning, and entrust confidential information to union representatives. The arrangement could be thought to be a kind of wedding between Government and the two main industrial parties, to promote industry both nationally and regionally. Many people query the amount of money which would be necessary to sustain this marriage and/or maintain its economic objectives. Others of us would be unhappy if the disclosure of information clauses were not much more closely tied to the planning agreement clause. Moreover, it has to be remembered that behind all the variety of industrial democracy with which we are experimenting today, there lies the principle of giving workers and unions responsibilities to match their power. I do not see sufficient of the concept of responsibility matching rights.
Lastly, one looks for a moment at the section on the disclosure of information.
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Again, I find myself asking some basic questions. To what extent should the element of compulsion be applicable in the disclosure of information regarding company affairs? In this whole concept of compulsion about disclosing information, should employees and shareholders have equal rights of access to information regarding company affairs? Should information about a company be disclosed to the officials of the relevant trade unions, for possible use in matters not directly concerned with that company? These points have already been outlined by noble Lords who know a great deal more about them than I do.
I also find myself asking whether information sharing will alter relationships, or change behaviour patterns to the good or the bad? There is no guarantee that the sharing proposed will change behaviour patterns for the better. In commenting on such questions as the need for a voluntary agreement as to how information should be disclosed, so that it may not be necessary to invoke the Act, I should say that a voluntary agreement on disclosure is much better than enforcement. The mandatory disclosure of information, as in Clause 21, has been changed and I do not need to refer to it, but the independent committee to which companies may appeal on disclosure will act as an advisory body. I think it must be pointed out that the Minister will be subject to the Negative Resolution procedure in either House, if he resists the advice of this committee. This we feel to be a very important Amendment.
Industry has been worried about disclosure, because unscrupulous people might use the information for personal gain, inside-dealing, et cetera. The present state of education and training within trade unions makes it doubtful whether they could process the new information that would be made available. It is to be recalled that trade union research departments are usually staffed by ideologists and activists, usually with inadequate facilities. This causes a good many companies anxiety. In most cases, it would be essential for a company to train and educate workers, and perhaps officials, as to how to use the information properly, and all the more so when a policy of industrial democracy is introduced. The disclosure of information to union officials is consistent with the Government's

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avowed aim of strengthening the power of unions. May it not also lead to a strengthening of their responsibilities? But the greatest worry about disclosure of information is that people will treat forward planning too seriously and take up positions.
I would point out in closing only that the Hudson Report, which I think was a Report given to the Bank of England, was rather disquieting the other day when it claimed that the City prefers to nourish foreign enterprise, rather than to renew our badly depleted infrastructure. If this is a fact, it has also to be remembered that investment has become the major concern of commercial institutions, and that the individual relies more and more on them, rather than on his personal investment acumen. By and large, they have taken a passive attitude to investment, ensuring the largest return for their policyholders. We recognise the dangers of this situation. In these circumstances, it is not surprising that Government seek a way to protect their national economic objectives and to provide a channel which will provide money to maintain them.
Finally, the critical question to ask of the Bill is whether it will do these things of itself, or create the opportunities for industry to regain its lost confidence. That strikes me as being the acid test. The Government are of the opinion that the National Enterprise Board will tackle the investment problem on a commercial basis. How it will operate depends on the guidelines that are produced. In very general terms, I am in support of this Bill. But I doubt whether the doctrinal basis of the proposed legislation will permit the Bill to achieve its objectives. It has certain very good objectives, and we recognise that fact, but it attempts to embrace too many of the industrial issues facing the nation all at one time.
5.10 p.m.
Lord SAINSBURY: My Lords, your Lordships will not be surprised when I declare that my views on this Bill are scarcely those of a dedicated Marxist. I consider the class-war oratory of the extreme Left as nursery talk. I have long believed that the mixed economy is best for Fritain and best for the continued growth and development of its industry. I therefore concur wholeheartedly with
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the White Paper, The Regeneration of British Industry, when it says in paragraph 1:
"We need both efficient publicly-owned industry and a vigorous, alert, responsible and profitable private sector working together with the Government in a framework which brings together the interests of all concerned—those who work in industry, whether in management or on the shop floor, those who own its assets and those who use its products and depend upon its success."
My attitude to public ownership is pragmatic and not ideological. Our failure since the war to achieve a growth comparable to our major industrial competitors is due to many causes. The first is under-investment, which is the fault of management and which is vividly illustrated in paragraph 3 of the White Paper:
" In 1971 investment for each worker in British manufacturing industry was less than half that in France, Japan or the United States, and additionally it was significantly less in 1972 and 1973 than in 1970."
The second is over-manning in parts of industry, which is the fault of both unions and management for letting it continue for so long in both the public and private sectors. And the third is of course our utterly dismal record of industrial relations, for which both management and unions share responsibility and which has resulted in the loss of so much valuable production through strikes and go-slow processes.
The National Enterprise Board is the chosen instrument for correcting some of these basic faults, particularly that of under-investment, and, in the enterprises it controls, by involving the employees in decision-making at all levels to achieve better industrial relations. But management must continue to have executive responsibility and be given the necessary scope for applying their skills efficiency must not be sacrificed. The opposition that the National Enterprise Board has aroused seems to me to be founded on hasty and excessive fears. In my opinion the Board is more of a bogey than a menace and it is nonsensical for the CBI to infer that it is the Government's intention to destroy the private sector of the economy as we know it.
It should be borne in mind that with the relatively modest purse of £1,000 million its impact on the economy is clearly limited. For example, if the National Enterprise Board used all its funds on one company it could just about

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afford to buy ICI at current prices. Thus, if the Board is to be effective over a number of industries and companies it will need the co-operation of the private sector and is likely to mean full-scale ownership of relatively few concerns. The White Paper underlines this need for co-operation in paragraph 4, when it says:
" Industry and the Government should also be partners in the pursuit of the objective which spells success for industry and prosperity for this country. This requires a closer, clearer, more positive relationship between Government and industry."
One thing the Board has to avoid is becoming a crutch for industry's lame ducks, or, to use Lord Ryder's words:
"…the biggest hospital in the country for sick industries."
At this point I wish to express regret at the Tories' hasty and unjustified action of winding up the former Industrial Reorganisation Corporation. Things might have been very different today if that ideological act had not taken place. It is perhaps a little easier to understand industry's reaction to requirements relating to the disclosure of information, particularly to trade unions, concerning the present and future activities of a United Kingdom manufacturing undertaking; but I should have thought that the disquiet among industrialists would have been greatly lessened by the Prime Minister's recent statement to the effect that the powers requiring disclosure are reserve powers and give a clear opportunity for voluntary arrangements to be worked out before there is a resort to compulsory powers.
To speak from my own experience, when I joined the family business over 50 years ago secrecy was carried to incredible lengths. For example, only senior members of the family were allowed to know the total turnover of the firm; and, incidentally, I was not at that time a senior member of the family. What a contrast to the present planned disclosure to all grades of employees of the most detailed information concerning present and future plans and financial results! This is now a common practice among progressive firms, of which we still have many in the United Kingdom. The age of autocratic management techniques is over. It is accepted by most people that the disclosure of information is part of good industrial relations and it is clear
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that, if consultation is to be effective in the interests of employees, union representatives must also be provided with the necessary information. Of course there must be safeguards, and Clause 25 of the Bill ensures the right of a person to apply for a direction releasing him from the obligation on grounds of breach of confidence. There is also an appeals procedure which can be invoked if the information is felt to be prejudicial to the company's interest. Clause 26 deals with confidentiality of information given to a Minister.
In my opinion, the Bill will fail in its purpose of helping the regeneration of British industry—something which we all desire in the national interest—unless employers and their spokesmen inside and outside Parliament cease their opposition and show a new spirit of constructive co-operation with the Government and the trade unions for the benefit of the people of our country.
5.22 p.m.
Viscount WATKINSON: My Lords, I shall always listen with the greatest respect to anything which the noble Lord, Lord Sainsbury, says and I hope he will not mind if I say that, as he based most of his arguments on the White Paper and as one of our complaints about the Bill is that it does not, despite assurances from very senior Ministers, follow the White Paper, he will no doubt support the Amendments which some of my noble friends will be putting down to bring the Bill back into line with the White Paper. Also, I cannot resist saying how pleased I was to listen to my old friend the right reverend Prelate the Bishop of Worcester. I felt that he very delicately dismembered the Bill, and I hope that the noble Lord, Lord Beswick, was listening carefully to his criticisms. What I really want to say, and I say it with great sincerity, is that many of us will remember the right reverend Prelate for his many years of very distinguished work in the industrial field at St. George's House.
I speak for myself in this House, as we all do; but I feel that it is only proper that I should disclose an interest—if that is what it is called—as chairman of the Companies Committee of the CBI and as Deputy President of that body. I very much regret that the House has to deal with this measure at this time. Despite

