Sitting of 30 July 1975

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRITISH WATERWAYS BILL
  Lords Amendments agreed to.
  GREATER GLASGOW PASSENGER TRANSPORT ORDER CONFIRMATION BILL
  Read the Third time and passed.

  BRITISH MOTOR CYCLE INDUSTRY
  Address for Return
  of the abridged version of the Report to the Secretary of State for Industry of The Boston Consulting Group Limited on Strategy Alterations for the British Motor Cycle Industry.—[Mr. Varley.]

ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Law Commission
    Lord James Douglas-Hamiltonasked the Secretary of State for Scotland whether he will make a statement on his last meeting with representatives of the Scottish Law Commission in Edinburgh.
    The Under-Secretary of State for Scotland (Mr. Harry Ewing): Relations with the Scottish Law Commission are handled by my right hon. and learned Friend the Lord Advocate, who will be replying to the similar Question addressed to him on the Order Paper today.
    Lord James Douglas Hamilton: In view of the fact that the Scottish Law Commission, the Law Society of Scotland and the Church of Scotland favour
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    divorce law reform, will the Minister and the Secretary of State for Scotland recommend to the Government that legislation be included in the Government's future plans on this subject, especially in view of the fact that the Government have not announced any plan for introducing any Scottish measures next Session?
    Mr. Ewing: It is far too early to announce plans for the inclusion of any kind of mesaures, Scottish or otherwise, in next Session's programme. It is normally a matter for the Queen's Speech, which will come later in the year. The Government recognise the views expressed by the various bodies mentioned by the hon. Gentleman. My right hon. Friend has consistently said that the Government are prepared to give drafting assistance to any private Member who brings in this type of legislation. Beyond that I cannot add to what my right hon. Friend said in answer to a Written Question put to him last week by my hon. Friend the Member for Fife, Central (Mr. Hamilton).
    Mr. Robin F. Cook: Is my hon. Friend aware that those of us who have followed the matter closely were disturbed by the Written Answer given to my hon. Friend the Member for Fife, Central (Mr. Hamilton), especially in respect of the reference to the Government's legislative programme for next year already being heavily committed. Will my hon. Friend assure the House that this is in no way a retreat from the assurance he has given me, in a letter, that if no sympathetic Member obtains a high place in the ballot the Government will give careful consideration to making time available for this matter?
    Mr. Ewing: This matter, like all other legislative matters, is under almost constant consideration. [Interruption.] The hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) may laugh, but when the Conservatives were in office they did not have a very good record on this aspect of policy. It ill-becomes the hon. Gentleman to treat this matter with frivolity. The House will be well advised to await the outcome of the draw for the Private Members' Ballot, when that takes place.
    Mr. Donald Stewart: I should like to raise a point on forthcoming legislation. In the crofting counties there was great

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    interest in the revised Bill for crofting reform, which was regarded as an improvement on the previous Bill. Can the Minister give any guarantee that it will be brought forward in the next Session?
    Mr. Ewing: The guarantee that I can give to the hon. Gentleman is that my hon. Friend who is responsible for crofting legislation has this matter under very active consideration.

    Warren Springs Laboratory
    Mr. Doigasked the Secretary of State for Scotland if he will give his approval to Scottish local authorities to make contributions to the Warren Springs Laboratory in Stevenage.
    The Minister of State, Scottish Office (Mr. Bruce Milan): Provided contributions do not exceed the limit specified in Section 83 of the Local Government (Scotland) Act 1973, my approval is not required.
    Mr. Doig: I thank my right hon. Friend for that reply, because some of the officials in my local authority are under the misapprehension that they are not allowed to make contributions. This laboratory investigates obnoxious smells which are a source of serious concern in two sections of my constituency. The first concerns an industrial factory near a housing scheme. The second concerns a corporation tip, also near a considerable number of houses. It is a serious problem for them, and they will be grateful to know that they can now contribute.
    Mr. Milian: I need add nothing to what I have said. We have not invited local authorities to contribute because we are not inviting them to take on additional expenditure for any particular matter; but, of course, they have full powers to do this if they so wish.

    Local Authorities (Expenditure)
    Mr. Rifkindasked the Secretary of State for Scotland what advice he is giving to local authorities in Scotland to ensure that expenditure for salaries and related purposes are in accordance with the Government's counter-inflation policy.
    The Secretary of State for Scotland (Mr. William Ross): I shall shortly be writing to Scottish local authorities about
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    the White Paper on "The Attack on Inflation" and the provisions of the Remuneration, Charges and Grants Bill which specifically concern them. Ministers have taken and will continue to take every suitable opportunity to remind authorities of the need for restraint in their expenditure and, in particular, for economies in staff costs.
    Mr. Rifkind: Does the Secretary of State realise that, quite apart from repeated increases in local authority salaries for senior officials, the great perks bonanza is continuing, with reports of 5½ per cent. mortgages and cheap car loans for senior officials paid for out of ratepayers' money? Does he further realise that this growing tendency of certain local authorities to spend money as if it were going out of fashion is creating a serious and grave danger of bringing local authorities into total disrepute? Will the right hon. Gentleman end his spineless silence and not merely caution restraint but demand an immediate probe and full inquiry into the remuneration of local authority senior officials to end the contempt with which ratepayers are being treated?
    Mr. Ross: It is a pity that we did not have the benefit of the presence of the hon. Gentleman in the House when the Conservative Government put through the Act reorganising local government. I do not doubt that he was one of those Scottish Conservatives who had their cars labelled "Freedom". Evidently he does not trust local authorities. We are taking every opportunity in these and other matters to impress on local authorities the need to use their freedom wisely and well. The feelings of ratepayers are what matter in this respect.
    Mr. Dempsey: Is my right hon. Friend aware that, according to one report, one officer in the Strathclyde Region will receive a salary of £17,000 per year because he looks after a population of 2½ million? Does he realise that, as Secretary of State for Scotland, looking after 5 million people, he should therefore receive £34,000 a year, and that the Prime Minister, respresenting a population of 55 million, should have £374,000 a year? Is it not time that we scrapped this unrealistic machinery and introduced a new negotiating authority which would

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    peg local government officers' salaries substantially below those of Cabinet Ministers?
    Mr. Ross: I am interested in what my hon. Friend said. I shall immediately sign him up as my personal shop steward in respect of these matters. We have negotiating machinery, covering the whole country, on which there are representatives of ratepayers. For example, there are representatives of Scottish local authorities on the negotiating boards. I remind my hon. Friend that at one time he was very concerned about this matter. What we have to impress upon local authorities is the importance, at any time, of the negotiations in hand.
    Mr. Rifkind: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I intend to raise the matter on the Adjournment.

    School Leavers
    Mr. Canavanasked the Secretary of State for Scotland how many young school leavers left Scottish schools in the summer at the earliest possible leaving date.
    Mr. Milan: Precise figures are not yet available for this summer, but it is expected that about 33,000 will have left on reaching school leaving age.
    Mr. Canavan: Is my hon. Friend aware that there are 16,000 unemployed school-leavers in Scotland at present and that employment prospects are particularly bleak for the 33.000 16-year-olds whom he has mentioned? Although, in the long term, we can look forward to measures, such as those of the Scottish Development Agency, with a strong public enterprise role, helping in some way to make up for the lack of jobs being provided through lack of investment in the private sector, will he urgently consult the Secretary of State for Employment with a view to taking immediate emergency Government initiatives to ensure that these young Scots get the right to work?
    Mr. Millan: Initiatives have already been taken, for example, by the Manpower Services Commission in its statement on 2nd July, from which a number
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    of measures will follow—a training award scheme, special financial incentives to employers in the construction industry to encourage recruitment, measures relating to apprentices, and so on. A good deal has already been done. However, I should not disguise from my hon. Friend or the House the fact that the employment position for school leavers this year is likely to continue to be difficult and a good deal less satisfactory than in recent years. I assure my hon. Friend that we are doing everything we can to improve the situation.
    Mr. Buchanan-Smith: Does the hon. Gentleman realise that the figure of nearly 16,000 is about half the total number of school leavers and is more than twice as bad as the worst figures of the past five years? Is it not a tremendous condemnation of the Government's policies over the last 17 months, and of their failure to manage the economy? When will he stop being so complacent and do something about it?
    Mr. Milan: I have already said that we are doing certain things about it. I do not recollect hearing any constructive suggestions by the Opposition regarding this matter or, indeed, anything at all. The figures are serious, and I am in no way complacent about them.

    Economic Situation
    Mr. Teddy Taylorasked the Secretary of State for Scotland if he will make a further statement on the outlook for the Scottish economy.
    Mr. Sillarsasked the Secretary of State for Scotland when he next expects to meet the Scottish Trades Union Congress and the Scottish CBI to discuss Scottish economic problems.
    Mr. Hendersonasked the Secretary of State for Scotland if he will make a statement on the outlook for the Scottish economy over the next year.
    Mr. William Ross: I would refer to the reply I gave to the hon. Members for Glasgow, Cathcart (Mr. Taylor), Aberdeenshire, East (Mr. Henderson) and Dunbartonshire, West (Mr. Campbell) on 9th July.—[Vol. 895, c. 506–8.] The success of recent Government measures to attack inflation, which the House has supported, is as important to the Scottish

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    economy as to the rest of the United Kingdom.
    I am prepared to meet the STUC and Scottish CBI as the need arises, and shall be discussing the economic situation with the STUC again tomorrow.
    Mr. Taylor: Will the Secretary of State explain his apparent utter complacency and lack of success in safeguarding Scotland's interests at a time of crisis, when Scottish living standards, employment, investment and business confidence are all sliding disastrously and we have a major steel crisis? Where has his fighting spirit gone? Why has he become so silent these days? If he has lost his fighting spirit, would it not be appropriate for him to make way for a fighter when Scotland needs a fighting Secretary of State more than ever before?
    Mr. Ross: The hon. Gentleman must not take too much out of himself. He must save himself for the fighting which is going on within the Conservative Party, regarding the terms of its policy. I am not prepared to take that kind of nonsense from him. The hon. Gentleman was a Member of the Conservative Government when the figure of unemployment in Scotland was higher than it is today. That went on for more than two years. Indeed, there was then no economic crisis and world recession, and there was no spiralling increase of oil costs. That was the Conservative Government's unique achievement, which considerably changed the whole situation in Scotland. Indeed, they left the whole country at a standstill and in despair, and we had to pick up the pieces.
    Mr. Taylor: What is the right hon. Gentleman doing about it?
    Mr. Ross: The hon. Gentleman asks what we are doing about it. If he is so concerned, I suggest that he should have been here at 5 o'clock this morning, when he would have heard my right hon. Friend the Secretary of State for Employment deal with this situation.
    Mr. Sillars: Given the magnitude of our present unemployment problems, especially among young people, will the Secretary of State discuss with the Scottish TUC and press in the Cabinet for the acceptance of the idea of work creation schemes proposed by the Manpower Services Commission and the TUC? When
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    the Cabinet further discusses the temporary employment subsidy, bearing in mind the importance of small firms to the Scottish economy, will he argue for that subsidy to apply to firms with fewer than 100 employees?
    Mr. Ross: I am grateful to my hon. Friend for his constructive approach. As he knows, my right hon. Friend the Secretary of State for Employment has already referred to this matter. My right hon. Friend will very shortly be making a statement which should cover many of the points made by my hon. Friend, particularly affecting young people.
    Mr. Henderson: Does the Secretary of State recognise that the exchanges in both directions with the hon. Member for Glasgow, Cathcart (Mr. Taylor) are of little help to the unemployed or to anyone else in Scotland? Does he accept that this is a serious situation? Is he not in a position to demand a much larger budget for the Scottish Development Agency than was originally suggested?
    Mr. Ross: I should be happy indeed if we could provide the Scottish Development Agency with all the powers that it requires. I remind the hon. Gentleman that in Committee the Scottish National Party did not help towards that aim. I should be grateful to see a speed-up in the provision of the powers which we think are necessary to deal with this situation. I assure the hon. Gentleman that £300 million is not a bad start, in addition to what is already being spent. I hope that the House as a whole will appreciate that we are concerned and are doing something about the matter. However, so far I have not heard a single constructive suggestion from the Opposition. Indeed, the SNP has suggested that we slow down operations in the North Sea. That would create more, not less, unemployment.
    Mr. Speaker: Order. The dialogue that is going on below the Gangway is not appropriate.
    Mr. Galbraith: If the right hon. Gentleman has recovered from his display of pyrotechnics, will he please direct his mind to the Question, which refers to the outlook for the Scottish economy? Will he tell us whether he considers that the outlook for the Scottish economy is the same as, worse than, or better than, the

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    outlook for the English economy? We all know about his concern, but what is the outlook for our economy?
    Mr. Ross: The hon. Gentleman should know that the outlook for the Scottish economy is brighter than that for the English economy. He should also know that the Scottish economy and the British economy generally are so interlinked that we require an overall solution. Anyone who shakes his head at that is not living in this world.
    Mr. Buchan: Does my right hon. Friend agree that the main problem facing the Scottish economy and that of other areas of Great Britain is the failure of capitalism and private enterprise to invest? Is it not abundantly clear that British and Scottish industry require investment of a nature which must now come from public sources, and would it not be a help if the Tory Party and the SNP removed their resistance to our attempts to invest in this way?
    Mr. Ross: I do not like to think what would have happened to our economy if we had taken the non-interventionist line of the Opposition. What would the people in Edinburgh have felt about Ferranti, and the people in the rest of Scotland about British Leyland and Rolls-Royce? We must appreciate that there is a lack of confidence which is created by inflation and the world recession. Unemployment is higher in Australia than it is here, and the unemployment level of 8·6 per cent. in the United States is much higher than the British figure of 4·1 per cent. The Scottish unemployment figure is not as high as it was when the hon. Member for Glasgow, Cathcart (Mr. Taylor) was in office. We shall need to invest, and we require mobile industry, but we cannot get that in a period of world recession, and this will affect our ability to achieve improvements at the rate we wish.