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what the noble Lord, Lord Beswick, said about it in his normal disarming and factual terms, this is a very divisive measure which is brought before us at a time when, above all, we want unity in the face of economic danger greater than we have ever faced. I feel that it is very sad that we have to deal with this measure at this time and that the Government have brought it here instead of postponing it as they should have done. However, we must deal with it as best we may.
I believe that it is perhaps not only the Bill that is important but the wider issues which it has raised. As my noble friend Lord Orr-Ewing said, few of us would challenge the concept of the mixed economy today. But I believe that most people wish the mix to represent a fair balance between State control and free enterprise. It is in the maintenance of that balance that there lies the real heart of the matter for industry so far as the Bill is concerned. Even the present Government have on many occasions made it plain—for example, in speeches by the Chancellor of the Exchequer and by the Prime Minister to the CBI—that they wish to see a vigorous and profitable free enterprise sector of the economy. We all know that such an attitude is nothing but common sense because free enterprise still provides nearly all the exports by which we pay our way in the world—something about which the Bill says not one word. Yet despite the assurances which the Government have given about wanting to maintain a fair balance in the mix, the Government have introduced what I really feel to be a rather sordid little measure. We all know that, in the words of the Bill's more activist supporters, both in another place and outside Parliament, it is designed not to regenerate British industry but to hand it over lock, stock and barrel to the State, without a single right of appeal.
Despite the protestations of the noble Lord, Lord Beswick, the main criticism which industry has of the Bill is that it makes no contribution to the increased efficiency and productivity which our nation needs at this time. Yet—and I do not think that this can be challenged, though, if it can, perhaps the noble Lord, Lord Lovell-Davis, will do so when he winds up—it certainly has within it the capacity and the legal right to do major
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damage to the whole concept of free enterprise. That is inherent in the purpose of every clause. Though I do not speak for the CBI as such, the CBI and industry oppose it, and not for doctrinaire reasons but because it will be capable of doing this lasting damage. I do not charge the noble Lord with wanting to do it, nor some of his colleagues, but we are not dealing with that situation. We are dealing with an Act of Parliament which can be operated by any Minister at any time. I say again that it has the purpose within it to do lasting damage to the very sector of the economy by which we all live. I do not believe that even noble Lords opposite would challenge the statement that if we remove free enterprise and the profit motive which sustains it from this nation, we shall cut away its very sinews. The British have always had to live by their wits but the natural wit of our entrepreneurs does not last very long under the stultifying effect of State control, as we shall see in the NEB, if it ever operates.
Nor is the Bill in any way justified, as some noble Lords have sought to suggest, by vague and untrue statements that the free enterprise sector has in some mysterious way failed the nation. We were regaled with a number of statistics about 1972. The factual answer to those is that, in the only recent period when British industry was allowed to make a little more profit and saw the chance of expansion once again—that is, around the year 1973—investment immediately leapt up. It will do so again immediately the State gets off the back of free enterprise and gives it a chance to operate within the disciplines of a free economy. Nor has the City of London failed the nation. We have not heard anything this afternoon from the Government Benches about the fact that, since the beginning of this year, the City of London has provided over £600 million of extra equity capital, more than half devoted directly to manufacturing industry. So there is no claim that in some mysterious way free enterprise or the City of London have failed the nation. They have done nothing of the sort, though they have been curtailed, cajoled, knocked over the head and then expected to provide better results.
Lord BESWICK: My Lords, I invite the noble Viscount, if he is going to tell

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us about the improvement which took place in 1973, to disclose whether that investment went into manufacturing industry or property, and I ask him to tell us what was the Budget deficit this year and what was the deficit on our balance of payments.
Viscount WATKINSON: My Lords, all these figures are well known and I need not waste the time of the House with them. However, what I will say to the noble Lord is that a group of leading industrialists with which I was involved towards the end of last year set out its considered alternatives to the Industry Bill. I do not suppose for a moment that the noble Lord has bothered to read a book called Industry and Government. If he had, he would have found in it a complete answer to everything that has been said today, both about the so-called failures of British industry and about the so-called lack of investment, although my noble friend answered most of those criticisms anyway. It is totally untrue that British industry has done a bad job over recent years, if one takes account of the fact that over all those years it has been hampered and curtailed by one Government after another—and I do not make a Party point about that.
In trying to produce this statement we endeavoured to be constructive, and I must formally say that on this basis industrialists like myself oppose the Bill in principle and we shall continue to do so, taking very serious acount of the pledge which the Opposition have given to repeal it in due course, if it eventually arrives on the Statute Book. If I may say so in defence of my noble friend, he is perfectly right, and constitutionally right, to indicate at this stage that if the Bill should reach the Statute Book, the Opposition in another place and here are pledged to remove it as soon as may be. We in industry welcome that, and we rely upon it.
After all that, as pragmatic people, we have to live with the Bill as it goes along. I have said what our long-term strategy is. Obviously, our short-term strategy must be in the national interest to make it as workable a measure as we can; and one that will do the minimum of harm to the free enterprise system by which we all live, including noble Lords opposite. Thanks to the efforts of the Opposition in another place, and to representations
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made by the CBI and others to the Prime Minister and other Ministers, we have at least made the Bill a little less bad. I hope that the very great experience that your Lordships' House can bring to these matters will improve it further; and that must be our immediate objective.
I now turn, my Lords, to just two matters which I think are the heart of the Bill. No doubt there are those who believe that the National Enterprise Board has a key role to play in the economy, and that the Bill is necessary for this purpose alone. Of course, the National Enterprise Board can be a lender of last resort. Nobody challenges that, because if it is not there, the Government themselves have to be the lender of last resort; and nobody challenges that. It can also, of course, be a custodian of Government shareholding in existing companies —nothing wrong with that, if one wants a particular institution just to do that job. These could be useful functions. But as for the Board's takeover role—and that is what it is—particularly so far as profitable ongoing industry is concerned, my advice to those industrialists who feel that possibly their cash needs may outrun their bankers' willingness to lend (because they no doubt would be the first applicants to the NEB) is, first, to seek the advice of Sir Henry Benson, industrial adviser to the Bank of England, and then to go to Finance for Industry for funds; and only at the very last desperate resort go to the NEB, if, in the end, we have to face this particular body.
As these alternative sources of advice and financial recourse are available, in my view and in the view of many other industrialists, it is quite improper to allow the NEB, with public money, to buy packets of shares through nominees, or to go playing the market by what is known as "warehousing". I was very glad that the noble Lord gave the pledge this afternoon—which some of his colleagues had also given—that the Board will not be allowed to do this. We shall look with great interest for the appropriate Amendment on the Marshalled List, because I am afraid I must say that assurances in this area are not good enough. I ask noble Lords please to note that I do not mean that in any unpleasant way to members of the present Administration. It is our job

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—if this Bill is to be an Act of Parliament —to leave it as fool-proof as we can for the long-term future for any Minister. Therefore. I am afraid that assurances from existing Ministers do not really cut any ice at all; they have to be written into the Bill.
Let me give one final example of criticism of this measure. This concerns a subject very near my own heart—the participative operation of British industry. Two years ago the Company Affairs Committee set up by the CBI under my chairmanship published its final report. In it we said:
"The board"—
meaning any board—
" has to forge closer relationships with its employees towards a common purpose. This must be to secure a wider participation in the processes of decision-making on the part of all employees."
Because I do not think you should ask people to do things that you are not prepared to do yourself, I tried to make my own large company, of which I was then chairman, the test bed for this concept of wider participation in decision making. Thanks largely to the initiative of some of our leading trade unionists—some of whom, I think, the noble Lord may know—and to the support of our largest leading union, the Transport and General Workers' Union, and its senior officers, we made participation work. Since then many other leading companies have gone down this road, and a greater degree of participation—and it is only fair to say that the noble Lord said this—is one of the major objectives of CBI policy. We have just taken another step in this direction by publishing the document which the noble Lord mentioned, The Provision of Information for Employees.
We have put in an enormous effort in this area, and many companies have done it before—ICI is a notable example. Now what will the Bill do? Clauses 22 to 26 will, as noble Lords on this side have said, negative nearly all the good work that has been done, because participation of the right kind rests on an organised voluntary policy; discussed on the shop floor, in the board room, and on every level. Once you apply legislative rules—I must not seek the support of the right
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reverend Prelate, but I listened rather carefully to what he said about this—and once you try to institutionalise this, you will ruin the whole concept. I know that the noble Lord will say that the powers are at the discretion of the Minister and that companies who conduct these affairs in a good and sensible way will not be made subject to the rules of compulsory disclosure. To be fair, the noble Lord has been more than courteous to me and has tried to explain all of this to me, and I am very grateful to him for that. Again, to be fair, so did Mr. Varley and other Ministers.
I am afraid I must stick to the point that this could have been made a much more simple operation. All this cumbersome apparatus of appeal could have been removed. This area should be subject to rather more simple amendment; it could not be more simple. I admit that for a want of something better we have to leave it to Ministerial discretion —unless the wit of my noble friends can find a better way—and say quite plainly that where the Ministers, or his advisers, are satisfied that any company is giving a proper degree of information to its employees and to those trade unions with whom it deals in the processes of collective bargaining, then this part of the Bill does not touch them at all. I must say to the noble Lord that if this is not done, then in the end more harm than good will be done in this very sensitive area upon which the good relations of British industry in the future largely depend.
There are many other aspects of the Bill to which I object, but I do not wish to detain your Lordships' House for long. I want to try, if I can, to end on a somewhat more constructive note, and return to the background to the Bill, rather than the details of it. I assume that this Bill must be seen in the context of Government policy as a whole, and industrial and political pressures, with the onset of even harder times, have brought the Government (I hope, at least) to a more central stance. If this be so, then, my Lords, this is much to be welcomed and encouraged, and I hope that this will be shown by the Government's further conduct of this Bill. I must say—and if I believe anything I believe this—that our country will not solve its great difficulties

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unless men and women are determined to work together to solve them, although in this process they do not in any way have to abandon their beliefs, political or otherwise.
This Bill was designed to meet a largely illusory crisis in British industry, a crisis fudged up by those who invented it in order to provide a Bill to solve it. Now we are faced with a real crisis of greater magnitude than anything that this nation has faced before. I should at this moment be visiting another place to find out what are some of the solutions, but I felt that I would rather speak in this House. I feel passionately about this issue. I feel that the Government are making a very serious and damaging mistake, and I pray that they will try to listen when we attempt to rescue them from some of the things they are doing wrongly.
I end by saying this: we face the greatest crisis we have faced in industry. We shall only solve it together, brushing on one side those relatively few people—and I think that here I share the views of the noble Lord, Lord Sainsbury—like Communists who want no agreed solution, other than the totality of their own doctrine. Therefore, I hope that both sides might compromise on the further stages of this measure. Much more important, I hope that the Government will now, by wide consultation and fair and balanced policies, seek to draw the nation together to win the battle against inflation. It is only fair to say that the course of the past few weeks encourages me to believe that perhaps they are beginning to do this. It will not be easy after so much that has been bitterly divisive, but it is the only course that can save us from domination by our foreign creditors—which I do not think we shall like very much. This is how industry will seek to face the issues behind the Bill and the much more important pay and prices measures which I think are to come upon us. If they are fair, if they call for the maximum collaboration from all sides with as little legal interference as possible, then, without in any way abandoning our beliefs, we will do our best to co-operate with the Trades Union Congress and the Government in this Bill or in anything else to see our country through to better times.
5.41 p.m.
Lord HOUGHTON of SOWERBY: My Lords, although I have sat through this debate so far, I regret that I shall probably have to leave this House before the debate is concluded owing to an unavoidable engagement. The noble Viscount, Lord Watkinson, regretted that this Bill comes before us at this time. But this is the time for this Bill, and indeed the Government, I think rightly, regard it as of some urgency so that the National Enterprise Board and the other provisions of the Bill may go into action to relieve the financial difficulties of many firms which are awaiting the kind of help which was given under previous Industry Acts, and which will be given under this one.
I was rather sad to hear the noble Lord, Lord Aberdare, speak of repealing this Bill. It is certainly within his constitutional right to do so; but I think that there are far too many forward pledges being made in politics today. Had previous Governments, including the present one, been a little more cautious about the pledges they gave only months ago in conditions of rapid and dramatic change, their political difficulties might have been smaller than they are. I think that it is a great mistake if Parliament after Parliament is to be a repeal Parliament; often on the narrowest electoral margin, one Parliament undoing what a previous Parliament has done. This will be bad for politics and bad for Parliament, with a real danger of creating recurring situations of uncertainty and doubt. I hope that this bold promise to repeal this Bill will at least be muted until there has been an opportunity of seeing what it does in practice.
This is an attempt, I think long overdue, to bring into positive contact and co-operation the three elements in our industrial affairs—managements, trade unions and the State. I can make a similar appeal in my peroration to that just made to the House by the noble Viscount—from a somewhat different standpoint but with the same aim and the same emotion to achieve the same result. I think we have to bear in mind that we are perhaps divided by our means but united in our intention, and we have to try to get the conciliation necessary to achieve that common pur-