    A74 (Safety)
    Mr. Monroasked the Secretary of State for Scotland what action he now proposes to improve road safety on the A74; and if he will make a statement.
    Mr. William Ross: As foreshadowed in my statement of 17th June, the overall accident pattern, the way the road is used and various possible safety measures have
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    now been examined. As a result, I have decided to modify the existing signs to show the general speed limit for heavy lorries. Additionally, more A74 route repeater signs will be used, to stress that the road is an all-purpose trunk road and not a motorway. Police patrols and other enforcement measures have been intensified and proceedings are being instituted in a large number of cases. The case for providing safety barriers at certain points is being examined, and the road surface and layout are being improved where necessary. My officials are to hold discussions with representatives of road users about the road, the way it is used, and features of it which affect regular travellers.
    Mr. Monro: Is the right hon. Gentleman aware that I am grateful for his statement and his indication that progress will be made in the very near future? Will he make a further announcement, perhaps during the recess, on any physical improvements in road access and underpasses, because the people of Scotland will not countenance any further delay to improvements in road safety on the A74? Will he press on the police forces concerned that the only way to make an immediate impact on this road is for speeds to be reduced and for them to make certain that commercial vehicles and private cars keep to the required limits?
    Mr. Ross: That is a fair point. The question of speed is all-important, but there has to be a recognition by all who use this road that they should drive to the conditions of the road and traffic at any particular time. There is no easy solution. There are accidents even on motorways. We are having joint discussions with lorry drivers and haulage associations, and also with the motoring organisations, to bring in people whose point of view may not have been taken account of by the engineers. With regard to the hon. Gentleman's point about access roads, this is a very busy farming area but very few accidents have taken place at the access roads. During the six months of the winter there was not one fatal accident on the Dumfriesshire section of the road.
    Mr. Buchanan: Will my right hon. Friend consider the solution used on the Continent and ban all heavy lorires from

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    the middle or outside lanes of this road? Does he realise that heavy lories are the chief cause of accidents on this road?
    Mr. Ross: I would not say they were the chief cause. They are certainly involved in accidents. Heavy lorries represent about 25 per cent. of the traffic on this road and they are involved in about 30 per cent. of the accidents. There is no easy, quick or sloganised solution. I hope something will come out of the discussions, but I have seen protests from lorry drivers that they are being blamed for the accidents. All road users must drive with care and observe the signs. They must realise that they are not on a motorway, and that speed limits do matter. I am glad to say that there has been an improvement in and stepping up of police management in this matter, with considerable effect.
    Mr. Gordon Wilson: Is the Secretary of State not being pathetically complacent about the problems being caused by this road? Does he not realise that it carries considerable loads of traffic in the summer and that it is ridiculous that a road of this calibre, which is a main umbilical link between Scotland and England—a link he is particularly keen to maintain—was not constructed as a motorway? Will he undertake that it will be upgraded to a motorway within the soonest possible time?
    Mr. Ross: What does the hon. Gentleman mean by "within the soonest possible time"? Are we to create a completely new road? He should talk more sense—[Interruption.] The hon. Gentleman knows that improvements are going on. I do not know how familiar he is with this road and the conditions on it—
    Mrs. Bain: Answer the question.
    Mr. Ross: The manners of the SNP are really disgraceful, both inside and outside this House. They do no credit to the people of Scotland.
    Mr. James White: Is my right hon. Friend aware that I am probably the only hon. Member who carries a driving licence for a heavy goods vehicle? Is he aware that I have been using this road since 1938, and in a question six weeks ago I asked what kind of disaster would be needed before something was done about the A74? Does he recall that 14
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    days later 11 people were killed on this road? Does he realise that I am delighted with his answer but that it is no use of drivers who appear in court having their fines paid by trade unions, and that unless they lose their licences, accidents will continue to happen?
    Mr. Ross: I am grateful to my hon. Friend for his comment. I know of his experience, and I have discussed this matter with him The important factor is the way in which the road is used. When an accident occurs we examine it to see whether the condition of the road had anything to do with it, whether the mechanical state of the vehicle was the cause, or whether it was caused by incompetence of the drivers. Anyone who thinks that the easy way out is merely to create a better road and therefore a safer road, does not understand. Drivers must appreciate the kind of road they are travelling on, and should drive to suit the conditions. The figures for accidents on the 68-mile stretch of the A1 in Yorkshire are relatively the same as for this road.
    The approach by the hon. Member for Dumfries (Mr. Monro), who is immediately concerned with the road, was very different from that of other hon. Members, who seek simply to make propaganda out of this issue.
    Mr. Buchanan-Smith: Contrary to what has been said in some parts of the House, is the Secretary of State aware that to raise this road immediately to motorway standard would isolate the communities in the areas through which the road passes? In the various plans that the right hon Gentleman may be bringing forward for structural improvements to the road, will he ensure that consideration is given to the future, and to the hopes of all hon. Members that eventually the road will be taken up to motorway standard, and that improvements will be made to that end?
    Mr. Ross: We may move in that direction ultimately, but the hon. Member must know that his Government took a decision on this road in April 1973, in respect of improvements, and that we have been carrying out those improvements and stepping them up. We have drawn on the experience of the users of this road in deciding what improvements should be made.

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    Hon. Members have referred to the need for safety barriers, but at certain points they could be a danger rather than a help. We would have to decide what sort of barrier was needed. All these things are being examined and decisions about improvements are being taken continually.

    Road Accidents
    Mr. Alexander Wilsonasked the Secretary of State for Scotland what immediate and long-term steps he is taking designed to reduce the number of road accidents in Scotland; and if he will make a statement.
    Mr. William Ross: In 1974, there were fewer road casualties in Scotland than in any year since 1963, and provisional figures for the first five months of 1975 suggest that this trend is continuing. Scotland benefits from general road safety measures in force throughout Great Britain. Within Scotland, new and improved roads help to reduce accidents, and the Road Safety Advisory Unit of the Scottish Development Department continues to investigate and advise. The new and more broadly based regional police and local authorities will develop road safety training and education work.
    Mr. Wilson: I am disappointed with that reply. In view of the feelings of my constituents, is it not about time that the road from Hamilton through Clyde-side was straightened and widened in order to avoid heavy lorries passing through my constituency? My constituents are scared of them. In view of the 22 deaths on the A74, will my right hon. Friend look into the question of the serious difficulties created by cars and lorries moving from motorway conditions on to dual carriageway roads, with the difference in speed limits and conditions which obtain? Will my right hon. Friend plaster that road with signs? Will he congratulate the police on their latest efforts in convening special courts in Lanark to convict motorists and lorry drivers? In one instance a motorist was driving at 106 mph on the A74. Will he do something about the A74 in terms of road signs?
    Mr. Ross: As I have explained, that is precisely what we are doing on the A74. We want to impress on people that they are on an A road and not a motorway.
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    The question of access is being examined. We have asked the agent authorities to make proposals to improve access and and to cut down the number of access roads. I note what my hon. Friend said about the police, and I am glad that he appreciates what has been done. There was considerable publicity about this road and about what was likely to happen in Lanarkshire in relation to the Glasgow Fair weekend, but there were no fatal accidents on that Lanarkshire road in the heaviest of the weekends. I take my hon. Friend's point about roads which lead into motorway sections, but there is always a problem there. When a new motorway is created there is a new pattern of feed-in of heavy lorries and industrial traffic, and this places a further burden on local authorities. I understand that they are looking at these points, however.
    Mr. Corrie: Is the Secretary of State aware of the problems of the road between Stranraer and Gretna, caused by juggernauts coming over from Northern Ireland? Many of the boys driving these wagons are not old enough to hold a heavy goods licence. They stop their vehicles and swap for more experienced drivers when they get near Dumfries. Many accidents are caused by these inexperienced drivers. Will the right hon. Gentleman undertake more rigorous inspection of these drivers at the port, to make sure that they are experienced, and can handle these wagons?
    Mr. Ross: A number of hon. Members from the Galloway area have written to me about this point, and we are looking into it.

    Oil Platform Site (Portavadie)
    Mr. MacCormickasked the Secretary of State for Scotland if he will pay an official visit to the oil platform construction site at Portavadie.
    Mr. Milan: My right hon. Friend has no plans at present to visit this site.
    Mr. MacCormick: When the Secretary of State makes plans to visit the site at Portavadie, bearing in mind the huge sum of Government money invested in it and the importance of future expansion of tourism in the area—and since the company involved is having to reconsider the transport arrangements—will the right

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    hon. Gentleman consider setting up proper vehicle ferries at Tarbert, on Loch Fyne, and Portavadie, with a view to further developing the area?
    Mr. Milan: We have looked into this matter, but we feel that the need has not been proven and we are not willing to give a grant for it. We have suggested that the harbour authority should discuss the matter with the Strathclyde Regional Council. I understand that when the site is operative the contractors will use their own ferry, so that their operations will not be affected by the absence of a normal roll-on roll-off ferry.
    Mr. Lambie: When my hon. Friend takes the boat across the Clyde to go to Argyll he will see very large bulk oil carriers discharging their cargoes into smaller tankers, which will transport the oil to refineries outside Scotland. This means that not one job is provided in Scotland in connection with that oil. Is my hon. Friend aware that while he is on the boat to Argyll, if he looks towards the Ayrshire coast he will see the Hunters-ton peninsula. We are very grateful to the Secretary of State for giving permission for an oil platform site there, but the people are disturbed and dissatisfied at his persistent refusal to give a final decision on the applications for an oil refinery on the peninsula, in spite of the ever-increasing level of unemployment.
    Mr. Milan: I have not yet said that I am going on the boat, but if I do I shall look out for all these interesting things. I have nothing to add to what has been said by my right hon. Friend about the oil refinery at Hunterston, except that there are very serious nuclear safety factors involved there which must be taken into account; but my right hon. Friend has already made his view clear about that.

    School Transport
    Mr. Adam Hunterasked the Secretary of State for Scotland what representations he has had from local authorities requesting information about changes in the financing of school transport; and if he will make a statement.
    Mr. Milan: None. The Government are reviewing the provision for school transport in the light of the report of the Working Party on School Transport set
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    up in 1972 by the then Secretaries of State for Education and Science, and for Wales. and of views expressed on the report by interested bodies, including the Scottish local authority associations. It is, however, too soon to say when conclusions will be reached.
    Mr. Hunter: Is my right hon. Friend aware that the cost of sending children to some schools is becoming prohibitive? Is he aware that in certain circumstances—at Inverkeithing High School, for example—parents are obliged to make their children stay for school meals rather than that they should bear the cost of bus travel home at midday? Does he not agree that where there are two or three children in a family who are not entitled to free travel, the cost of bus fares and school meals represents a heavy draw on the budget? Why cannot the local authorities, with the help of the Government, do something about this?
    Mr. Millan: My hon. Friend will know that educational authorities have certain discretionary powers. At the minute they need not stick to the recommended limit for free transport, and in the past some of them have decided on more generous limits, at their own discretion. I understand that if the home of a family of school children falls just outside the limit, bus fares can be quite a heavy burden. However, discretionary powers are available to local authorities to meet these cases.
    Mr. Russell Johnston: Does the Minister agree that the two-miles' limit is applied somewhat inflexibly by certain local authorities? Will he make it clear to local authorities that where either road safety or exposed weather conditions are factors they should apply the two-miles' limit with flexibility, and provide transport where it is necessary?
    Mr. Milan: I should be rather chary of recommending such a thing to local authorities. At the moment they have complete discretion, and they take different views in different areas. Some authorities would be glad to be more flexible, but they believe that if they make a concession in one area, in particular circumstances, it is liable to be quoted against them elsewhere. This happens. These are matters wholly within the discretion of local authorities I am

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    sure that what the hon. Gentleman has said will be drawn to their attention.
    Mrs. Bain: Does the Minister not agree that the present recommended cutbacks in public expenditure by local authorities militate against their use of this flexibility? Does he not further agree that it would be more advisable to issue free public transport passes to all students attending school in the area? This would mean that the Government's commitment to encouraging children to stay on beyond the school leaving date would be more likely to be carried out.
    Mr. Milan: In terms of additional public expenditure, it would not be one of my priorities to give free school passes to all children regardless of the distance they live from school. As I have said, local authorities may use their discretion in this matter.

    Fishing Industry
    Mr. Sproatasked the Secretary of State for Scotland if he will make a further statement on the state of the fishing industry in Scotland.
    The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): The industry continues to face difficulties arising mainly from reduced catches and reduced prices at the ports. In the light of these difficulties the Government have decided, as was announced yesterday by my right hon. Friend the Minister of Agriculture, Fisheries and Food, to extend the present temporary aid to the industry for a further six months.
    Mr. Sproat: Does the hon. Gentleman agree that although anything is better than nothing, to cut financial aid to the industry at this time is scandalous? Is he aware that 30 per cent. of the Scottish fleet has had to be tied up over the past 18 months, and that this drop in financial aid will mean that this horrific figure will increase even further? Does he not also agree that there is a need for a scheme to be introduced after September to give the fishing industry the certainty of stable, long-term financial viability?
    Mr. Brown: It is unusual for the hon. Gentleman to exaggerate in the way he has. There has not been a cut in financial aid; the scale has been reduced at the top end, as the hon. Gentleman knows,
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    which has resulted in a modest reduction. The overall figure is reduced because fewer vessels are involved. To call it scandalous is certainly an exaggeration.
    I appreciate the point that the hon. Gentleman made. What does the industry really need? It needs to be able to catch more fish, but it also needs more people who are willing to eat fish, otherwise there is no guaranteed certainty of profitability for the industry, at its present size.
    Mr. Grimond: Is the Minister aware that as far as it goes this new offer is better than nothing? However, perhaps it does not go far enough. Can he bring us up to date on the limits? Is his advice still that a 50-miles limit will not achieve very much, although the industry very much wants it? If this is so, is it the Government's policy to go for a 200-miles limit? When shall we reach a measure of international agreement on this greater limit?
    Mr. Brown: That is an improvement. At least the right hon. Gentleman has said that the announcement is good as far as it goes, and I welcome that. He knows that Government thinking and strategy on limits are continually evolving. It is far from being a simple issue. It is perhaps, made more complicated and delicate by the announcement by Iceland, with which I shall be dealing in the next Question.
    Mr. Watt: Does the Minister recognise that we also welcome the extension of the subsidy? Does he further recognise the relatively greater importance of the fishing industry to Scotland than to the rest of the United Kingdom? Will he accept my plea for him to take the lead in pushing for an extension of the fishing limit to 200 miles?
    Mr. Brown: We are making progress; we have now had the announcement welcomed, and I appreciate that. It is no secret that the Scottish Office takes the lead in many issues involving the United Kingdom fishing industry, because of our greater interest in fishing and its effect on our communities. I assure the hon. Gentleman that we are well aware of the need to think ahead on the whole question of limits, including those related to the common fisheries policy of the EEC.
    Mr. Buchanan-Smith: I, too, acknowledge what the Government are doing, and particularly the part played by the Scottish Office. In all seriousness, I ask the hon. Gentleman to pay attention to what my hon. Friend the Member for Aberdeen, South (Mr. Sproat) said. This is an industry on which the livelihood of many people depends. It is also an industry on which the livelihood of many communities depends. The industry is crying out at present for a longer-term strategy, rather than the hand-to-mouth existence which the Government are handing out at present.
    Mr. Brown: I appreciate that. However, I am sure that the hon. Gentleman recognises that in the long term the industry inevitably looks as though it will be a contracted industry. That is the problem facing all of us. We have had constructive discussions with the industry, and I shall certainly continue to help the industry in any way I can.

    Fishing Limits
    Sir John Gilmourasked the Secretary of State for Scotland what estimate he has made of the changed fishing pattern round the Scottish coast which is likely to emerge as a result of Iceland's decision to operate a 200-miles' fishing limit.
    Mr. Hugh D. Brown: The recent announcement by the Icelandic Government made it clear that they wish to hold discussions with interested States on the consequences of their claim to a 200-miles' fishing limit. It woud not, meantime, be helpful to speculate on the outcome to these talks, or on any effect this might have on the pattern of fishing around the Scottish coast.
    Sir J. Gilmour: Does the hon. Gentleman agree that whatever may be the outcome of the discussions that we may have with Iceland, that country is obviously determined to limit the amount of fish caught round its coasts, and that as a result this will put a greater pressure on other waters around the Scottish coasts? Would it not be a good idea to have an early conference of the North East Atlantic Fisheries Commission to consider how to meet the new situation which Iceland's attitude has caused?
    Mr. Brown: I am not aware of any statement made by the Icelandic Government that their intention is to reduce catches. Certainly they are concerned about conservation, as we are. However, at this stage it would be wrong to enter into a wider discussion, given the fact that we have already sought and agreed to have talks with the Icelandic Government.
    Mr. Sillars: Is it not the case that if Iceland's policy is successfully pursued it will become all the more difficult for us to persuade our Common Market partners to alter the common fisheries policy? Does this circumstance not make it imperative that before the next 12 months are up we should reach some concrete decision on the common fisheries policy?
    Mr. Brown: I am afraid that I do not regard the situation in that light. The EEC has a powerful influence as a market for Iceland. It would be wrong to convey the impression that we want to threaten Iceland, because that is not the atmosphere in which to proceed with talks that have been freely offered and accepted.
    Mr. Corrie: Is there any chance of getting trawler-free zones off the west coast of Scotland to try to protect the herrings that are left? Perhaps fishing, including fishing by British boats, in that area could be prohibited during certain times of the year, so that the fish stocks can build up.
    Mr. Brown: To talk about trawler-free zones which would include British trawlers, as the hon. Gentleman has said, is certainly a little far reaching. I am sure that he knows that we have already reached some kind of agreement about and improvement in the reduction of industrialised fishing, and we shall continue to do everything possible to secure the livelihood of our fishermen.
    Mr. Henderson: Does the hon. Gentleman accept that most hon. Members will welcome his statement that there is to be no browbeating of Iceland, which has taken this measure to protect her national interests? Is it not disgraceful that we should wait for a small country such as Iceland to take these steps before we take them ourselves?
    Mr. Brown: The economies of our countries are entirely different. I appreciate the reasons lying behind the decision of Iceland, but at present we have a licensing system which operates generously for the United Kingdom fleet. We have no reason to assume that that harmonious arrangement will not continue in some form. I am confident that we shall have constructive talks with Iceland, which will be to the advantage of our industry.

  LAW COMMISSION AND LAW SOCIETY
  Lord Douglas-Hamiltonasked the Lord Advocate whether he will make a statement on his last meeting with representatives of the Scottish Law Commission and the Law Society of Scotland in Edinburgh.
  The Lord Advocate (Mr. Ronald King Murray): I have had no formal meetings with representatives of the Scottish Law Commission or the Law Society of Scotland in recent months. I do, however, meet the chairman and president respectively of these bodies at frequent intervals and exchange views and information with them on a wide variety of subjects with which they are concerned.
  Lord Douglas-Hamilton: Will the right hon. and learned Gentleman say whether the Government will introduce legislation to make it unnecessary for Scots resident in Scotland to travel to London at great expense in order to complete formalities at Bow Street Magistrates' Court when they wish to seek employment abroad?
  The Lord Advocate: The hon. Gentleman was kind enough to give me notice of that supplementary question, which does not follow in an obvious way from the original Question. The introduction of legislation on this topic is not a matter for me, although I am very much concerned with the difficulty which the hon. Gentleman has rightly highlighted. I understand that my right hon. Friend the Secretary of State for Scotland has already assured the hon. Gentleman of his interest and concern in the matter, in a letter that he has written to him. I think that the hon. Gentleman can take it that the fact that he has highlighted this matter is very much appreciated by the Government.

  DIVORCE LAW
  Mr. Sproatasked the Lord Advocate what recent representations he has received about the reform of divorce laws in Scotland.
  The Lord Advocate: None, Sir.
  Mr. Sproat: Does not the right hon. and learned Gentleman agree that there is a widespread and growing bitterness in Scotland about the way that this House is handling this matter, which affects the happiness of thousands? Is this question not far too important to be left to the hit or miss methods of private Members' legislation? As plenty of time exists in the House, if the will exists in the House, will the right hon. and learned Gentleman urge his right hon. Friend to see that in the next Session of Parliament the Government provide time for the introduction of Government legislation to prosecute this report?
  The Lord Advocate: This matter was dealt with by my right hon. Friend in reply to the first Question on the Order Paper today. There is nothing much that I can add to that. The hon. Member has highlighted the concern that exists for divorce law reform, and I share this concern, as he knows. But we must consider the other side of the picture, as given in the reply which my right hon. Friend made in writing to my hon. Friend the Member for Fife, Central (Mr. Hamilton). As he made clear in that reply, Governments—the hon. Gentleman's Government and the Government now in office—have taken the view—wisely, and taking account of all the considerations involved—that in this field the appropriate way to proceed is by private Members' legislation.
  Mr. William Hamilton: Why is that so, when the Government can give time for the Hare Coursing Bill, and here is an issue that cuts across every party in the House? As all responsible bodies in Scotland want to harmonise the law of Scotland with that of England, will the Lord Advocate now give an assurance about this matter, or will his right hon. Friend the Secretary of State talk to the Leader of the House with a view to giving time? It is simply not good enough to leave it to the whims and chance of the Ballot for Private Members' Bills.
  The Lord Advocate: The hon. Gentleman has referred to the Leader of the House, and, of course, it is his responsibility to concern himself with the time available for legislation. It is not my responsibility. But I ought to repeat what I sought to say when answering an earlier question. I very much appreciate the concern and anxiety for reform in divorce law, but it would be quite wrong for people who express that concern not to recognise the strong moral feelings that exist on the other side of this issue.
  Mr. David Steel: Is the Lord Advocate aware of the growing practice of people in my constituency being advised to seek residence just over the border and commute to work in order to be able to avail themselves of the facility of the divorce law of England? Is that not bringing the law of Scotland into disrepute? If a private Member introduces a Bill early in the Session, what is to stop the Government's referring it to the Scottish Grand Committee for Second Reading?
  The Lord Advocate: I am aware of that anomaly. No doubt others will take note of the second point the hon. Gentleman raises.
  Mr. Galbraith: Does the Lord Advocate consider the law relating to marriage and the family an important branch of the law? If he does, why does he appear to favour changes in that law without any explanation to this House of the principles involved in the changes? Will he now withdraw the unworthy allegations of obstruction which on 9th July he directed against those of us who believe that it is utterly wrong that legislative changes of this nature should go through the House without one word of debate on Second Reading? Is that really what, as Lord Advocate, he believes in?
  The Lord Advocate: Now that the hon. Gentleman has finished his pyrotechnics, I should say that I acknowledge that the hon. Gentleman, in his own mind, is not being obstructive in this matter. I think that, as he sees it, he is seeking merely to have a proper Second Reading debate about the merits of this cause. That is the point he makes. Whether that is a matter of substance I leave to those who read Hansard and I hope that the reading of Hansard
  1810
  will include the hon. Gentleman's contribution to the Committee stage of the Bill introduced by my hon. Friend the Member for Aberdeen, North (Mr. Hughes) in a previous Parliament, when I think the hon. Member made many excellent Second Reading speeches.

  EUROPEAN COMMUNITY (LEGISLATION)
  Mr. Russell Johnstonasked the Lord Advocate what steps he is taking to ensure that the European Commission in formulating EEC legislation is adequately informed of its impact on Scottish law.
  The Lord Advocate: Earlier this year I took the initiative in having a discussion with the Director General of the Legal Service of the European Commission, in which I drew attention to the separate nature of the Scottish legal system and to the necessity of the Commission's taking Scots law into consideration in formulating proposals for EEC legislation, and I propose to take further steps in this regard shortly. I also make every effort to ensure that Scottish legal advice is available to the Commission with respect to particular proposals for legislation. I should add that so far I have found the Commission well informed on Scots law and extremely anxious to take it into account in framing any proposals.
  Mr. Johnston: I am grateful for that reply. Does that mean that the Lord Advocate agrees or does not agree with the highly critical comments recently made by Lord Hunter, in which he basically alleged that the Government—not just the present Government but all Governments since we entered the Community—have, in their relationships with the Commission, ignored the differences between Scottish and English law? Does the Lord Advocate agree? He knows that the statement has been made. Is he taking steps to ensure that Scottish lawyers are employed within the directorates of the Commission? If so, when does he expect to have some results from them?
  The Lord Advocate: As to the first matter, I certainly agree with Lord Hunter in so far as he was stressing the

  1811
  need for Scottish law to be taken fully into account in Brussels. I do not go the whole way with Lord Hunter, because I think that he does not fully appreciate the extent to which Scottish law is being taken into account. I am not satisfied with the position, but I do not wholly agree with him on the matter.
  On the second point, I say with some regret that the Director of the Legal Services Commission, whom I met in January this year when I was in Brussels, has since died. Accordingly, it has not been possible for me to follow up the exchanges I had then. It is my intention to take that up as a matter of urgency.
  Mr. Dalyell: Will the "further steps" to which the Lord Advocate referred in his first answer include submissions to the Tindemans inquiry?
  The Lord Advocate: I should require notice of that question.
  Mrs. Winifred Ewing: Is the Lord Advocate aware that on the legal committee of the EEC there is no Scottish qualified lawyer—though there could have been, as I myself applied but was turned down—and that Lord Hunter appears to regret that fact? Does the Lord Advocate not realise that information must go two ways? We very much appreciate his answer about the information given to the EEC, but is not the House very much concerned about the degree of information coming to the Lord Advocate? As he must be aware, in this House there is not the same scrutiny available for the vast outpourings of EEC legislation as there is for United Kingdom legislation. As that is admitted is it not time for the Lord Advocate to set up some sort of special office under his Department for the specific purpose of scrutinising all legislation from the EEC as it affects Scottish law?
  The Lord Advocate: The hon. Lady has previously put questions to me about information coming to the Lord Advocate. I hope that these answers satisfy her. I have noted her concern—a concern which I share—that there should be two-way communications in this field.
  Mr. Rifkind: Will the Lord Advocate confirm that the last Government's appointment of a Scottish judge as the
  1812
  sole British representative on the European Court of Justice ensures that Scottish legal principles are taken fully into account whenever legal matters are being determined by the court?
  The Lord Advocate: I am happy to confirm that.