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pose in common accord. I think this is an essential part of this Bill, as of other measures at the present time.
The most contentious and excitable part of the trinity that I have mentioned is the State. A lot of industrial managements look upon the role of the State with distrust. They dislike it. They call it interference. The noble Lord, Lord Aberdare, used that word; the noble Viscount a few minutes ago used the same word—"interference" or, at least, "intervention". But bear in mind, my Lords, that there are a number of firms who have come to the State in recent months for the means to continue their business, for the means to avoid the serious collapse of their affairs. It was not regarded as interference then it was regarded as ready and welcome aid. Let us get a better understanding of the terms we use.
It is true that under all Governments of recent times, including Conservative Governments, there has been a suspicion between industry and Government; and Mr. Heath when he was Prime Minister did not enjoy the full confidence and good will of industry which he might have expected. Britain cannot afford, within this most vital sector of our economy, distrust and ill will and something must be done to get rid of those two disadvantages in our present relationships. As my noble friend Lord Beswick said, in Europe they have got rid of it; and unions and management have found a closer identity of interest than we have. One might go over there to try to find out why. In France, Italy and the Netherlands, for example, planning agreements are a recognition of mutual self-interest between Government and industry. There is evidence that a consensus policy can work. There is really nothing new in this. It seems to me that in present conditions it is common sense.
My Lords, why has there been so much fuss about this Bill? It is probably because those who were sponsoring it and those who have had to comment on it have become too excitable and too articulate about what it would do. This Bill has undoubtedly suffered from the kind of atmosphere in which it was debated in the earlier stages, and we have to try to subdue whatever we feel about that. We are dealing with a Bill whose practi-
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cal aspects have been applied with considerable success in other parts of Europe.
I believe that sectional antagonism in this country has continued for far too long. Like my noble friend Lord Sainsbury, I am a firm believer in a balanced, mixed economy. I think that we all have to try to arrive at what that balance is and what changing conditions may require in adjusting the balance to different times. We have not only to concern ourselves with the prudent management of industry, but we have now to concern ourselves with the prudent management of the nation's affairs. Do any of us believe that private enterprise, either individually or collectively, can take the overall view of the national interest? Governments must have that responsibility and their judgments must be subject to debate and appraisal. But in these complicated conditions we have to concede to Government more than we have done before in the role of guidance for our economy and assistance to particular sectors of it to stimulate production, to show new initiatives and to encourage growth points in our industry and in our exports.
The State cannot be dismissed from the scene. No future Government of whatever political complexion will be able to fold their tents and go away, however much some people hope they will. Those days are gone. I believe that major gains can be obtained from closer relations and not from more distant and antagonistic ones between industry, financial aid and Government-sponsored planning, Government commitments on industrial investment and the like. I think we should welcome the involvement of Government in industry, provided that they know what they are about and provided also that they respond to the mood of the nation, of industry and of the trade unions in finding what the Prime Minister constantly reiterates, which is consent and consensus. That, I think, is the object of this Bill and it would be a mistake to read into it anything to the contrary.
I admit that a good deal of suspicion —which has turned out to be unnecessary—attaches to the use of the words:
"The extension of public ownership into profitable areas of manufacturing industry."
Both the noble Lords, Lord Aberdare and Lord Rochester, referred to these words

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in the Preamble and the Bill itself as being part of the functions of the National Enterprise Board. I can tell your Lordships from personal knowledge that this is pure manifesto, every word of it. I do not think it is any longer justified by the contents of the Bill. It is a piece of political doctrine—and who can blame a Labour Party and a Labour Government for putting in any measure of this kind an indication of its ideological objective? But I believe it has to be kept strictly under control for the sake of gaining the confidence of private enterprise which is indispensible to our economic recovery. As has been said, we must treat them as reserve powers for use only when that kind of initiative is essential.
Regarding the National Enterprise Board, we must welcome the fact that it will not be merely another merchant bank. It will have powers of initiative. It will have powers of looking into the structure and management of companies. It will be able to look at the industrial relations in enterprises where it might have to go. The Secretary of State remains fully accountable. The powers of the National Enterprise Board are limited, and the Secretary of State has to account for what is done in this particular direction. It is important to assure industrial undertakings that co-operation with the Government and the National Enterprise Board will not put them in an exposed position or in danger of a takeover by the State for political reasons. I think that should be done only when there is no other way of ensuring the greater certainty of industrial success.
Subject to all that, industry will find that planning agreements with sponsoring departments will expand and improve prospects and free industry from some of the irksome features of going to the joint stock banks for finance. It will help to make employment more secure, not necessarily in the particular enterprise, but perhaps in the same area in another and more profitable enterprise, one with a future. And this is another great problem at the present time—the way in which we tend to keep alive redundant industries, afraid to let them run down fearing the social consequences of redundancy and unemployment, but unable in present circumstances to provide the alternative to that industrial tradition
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of particular areas. There is a great deal which needs to be said about the constructive effort and enormous possibilities for good that can come from this Bill.
The benefits of the Bill will come in when the politics of it go out and when we can get down to the practical work of utilising the powers which the Bill provides. I believe that the Government Departments have a duty to understand their wider role and responsibilities as well as industry. It will take time to reap anything like the full benefit from this Bill, and we are desperately short of time. We are an industrial nation heavily dependent upon industrial earnings, and we have neglected the very sector of our economy which matters most. We have elevated the slick financiers, the speculators, the asset strippers, to the eminence of pop-stars, while goading successful industrialists into a feeling of guilt. The nation has its values upsidedown, and it is outrageous. On the question of exchange of information, I hope that the Government will be content to retain in the Bill those provisions of Schedule 3 which were put there by another place although the Government did not like them. I think they should be there and the Government should acknowledge their responsibility to provide information to industry, as well as for industry to provide information to them.
Now I want to say something about the trade unions. I was glad that the noble Viscount referred to these, because I will do the same. I do so as a former member of the General Council of the Trades Union Congress. I was a member for ten years. For over 30 years I was secretary of a public service trade union. I am not a union "basher" but I claim the right to speak to the trade unions about trade unions. I believe faster progress is needed now in formulating the British model of industrial democracy. The trade unions should get on with it. Also, the CBI should play their part in looking at what is happening in Europe and at what is contained in the new proposals coming from the Commission, and generally informing themselves on how our successful rivals managed their industrial relations.
I believe nothing reveals the failure of both sides of industry to develop that relationship to meet the challenge of this

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Bill more than the constant rather puny and pathetic reference in the Bill to consultation with the relevant trade union. My noble friend Lord Peddie referred to this, and there is an interpretation clause on page 28 of the Bill, Clause 30, which tells us what a "relevant trade union" is. What is the relevant trade union of British Leyland? What is the relevant trade union at the Ford Motor Company? What is the relevant trade union in Fleet Street and the printing industry? I could mention dozens more. In Europe they would be referring a Bill like this to the works committee or the works council and referring, if need be, to the supervisory board. I believe that greater opportunities, not to mention additional responsibilities, will be offered to unions in this Bill, and in my judgment they are not yet equipped to accept them, to utilise them fully and make the fullest use of the information they may seek and get.
Where is the machinery, the willingness, the ability to fulfill this new and responsible role? When I looked at Mannesmann Steel Works in Dusseldorf, I saw the works council on a vast block in the industrial complex with 11 members of the works council released full time for works council duties. Into that office block was going a constant stream of information from every part of this vast enterprise from the board room and so on. Nothing like that, so far as I know, exists in this country. British trade unions, with their own history and traditions based upon conflict, and having in many cases a political hostility towards the capitalist system, will have a very big adjustment to make if they are to play their industrial role envisaged by the Bill. This is the imperative, and only this Bill can be put behind this imperative. This will require the reconciliation of conflicting interests and the need to reach out for the community of interest within agreed procedures for participation.
The trouble is that at present trade union demands are all too frequently made in an atmosphere of discord. This Bill must surely envisage that they should emerge as mutual benefits from a more harmonious relationship resting upon a fuller understanding. I think trade unions will have to develop a much more sophisticated approach to that which they are
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seeking to achieve for their members. Participation and co-operation in decision-making must replace protest and narrow sectional interests. The unions will have to develop their educational training schemes enormously to be fit for this job. In Denmark a small trade union centre there—smaller than the largest trade union in Britain—has eight educational centres for their shop stewards, for the members of the works council who are trained to understand the problems of management, its finances, its organisation, its export problems and the rest. This is the way to get full co-operation.
By this Bill trade unions and shop stewards are given a one-third share in the planning of the nation's growth, and I do not think it is impertinent to suggest, with some humility, that it is their duty to make themselves fit for it. This Bill cannot draw upon any firm expectation that the workers and the unions can play their part unless these things are done. I believe that the whole Bill needs underwriting speedily by agreed forms of participation, changing company law if need be. The European models in Western Germany, Holland and Denmark are there, working models every one. Those countries cannot believe how disorganised we are, considering the multiplicity of our unions, the overlapping of membership, the demarcation squabbles and all the rest. This contrast, as I have told your Lordships before, is absolutely unmistakable. There are former members of the General Council of the Trades Union Congress in your Lordships' House, as I am myself, and I hope I am not presuming if I say that I probably speak for them, too, in saying that we want to see those who work in the productive sections of industry to pull their weight on both sides in the supreme national effort which is urgently awaiting us all.
6.2 p.m.
Lord CULLEN of ASHBOURNE: My Lords, I understand there has been some criticism recently that the views of those who work in the City are infrequently heard in your Lordships' House on such matters as we are debating today. Therefore, although there are many of your Lordships better qualified than I, I decided briefly to try to remedy this situation. I must first declare my interest,

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as a member of the Stock Exchange. As one who is going through an extremely gradual metamorphosis from a backwoodsman to a Back-Bencher, I seem to have selected a very complicated Bill on which to speak.
I am entirely in favour of voluntary planning agreements between Government and industry. The closer the liaison, the less likely it is that well-intentioned Government policies will turn out to be disruptive rather than helpful. The three major Parties are all committed to the maintenance of a mixed economy, though the constituents of the mix may vary. So the more the Government know about the problems and aspirations of industry and commerce, the better. What I regard as being extremely unwise and potentially very dangerous is the colossal responsibility and power that it is proposed to place in the hands of one Minister. Personally, I am in favour of a more traditionally conservative conception of Government, where the Government are responsible for the defence of the Realm and the keeping of the public purse—responsible in effect for providing a solid foundation on which industry and commerce can build the wealth of the nation and a steady economic environment in which long-term plans can be made with reasonable confidence. Since, however, intervention by Government seems to occur more and more, whichever Party is in power, it would be unduly optimistic to expect a return to the system which was in force when we were a very great nation. If, therefore, one assumes that intervention is, at any rate for the present, to be the order of the day, let us try to make it work as well as possible. Let us amend this Bill so as to make it sensible and effective, and remove anything which would cause reasonable men and women to withhold their co-operation.
I agree with so much of what the noble Lord, Lord Houghton, has just said. It is not only the present Government which have criticised industry for not spending more on re-equipping or on modernisation, and the City for not providing the necessary funds. That some industrial companies have insufficient capital investment is manifest, though there are very many of them who have invested very fully over many years. I do not accept that the blame lies either with in-
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dustry or with the City for such failures as have existed. I place the main blame fairly and squarely on the radical and abrupt changes of fiscal policy caused by U-turns of the Government in power and the differing policies of successive Governments. I refer of course—and here I am paraphrasing what has been said by the City and Capital Markets Committee—to such things as stop-go, nationalisation, denationalisation, re-nationalisation, threats of nationalisation, frequent changes in tax rates, alterations in grants and allowances, varying controls, prices, wages, margins, dividends and so forth. Worst of all is the knowledge that legislation brought in by one Government will in all probability be repealed by their successor. In that connection, I hope we shall so amend this Bill that the future Government will not have to repeal it. How, in all conscience, can industry expect to plan ahead with confidence, against such a constantly changing background as I have tried to outline?
The same argument applies as regards the role played by the City. So far as I am aware, though there may have been instances between the autumn of 1973 and the autumn of 1974, no worthwhile capital projects have been held up in the last 10 years because City institutions have failed to provide funds. It may not be sufficiently well known that, as the noble Viscount, Lord Watkinson, mentioned just now, the amount of capital already raised in the City, mainly for British industry, during the last six months totals £765 million, of which £637 million were rights issues of equity capital. Noble Lords may be interested to have a breakdown of that latter figure. It is as follows: capital goods, £121 million; consumer durables, £23 million; consumer non-durables, £124 million; other industrials (chemicals, oils, et cetera), £108 million; financial, £197 million; and commodities, £61 million.
Considering the financial uncertainties during that period, this was by any standard a very remarkable achievement and it is clear proof of the financial support which the City—and, may I emphasise, also the much maligned shareholder—has given towards the expansion and modernisation of our industry. The

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oft-repeated accusation that institutions are more concerned nowadays with speculation rather than with long-term investment is very wide of the mark. The actual position is that the inconsistencies of Government make long-term investment so hazardous as to be virtually impossible, and fund managers and other serious investors are forced to take a much shorter view than they would like. By the same token, stockbrokers greatly prefer economic conditions where investment can be planned well ahead with reasonable confidence, instead of being dependent on the will-o'-the-wisp character of speculation.
One extraordinary omission from the Bill is any reference to shareholders—who are, after all, the owners of the companies in the private sector. Most shareholders are not millionaires but ordinary hard-working people of every type and group of our country, including many individual trade unionists and trade unions. Clauses 20 to 24 deal in detail with the subject of disclosure of information to the Minister which, it is proposed, he may obtain by compulsion and pass on to representatives of trade unions without any compulsion on the company concerned to pass that information to shareholders at the same time. The Government's views about insiders are well known, and I should have thought that insiders with union cards would be no more popular than those without them. In accordance with the Stock Exchange listing agreement companies quoted on the Stock Exchange are obliged to disclose publicly all information that has been privately disclosed, which directors consider might be price sensitive. In my opinion, and I am authorised to say in that of the Stock Exchange Council, it would be far better if all companies, whether officially quoted or not, were compelled by law to publish all information disclosed to union representatives. This provision would have the advantage of removing from directors the onus of deciding whether or no information given under the terms of the Bill was price sensitive. This also covers the case of companies not listed on the Exchange.
There are many other aspects of Clauses 20 to 24 which cause concern in the City. These are, briefly: the nature and extent of the information requested,
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the danger of leaks within Government, the apparent advantage to small undertakings over larger ones and of foreign competitors over United Kingdom undertakings. There is also the danger that foreign companies may prefer to set up their European headquarters elsewhere than in this country. These are important matters.
I consider that one of the most alarming features of this Bill is the licence given to the NEB to make substantial investments in companies against the will of those companies. Whereas the noble Viscount, Lord Watkinson, said that this really amounted to an ability to carry out takeovers, the noble Lord, Lord Beswick, said that that was not the case; so I am not quite clear on this point.
Lord BESWICK: When the noble Lord says that that power is given to the NEB, will he say to which part of the Bill he is referring?
Lord CULLEN of ASHBOURNE: My Lords, I think it is Clause 9 of the Bill, but I am saying that from memory. As far as I understand it, under Clause 9 the Board can go up to 30 per cent. Is that correct?
Lord BESWICK: Only with the consent of the owners of the company.
Lord CULLEN of ASHBOURNE: I thank the noble Lord very much for putting me right on that. Obviously, I have got it wrong.
Finally, my Lords, I should like to say how grateful I am to the noble Lord, Lord Beswick, for having given us the assurance that the NEB will be subject to the provisions of the City Code and to those of Section 33 of the Companies Act 1967 relating to notification to a company of the acquisition of a substantial stake in its equity. To me this Bill has all the appearance of the curate's egg. Let the bad parts be excised or we shall all be poisoned when the whole Bill is finally swallowed.
6.14 p.m.
Lord STRANGE: My Lords, I must apologise for getting up at the right time which is the wrong time, or the wrong time which is the right time—I am not sure which. The point is that I do not see very well and I thought there was another speaker before me, but now I

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know and I apologise. I shall not make a speech; that would be wrong. It is often said that this is the finest debating society in the world, and it is so good that I agree it could almost be described as that. Through no fault of my own, because of flight delays and one thing and another, I arrived very late in the day, so I missed all the leading speakers. Therefore, I have nothing to debate, and all I could do is launch off on my own, which might be quite funny but not necessarily a very good speech. I will read the Report of the speeches and form an opinion about the Bill tomorrow. I think that is the only fair thing to do. I thank your Lordships for listening to me so far.
6.15 p.m.
Lord RHODES: My Lords, may I apologise in advance for having to leave to catch a train North in a short time? I used to regard it as an unpardonable offence not to stay until the end, and I hope that the Front Bench does not have that opinion now. I never thought I would hear again of an attempt to repeal a Bill of this description. Over the last few years we have become sick and tired of undoing other people's work, simply because we have never been able to get down to what the Prime Minister has asked for for so long—a consensus as to how to run a mixed economy. It would need only a few basic principles to do just that.
About 12 months ago, the Government published a White Paper, The Regeneration of British Industry, which was a first-class job. Its declared object was to ensure a vigorous, alert, responsible and profitable private sector, and investment was to be the means of achieving this. We were told we had a job to do. We were told how France, Japan, Germany and even Italy have beaten us in the investment field. Any intelligent or successful manufacturer who knows his business will tell you that the pre-requisite for investment is confidence in the economic environment. If he does not have that, he shies like a horse at a blowing piece of paper. I think we are on the wrong tack with this demand for investment. Surely in this day and age we should know precisely what each industry needs to make, to be able to renew on the basis of technological advance, or to be able to install equipment for additional pro-
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duction. I went into that at some length on Tuesday, and if anybody is interested he can read the report of my speech, so I will not reiterate what I said.
The question arises: does this Bill give more confidence or less? I should say quite categorically that, as it stands, the Bill gives less confidence. But we have it in our power to amend it, and my reasons for saying that are these. The Bill is not a true reflection of the White Paper. I sincerely believe that industry assumed that the White Paper was not only informative, but consultative as well. This is important. I believe, too, that industry in general assumed that it must plan on having to carry out its main provisions. Industry had decided that, as the White Paper laid great emphasis on better planning between Government and industry, it was reasonable to assume that this would be the main burden of the Bill when it appeared. But there are grave omissions.
The subject of planning agreements took up 12 of the 32 main paragraphs in the White Paper, but in the Bill it is reduced to one clause and a few minor references. Having had a good look at the Bill's Preamble, I do not believe it is mentioned there at all. Why is the subject of planning agreements so unimportant now, in comparison with the situation 12 months ago? The White Paper emphasised a full exchange of information between industry and Government as an essential part of planning agreements. When the Bill came out there was little mention of the information to be expected from Government. The Commons rectified this in Committee by Amendments, but when the Bill reached Report stage the Government proposed to delete them. Fortunately, Labour Back Benchers rallied and put back the Amendments and they are in the Bill in the terms of Schedule 3. Labour Back Benchers restored one of the most valuable Schedules to the Bill. But the question remains, and I ask it: Why are the Government unwilling to participate in the planning process?
The White Paper said that information provided by industry for planning purposes would be used solely for planning agreements, but that assurance does not appear in the Bill. I think a little more confidence would be given to industry if it were put in the Bill. Why not? Why