COURT LINE LIMITED
The Secretary of State for Trade and President of the Board of Trade (Mr. Peter Shore): With permission, Mr. Speaker, I would like to make a statement. As the House will recall, following the collapse of Court Line I appointed inspectors on 22nd August 1974 under Section 165 of the Companies Act to inquire into all the circumstances relating to the collapse of that firm. Subsequently, following the approach by individual MPs on behalf of their constituents, the Parliamentary Commissioner decided to undertake investigations of allegations of maladministration arising from the statements made by Ministers prior to the firm's collapse. Both these reports were published at 3 o'clock this afternoon and are now available in the Library and the Vote Office.
I would like to take this opportunity of expressing the Government's gratitude to Sir Alan Marre and the inspectors and to pay tribute to the thoroughness of both reports.
Neither report makes any criticism of the decisions taken by the Government in the handling of the issues. Indeed, the reports pay tribute to both officials and Ministers for the speed and sense of responsibility with which they reacted to the situation as it developed.
Both the PCA and the inspectors do, however, criticise in certain respects the statements made to Parliament on 26th June and 1st July by the then Secretary of State for Industry on behalf of the Government. They accept that the statements were made in good faith and reflected the confidence which the Government genuinely felt at the time about the prospects of the business based on a careful assessment of the best information available to it, but they consider that the statements went further than was justified in reassuring the public about

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the continuation of the company's operations for the rest of the summer season last year. The Government note and respect the criticisms made in both reports, but the Government considered then, and still believe, that the statements made were right in the difficult circumstances at the time.
Mr. Brittan: Shame.
Mr. Rost: Arrogance.
Mr. Shore: The Government have carefully considered in the light of the reports whether any further measures to assist those affected are called for. This is not a case in which any legal liability arises. The Government's statements were not phrased or intended to give a formal guarantee, and did not do so. Furthermore, the House will recall that the Government decided last September to legislate to compensate those Court Line and other holidaymakers who had a reasonable expectation that they were protected by adequate bonding arrangements but who nevertheless suffered loss as a result of the failure of their tour operator. The Air Travel Reserve Fund Act 1975 has accordingly established a fund to which the Government have offered a £15 million interest-free loan and from which the Court Line and other holidaymakers to whom I have referred are being reimbursed and future holidaymakers will benefit. The Government have, therefore, concluded that no further payment out of public funds would be justified.
Mr. Adley: Disgraceful!
Mr. Shore Mr. Shore However, wider issues of public policy are involved. Very difficult questions of judgment are always involved in deciding how much or how little should be said publicly in situations of this nature, particularly when there is a risk that a wrong emphasis in a statement may bring a company down. This is a matter of continuing concern to all Governments. Because of the importance of the questions raised, the Government feel it right that there should be an early opportunity for debate, and my right hon. Friend the Lord President of the Council will make an announcement shortly about the arrangements.
Mr. Heseltine: Will the Secretary of State understand that we on this side of the House think that it is totally disgrace-
1814
ful for the Government to reject the Ombudsman's report in this way? Will he understand that this report by the Parliamentary Commissioner fully vindicates our request last year for a full inquiry? Will he understand that it fully supports our view that the Secretary of State for Energy misled the House and the wider public at the time of the announcement last year, and that we on this side of the House unreservedly support the Ombudsman's conclusions in paragraph 87 of the report that
"the statements were liable to leave a misleading impression with the public"?
Will the right hon. Gentleman specifically explain whether any Government have ever rejected a report of a Parliamentary Commissioner before? Does he agree that in the circumstances the loan made under the Air Travel Reserve Fund, which must be repaid by future holidaymakers, should now be turned into a grant from the Government, and that the responsibility for that grant must lie at the feet of the Secretary of State for Energy?
When the right hon. Gentleman says that the statement was made in good faith, is he aware that in paragraph 79 of the report it is specifically made clear that the Minister was briefed to take a more cautious view of his civil servants, and that he ignored that advice? Will he understand that what the House needs is not a debate next week, not a statement by him, but an explanation and apology from the Minister responsible, the Secretary of State for Energy?
Mr. Shore: The hon. Gentleman's remarks were entirely predictable and once again reflect his over-rapid response to reports which I doubt whether he or other hon. Members have yet had much opportunity to examine.
The hon. Gentleman has made a number of attacks, thinly disguised as questions, on the Government. Very tendentious pieces have been taken from the report. The hon. Gentleman has made points which I believe should rightly be taken up in the debate, which I very much hope we shall be able to hold shortly.
As the hon. Gentleman mentioned my right hon. Friend the Secretary of State for Energy, I can tell him that my right hon. Friend looks forward to an opportunity to speak for himself.
Mr. Richard Wainwright: Is the Secretary of State aware that the unanimous and firmly worded criticisms made by the three distinguished inspectors, drawn from different professions, cannot be brushed aside with a perfunctory gesture of respect? Is he also aware that what is said about a debate will be welcomed, because the whole unhappy incident raises yet again the question of the quality of commercial information available to Ministers?
Mr. Shore: The hon. Gentleman is on to a very serious point, certainly at the end of his question, when he spoke about the quality of information available to Ministers and what Ministers can and should say in public about that information. That is one of the really serious issues which I hope that we shall debate.
We did not brush aside the conclusions of two reports. What we did, as we had the right to do, was to come to the genuine conclusion, in the face of the obvious difficulties, that we disagreed with the finely balanced judgments reported by the two inspectors. We look forward to an opportunity of explaining exactly why.
Mr. Roy Hughes: Does not my right hon. Friend agree that the Opposition's criticism is ill-founded, bearing in mind that the Government's measures were the means of saving many jobs, particularly in Appledore in North Devon, and that the financial compensation to holidaymakers fully justified the public expenditure incurred?
Mr. Shore: It is right for my hon. Friend to remind the House of two of the major background features of the whole affair—first, that the Government's main rôle in relation to Court Line was to take measures which would safeguard the jobs of many thousands of shipbuilding workers, and, secondly, that—as I think the whole House will in the end agree—the major problems with Court Line were the problems that arose out of its own financial mismanagement.
Mr. Kenneth Lewis: Is it not extraordinary that the Minister should come to the Dispatch Box and treat this report from the Ombudsman in such a way as to make the public believe that it is useless for him to produce any reports?
1816
Would the right hon. Gentleman have accepted the report if it had been favourable to the Government? Will the right hon. Gentleman say whether he believes that the fund ought to have a direct contribution from Government since at present it is being built up by the public for the benefit of the public?
Mr. Shore: I entirely repudiate the idea that the report is useless. On the contrary, the whole value of reports of this kind is that the Parliamentary Commissioner is afforded full access to all the documents and all the reports. He gives his best judgment on all the facts. Let me put this point to the hon. Gentleman in return: if the report had been marginally in favour of the Government as it is marginally against them, would that have silenced him and his right hon. and hon. Friends on the Opposition Front Bench? I do not think so for a moment.
Mr. John Mendelson: Is my right hon. Friend aware that judging from my correspondence from people directly affected as customers of Court Line, and from conversations with hon. Friends, what people seem to be primarily concerned about is not that this should be a cockpit of political in-fighting but that there should be the right to compensation for losses? Will my right hon. Friend address himself to this problem and give the House the assurance that those who sometimes had saved for a considerable time for their holidays will be fully compensated so that those who approve of the prudent housekeeping shown by the way in which this arrangement will be financed, and their constituents, will be satisfied?
Mr. Shore: My hon. Friend will know that the whole purpose of the Act we introduced some months ago was to make sure that holidaymakers, not only with Court Line but with a number of other travel firms that failed in the special circumstances of last summer, received monetary compensation. I am glad to say that that compensation will shortly begin to be paid. In addition, what we have tried to do is to make provision for the future so that if and when such collapses occur again they do not lead to the kind of appalling loss and mess with which we were faced last summer.
Mr. Donald Stewart: Leaving for the debate those matters suitable for it and referring to the Ombudsman's report, may I ask the right hon. Gentleman whether he does not believe it to be a serious situation when bodies and people such as the Ombudsman, whom we have come to regard as an independent arbiter, have their reports brushed aside by the Government? Is the right hon. Gentleman aware that we saw this yesterday with the report of the Civil Aviation Authority? Surely it is not beyond the Government to say in an honourable way, "We admit that we made a mistake."
Mr. Shore: I repeat that we did not brush aside this criticism. It is right that the House and the Government should have the opportunity to put their side of the story. We shall do that. We have no doubt that the House will then be in a much better position to make a judgment.
Mr. Fletcher-Cooke: Does the right hon. Gentleman appreciate that the report of the Parliamentary Commissioner is a report to Parliament not to the Government? Is he aware that it was available to Members only at three o'clock although for the Government it was evidently available much earlier? Does the right hon. Gentleman further appreciate that this is not the first time that the Government have pre-empted the Select Committee on a Parliamentary Commissioner's report before the Select Committee has had an opportunity to consider it? If the Government are to treat reports which they do not like in this way, the whole purpose of the Select Committee will be defeated.
Mr. Shore: I understand the difficulties to which the hon. and learned Gentleman refers. We felt that as we were receiving not only a report from the Parliamentary Commissioner but also the report of the inspectors, it was right for us to give our reactions and state our conclusions on them at this time and thus to prepare the way for a debate before the recess overtakes us.
Mr. Blenkinsop: Is my right hon. Friend aware that there is overwhelming support for the Government in constituencies such as mine where large numbers of men work in the shipyards affected and where many people were also affected through their holiday plans? Does he
1818
realise that there is overwhelming support for the action taken by the Government to protect people from the effects of the private financial take-over that was the cause of all this trouble?
Mr. Shore: I am glad that my hon. Friend has made that point. I said earlier that it is all too easily overlooked in the general discussions that have taken place and the comments that have been made, particularly last summer by the hon. Member for Henley (Mr. Heseltine) and some of his hon. Friends, that the major result following the Government's intervention in Court Line, or the Government's response to Court Line's approach to them, was the saving of thousands of jobs in the shipbuilding industry.
Mr. Eldon Griffiths: As the Member who raised this matter with the Ombudsman, may I remind the House of the statement by the present Secretary of State for Energy to me to the effect that he would await the Ombudsman's report with confidence? Is not the position now that the right hon. Gentleman has been found guilty of misrepresentation to this House and to the country, against the advice of his officials, in seeking to strike a posture as the saviour of the holidays? Is it not also the case that he has been shown beyond peradventure to have cost thousands of our fellow citizens their money and their holidays last year? In those circumstances—the Government having accepted a referee in the form of the Ombudsman and having kicked that referee in the teeth—is not the Government's action a disgraceful exhibition of misrepresentation and capricious disregard of the Parliamentary Commissioner's report in which the public at least repose more confidence than do Labour Members?
Mr. Shore: The hon. Gentleman has disregarded not only the Parliamentary Commissioner's report but also the report of the inspectors. I do not know on what other basis he can establish the point he has made that my right hon. Friend was guilty of misrepresentation. He is not in the least guilty. The whole judgment of the inspectors and the Parliamentary Commissioner turned upon whether there might have been included a reply to a supplementary question that was not raised. That is the fact of the matter. The significance of that will be debated properly next week.
Mr. McElhone: Is it not the case that responsibility for the collapse of this company rests fairly and squarely on the shoulders of the directors of the company? Talking about misrepresentation, is it not the case that the financial and legal advisers of that company and the board misled the Government when they applied for assistance in June 1974? Is is not a fact that if the Secretary of State had not saved the shipyards and the jobs then, this company would have collapsed much earlier?
Mr. Shore: My hon. Friend is on a central point. If the Government had not made money available to save the shipbuilding industry, the whole company would have collapsed and it would have collapsed slightly earlier, involving more holidaymakers in loss than was the case when it went down in August.
Mr. Whitelaw: Does the right hon. Gentleman appreciate that the Government's attitude to the publication of this report raises serious issues about the relationship between the Government and the reports of the Ombudsman? Does the Minister realise that if the Government try to slide or manoeuvre themselves away from the report, after the Ombudsman has made it, that will raise serious long-term issues? All Ministers—I include myself—from time to time make errors of judgment. To put it at its lowest, the report shows that the Secretary of State for Energy made an error of judgment. When we make errors of judgment, an apology to the House costs nothing. I hope that my remarks will be regarded seriously by the right hon. Gentleman.
Mr. Shore: When the right hon. Gentleman has had an opportunity to study both reports he will find that they both emphasise the fact that my right hon. Friend spoke on behalf of and with the authority of the Government. Therefore, there is no point in trying to single out my right hon. Friend for Opposition censure.
We accept that the issue of the relationship between the Government and the reports of the Parliamentary Commissioner is very important. We do not lightly disagree with those reports, but this not an unheard of occurrence in the history of Parliament. Although we must
1820
give due credit and pay proper respect to the reports brought before us, we cannot accept that they are infallible.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. The House will have an opportunity of debating this matter.
Mr. Les Huckfield: On a point of order, Mr. Speaker. I heard the hon. Member for Henley (Mr. Heseltine) say that paragraph 79 of the Parliamentary Commissioner's report referred to the then Secretary of State having deliberately ignored the advice of his civil servants. I have read paragraph 79—
Mr. Speaker: Order. This is a matter for argument. It is not a matter for the Chair.
Mr. Sedgemore: On a point of order. Mr. Speaker. Is it not customary in the House, apart from calling the old favourites to ask supplementary questions, to allow those with a constituency interest—that includes my hon. Friend the Member for Luton, East (Mr. Clemitson) and myself—to put questions? Is it not disgraceful that that has not been done in this case?
Mr. Speaker: If the hon. Member is describing my conduct as disgraceful, he must do so by a motion. There is to be a debate on this matter. I shall consider the prospects for hon. Members in that debate.
Mr. Heffer: Further to that point of order, Mr. Speaker, and without entering into the previous discussion, some of us have intimate information about the events of that time. Surely it would be interesting for the House to know that we possess information which may well not be otherwise understood by the House? It is wrong for the House to arrive at a judgment on the basis of exaggerated statements made by the Opposition which can easily be repudiated by the facts of the situation.
Mr. Speaker: The Chair is in a difficulty on an occasion such as this. If in the statement it is said that there will be an early opportunity for debate, I must be entitled to bring the proceedings to a close. We have a heavy agenda for today. There is to be a Ten-Minute Bill.