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the reluctance to give that assurance when, by so doing, we could obtain co-operation on a scale we have not had before? We cannot blame industry for being suspicious and apprehensive and fearing the worst if that assurance is not forthcoming. The White Paper said that the Act would provide only reserve powers regarding disclosure of information; and the Bill as amended at Report stage hardly acknowledged this. There was an attempt to remedy that situation. Whether the Bill preserves the voluntary element specifically mentioned in the White Paper, I doubt very much. If we could have a guarantee that this was so, I think the Bill would have an easy passage; the Government would rally support to the philosophy lying behind the Bill.
Since the war every Government have had their own pet agency for industrial and economic affairs. Often when there was a change of Government the agency was dismantled and an almost similar one elected in due course under another name by the new Government. More often than not, it was created by a powerful political figure given his head by the Prime Minister to keep him quiet. Those who have been in politics as long as some of us have, know this to be so. We could recognise these figures throughout the years and do not need telling about them. There was, of course, no better instrument for all these purposes than the old Board of Trade. They really understood the customers. It is sad that it is not envisaged to use the services of NEDC, an organisation which has planning objectives and where Government, industry and unions are already working together. I do not think there is any doubt that we could get a first-class service for this very job from that organisation—in particular, as the noble Lord, Lord Aberdare, mentioned, in the sector of planning; it could be pursued much more quickly and effectively through NEDC committees than in any other way.
No board that we set up can take the place of willingness to work and national pride in what we make. The sooner we get away from this idea that it is easier to make money by spivery than by hard work, good company management and loyalty to good company management, the better it will be. Until there is a
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sense of national urgency to keep promises made and deliveries on time, any new board that is set up will be largely a waste of time. I urge the Government to pursue the principles set out in the White Paper. Remember, my Lords, it was a good White Paper. Its proposals should be examined in the light of all that has been said here and elsewhere about it.
I want to leave your Lordships with the picture of a man who had been a working lad and went to night school, became a first-class engineer, innovator and creator of first-class machines for a particular industry. Now in his forties, he is recognised throughout the world as an expert and pre-eminent in his line. A month ago he returned from a successful trip to East Germany. He arrived at Cologne and they laughed at him and said: "Oh, you are going to have difficulty. They are on strike again at Manchester Airport." He managed to get to Manchester airport on the Saturday afternoon, but he was supposed to be off to Madrid on the Monday morning on a plane which flew there direct from Manchester. He was selling our stuff, doing what noble Lords were talking about yesterday; he was actually on the job. But what was he told? "There's no plane from Manchester. You see, we are on strike." That was the second time it had happened. If he was not in Madrid on the Monday morning, a German firm was going to get the order. My Lords, where are we on this issue? This man took a car down to Heathrow and flew from there to Zurich, and then from Zurich to Madrid and arrived on the Monday morning. Is that the proper way to treat a chap who is out to get business for this country? What the noble Lord, Lord Hawke, was addressing himself to concerning the unions should be hammered home in every guild and every workshop because, sooner or later, if we do not take notice of what some of our men are suffering from at the present time, by God, we shall regret it!
6.29 p.m.
Lord DRUMALBYN: My Lords, the noble Lord, Lord Rhodes, almost represents consensus in himself. If we could only gather round him and listen to his wise words, amend this Bill as we think it ought to be amended, and get it generally accepted so that we could all work together, we should be working for the

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objective we ought to achieve. I am going to say one or two hard things about it, because if they are not said the case would appear to go by default or people would say that we were too ready to accept what is in the Bill. The Bill was, of course, heralded by a White Paper The Regeneration of British Industry, page 1 of which has been quoted at various times. I shall quote again what has already been quoted. It attributed Great Britain's ills, despite the efforts of successive Governments, to too little investment and to our making less effective use of our manufacturing equipment than other countries make of theirs. What is needed, the White Paper said, is a closer, clearer and more positive relationship between Government and industry, and to construct that relationship requires the development of new institutions.
When we were in Government, we tried to bring industry and Government closer together and I believe that we were graduallly getting closer, using institutions such as the NEDC and, above all, working patiently to improve relations not only between Government and industry, but also within industry. My noble friend Lord Watkinson has drawn attention to what has been done to build up methods of participation and consultation in industry—not everywhere in industry, but the pace-setting has been done and is going ahead. The question is whether this Bill will do anything to bring industry and Government willingly together, and a great deal of the debate has centred around this point. For that, there must be mutual confidence. Even if the two come closer together, higher investment will not necessarily result. Industry will invest in modernisation if, and only if, it is permitted to derive the benefits of productivity and the profit that should result. It is in the interests of industry and the public to invest in productive assets, and indeed in a period of inflation it is better to have productive assets than anything else.
We all know how difficult it has proved to persuade trade unions in many industries to allow these benefits to accrue. The noble Lord, Lord Houghton of Sowcrby—who is not now with us—dwelt on this and pointed out how in Germany this aim has largely been accomplished. But it is only if agreement can be reached on the more economical and flexible use
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of manpower, on continuity of effort rather than erratic stoppages of production, that we can reap the benefits of modernisation, improve productivity and get a better return on investments.
I take the view that the White Paper was wrong in making the first priority the setting up of new national institutions. Even this Government have recognised that the primary need is for a change in attitudes, and this is something that we all know can come about only slowly, by a gradual penetration of the new approach. Will that be brought about by the Bill? What can a National Enterprise Board contribute to a nationwide change of attitude on the part of trade unions and management? In so far as it engages in production, the National Enterprise Board and its subsidiaries will be like other employers, the Coal Board, the Steel Board, British Airways and their subsidiaries—or indeed, like Reid International. It is to be hoped that it will follow the best existing practices, but it is idle to suppose that it is needed as a pacemaker. The pacemakers are already there.
I grant that the Bill is littered with good intentions, although not all the intentions are equally good. But the question is: will they be there? For example, the purposes for which the National Enterprise Board is to exercise its functions are commendable, though we on this side doubt whether it is really possible for a Board of this kind itself to provide employment in a manner which will win the confidence of industry. We are not talking about joining and providing it, but itself providing it. Certainly, if it can find profitable tasks in which industry is unable or unwilling to engage, then by all means let it get on with them—and they must be profitable or the National Enterprise Board will fall foul of the Treaty of Rome. But what reason is there to suppose that there are such tasks about? Have they been identified? If so, what are they? In any case, would it not be much better for the National Enterprise Board to help industry to take them on?
If there is a shortage of capital for profitable investment, by all means let the National Enterprise Board prime the pump. But with interest rates at their present level, the prospects are not encouraging. If the National Enterprise

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Board is to compete fairly, it should be permitted to borrow money at no less than current rates. And where will it get the money—by even heavier taxation of existing industry and of those who work in it, by further borrowing at a time when the Government are already having to borrow such fantastic sums, or simply by the Government's printing the money, which hardly seems compatible with the overriding need to curb inflation?
I come now to a question which I should like to ask the noble Lord who is to reply to the debate, because I am not certain that in this respect I have read the Bill correctly. Is it the case that the limit of the resources at the disposal of the National Enterprise Board is £700, to be raised to £1,000—
Lord ABERDARE: £700 million.
Lord DRUMALBYN: My Lords, £700 million. I am obliged to my noble friend. Does that include any shares that are transferred to it from the public sector? What happens to them? What happens also to the money which the Secretary of States advances to it in implementation of Sections 7 and 8 of the Industry Act 1972? If shares are transferred from the public sector—that is to say, shareholdings in private industry held by the Government at the present time—will not the National Enterprise Board be able to use the dividends itself; and, as I read it, will that not be additional to the £700 million and not something to be deducted? Therefore, Parliament has a right to know what is the amount of the assets that the Government propose to transfer to the National Enterprise Board, and what is the amount of the dividends that they are receiving from those assets at the present time.
In the same way, I should like to know how much of the £250 million that could be used under Section 8 of the Industry Act—if it has been increased; I am not certain that it has—is left, and how much will be available for the Board to buy shareholdings in the companies which it is enabled under that Act to assist, and which it will be assisting under the direction of the Secretary of State? We ought to know these facts, and that brings me on to my next point. Someone has been talking about a marriage between the two sides, but
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it seems to me that this may well appear to be a kind of dowry that the National Enterprise Board is receiving. If I am right about this, the dividends will be lost to the, Exchequer, which will then have to make up the loss by taxation or other means. So we want to know what it will cost the taxpayer to make this dowry. As for the National Enterprise Board, it will be able to spend the dividends on setting up undertakings in competition with other businesses.
That brings me to the point of how the Government will ensure that that competition is fair. We understand that there are to be guidelines, and no doubt the Secretary of State can give directions if the National Enterprise Board fails to comply with the guidelines. I would reinforce the plea made this afternoon for the guidelines to be made fully known before Parliament parts with the Bill. I remember in days gone by, when discussing the Industrial Relations Act, great pressure was brought to bear for the Code to be fully available for discussion before we parted with that particular Act, so I think I am entitled to ask the Government to make known these guidelines before we part with the Bill.
My Lords, in addition to what I have been saying, as I understand it—and I hope the noble Lord will forgive the only word that occurs to me—the National Enterprise Board is to be given a free hand, at least within certain limits yet to be finally fixed, to "weasel" its way into profitable enterprises, without even having to consult those enterprises. No good reason for this has been given in the debate. Does anyone believe that, for example, the trades unions will exercise more restraint in an undertaking run by the National Enterprise Board than in any other undertaking?
Lord DAVIES of LEEK: My Lords, I always listen with great interest to what the noble Lord has to say, and I apologise for interrupting, but I do not like the word "weasel". We now have a bench mark in the history of capitalism. We are moving straight into one of the most horrid systems of State capitalism where we privatise the profits and socialise the losses. This is happening throughout the world. Here is an honest endeavour to find an answer to the acquisitive society, also with freedom,