1821
If there had not been the intimation of an early debate I should have allowed the supplementary questions to continue. I must be allowed to exercise my judgment, especially as it is now 3.55 p.m.
Mr. Buchan: Further to that point of order, Mr. Speaker—and I do not often raise points of order. It seems to me that my hon. Friend the Member for Nuneaton (Mr. Huckfield) raised an extremely important point which is not, with respect, a question of argument. He challenged an Opposition Front Bench spokesman with having uttered an untruth. Normally that is a matter for withdrawal in the House if the allegation is correct. I believe that the allegation is correct. All of us who have read the paragraph believe the allegation to be correct. I should have hoped that you, Mr. Speaker, might direct the hon. Member for Henley (Mr. Heseltine) to withdraw.
Mr. Huckfield: I recognise your difficulties, Mr. Speaker, in this situation. But is the House to have no protection when the hon. Member for Henley (Mr. Heseltine) deliberately and directly misleads the House by saying that certain words are contained in a paragraph of a report, which is before the House, when they do not appear therein?
Mr. Heseltine: Further to that point of order, Mr. Speaker. Although I do not want to trespass on your judgment, particularly as there is to be a debate next week. I must point out, however, that my remarks have been called in question. Serious points have been made. Would it be permissible for me to read four lines from the paragraph mentioned so as to clarify my remarks? That will take only a moment. It would explain the matter to hon. Members who may not so far have read the passage. The passage reads:
"the Department did not think that this had been or could have been absolutely guaranteed. This is clearly borne out in the notes for supplementaries which an official prepared for the Secretary of State and which made it clear that guarantees could not be given …"
I believe that I was entitled to assume that the Secretary of State for Energy therefore decided consciously to ignore the advice of his officials.
Mr. Speaker: These exchanges have made it clear that I was right. This is not a matter for the Chair. It is a matter for argument.
Mr. Huckfield: With the greatest of respect, and while I appreciate your difficulties, Mr. Speaker, can the House receive no protection when the hon. Member for Henley deliberately excluded half a sentence from the passage which he quoted?
Mr. Speaker: Frequently comments are made whether the remarks of hon. Members opposite are incorrect or inaccurate. Those are matters for debate. The Chair cannot possibly judge immediately whether an hon. Member has gone beyond the limit. I have not read the paragraph. I should have to check what was said from the Official Report. I should have to check on the point of order which was made. This cannot be a matter for ruling by the Chair. It must be a matter for debate—and there will be a debate.
Mr. Mendelson: Further to the point of order, Mr. Speaker. This raises the position of Front Bench Members and their relationship to back-bench Members.
The Secretary of State announced that the paper was available only at the moment when he spoke. Many hon. Members have not had time to read it. The hon. Member for Henley (Mr. Heseltine) was therefore under a special obligation to be more than careful in giving an impression of any part of that document.
It is against all honour and tradition for a Front Bench spokesman from either side to give a totally wrong and false impression about a Minister. But having done so, he is obliged to withdraw his statement and to enable that to be subject to debate. But now he must withdraw.
Mr. Speaker: Order. The hon. Member is on a slightly different point of order about the time at which hon. Members received a document. If I may say so with respect, it is a pity that all hon. Members did not receive it at the same time. That is not a matter for me. That is an obiter dictum, and I am careful not to make too many of them.
It is wrong to suggest that it is a matter of order when an hon. Member

1823
says of another hon. Member that what he has said is inaccurate, incorrect, ill-judged or a breach of this, that or the other. That is not a matter for the Chair. That is a matter for debate. I must insist on that. I have no power to order any hon. or right hon. Member to withdraw unless he has used unparliamentary language, and I do not think that any unparliamentary language has been used today.
Mr. Adley: On a point of order, Mr. Speaker. You have ruled that you have terminated this question time because there is to be a debate next week. May I put it to you that the debate next week will take place upon all the political events surrounding the Court Line affair, and that the statement today is concerned with morality and the moral principles involved—
Mr. Sneaker: Order. We must get on. Dr. Marshall.

CARAVAN RATING
4.1 p.m.
Dr. Edmund Marshall: I beg to move,
That leave be given to bring in a Bill to amend the law in respect of the rating of caravans.
Such a Bill is necessary to resolve—
Mr. Charles Fletcher-Cooke: On a point of order, Mr. Speaker. It was said that the Leader of the House would be making a statement about the revised form of business. He has now disappeared.
Mr. Speaker: Order. There will be a Business Statement tomorrow. Thursday is the day for a Business Statement.
Dr. Marshall: Such a Bill is necessary to resolve the confusing situation which has arisen this year over the rating of holiday caravans which remain at their holiday sites all the year round. I expect that most hon. Members will have heard about this problem from constituents owning such holiday caravans who, when visiting their caravans for the first time this year, discovered that a rating proposal, and in many cases a rates demand, had been made in respect of their individual caravans.
Altogether there are 4,300 holiday caravan sites in England and Wales, with over a quarter of a million caravans. Until 1st January 1975 all but 80 of these sites were rated as single hereditaments. Because of a decision of the courts back in 1966, rating and valuation officers are now required to treat each individual caravan as a separate hereditament in the valuation list. A corresponding court decision in Scotland was made in 1974. It is the impact of those legal decisions which has hit caravan owners this year.
Previously, when each site was rated as a whole, the site owner paid the rates to the local authority and passed on this expense to caravan owners as part of their normal site rental. In none of the cases I know of where caravans are now rated separately have I heard of the site rental being correspondingly reduced. These caravan owners, therefore, are faced with the prospect of having to pay rates on their caravans twice over.

1825
Furthermore, the valuations now determined for separate caravans when totalled for a particular site are generally much in excess of the previous single valuation for the site as a whole. For instance, prior to this year's change, a group of eight caravan sites in the Tendring district Essex had a total rateable value of £28,000. With the change to individual caravan rating, the total has risen to £96,000. This has come about independently of any general rating revaluation. Perhaps some of the finer points of rating and valuation practice are involved here and have brought about this strange result, but these are technicalities which the caravan owner in general cannot be expected to appreciate.
Many owners of holiday caravans are not well endowed financially. The new additional rates are adding hardship to confusion for them. Some owners are thinking of selling their caravans and others are towing them around on the congested roads to the coast rather than leaving them fixed and thereby rateable.
Equally anxious over the new situation are the local authorities—numbering 159 altogether in England and Wales—which are required to collect the rates on these caravans. The district authorities all round our coastline have to bear the administrative brunt of the problem, calculating and delivering rate demands for each individual caravan. The problems involved are Herculean, particularly when details of caravan ownership are difficult to obtain or when caravans charge hands or are moved round the same site.
One local authority, the East Lindsey District Council, covering the whole Lincolnshire coast between the Humber and the Wash, has had an extra 21,000 hereditaments added to its rating list, an increase of 45 per cent., because of the change in the rating of caravans Any extra revenue which could accrue to such an authority will be largely offset by the
1826
cost of collection and by the corresponding reduction in the resources element of the late support grant it receives from the Government. The Association of District Councils strongly supports the treatment of holiday caravan sites as single hereditaments.
The Bill which I am now seeking leave to introduce would tackle this problem simply by amending the law to reverse the court decision in 1966 in the case of Field Place Caravan Park Limited v. Harding. The Bill will not exempt holiday caravans from rates, so there is no question of giving caravaners an unfair advantage over other holiday home owners.
The Bill will simply require sites to be rated as whole hereditaments, which is the position which in general obtained before this year. I regard the Bill as a straightforward application of common sense to a confusing and anomalous situation. I shall pursue the objectives which I have described as far as I have opportunity to do so, and I now ask the House to make one such opportunity available to me.
Question put and agreed to.
Bill ordered to be brought in by Dr. Edmund Marshall, Mr. Dennis Canavan, Mr. John Cartwright, Mr. Martin Flannery, Mr. Bruce Grocott, Mr. James Johnson, Mr. Ron Lewis, Mr. David Marquand Mr. John Mendelson, Mr. Caerwyn Roderick, Mr. John Watkinson and Mr. Frank R. White.

CARAVAN RATING
Dr. Edmund Marshall accordingly presented a Bill to amend the law in respect of the rating of caravans: and the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 225.]
ORDERS OF THE DAY
  EMPLOYMENT PROTECTION BILL
  As amended (in the Standing Committee), considered.
New Clause 1

  PROVISION OF FINANCIAL AID FOR POSTAL BALLOTS IN TRADE UNION ELECTIONS
  (1) The Secretary of State may, after consulting the Trades Union Congress, make such arrangements as he considers appropriate for the purpose of providing financial aid to trade unions for the conduct of postal ballots in trade union elections.
  (2) Any such arrangements shall be embodied in an order which the Secretary of State shall lay before both Houses of Parliament and which shall come into effect when a resolution approving the order shall have been passed by both Houses of Parliament.
  (3) The Secretary of State shall not make any payments in pursuance of subsection (1) of this section unless the amounts of the payments and the terms on which they are made are approved by the Treasury.'.—[Mr. Prior.]
  Brought up, and read the First time.
  4.11 p.m.
  Mr. James Prior: I beg to move, That the clause be read a Second time.
  At the start of our proceedings on Report, perhaps it might be in order if I say to the House that I hope very much that we can make reasonable progress. We shall try to keep our speeches as short as we can. We have a great deal of business to get through, and I think it will be better conducted if we try to get through it at a reasonable hour. This will impose a self-denying ordinance on all of us.
  Mr. Russell Kerr: Does that include the right hon. Gentleman?
  Mr. Prior: As the hon. Gentleman knows, I do not usually make very long speeches. In Committee we were able to have a satisfactory debate and to agree on a satisfactory timetable. I hope that we shall be able to proceed in a rational way on Report.
  The new clause is a matter of great importance and follows the debate that we had not only in Committee but on the
  1828
  Floor of the House. I do not know whether the Secretary of State has had time to read his speech, but I think that he will find that it was not one of his greatest efforts. On the Floor of the House he said:
  "Moreover, the Committee proceedings and Report proceedings, which I know are sometimes criticised in some quarters because of the slowness of the operation, are also designed to enable Governments to take account of what is said by the House of Commons and to return on Report and to give a reasoned comment, perhaps in the form of a fresh amendment, on what has been said in Committee."—[Official Report, 23rd June 1975; Vol. 894, c. 44.]
  The Secretary of State should have had ample opportunity to make a reasoned reply. We hope very much that he will be able to accept a new clause on the important matter of financial aid for postal ballots in trade union elections.
  In Committee the Minister of State finished his speech by saying:
  "we will respond to the call that has come from many parts of this Committee by conducting a discussion with the trade union movement to ascertain whether, provided such public help is given, we could achieve the end which many members of the Committee have indicated they desire. In doing so, we shall come back and say what the outcome is. If we can find a way of giving effect to what we agree is desirable we shall attempt to do it within the Bill."—[Official Report, Standing Committee F; 22nd May 1975, c. 246.]
  We have tabled the new clause in a different form from the clause which was put forward in Committee, where we tied it to the Advisory, Conciliation and Arbitration Service. I think that in its present form the clause meets the spirit of the debate which we had on the Floor of the House on 23rd June. Further, I believe that to a large extent it meets the spirit of the motion which was signed by hon. Members from both sides of the House, which read:
  "That this House, in the interests of maximum democratic participation, urges the Government to introduce legislation to ensure the provision of financial aid for postal ballots in trade union elections."
  I think that there is a great deal of support in all parts of the House for a clause to be put into the Bill along the lines of that now before the House. We hope very much that on this occasion the Secretary of State will be forthcoming and accept the clause or tell us what the Government's intentions are as regards implementing the spirit that lies behind it.

  1829
  4.15 p.m.
  Let me make it absolutely clear to anyone who may be worried about the clause that it is our intention that any facility granted for the holding of a postal ballot should be entirely voluntary, and that no union will have to take advantage of it if it does not wish to do so. However, if a union does wish to take advantage of the facility it can take the opportunity of a free post for the purpose of a postal ballot. Of course, since we last debated this matter the cost of postage has increased once again. I believe that this would be a small measure of increased public expenditure that would be entirely justified.
  The greater the opportunities for the rank and file to take part in the democratic processes of their unions the better it will be for the unions and the union leaders. If they wish to take advantage of electing leaders by post, as some unions do, the new clause will give them encouragement to do so. To Labour Members who say that everything is all right and there is no need for any improvement, and particularly any improvement or suggestion which emanates from my right hon. and hon. Friends, I would say that the people who see some of the things that can be put right or improved are not always those who are most intimately connected with what is taking place.
  My right hon. and hon. Friends are responding to a view that is widely held that there is a need—and the need has been shown clearly by the dramatic increase in the votes recorded in the engineering unions' elections—for some form of postal ballot if more people are to take part in union elections. This may be the way in which unions may wish to proceed, but we do not seek to introduce any compulsion.
  I have pointed out in debate that it is my considered opinion—it has been backed up by certain union leaders I have spoken to who feel that their positions would be greatly strengthened if more people in their unions supported them and took part in union elections—that the facility that is set out in the clause should be made available.
  When I came to read the Secretary of State's speech I noticed that he said that some people are under the impres-
  1830
  sion that it is the leaders who control what happens in the union and that they tell the rank and file what to do. We all know only too well that it is the rank and file who dictate policy to the unions. I want to ensure that the majority of the rank and file carry out that process and that it is not operated by only a few.
  We would like to go further than merely providing financial aid for postal ballots. We would like to introduce a similar scheme for at least one election address by any union that chooses to adopt this approach. For local elections we should like to go further and provide a code of practice. We should like to see union elections held on employers' premises and in employers' time. We believe that the twin attack on the problem would have a very good effect as regards the number of people who play a part in union affairs.
  Sometimes Labour Members accuse us of adopting a sort of Trojan Horse attitude towards the trade union movement. They think that everything we suggest is designed not to help the movement but in some way to cause it trouble, or to change it in some direction which they consider to be wrong. I think that those views are totally unjustified by the attitude we are taking in respect of the clause. I believe that when its provisions are recognised there will be an enormous response in the country. I believe that there will be a wide measure of agreement.
  It is some months since we put forward this suggestion in Committee. At that time the Government wished to have a chance of discussing the matter with the TUC. I hope that by now those discussions have been completed and that today the Secretary of State will be able to give us a satisfactory answer. I do not believe that people outside the House will understand the position of the Government, or of the House of Commons, if on a straightforward matter of this nature we are not able to come to a decision to put the clause into the Bill.
  Mr. John Evans: The right hon. Gentleman has spent a long time in past debates dealing with the problem of postal ballots and has referred to my union, the AUEW. He got a little upset when it was suggested that the AUEW

  1831
  should change its method from postal balloting of members to the old method of voting at the branch. Would he have any objection if the AUEW decided to scrap the election of officers altogether and adopt the course followed by other unions of appointing their officers? Would he find that an objectionable course, or would he consider that it would be for the AUEW to decide?
  Mr. Prior: I must make it plain that it must be a matter for the AUEW to decide. But I happen to believe strongly that it has been proved to be a good deal more democratic and in the interests of the members of unions that they should have the opportunity to vote by post. This has been borne out time and again by the numbers of people who have recorded their votes by post compared with the number of people who have recorded their votes at branch meetings. Although it must be a matter for the unions, Labour Members should think of the public interest. The trade unions are extremely powerful elements in our society. Men who become national trade union leaders are very powerful indeed. They exercise great power and possess great authority. It seems to us that the wider the means open to trade unionists of voting for those leaders, and the more democratic those ways are seen to be the better it will be and the more confidence the country as a whole will repose in those who are elected.
  The step proposed in the clause is widely required by trade unionists and supported by the country as a whole. It also has overwhelming support in the House. Labour Members would not have tabled their motion, and we would not have had references by the Prime Minister to this matter at Question Time giving his support to such a procedure, if there were not widespread support for it.
  I hope that Labour Members will not allow their prejudices to run away with them just because this matter is being proposed from the Opposition benches. Because the proposal will add one possible extra element of democracy to the running of these great institutions, we should grasp it and not cavil at what might happen. I hope that the engineering unions will continue to vote by post, and I hope that Parliament will make it
  1832
  easier for trade unionists generally to vote by post. That is the spirit in which we tabled the clause, and I very much hope that we shall have more satisfactory answers than we have had up to now.
  Mr. John Evans: I shall be brief and not delay the House for more than a couple of minutes.
  The clause is of considerable interest. We have discussed the matter at length in Committee, and we had a somewhat inconclusive debate on this tpoic on the Floor of the House. I am a member of the AUEW, which has always supported postal ballots. I also support the fact that the affairs of unions should be managed and run by the unions themselves.
  There is one aspect of the case put forward by the right hon. Member for Lowestoft (Mr. Prior) which should be further examined. He suggested that if the AUEW were to continue with postal ballots it would make it a more democratic union. That raises many questions. It is generally agreed by the trade union movement that the AUEW is already the most democratic union of all.
  Does the postal ballot mean that there is more democracy and more participation in union affairs? There is a strong argument to the effect that the reverse is the case. Simply because one gives members votes two or three times a year to elect national officers can they be truly said to be participating in democracy? Many who oppose postal ballots argue that the best means of participation of members is through attendance at branch meetings. In that way union members can participate in the election of officers and also in union policy-making processes. In regard to the AUEW, it is only through attendance at branch meetings that members can participate in policy. Surely it is most important in making progress and putting forward ideas in union affairs that we should aim at the maximum number of members participating at branch level.
  I suggest that there is something rather hypocritical in a suggestion of this nature coming from the Opposition, because they have not dealt with any of the trade unions which do not hold ballots in any shape or form. They have not said that such a practice is democratic or otherwise in respect of the election of leaders in trade unions. That ground could have

  1833
  been covered, but that has not happened. The AUEW is a democratic organisation. There is an argument among the rank and file of the union about how we should conduct ballots, but I hope that nobody will be misled by thinking that this is what democracy is all about. Democracy lies in participation in union affairs and in the policy-making processes. I suggest that is a matter on which we should exercise our minds rather than dealing with the proposals in the clause. The proposal seeks to lay down the practice that the Government should instruct the trade union movement in how to control its affairs. I reject that proposal.
  Mr. Ray Mawby: I support the clause but, on reflection, I would go a little farther than my right hon. Friend the Member for Lowestoft (Mr. Prior) went in his speech. The hon. Member for Newton (Mr. Evans) raised the point that matters—namely, the question of what makes a union more democratic than it is at present. It is important that every trade union member should regularly attend branch meetings and become involved in elections and in the decision-making machinery. That is the ideal at which we should aim.
  Let us remember that the AUEW for many years tried to ignore the fact that its members were not attending meetings. Certain arrangements had to be made to collect members' "subs" because they did not attend branch meetings. There was always somebody there to collect that money and to take it along to the branch meeting. The system in my union, the Electrical Trades Union, involved the appointment of collection stewards to take in money because we knew that many members would not attend meetings
  It is true that many trade union members do not attend branch meetings. Even the introduction of fines for non-attendance at quarterly meetings does not bring in the members. For one reason or another they just do not attend. We cannot condemn them for that because those of us who are members of other organisations are not necessarily good attenders. We tend to leave it to branch officers to get on with it, and it is only when we hear a rumour that the secretary has made off with the funds that we attend a meeting. That is human nature.
  Mr. David Mitchell: Does my hon. Friend agree when talking of other organisations that there must be many Labour Members who are familiar with the events in the local Labour Party in Newham where those who are not representative of the majority of Labour Party members in that area have gained control and where exactly similar parallels apply?
  Mr. Mawby: I should like to remind hon. Members that it does not happen only in the Labour Party. The Conservative Party, the Liberal Party and other parties have the same problem. Members attend in order to pay their union subscription and then leave others to get on with the running of the union. This is an aspect of human nature that we have to accept. It is right and proper that the hon. Gentleman should continue to try to ensure that branch meetings are made more interesting in order to attract more members. Only in that way will a trade union be absolutely fully democratic, with members taking part in the election of officers and having their full say in deciding policy.
  4.30 p.m.
  In the meantime, before we arrive at that Utopian position, we have to look at the present situation and consider what we ought to do about it. I believe that the number of votes cast in many elections of national officers of trade unions is far too low without the introduction of a postal ballot system. The clause is purely permissive and puts a duty only upon the Government and upon no particular trade union. I should like to see it place a duty on trade unions, but one must talk about the clause as it stands. It seeks only to say that the Secretary of State shall make the necessary funds available—I should have liked it to make available also the back-up services, if required—to enable a union to conduct its elections by post. I believe that this is a move very much in the right direction.
  We have to compare the two methods. The first is that by which members can vote only by attending a branch meeting on a particular night, with all the problems involved for shift workers and others who perhaps are members of darts teams, and so on. There are many other human problems involved. We have to compare that system with the right of a member

  1835
  to be able within his free time to make a serious decision and return his secret ballot by post.
  This is a move in the right direction—although it does not go quite far enough to suit me—and I certainly recommend the House to accept it.
  Mr. T. W. Urwin: I join this debate first of all, perhaps, as the sponsor of the Early-Day Motion which the right hon. Member for Lowestoft (Mr. Prior) has called in aid in presenting his case for the clause. I want to make it perfectly clear that, together with my hon. Friends who supported that motion, numbering more than 100 Labour Members, it was not my intention—nor, indeed, was it theirs—to institute, or even to participate in, a witch-hunt against the AUEW or any other union.
  I speak from a good deal of personal experience of the conduct of trade union ballots and participation, first, as a branch secretary of some 14 years' standing, and, latterly, before I came to this House, 11 years as a full-time officer of a union in the construction industry. I had the unfortunate experience year after year, as a branch secretary, of sending out ballot papers by post to over 500 members, and the responsibility then devolved upon the member to ensure that the ballot paper was returned. I had to face the quite obvious fact that there were far too few members sufficiently interested in the affairs of the union to return those ballot papers. Indeed, by far the majority of the few that were returned were returned personally by those members who were deeply interested in the conduct of the branch affairs of that union.
  It is also clearly understandable that there are many competing factors for the time of trade union members. Whatever their interests might be, it is unforunately true that only a few of them express the kind of interest that I should like to see them take in the conduct of trade union affairs.
  I see no reason why my right hon. Friend the Secretary of State should not lend not just an attentive ear but a sympathetic ear to the request that has been made both through the medium of the
  1836
  Early-Day Motion and in the rather inconclusive debate on the Floor of the House in June, when, even though my right hon. Friend appeared to be in some difficulty, I detected a degree of sympathy in what he said towards the spirit and intention of this proposition.
  I should like to state, on my own behalf and on behalf of my 100 Labour colleagues who signed the Early-Day Motion, that the spirit and intention of it are honest, objective and straightforward. There is no attempted witch-hunting and no attempt to change the rules of any other union.
  The only adverse comment I make concerning the clause is that it should be a voluntary system rather than a statutory requirement on a trade union. If a trade union conducts its affairs on a voluntary basis, that should be acceptable to the House, and the House should not attempt to interfere statutorily or to intervene in the conduct of the affairs of a trade union. But why should not the facilities be made available to permit many more members to participate in the election of officers, who have a vitally important rôle to play in the union they seek to represent? I hope that my right hon. Friend will be a little sympathetic towards the clause.
  Mr. Hugh Dykes: The debate is settling down within a thoughtful framework, as far as one can tell, and that is the right kind of atmosphere for this subject. I shall be brief, because this subject has already been exhaustively discussed in a very long Standing Committee and debated elsewhere. It is also a subject that has been familiarly and frequently aired in the newspapers.
  I merely want to add my words not in any way as an expert but in support of the terms and content of the clause proposed by my right hon. Friend the Member for Lowestoft (Mr. Prior). I unfortunately missed his first few sentences, but I should like to congratulate him and his colleagues in the Standing Committee on arguing the merits of this idea in a very reasonable and restrained way.
  Without wishing to be too abrasive, I must say that it was a little irritating for Conservative Members to have to put up with some laughs and sniggers once again

  1837
  from Labour back benchers—not from the Front Bench. This is the traditional reaction of some Labour Members when confronted with reasonable proposals from Conservatives for the restructuring and reform of some of the institutional arrangements in industrial relations practice. As a result of the Conservative Government's Industrial Relations Act, this is now the automatic response of Labour Members when such matters are discussed. It is an ill service to the trade union movement as a whole and to the wider public, and also to my right hon. Friend, who has argued this subject in a very restrained way.
  There is no sense in which the clause says that the Secretary of State shall intervene in a mandatory way in the internal affairs of trade unions. It is all on the basis that unions themselves should decide their electoral systems, and the election of officers in unions should be decided by the membership as a whole. I believe that there is overwhelming support for this, and equal support amongst registered paid-up trade union members.
  In view of the experience of the hon. Member for Houghton-le-Spring (Mr. Urwin) as a branch secretary and full-time trade union official, we always listen to him with care. However, I think that in 1975 it is probable that there would be much greater acceptance in the wider sense for this proposal of postal ballots because of some of the larger issues which have come up in recent years about the democratic functioning of trade unions, about the ways in which their officers are elected and about the way in which the ordinary branch member feels not literally but emotionally disfranchised.
  But, above all, this is the provision of an option. Subsection (1) of this skilfully drafted clause contains the cautious proposal that there should be full consultations with the TUC before any provisional steps are considered. Subsection (2) says what would undoubtedly satisfy lawyers on both sides of the House who would have their own ideas about the legal and legislative way in which this proposal should be put into effect. The control there seems adequate, to say the least.
  Then we come to subsection (3), which deals with the control of payments. The wider public expenditure arguments apart,
  1838
  the idea today of State money being provided for any purpose is bound to be a sensitive issue. I was a little displeased, for example, about the way in which right hon. and hon. Members on both sides of the House responded, in my view wrongly, to the idea of State money for political parties. But in this case there would be a proper degree of control of the way in which State money would be provided for this unique and limited purpose of ballot papers being delivered free by the Post Office.
  We appreciate that this is a bad week for the Secretary of State. Nevertheless, I hope that he and the Government will respond favourably to the clause. It redounds upon that very critical issue in our modern industrial society of the way in which, all too easily, all sorts of organisations become self-perpetuating oligarchies. This happens in some trade unions. The clause provides a way in which the ordinary members can be represented in a trade union and can be encouraged to show an interest in its affairs.
  It may be that the average turnout in a recent union election was 8 per cent. of the membership. I take that figure out of the air just as an example. If, as a result of the Government bringing in as soon as possible arrangements for postal ballots, the average turnout figure rose to no more than 10 per cent. or 15 per cent., I believe that it would be a built-in justification for adopting this proposal. But I believe that it would be more than that. With my limited experience, I detect that more and more average trade union members, primarily in the general and industrial unions, wish to participate. They wish to have the alternative option of saying that for various reasons—and it may be the very severe human problem referred to by my hon. Friend the Member for Totnes (Mr. Mawby) of a man on the late shift having to play darts—they wish to exercise the alternative option. It may be that they cannot attend a branch meeting. It may be that they do not find branch meetings congenial. Whatever the reason, they may prefer to vote by post.
  4.45 p.m.
  What I have referred to as the "self-perpetuating oligarchy" in our society is a very much wider issue, of course, and the clause concentrates only on trade

  1839
  unions. But, taking the mirror image of the corporate entity in our society—the company—there is a similar problem about the representation of the average shareholder, which is far too low, and virtually non-existent in most cases. But perhaps a different conclusion arises from that which is in itself an interesting paradox.
  People quite rightly complain about inefficient sloppy, bad and in some cases thoroughly disreputable boards of directors which go on perpetuating their existence and often are relatively well-heeled. They do it as a result of formal motions at annual general meetings which are not challenged because of the absence of those who have democratic rights in those companies; namely, the shareholders. But the fault in that case is the reverse of that which my right hon. Friend the Member for Lowestoft seeks to put right in the trade unions It is precisely because boards of directors can command automatic and automaton-like responses by way of written ballots that they succeed in perpetuating themselves and their inefficient colleagues. It is only if the shareholders could be enjoined to attend annual general meetings and to vote by a show of hands that a different result could be brought about.
  In the case of trade unions, the reverse is true, but not exclusively so, and that does not knock out the basic idea that personal attendance at branch meetings is a much better option and much more desirable. Nevertheless, this is a reasonable clause. It would improve the quality of this very lengthy piece of legislation. I hope that the Secretary of State will respond favourably to it.
  Mr. George Park: The right hon. Member for Lowestoft (Mr. Prior) said that he and his colleagues had given this clause considerable thought. However, the very first line of it is based on a false premise. It says:
  "The Secretary of State may, after consulting the Trades Union Congress …".
  That ignores the fact that the TUC is in a way like the CBI—an organisation built up of autonomous members. For that reason, consultation with the TUC is no way to start trying to alter the rules of any trade union which is a member of the TUC.
  1840
  Then the right hon. Gentleman said that he had talked to trade union leaders, who supported his clause. I should like to know the union leaders to whom he talked. As my hon. Friend the Member for Newton (Mr. Evans) said, the clause can refer only to one trade union. No comment was made in Committee or in the right hon. Gentleman's opening speech about other national trade unions which appoint or elect their national officers. I should have been more inclined to agree with the right hon. Gentleman if he had started by saying that he felt that all the national leaders of the major trade unions should be elected. That might possibly have been regarded as a step on the road to greater democracy.
  Although my hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) referred to the "spirit and intention" of his Early-Day Motion—and those are honoured trade union words which we use in all our agreements—his motion may have started off with that spirit and intention but it turned out to be a witch-hunt on the AUEW. There is no doubt about that. I know that was not his spirit or intention. However, very often one starts off on a good course but finds that it becomes warped along the way and comes back and hits one round the ear. I think that the Early-Day Motion did that to my hon. Friend.
  If the right hon. Member for Lowestoft really meant what he said, we would be suggesting, via the Government, to the CBI that there should be a ballot of shareholders to elect the managing director. As the hon. Member for Harrow, East (Mr. Dykes) said, very many shareholders are moribund and inefficient and have contributed to the troubles of my right hon. Friend the Secretary of State during this week in his struggle to do something about the current crisis. That might be a step along a good road.
  I accept that it is not satisfactory in any election for only a minority of people to take part. We should be seeking and striving all the time to get above at least the 50 per cent. mark. It may well be that the right hon. Member for Lowestoft would be more constructive if he spoke to his friends in the CBI and suggested that they should come forward and offer to all the trade unions the possibility and the