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and the mixed enterprise. Therefore, "weaseling" is not correct when we have helped industry when it has asked for help in the past.
Lord DRUMALBYN: My Lords, I use the word advisedly, because I am talking about the use of nominees to buy shareholdings without consulting a company, which I understand it will be able to do up to the limit of £1 million.
Lord BESWICK: My Lords, I said that this body would have the same powers, no more no less, than any other company in the country. If the noble Lord, Lord Drumalbyn, thinks other companies in the country are "weaseling" they way ahead, he should say so.
Lord DRUMALBYN: My Lords, I think it is certainly right for the National Enterprise Board to consult with any company before it starts using the taxpayers' money to buy into a profitable enterprise. I believe this to be right. If other companies wish to buy shareholdings as investments, that is fine. If they wish to buy shareholdings with a view to taking over a company, then they are bound by Stock Exchange rules. I accept the point of the noble Lord that the National Enterprise Board will be expected to abide by Stock Exchange rules. But that is not what I am talking about.
My Lords, I am talking about the clandestine use of public money in order to enable the National Enterprise Board to buy itself into profitable enterprises. I must say that I am well aware, of course, that this has been in successive Manifestos. It was understood that the Labour Party were going to do this, but it is no answer at all to say that this Bill must be enacted because it embodies ideas in the last two or three Labour Party Manifestos. This Bill was carried in another place by 13 votes, a majority representing less than two-fifths of the electorate—only about a quarter of it, if you take the total electorate. Is that what the Government call a consensus? Is it not reasonable to ask that the Government should seek a more broad consensus than that? In this House, our task should surely be to try to achieve something like a consensus.
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My Lords, there are parts of the Bill introduced on Report in another place which have not been debated at all. For example, there is Clause 8, to which my noble friend referred, which deals with the National Enterprise Board and the media. There are other parts of the Bill for which there was inadequate time for debate in the other place. There are extraordinary provisions about the disclosure of information to representatives of trade unions, and it seems that these representatives are not intended to be employees of companies concerned. This is something we must look at in Committee. I believe those provisions could do immense damage to the interests not only of the companies, but of the nation. They could do great harm to the extent of participation and consultation that has already been established. As they stand, they are bound to create confrontation between management and other workers, because the workers, the trades unions, are almost certain to appeal against any application on the part of the companies not to disclose information. It is wrong to do anything to increase confrontation at a time when there is a crying need for better understanding.
My Lords, there is the whole question of the accountability to Parliament of the National Enterprise Board. This is particularly important because it seems, as has been said, that the National Enterprise Board will grow to gigantic proportions, and will go on growing until it is directed by the Secretary of State to stop, or else its powers are repealed. I would say just this. We are at least as anxious as the other side to see the modernisation of plant and equipment, to see new enterprises based on the latest technology set up, enterprises which will give new employment and produce goods we now have to import, and goods which we can export, and so improve our balance of payments. But to set up a National Enterprise Board is not the only, and certainly not the best, way to achieve these ideas.
When we come to the Committee stage, we shall seek to improve the Bill, but for the moment our task is to remove some of its worst blemishes. This is something, I regret to tell the noble Lord, that cannot be achieved hurriedly. I hope noble Lords opposite will enter the discussions in Committee with the intention of meeting the points we have to raise, and of

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achieving the consensus that is so important at the present time.
6.48 p.m.
Lord CAMPBELL of CROY: My Lords, this has been a serious and constructive debate on what is probably the most controversial Bill in this Session. As was the hope expressed by the noble Lord, Lord Beswick, in the course of his helpful introduction to the Bill, we have had a factual and analytical discussion unclouded by purely political responses. I trust this will continue during the later stages of our examination of the Bill. Those noble Lords from all sides who have taken part in the debate make special contributions on these subjects from their own experience and achievements.
My Lords, this debate takes place at a crucial moment in our country's battle against inflation. I do not think the Bill can be supported within that context. My noble friend Lord Watkinson called attention to the stark reality of the present crisis. He suggested that an earlier, bogus crisis had been invented to provide the pretext for this Bill; but in the present crisis with which we must now be concerned, I hope the Government will consider carefully, and accept, the wise advice given to your Lordships by my noble friend Lord Watkinson, notably his assessment of lasting damage that will be inflicted on private enterprise by this Bill in its present form, for today the Government appear to be presenting an extraordinary picture of conflicting policies. At last they accept that they have allowed the nation to drift into great danger.
We understand that the Cabinet today have been considering urgent measures to deal with this. The Government are desperately trying to keep the economy afloat, but they have still not cut it away from the leaden weights of their nationalising Bills. There is no single action, I believe, which would be more likely to help our economy and sterling than an announcement by the Government that this Bill is to be dropped; and for good measure the Petroleum Bill and the Community Land Bill could also be discarded, making the tonic for sterling abroad even stronger. This is a time when Britain can least afford to spend hundreds of millions of pounds on grandiose schemes of
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nationalisation, and the rest of the world knows this. The party is over, to quote words of the Secretary of State for the Environment, but it is over for the Government as well as for local authorities.
The two most objectionable features of this Bill are, first, the irrelevant and excessive powers of the National Enterprise Board arbitrarily to extend public ownership into private industry; and, second, the compulsory disclosure of sensitive information by companies to trade union representatives who are not employees and who could inadvertently, or perhaps deliberately, pass it on to competitors. These provisions would be destructive in their effect on private industry and divisive in upsetting the many good arrangements now existing for the transmission of information within companies. Unhappily, they would also be a strong deterrent to foreign investment. At this critical time in our history this Government seem obsessed with tormenting British industry, upon whose efforts our recovery will depend. There is even to be an inquisition, though the grand inquisitor has been replaced and the system somewhat modified. Indeed, all three Ministers who were originally in charge of this Bill in another place were moved out of the Department before the Bill arrived here. I hope the noble Lord, Lord Beswick, will personally prove more durable.
The Bill as it stands is likely also to lead to unfair competition, and there is great concern in industry about this, as the right reverend Prelate the Bishop of Worcester pointed out.
Lord GEORGE-BROWN: My Lords, if I may intervene, I am following the noble Lord in his argument and I happen to agree with much of it, but may I ask him what is his answer to the fact that in Holland, in Sweden and in Germany the employers, as he calls them, take the workers, if that is the right term, fully into account and share the boardrooms with them? The noble Lord is knocking down what the Government are putting up. Would he take the Dutch, the Swedish or the German alternative, because it works there?
Lord CAMPBELL of CROY: My Lords, I know that the noble Lord has interested himself at times in this impor

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tant subject, but if he had been here earlier—and I do not think he was—he would have heard my noble friend Lord Watkinson speaking about participation of employees in decision-making in firms, and particular methods which have been employed in this country and which he has employed himself. We know that other methods are being employed elsewhere, including the countries the noble Lord mentioned. That is one of the subjects we propose to go into, I hope at considerable length, at Committee stage. I promise the noble Lord that if he will come then—and we are being allotted a lot of time, I understand—we will certainly develop the important point he has raised.
I was just dealing with the matter which the right reverend Prelate the Bishop of Worcester pointed out; namely, that there is concern about the unfair competition which could result from this Bill as it stands. Considering the powers and functions of the National Enterprise Board, the most obnoxious of these is the egregious role prescribed in Clause 2 for extending public ownership into the profitable areas of manufacturing industry, the NEB being armed with powers for taking over and holding securities and property of companies with no provisions for releasing them. How is the NEB to choose the areas of industry in which it is to extend public ownership or the individual companies to nationalise?
We are told that there are guidelines foreshadowed, but according to statements in another place that is weeks ahead. I hope that the Minister who is replying tonight will be able, in response to the request by my noble friend Lord Aberdare, to tell us that these guidelines will be available by the Committee stage at least. Otherwise we shall not know whether it is to be left to the whim of the NEB or to the dictation of the Government of the day whether particular firms or sections of industry are to he taken over. When they come, the guidelines themselves may bring in significant changes. The Minister in the other place in referring to them said that they also would be subject to changes from time to time after they had been issued. Apart from the expense and upheaval, which as a nation we cannot at present afford, these proposals will antagonise and unsettle industry at a time when its full
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co-operation is needed by the country and by the Government.
The paradox here is that, except for the passages on nationalising profitable industry to which I have just referred, virtually all the powers needed for the NEB are already in the hands of the Government under the 1972 Industry Act; for example, special assistance to industry under Section 8 of that Act, and also operations to help if firms are in difficulties; these operations can be carried out now. This Bill could be simply three or four non-controversial clauses updating as appropriate certain legislation on industry. With their Parliamentary programme so seriously congested, as it is, in the worst economic crisis since the war, it seems madness on the Government's part to try to force so much through Parliament at present. There is an explanation; that is, that it is an effort to placate the Left Wing of the Labour Party.
The noble Lords who spoke today, I think all of them, Lord Sainsbury, Lord Houghton and others, made it clear that they approve of a mixed economy, but we know that there are others elsewhere in the Party who have quite different views. It seems to many that the proposals for the NEB owe their existence more to divided opinion within the Labour Party on how much more should be nationalised, if any, than to any positive concept of the NEB's role and scope. My noble friends have pointed out during this debate that Ministers change, Governments change. It is the Act, the Bill which eventually becomes an Act, which matters. My noble friend Lord Watkinson pointed out to those who were approving of a mixed economy that in Britain it is not just a mixed economy that is important; it is the balance.
British industry knows that there is an especially difficult period immediately ahead of us, whatever the Government announce as counter-inflation measures within the next few hours or the next few days. Some companies may find themselves in difficulties in meeting new requirements on pay or prices, or both, and in facing possible strikes. If they are in trouble, they are likely to be a prey for the NEB to consume, whereas in normal times they might not find themselves in that position. But there is not much consolation for those who get

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through this period without major problems. Any of them in profitable areas can also be targets for take-over by the NEB. This present uncertainty, unless it can be ended by changes in this Bill or by precise guidelines, could be most damaging to the economy in the next three or four years.
Now I come to the disclosure of information by companies. This is provided for in clauses now numbered 22 to 26 in the Bill. We on this Bench are in favour of a flow of information within companies, with a common sense attitude about the treatment of very confidential information. But this part of the Bill is a cause of great concern to industry. I think that this has been accepted by all sides of the House. Some changes in the Bill were made at the Report stage in another place, but they have not met the principal objections. The noble Lord, Lord Beswick, described the new procedure fully for us, but he confirmed that the original principle has been retained. This means disclosure to trade union representatives who may be outside the company in question, not employees; disclosure of information, including sensitive information which would be damaging if it reached rival firms. Another problem is that an individual company may be dealing with many unions who are represented among its employees. The system in the Bill now is not linked to the proposed system of planning agreements as the White Paper originally indicated. We intend to examine this part of the Bill in great depth at the Committee and Report stages, and the Government should be prepared to consider further changes, especially in the light of the great anxiety in industry on these clauses.
Although there is now an independent advisory committee—several committees, if necessary—when there is a dispute, the Minister still has the final decision, though in certain circumstances it is subject to Negative Resolution procedure in both Houses of Parliament. But situations would then arise where the discussion, whether in your Lordships' House or in another place, would be taking place without any of the Members of either House, except the Minister, knowing the nature of the information which was the subject of discussion, because of course what the argument is about is
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whether it should remain confidential. We will be examining very fully how such a procedure can really be a safeguard when the Minister is being given absolute discretion to take the final decision. We believe that such a complicated procedure as proposed is inappropriate and unnecessary. It strikes at the roots of good relations now existing in many companies. It is unnecessary because we know of no occasion when a company has failed to provide information to the Government in conditions of confidentiality which are respected. I do not know whether the Minister who is replying can answer this tonight, but I ask the Government to tell us whether there have been any cases of refusal by a firm to provide to the Government information which was needed for important national reasons.
I should like to refer briefly to Clause 11, which was touched on by the noble Lord, Lord Beswick. This concerns prohibition and vesting orders. These are to enable the Minister to take control, or make directions to a company, if, in his opinion, its being taken over by a foreign company is unacceptable. It has not yet been satisfactorily explained why existing controls, especially the Exchange Control Regulations, are not adequate to prevent objectionable takeovers. There is a danger that these provisions will deter foreign investment in this country that they will also discourage joint ventures with foreign companies expected to be of benefit to Britain.
On Clause 11, I would draw attention to the matter on which this House has already achieved a change before the Bill reached us. I think that this is a good augury for later stages. Originally this clause would have cut out completely the traditional procedure, when an Order is of a hybrid nature, of referring it to a Committee for the purpose of receiving petitions. I referred earlier this year in your Lordships' House to this matter when the Bill had just been published and when we were examining a similar provision in the Offshore Petroleum Development Bill. This House then strongly expressed a view against the Government. The Government accepted this view and introduced an alternative which gives twenty-eight days for this Committee procedure. That alternative was included in the Offshore Petroleum Development Bill. I am glad to say,

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because the House felt strongly about this at the time, that the Government saw fit to introduce a similar Amendment at the Committee stage of another place on this Bill. Some of your Lordships may not think that the urgency in the Industry Bill would be so great as it was under the Offshore Petroleum Development Bill, and they will no doubt raise this later; but we in your Lordships' House can feel some gratifying responsibility for this considerable improvement already made in this constitutional matter.
The main reasons given by the noble Lord, Lord Beswick, for this Bill were related to industrial investment. The pretext for wholesale nationalisation and Government intervention is that investment in British industry has been flagging. They have misread events and their diagnosis is wrong. Investment could no doubt have been greater in recent years, but the main deterrents have been too much Government intervention, not too little, and too frequent changes in Government policies. My noble friend Lord Cullen of Ashbourne gave examples of these, so I will certainly not list them.
The enemies of investment have been uncertainty and inflation. At the beginning of this debate, the noble Lord, Lord Beswick, made comparisons with the United States, Germany, France and Japan, and my noble friend Lord Aberdare immediately pointed out that the unfavourable comparison was meaningless, because the other countries were market economies also. I would also add that he was giving figures which were related to each employee; they were figures for new investment per employee. That, again, does not give a complete picture of the total investment, because, unfortunately, the countries he cited have much higher productivity, certainly the United States, than we have in this country.
That brings us to another of the obstacles to new investment, because indeed it has been a resistance—and it is quite understood—to reduction in labour forces which has made some new investment more difficult. I would remind the noble Lord, Lord Beswick, whose personal business it is, that in the steel industry, public and private, there is the problem that modernisation and new investment means a considerable reduc-
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tion in jobs, and that in itself has been a cause of resistance to change and new investment. Far from improving conditions for investment in industry, this Bill will add to the uncertainty and to the likelihood of frequent Government intervention in future.
We do not propose to divide your Lordships' House on Second Reading. This is in accordance with our normal custom that when the Government Party put forward something which was in their Manifesto and has come from another place, we do not divide at this stage. We have already made some important improvements to the Scottish Development Agency (No. 2) Bill and the Welsh Development Agency (No. 2) Bill. We intend to show the Government, if they persist with this Bill, the major improvements that can be made with the object of helping British industry. We regret that in its present shape the Bill is now discouraging to industry, and that if it is put into effect it will be gravely damaging to it.
Lord GEORGE-BROWN: My Lords, I hope that the Minister will allow me a few minutes before he rises to reply to the debate.
Several Noble Lords: No.
Lord GEORGE-BROWN: Oh?
Lord BESWICK: It is not normal, my Lords.
Lord GEORGE-BROWN: In which way is it not normal, my Lords?
Lord BESWICK: My Lords, when I say it is not normal, I mean it is not normal for another noble Lord to intervene, apart from the Minister, after the Opposition winding-up speech.
Lord GEORGE-BROWN: My Lords, I am sure I can speak after the Minister has spoken, but would it not be more sensible if I spoke now, before the Minister has replied?
7.10 p.m.
Lord LOVELL-DAVIS: My Lords, I agree with the noble Lord, Lord Campbell of Croy, that this has been a constructive and informed debate. The hour grows late and I hope not to detain your Lordships for too long. I hope that noble Lords will forgive me, therefore, if I am unable to cover all the contributions

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which have been made to the debate. I feel that I must start by saying something about the much vexed question of the disclosure of information. The noble Lord, Lord Aberdare, emphasised that his Party favour the disclosure of information to employees in principle. The words "in principle" were his own and they are the crux of the matter. The noble Lord, Lord Campbell of Croy, said that he was in favour, too. We are all agreed that a wider disclosure on a voluntary basis is desirable and should be encouraged. What this Bill is concerned with, however—and this was made clear by my noble friend Lord Beswick—are measures to ensure that there is wider disclosure in practice on those regrettable occasions when the fine words "in principle" have not yet borne fruit.
The noble Lord, Lord Rochester, asked what would happen if our competitors do not have to disclose information and we do. Shall we not be under a disadvantage and will it not damage us? My noble friend has made the point that in fact the position in most of our competing countries is precisely the reverse; there is much greater disclosure of information there than there is here. The noble Lord, Lord Rochester, then asked why it was assumed that the needs of the Government and employees for information were the same. There is indeed no such assumption and the changes already made to meet this point were also explained by my noble friend, and the Minister is able in such cases to exercise his discretion. Several noble Lords, including the noble Lord, Lord Rochester, and the noble Lord, Lord Aberdare, raised fears that voluntary disclosure of information might be discouraged by the Bill. I find it hard to relate this fear to the very clear statements made by my noble friend Lord Beswick that the powers in the Bill are reserve powers to be applied only where voluntary action is not forthcoming. Where voluntary action is already satisfactory, there is no question of the powers being used. This has been made clear by my noble friend and is made clear in Clause 22(6).
The noble Lord, Lord Orr-Ewing, referred to the disclosure of information and the City Code and suggested that information disclosure would create a privileged group who might use the
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information they obtained for dealing in the company's shares. I do not believe that this need occur. First, the company will be able to argue—and seek the advice of the committee established under Clause 25—that disclosure of the information to trade union representatives would cause it or its employees substantial injury. I would expect that much price-sensitive information would be excluded by this safeguard, but I accept that some information that is price-sensitive may be required to be disclosed. If this occurs, however, there is no conflict with the company's obligation under the requirements of the Stock Exchange; it will be required under its listing agreement to publish price-sensitive information made available to trade union representatives. There is nothing in the Bill to stop this.
Indeed, I hope that one effect of the Bill will be to stimulate wider disclosure in general to the benefit of shareholders as well as workers. In this respect, the noble Lord, Lord Cullen, expressed surprise that in the Bill there was no mention of shareholders. He might ponder on the successive Companies Acts which have made no reference to employees. I believe that all concerned in a company, employees as well as shareholders, have rights to information about the company and I make no apology for restoring the balance. The noble Viscount, Lord Watkinson, asked that the Bill should say that the powers should not be applied to a company which was already making satisfactory disclosure to its employees and unions. I must read out Clause 22(6) which says with great clarity:
" A Minister shall not make such an order unless it appears to him that the company or companies concerned will not voluntarily furnish the information to him and to a representative of each relevant trade union."
I think an impartial observer would be bound to say that that subsection says emphatically what the noble Viscount asked that it should say. The noble Lord, Lord Campbell of Croy, asked whether I knew of any case where a company has refused to provide information. I must say personally that I know of none, but this surely means that there will be no need to use the reserve powers. Finally on this matter, the noble Lord, Lord Rochester, asked for an assurance that the Government will not seek to reintroduce Schedule 4 to the Bill which

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requires disclosure of information by the Government. I think he meant that the Government will not seek to delete the Schedule. My noble friend Lord Beswick made it clear that the Government would not seek to delete the Schedule but that some amendment was needed to make it practicable and at acceptable cost to industry and to the Exchequer.
The question which I think most of those who have opposed the Bill in one way or the other have failed satisfactorily to answer is what solutions they would adopt, if any, to deal with our present industrial problems. The National Enterprise Board and the planning agreements system will have a vital role to play in dealing with our deep-rooted regional problems. Already the Government have a powerful system of regional incentives to attract private industry into the underdeveloped regions. After a short period of trying to dispense with such measures altogether, the former Conservative Government played their part in further developing and strengthening these incentives under the Industry Act 1972. But can anyone say that, as a result of these incentives, our regional problems have been solved? The fact is that there is still a great disparity in unemployment levels in different parts of the country; and it is in periods like the present, with its rising tide of unemployment, that the full force of these inequalities is felt in the regions in the North and West of this country. Unlike previous attempts, the Industry Bill is not merely one of sharpening the old weapons for further use; it actually provides us with a complete array of new weapons to use in our attack on the regional problems.
Under the planning agreements system, we shall, for the first time, be able to ask firms directly in our discussions with them over their plans, "What exactly are you doing to provide investment in the regions?" Together with them, we shall be able to go through their main projects for investment and ask them in each case whether or not they would be appropriate for the assisted regions. We shall be able to explain, face to face, the precise financial and other incentives that we can provide and, where discussion shows this to be necessary, offer them additional help in the form of selective assistance.
The right reverend Prelate expressed anxiety about planning agreements. I
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share with him his concern about the difficulty of ensuring that where public money is invested in private industry, the interests of the taxpayer and the interests of the company are both properly protected. However, I doubt whether his fears are properly directed to planning agreements under this Bill. The object of the planning agreement system will be to try to secure that the interests of Government and company, both management and employees, are better harmonised so that both can work more closely together and towards a common aim. It is easy to say this, but it will be more difficult to achieve. But it is an aim so laudable and so necessary and so much in line with the views expressed from all quarters in this House that I hope the fears of the right reverend Prelate will prove groundless.
The noble Lord, Lord Rhodes, complained that only one clause in the Bill refers to planning agreements. My noble friend Lord Beswick referred specifically to this in his opening speech and pointed out that it reflects the fact that, although vitally important, planning agreements will be voluntary and will not be regulated by Statute. But the really significant and novel departure in our attack on regional problems lies in the National Enterprise Board. Through this instrument, for the first time, a public body specifically set up for the purpose will be able to move directly into the problem areas and establish its own new investment projects. Since the Industry Act 1972, the Department of Industry has stepped up its efforts to attract private industry to the development areas; but they could make a long list of the frustrations they have experienced when, having picked out localities which looked ideal from all points of view for particular types of investment, they find that, try as they may, private industry simply cannot be induced to invest in those sites —and this may be due to nothing more than prejudice perhaps on the part of the managing director or his wife.
The noble Lord, Lord Rochester, asked whether there would be a more section-alised or regionalised structure for the National Enterprise Board. Such questions of the reorganisation of the National Enterprise Board are at present being considered by the organising committee, but in order to assist its work in the regions