  1841
  right to have facilities to conduct voting at the work place.
  Mr. Prior: I do not think the hon Member for Coventry, North-East (Mr. Park) has listened to my speech. On various occasions I have put forward precisely that suggestion. If it is any consolation to him, I am constantly urging my so-called friends in the CBI—I am not quite certain who they are—to do just that. I should be very happy to see a code of practice incorporated into this Bill or another Bill to bring that about.
  Mr. Park: I am glad to hear that. I am quite sure that if the trade unions saw that kind of approach being made they might well react in a different way. Unfortunately their reaction will be to regard it as a gross intrusion into their affairs. Therefore, I hope that people will view the clause in its total context. It really applies to only one national union. Therefore, it is limited and cramped in its scope and can be interpreted by the members of that union only as something which sets out deliberately to interfere with their affairs. As my union has one of the most democratic setups of all trade unions in this country, I have sufficient confidence that it will argue this one through and come to conclusions which are in the best interests of all its members.
  However, if we accept the wording of the clause that there should be postal ballots, and if it could achieve the objective of getting above the 50 per cent. mark, I hope that the sponsors of the clause will accept that there should be a general application of this principle to local government elections and also national elections.
  Sir Raymond Gower: In my view, the last two Labour Members who have spoken are in error on one or two vital points.
  The hon. Member for Houghton-le-Spring (Mr. Urwin) said that he did not want provisions of this kind causing trade unions to change their rules. I sympathise with that view. There is no provision here causing any single trade union to change its rules. I ask him to look at the wording again. There is no provision which persuades, obliges or brings any influence to bear, except to the extent that if any union decides freely to adopt
  1842
  this method it will have the benefit—if it so desires and if the clause is implemented—of financial assistance. In that respect it should be welcomed and greeted with approval by all trade unions, because at some time in the future any trade union might decide in its wisdom to adopt the postal method of election. Certainly there is nothing in the clause to cause that to happen at any particular date or on any particular occasion.
  The hon. Member for Coventry, North-East (Mr. Park) said that he believed that trade unions should decide these things for themselves. He thought it was a useful method but that it was directed against only one union. The clause does not specify application to a single union. It is a general power which could be for the benefit of all unions.
  Mr. Park: The reason I said that was that the AUEW is, to the best of my knowledge, the only major union which elects its national officers by whatever method. In the other major national trade unions the officers are elected by a combination of methods. In some cases they are appointed, whereas in others there is an electoral college of an executive which in turn appoints. That is why I interpreted it as meaning that it is directed to only one union.
  Sir R. Gower: I do not seek to make any invidious distinction between major and minor unions any more than between major and minor prophets. No one knows what any particular trade union will choose to do in the future. If any union should choose to adopt this basis of election these provisions will certainly be to its advantage.
  My hon. Friend the Member for Totnes (Mr. Mawby) and other speakers, including my right hon. Friend the Member for Lowestoft (Mr. Prior), were absolutely right in pointing out that the vital business of regular attendance may be much more important. No one quarrels with that, and, indeed, a Labour Member made that point earlier. There should be a regular attendance for any organisation, whether it be a voluntary association, a club or a political party. There should be full participation.
  Nevertheless, as in any election, it is surely of benefit to an elected person to know that he has been elected by a large

  1843
  proportion of those who are entitled to elect him. A person who is elected with a small vote cannot feel the same confidence. That is obviously of tremendous advantage.
  Mr. John Evans: Does that apply to councillors?
  Sir R. Gower: It is the same for councillors. If the hon. Member for Newton (Mr. Evans) happened to be a councillor for a particular ward, he would obviously prefer to be elected on a turnout of 70 per cent. rather than 17 per cent. Experience has tended to show—I shall not put it higher than that—that by this ballot method a higher proportion of votes is obtained than by most other methods. I hope that is not an extreme exaggeration.
  On the whole—I say this with diffidence—this is an admirable provision. It makes no compulsion. It is not, as was suggested by the hon. Member for Houghton-le-Spring, imposing any statutory obligation on any trade union. It is statutory only in the sense that it is embodied in a statute. However, it imposes no statutory obligation on any trade union. The unions can choose to carry on by any method they like
  If this clause is incorporated into the Bill, the unions can still have any method of electing their officers. Should they decide in their wisdom to adopt this method they would receive the benefits. Experience has shown that this can be a fairly expensive procedure. That is why the provisions will be of great benefit to them. I hope that hon. Members who have doubts about this will reflect that in the long term it could be advantageous to those unions which may adopt this method.
  5.0 p.m.
  Mr. A. W. Stallard: Does the hon. Gentleman really think that we or the country are so naáve as to believe that if the Government were to give this kind of financial assistance both the Government and the country as a whole would not very soon want more control over how that financial assistance was spent? Does he really think that the trade union movement is so naive as not to see this as a device for mass intervention in its affairs?
  Sir R. Gower: The hon. Gentleman is reading into the clause more than is in it. He is quite wrong. We would require a different form of legislation for any control to be exerted. No control of that kind could be exerted under this provision.
  Mr. Stallard: That comes next.
  Sir R. Gower: Parliaments will come and go. I should hope that our successors will be more successful than we have been—
  Mr. Stallard: That should not be difficult.
  Sir R. Gower: —in inducing good relations in industry. I hope that those who succeed us will go far beyond our best achievements on both sides of industry. Nevertheless, I stick to what I said. I hope that the hon. Gentleman will study this matter again to see whether he can find any justification for his intervention.
  I think that this is a fair, reasonable and most attractive suggestion. I should have thought that hon. Members on both sides of the House would be anxious to incorporate it in the Bill.
  Mr. Caerwyn E. Roderick: Will the hon. Gentleman tell the House of any other trade union activity for which he thinks the Government should provide financial assistance?
  Sir R. Gower: That may come. We can study the matter with great interest. We have this interesting proposal before us which could provide the basis for some reasonable help. There does not appear to be a comparable need in other trade union activities as a whole for such help. I do not exclude such a provision in other places. Mention has been made of the possibility of having such a provision relating to companies. However, companies are governed by a mass of statutory provisions which trade unions would not welcome, but perhaps that is not a fair comparison. I hope that we shall have support from both sides of the House.
  Mr. Greville Janner: I think that hon. Gentlemen opposite ought to understand the deep sensitivity which is felt by hon. Members on this

  1845
  side about suggestions of this kind coming from the Opposition.
  After the introduction of the Industrial Relations Act had succeeded in souring industrial relations and after efforts to control industrial relations through the use of the legal process, it is inevitable that any suggestion of any so-called help to trade unions which emanates from the Opposition will be regarded with the deepest possible suspicion. It is not surprising that my hon. Friends, who in many cases have spent the bulk of their working lives in the trade union movement fighting for democracy within that movement, often against opposition from both sides, should feel distrust about the nature of the gift which is being offered by the Greeks, to misquote that old childhood phrase, and the nature of the motives behind that offer.
  Therefore, we on this side start off soured by the knowledge that the new clause is without question the result of a campaign involving the AUEW—there is no doubt in my mind that that is its origin —and comes from people who have no understanding of the nature and sensitivities of the trade union movement.
  Sir Edward Brown: The historical fact is that it was the Conservative Party, not the Labour Party—which was not then in existence—which introduced the Trade Union Act 1871.
  Mr. Janner: We are moving back into ancient history—almost as far back as the Greeks. I content myself with having watched the destruction which, during the five years in which I have been a Member, the Conservatives brought about when they were so disastrously in power.
  The fact that a suggestion comes from the Opposition in these circumstances does not necessarily mean that there may not be a seed of good in it. Because it comes from them, it starts off on the wrong foot, but it is entitled to be examined to see whether it would or would not be of assistance.
  I start from the basis, first, that there must be no interference of any kind or at any time in the workings of trade unions; secondly, that every trade union should be totally free now and at all times to decide how it conducts its own affairs and elections; and, thirdly, that, where a trade union decides to hold elections, it
  1846
  should not be trammelled because it is poor and unable to afford a method which it might wish to employ. The fact that a union does not have the money for a postal ballot should not prevent it, if, but only if, it so desires, from holding a postal ballot.
  I can understand the feelings expressed by my hon. Friends. My hon. Friend the Member for St. Pancras, North (Mr. Stallard) said that he feared that this would be the start of mass intervention in union affairs. I also understand very well the feeling expressed by one of my hon. Friends that, once payment comes from the Government, those who pay the piper will wish to start calling the tune.
  I do not think that we can impose upon trade unions the ability to have money from the public purse unless they want it. Has my right hon. Friend consulted the Trades Union Congress leaders on whether there is a desire to have this help if it could be freed from the taint of the source of this suggestion? We must accept that that is how it will be regarded. Are not the trade unions ready, willing and anxious, if they are satisfied that there are no strings attached, to have the freedom to decide upon a postal ballot, if they wish, without having this vast drain on their resources—a drain which is likely to become even greater when postal charges are raised in the autumn?
  If the trade union movement is against having this help, I do not believe that we should force it upon it. However, the suggestion has merit and requires consideration. I hope that my right hon. Friend will indicate that he has given it that consideration, and will show some approach towards understanding the feelings of many hon. Members on both sides of the House regarding this suggestion, which merits careful consideration and thought, before it is totally rejected.
  Mr. Esmond Bulmer: I welcome the clause. I am sure that many hon. Gentlemen opposite wish money to be made available, even if it is in the terms outlined by the hon. and learned Member for Leicester, West (Mr. Janner).
  I believe that the public at large has a legitimate interest in the way in which trades unions are led. It is clear to the public at large that the leadership of

  1847
  important trades unions confers powers which, if used against the national interest, affect the whole of our society. I believe that this sensitive matter lies at the heart of our wish to encourage anything which may allow trades unions to reflect their membership more adequately. The vote on the Common Market created a situation in which all trade union leaders should stop and think whether they ought not to make greater effort to see that there is participation throughout the movement in all important matters.
  We shall be moving in the 1976–77 Session to some form of legislation on industrial democracy. It therefore becomes extremely important that trade unonists should be seen to participate fully in their own activities if they are, in turn, to participate in the management of their companies. Their position will be that much weaker if they do not join in their own activities to the full.
  On this side, we have a serious problem referred to in The Economist on 24th May. An article in the magazine said:
  "At the last general election, roughly 0·1 per cent. of union members voted Communist and at least 20 per cent. voted Tory. Yet of the 345 members of the executive of Britain's 13 largest unions, there are some 50 Communist party members, but no Tories at all."
  There can be a theory of conflict or a theory of co-operation. The theory of conflict has failed this nation. We look forward to co-operation, but as long as important trade unions are dominated by unrepresentative elements that cooperation will not be so easy to secure.
  While I have laid these facts very crudely before the House, I think there is a lot more that could be done by companies to make it easier for trade unionists to participate in elections. I hope companies will make time and premises available for this purpose.
  On the question of cost, I do not think we should quibble, because important issues are at stake. I do not believe this would involve the use of one extra postman or post van. Compared to the cost of a strike which might otherwise have taken place, it is clear where the balance lies.
  Mr. James Sillars: The right hon. Member for Lowestoft
  1848
  (Mr. Prior) understated the real intention of the Conservative Party in relation to trade unions. He has not demonstrated that this particular collective leopard has changed its political or industrial spots. Given the recent history of the Conservative Party in relation to the trade union movement, trade unionists like myself are justified in being very sceptical of this new-found attitude emerging from the Opposition Front Bench and in being worried about the real motivation of the Conservative Party in wishing to put money in the direction of the trade union movement.
  To my hon. Friends who are attracted by the wording of new Clause 1, I say that I believe the Conservative Party has taken a lurch to the Right, if that is possible after the previous administration. If they pay now, they will insist on certain rules being observed by the trade union movement at a later date. We are witnessing the old method of "gently, gently, catchee trade union monkey". They still hanker to find some truth in the Tory myth that trade unionists are a bunch of sheep led by wolves on executive committees and at trade union headquarters. When they used the ballot of NUR members during the railway dispute, that myth was totally disproved.
  I know people who would never dream of voting Communist in a parliamentary election, but who vote for Communists for trade union positions because they believe those people will do a better job in the industrial field than any other candidate. There is nothing wrong with that, and it should not be surprising to hon. Members that we have more Communists than Conservatives in trade union positions.
  The right hon. Member for Lowestoft hung his argument on the importance of trade union officials in the make-up of national policy. I have been a member of a trade union which conducts national ballots. I am in favour of them, but only if the membership pay for their own trade union organisation. The right hon. Gentleman's priorities are wrong. Is he telling me that it is more important to have a postal ballot for the post of district secretary of the AUEW in Edinburgh than a postal ballot of party members for the leadership of the Conservative or Labour Parties?