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the National Enterprise Board will be establishing branch offices in the North-East and the North-West. This will enable valuable contacts to be built up in those regions. In Scotland and Wales, as the House will know following the debates we have had on the subject, functions akin to those of the National Enterprise Board will be carried out by the Scottish and Welsh Development Agencies. That is why, if the English developing regions are not to be left behind, it is important that comparable powers should be available to the NEB in those areas of England.
It might be appropriate if at this point I explained the position of Northern Ireland with regard to the Bill. Noble Lords will have noted that the Bill extends to the whole of the United Kingdom. Its powers therefore extend to Northern Ireland. It is important that this should be so for, if the National Enterprise Board were to take into public ownership a company with subsidiaries in Northern Ireland, or if the Government were to enter into a planning agreement with such a company, it would be important that those subsidiaries should be included in the overall national plan for the company. In such cases, arrangements will of course be made for liaison with the Northern Ireland authorities. However, we must remember that a future Northern Ireland Administration will almost certainly have wide devolved powers in the industrial field. I want to make it clear that it would not be my right honourable friend's intention to exercise the powers of the Department of Industry under the Bill in relation to matters which are clearly internal to Northern Ireland.
On the subject of the National Enterprise Board, the noble Lord, Lord Rochester, asked that the National Enterprise Board should prepare an inventory of the likely needs of vulnerable sections of industry, so that the need to give support will not come as a surprise. I can give an assurance to the noble Lord that the National Enterprise Board will not merely react to problems as they arise, but, as my noble friend Lord Sainsbury indicated, will form strategic plans so that its intervention can be orderly and deliberate.
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The noble Lords, Lord Aberdare and Lord Orr-Ewing, took up the doctrinal opposition to State intervention in industry and to State ownership of industry which has characterised the attitude of the Conservative Party, at least when in Opposition. Of course in Government they found from Upper Clyde Shipbuilders to Rolls-Royce that it was not expedient to practise what they preached. I was sorry that they chose to approach the Bill in so doctrinaire a way. I shall not follow their arguments in detail, but it has never been clear to me nor to my noble friend Lord Houghton of Sowerby why they believe that the State should be allowed to own only industry which is in trouble, and feel that it should be obliged to return such industry to private hands as soon as the difficulties have been solved.
The noble Lords, Lord Aberdare and Lord Drumalbyn, have asked for guidelines for the NEB to be made available to this House. This I can guarantee, but I am sorry to tell the noble Lord, Lord Campbell of Croy, that I cannot indicate any expectation that this will be done before the Committee stage. It is the Government's view that the guidelines should not be part of the Bill, so there will be flexibility to amend them as occasion demands without need for further legislation.
Lord ORR-EWING: My Lords, before the noble Lord leaves that point, he must be aware since the Social Contract that the word "guidelines" has unsatisfactory connotations, and that we never saw them. We are therefore anxious to see these guidelines before the Bill passes this House. If they cannot be ready for the Committee stage, which I understand, perhaps we could have them by Report or Third Reading. Could we have something down about the guidelines, because otherwise it seems to me to leave the possibilities wide open and undebated?
Lord LOVELL-DAVIS: My Lords, I take the noble Lord's point. We certainly want to get the guidelines as quickly as possible, too, and shall take whatever steps we can to ensure that they are before your Lordships' House as soon as possible.

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Several noble Lords, including the right reverend Prelate and the noble Lord, Lord Rochester, referred to overmanning as being a consequence of the NEB's purpose of safeguarding employment. But this is the very type of problem—to which, presumably, the alternative is unemployment—to which the NEB can address itself, possibly by providing alternative sources of employment in other companies and industries.
To answer the financial questions raised by the noble Lord, Lord Drumalbyn, the financial limits of the NEB do not cover the value of shares transferred from the Government; nor should they. If the Government transfer their shareholdings in Rolls-Royce (1971) to the NEB, that does not involve any new public expenditure. I am afraid that I cannot, without notice, say what is the total dividend received by the Government on all the investments which it is intended to transfer to the NEB, but I can say that no dividend has yet been received from Rolls-Royce, which is by far the largest investment. The noble Lord also asked about the £250 million in the Industry Act 1972 and I can say that this is additional to the limits in the present Bill. The noble Lord also asked how much money is still available under Section 8 of the Industry Act 1972. The initial funds available under that section were £150 million, and there was provision for successive further tranches of £100 million to an ultimate limit of £550 million. So far one of these tranches has been provided, though not yet fully utilised. Three further tranches of £300 million altogether remain to be withdrawn.
It has been asked in this debate: "Why must we have these powers to fetter private industry? Why can we not simply let it do its job unimpeded? "I can only point to the record of our industry over the last 20 years or so—that is, under all types of Government, as my noble friend Lord Peddie emphasised. Levels of investment and productivity have been and remain well behind those of our main industrial rivals. This is not to put all the blame on industry. The noble Lord, Lord Aberdare, said that we had put the blame on the private sector, but that is not so, as I said before.
On the other hand, private industry cannot, in all conscience, lay all the blame
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for its own shortcomings on political intervention as he, the noble Viscount, Lord Watkinson, and the noble Lords, Lord Campbell of Croy and Lord Cullen of Ashbourne, were so ready to say. I am aware of the difficulties caused to investment by factors such as our present high inflation and interest rates, and by our uncertain growth prospects. However, by allowing the Government to discuss our economic forecasts with industry, planning agreements should enable those companies to plan their investments with a much greater knowledge of the kind of key economic assumptions which everyone in progressive management knows, as my noble friend Lord Sainsbury so graphically stressed, are so important to the development of sound, long-term investment policy.
My Lords, I was sorry to hear the noble Viscount, Lord Watkinson, use what I considered to be extravagant language in opposing the Bill. To take only two examples, he said that every clause was damaging to industry. But Clauses 10 to 15 are specifically designed to protect our national industry from foreign takeover. He talked about powers in the Bill to hand over the whole of British industry to the Government lock, stock and barrel.
Viscount WATKINSON: My Lords, I am sorry to interrupt the noble Lord, but if he is to quote me he should do it correctly. On that point, I said that we could draw our conclusions from what has been said about the Bill by members of the noble Lord's Party in another place and outside. Those were conclusions that I was drawing. So far as the Bill as a whole is concerned, certainly I agree with what he said. It is totally inimical to free enterprise.
Lord LOVELL-DAVIS: My Lords, I will turn to the fact that the noble Lord also talked about a power to hand over the whole of British industry to the Government lock, stock and barrel. I think that is a correct quotation.
Viscount WATKINSON: I am very sorry, my Lords, but we must have it right on the Record. I said that, if one draws the conclusion from what the noble Lord's own friends have said in another place, that is the conclusion one would come to.
Lord LOVELL-DAVIS: My Lords, the impression he gave is clear in my mind and the noble Viscount should draw his conclusions from the Bill, not from what is said in another place. My noble friend Lord Sainsbury had already made it clear how far from true that wild assertion was.
My Lords, a few weeks ago in this House we were debating a Motion put down by the noble Viscount, Lord Watkinson, which called for a united approach to our economic and industrial problems. As my noble friends Lord Sainsbury and Lord Peddie pointed out, the strategy proposed in the Industry Bill is such a united approach. By means of this Bill we are harnessing the joint effort of those who have most to contribute, in order to develop a programme for this country's economic and industrial recovery. As the noble Lord, Lord Orr-Ewing, pointed out, industry is people. The contribution which this Bill enables workers to make is clear—particularly through their rôle in planning agreements.
I should like to congratulate my noble friend Lord Houghton of Sowerby on his most thoughtful speech about the responsibilities that this Bill will impose on unions, and the changes which they will need to make to be able to take up and fully discharge them. I feel that the perspective which his speech lent to the debate did much to balance the previous speeches, and gave a reply to the question put by the noble Lord, Lord Drumalbyn. But let it not he thought that we have either neglected the contribution that businessmen can make, or even that the Bill represents an entirely one-way traffic system of control passing to the Government.
In Sir Don Ryder, the National Enterprise Board will be chaired by a businessman of great experience at the highest levels, and of proven business ability. The same high standards will be required of other appointments to the Board, whether from businessmen or from trade
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unionists. The establishment of the NEB will enable shareholdings in companies previously held direct by the Government to come under the control of these people, with their wide industrial experience in running companies. Planning agreements and the National Enterprise Board should be seen as forerunners of the kind of co-operation that we must develop if, as I firmly hope, we are to put our industrial performance once again at the top of the international table, where it belongs and where it has to be.
I therefore ask this House to give the Bill its support.
Lord GEORGE-BROWN: My Lords, just before the noble Lord sits down—
The DEPUTY CHAIRMAN of COMMITTEES (Earl Cathcart): No, my Lords, the Question is, That this Bill be now read a second time.
Lord GEORGE-BROWN: The noble Lord has not yet sat down and I was—
Several Noble Lords: Order, order!
Lord GEORGE-BROWN: I was ordered out—
Several Noble Lords: Order, order!
Lord GEORGE-BROWN: If you wish it that way, have it that way, but it is foolish of you.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

GUARD DOGS BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.

DIVORCE (SCOTLAND) BILL [H.L.]
Read 3a, and passed, and sent to the Commons.
House adjourned at twenty-seven minutes before eight o'clock.