  1849
  5.15 p.m.
  The right hon. Member for Sidcup (Mr. Heath), in an interview shortly after his speech here on the economic situation, claimed that he was the candidate of the rank and file of the Conservative Party. One can only conclude that the person who now leads the Conservative Party, the alternative Prime Minister, is there as the candidate of an unrepresentative lot that happens to be inside the House of Commons.
  Sir Anthony Meyer: I am most interested in the hon. Gentleman's argument. Is he advocating a ballot of Labour Party members in Newham, North-East?
  Mr. Sillars: No. That is quite logical because I am not supporting new Clause 1. I do not think that a postal ballot always gets the right decisions. One can have uninformed opinions. One of the arguments put forward by hon. Members opposite in the referendum campaign was that only the people in Parliament had all the information at their disposal and they were the only ones equipped to take the decision. I believe in delegation inside the Labour Party.
  There seems to be a contradiction in the right hon. Gentleman's argument. Who is the more important person—the district secretary of the AUEW in Edinburgh or the Leader of the Conservative or Labour Parties? Who has the most bearing on public policy and who is likely, on the past record, to do most damage to the economic and social fabric of this country? The answer can only be the Leaders of the Labour Party or the Conservative Party. I think the right hon. Member for Lowestoft has his priorities wrong.
  If the Opposition want to extend participation, let us extend it in our own political parties first and thereafter to other voluntary organisations like the Church of Scotland, where we elect our own ministers—unlike one or two other organisations.
  This is not the method by which to get reform inside the trade union movement. I concede that reforms are required in various places inside the movement. One of the tragedies of the period since 1968 is that the trade union movement has not been able to respond constructively to the criticisms of its internal organisation con-
  1850
  tained in the Donovan Report. It was responding constructively and had asked its affiliated organisations to review their rules and methods of conducting their internal affairs, but then it was forced back to defend basic principles. At every turn, the trade union movement has been hounded from pillar to post, and we shall never get the movement into a constructive frame of mind about its internal deficiencies until we stop the hounding which has been going on this afternoon and is contained in the clause.
  I do not think the right hon. Member for Lowestoft realises the full implications of this clause in terms of public expenditure. It means there will even have to be a ballot of individual unions for delegates to the Glasgow trades council. I do not think this is small beer in terms of public expenditure. I have to explain to my constituents that we have problems raising money for nursery schools and hospitals and for improvements to the A74, where a number of people have been killed. The fishing industry, the agricultural industry and others need assistance, and these must be the priorities on which money is spent before the provisions of the clause.
  Mr. Tom Arnold: There can be little doubt, after our debates in Standing Committee and the Adjournment debate on the Floor of the House on 23rd June, that the singular merit of the proposed clause is that it does not seek the statutory application of a system to all trade unions in their many differing circumstances.
  If the hon. Member for South Ayrshire (Mr. Sillars) is saying that political parties are in need of some measure of reform in the handling of their business, there may be a case for that. However, here we are dealing with the Employment Protection Bill and the opportunity is open to us to deal with this problem within that context.
  The strictly limited nature of the clause is such that it does nothing more than give a discretionary power to the Secretary of State should he choose to use it, and, with reference to what was said earlier by the hon. Member for Newton (Mr. Evans), it does not suggest that the appointment of trade union officers or their indirect election should be abandoned in favour of the direct election of

  1851
  officers in each and every union. The clause does not in any way suggest an infringement of the rights of trade unions or propose anything which could exacerbate the very situation we are trying to solve. Nor does it suggest that unions, by conducting postal ballots, are in some way adopting a system which may be more democratic than that used by unions which do not.
  Subsection (1) simply makes clear beyond peradventure that there can be no suggestion that we on the Opposition benches have misunderstood the way in which individual trade unions should be allowed to conduct their affairs. The precise nature of the powers given to the Secretary of State is further refined by the words "as he considers appropriate", and, going beyond that, the particular arrangements which the Secretary of State may choose to make are not specifically laid down. This leaves him with the maximum amount of flexibility. Finally, provision is made in subsections (2) and (3) for use of the affirmative resolution procedure and approval by the Treasury in respect of all the relevant public expenditure considerations, so that these can be taken into account. This is a matter of deep concern to all hon. Members.
  Taken together, these many considerations surely indicate that there is no question here of us seeking to impose upon unions something which they may individually find alien. Rather it is a matter of providing unions which wish to avail themselves of it with the means of encouraging a wider degree of participation in their affairs by their members in circumstances, and only in those circumstances, where they themselves consider that the introduction of a postal ballot would be appropriate towards achieving that end.
  The issue therefore is not one of compulsion but, as has been said many times before, one of encouragement. There can be little doubt that the low polls typical of union elections are an unsatisfactory feature of trade union life. It would be unreal to expect the level of participation in union elections to reach that of parliamentary elections. Undoubtedly many factors other than apathy contribute to a low poll, such as the constantly changing membership, and
  1852
  the Donovan Report was right to emphasise in paragraph 633 that a low level of participation ran the risk of placing power in the hands of unrepresentative minorities, thereby weakening the authority of elected leaders or trade union officials.
  If an individual union takes the view that it wishes to widen the basis of participation and activity among its membership, and that the introduction of a postal ballot system is a suitable way of doing this, we say that it is not unreasonable for the State to make a financial contribution towards facilitating such an endeavour, when the exorbitant increase in postal charges might otherwise militate against such a decision.
  I have no wish to stir the embers of the controversy which took place on 23rd June, when the Secretary of State seemed to imply that the Conservative Opposition were not assisting the process of a proper examination of the question whether some financial provision could be afforded on a limited basis, as some of his hon. Friends had suggested, and that we were seriously undermining the argument through the mere fact of holding a debate, since that had raised grave suspicions within the trade union movement. However, I do not believe that it is actually immoral to advance suggestions or to put forward arguments of which the Secretary of State and some of his supporters outside the House do not approve.
  Conservative support for what was originally a Labour Party Early-Day Motion should not be considered so reckless that it immediately evokes the suspicion of an improper motive, and criticism leads to an inquiry into the culprit's personal character and antecedents, which is what the Secretary of State seemed coyly to imply when he said that we were seeking by some devious means to resuscitate parts of the 1971 Act.
  The issue before us today is simpler. It is that the complexities of industrial life, which we are quite happy to accept, and the practical difficulties of organising trade union elections at different levels within the trade union hierarchy have led us to the belief that a clause of this kind would be in the public interest, and would go some way towards encouraging a greater degree of participation in trade union affairs by a growing range of the membership.
  Mr. Brian Walden: In rising to speak, I offer my right hon. Friend the Secretary of State two consolations. I do not think that he will necessarily disagree with anything I say. Secondly, this is the only time on which I intend to intervene in the course of this Bill. I hope therefore that I shall be permitted to put the case from a slightly different point of view compared with Conservative Members.
  I sympathise with the hon. Member for Hazel Grove (Mr. Arnold), but I am afraid that he will just have to learn to live with these things. The 1971 Act was a fatal blunder, the worst mistake by the Conservative Party at least since the war. I am afraid that, as he will see from many of my hon. Friends and from trade union leaders outside this House, it is no good the Conservatives saying that things are all different now and that the time has come to think again. As I said at the time of that legislation, and as the Opposition Front Bench knows, to do such a thing as that puts one out of the business of discussing things with trade unions for 10 years, and I am afraid that that is the situation in which the Conservative Party now is. I understand how annoying it must be when even supporting an idea put forward by someone else amounts to the kiss of death, but these are the practicalities of the matter.
  That does not mean that I do not welcome the fact that the Conservative Party has put this new clause down in order to allow a debate. Nor does it mean that I in any way feel bound by the wording of the clause. I say to my right hon. Friend the Secretary of State that if one strips the clause of the technicalities and forgets the exact wording—and my right hon. Friend, having been a back bencher for many years, is unusually tolerant in doing just that—one can see that there is no question here of a statutory fund. Trade unions as voluntary bodies must always be allowed to determine what methods they will use for the election of their officers. That applies to the AUEW, which used to have a postal ballot system, and which now does not wish to have one. Frankly, that is that union's business. Nevertheless, trade unions must not get into the ridiculous posture of saying that no one should ever be allowed to comment on what they do because to do so is in some way anti-
  1854
  working class or against the Labour movement. That is palpable nonsense.
  However, this House has no right to impose any sort of statutory function or liability upon the trade unions in respect of their own elections. That would be intolerable, and it would have exactly the effect of the legislation introduced by the Conservatives. It would produce a complete unity of effort to defeat that legislation. I could predict that trade unions would do nothing but campaign for several years to remove that imposition.
  It is hard to explain these things, but the Conservatives must understand that the merest straw falling on the trade union neck seems to that movement to be a most irksome yoke. That is not an attitude I necessarily share, but the trade unions in general do. They do not like any kind of legal requirement imposed upon them in their internal affairs. It is very annoying of the trade unions, and it may be that this country would progress if they did not feel like that. However, they do and, therefore, it is completely impractical for this House to overlook that deep-seated feeling. There is no question of a statutory approach being taken.
  5.30 p.m.
  The emotions having, I hope, been taken out of the argument—because it is certainly not my intention to do grievous damage to the trade union movement—everything that is left in the clause is good, with one exception, namely, public expenditure, with which I shall deal towards the end of my remarks. All the rest is a solid and sensible idea. It says, in essence, that any trade union that would like to have a postal ballot but does not have the financial resources to justify such a ballot can have that ballot at State expense. That this should be seen in some way as a grievous attack upon the trade union movement or even upon democracy is an illustration of the fact that if we are not very careful we and the Labour movement will get into a state of paranoia over this.
  It is not anti-democratic to wish to produce a rather larger vote. I admit—and this is a vital point—that there are two different theories about democracy which are in conflict here. I do not have the slightest doubt about which theory

  1855
  is the correct one, or about the pedigree of the argument put forward by the Conservative Party. I shall state the two arguments. People such as me say that democracy is "One man, one vote", and that there is no question, as my hon. Friend the Member for South Ayrshire (Mr. Sillars) said, about informed or uninformed votes. Democrats do not recognise any such concept. Votes are votes, they are all equal and none of them smells.
  The other view is that that is not proper democracy at all and that real democracy is active participation by the concerned. Active participation by the concerned is a valuable asset, but it is not democracy—it has absolutely nothing to do with democracy. Often active participation by the concerned is the very reverse of democracy because frequently what the concerned want is not what the majority want. That is true in many spheres of human life, not simply in politics or trade union affairs.
  The Labour movement has to be careful about the argument that unless one is active, concerned to give one's own time and in a mood of sacrifice, somehow one's votes and opinions do not count or, at least, are significantly inferior to those who can claim these qualifications. That is rubbish. I will state its pedigree. It comes straight from the most reactionary kind of Toryism that argues that there should not be "one man, one vote", because necessarily no electorate or no national leadership should comprise anything other than a small number of highly concerned people who "understood the issues", and were prepared voluntarily to give up their time in order to govern or participate in government. It is a Conservative idea, and the nineteenth century was all about defeating it—it was about "one man, one vote" irrespective of his education and his literacy, and whether he read or knew anything about the country.
  The Conservative Party in those day was right to say "There are dangers in this system; stop and think what you are doing". There are dangers in that system. Some of my hon. Friends are quite right that there are dangers in a system that puts the trade unions under a greater degree of democratic control. However, we have to make up our minds
  1856
  whether we want the oligarchy of the concerned or democracy. I do not understand why we should not have democracy—my hon. Friend the Member for South Ayrshire is right about this—in political parties as well.
  In this respect I am totally pro-American. I am all for as many elections at as many different levels with as much participation of as many people as we can conceivably achieve. In my opinion, it works very well. Someone has to be purblind to claim that the present system is producing beneficial results, either for the trade union movement or for the country. Palpably it is doing nothing of the kind.
  My hon. Friend claimed that it does not matter that someone who would not dream of voting Communist in a parliamentary election votes Communist in a union election because his Communist candidate works very hard for him. My hon. Friend said "What is the harm in that?" I shall tell him. If that individual were doing what he is doing for a purely industrial purpose, and if the Communists existed in order to increase wages and improve living condictions and found particular joy in doing that by serving in a voluntary capacity in the trade union movement, he would be absolutely right. However, the Communist has certain other functions, such as the overthrow of this society. There are those, and I am one of them—it is not a question of a witch-hunt—who believe that the reason why the Communist Party is prepared to do that sort of thing in industry is so that it will be better placed for the overthrow of our society.
  I am old-fashioned. I like Labour men elected everywhere. It may be that the Conservative Party should have better representation in the trade unions. However, on the whole I would sooner see Social Democrats winning elections in the trade unions than I would see them winning elections in Parliament. I am old-fashioned about that; I do not want any allies outside the broad stream of the Labour movement, and there is no doubt where that is.
  Public expenditure is the one argument against this. It will be a fairly costly business. I do not know if hon. Members have studied what it costs unions to

  1857
  conduct elections by postal ballot. The sums are staggering.
  I do not wish to take part in any AUEW argument, but that union has a case against a postal ballot because it is extremely expensive. None of us can afford to say that that is nonsense, that there is no case at all and that it is all a secret conspiracy. Postal ballots are a devilishly expensive business.
  My hon. Friend the Member for Coventry, North-East (Mr. Park) was quite right when he said that the AUEW is much the most democratic of all our major unions. If the major unions went over to this system, I do not deny that great sums of public money would be involved. It is for the Government to decide whether the considerable sums that would be spent are justified by the effect that they might produce. In view of the money that we spend on so many other projects, is this wasted money? What are the effects? Will there be no Communists in the unions, masses of Social Democrats, no strikes and happy agreements with some Conservative Members? Of course not.
  First of all, it will remove suspicion about the choice. This is a most vital aspect of all electoral systems, and, as Newham has been mentioned, I would add that it applies to Newham. What is always wrong with low polls is that there is a suspicion about the choice. I do not believe that in the vast majority of these low polls Communists or Communist sympathisers have been manipulated into office. However, many people do believe this. They will continue to believe it because it occasionally happens. Therefore, every time that we get a low poll there is a suspicion that the person so elected does not represent his members.
  It is worth spending a lot of money to be rid of that idea. I agree with my hon. Friend the Member for South Ayrshire that the result of a postal vote will not be significantly different from what we get now, and it certainly will not be unmilitant as far as wages and conditions are concerned.
  It suggests two things. The first is that the average trade unionist can be divorced from his leadership on those things. He cannot. So long as his union is looking after his wages and conditions, all the evidence is that the average trade unionist, given any chance in any sort of
  1858
  election, will back his own leadership. However, we shall be rid of the suspicion that there is something unrepresentative about the choice.
  Secondly, I hold a view that is exactly the reverse of that of some of my hon. Friends. I am far from feeling that participation in anything in life, let alone unions, is an all-or-nothing business— "You must go to the branch meeting. If you will not do that, you are unredeemed and cannot be saved until you do, and if you are given any soft, idle options such as filling ballot forms in, that will make everything worse". I believe that that is a very Calvinistic view. I do not believe it. Filling in ballots might encourage an increasing number of union members to want to know what sort of ballot they are filling in and who is on the ballot. It might encourage them to want to know a little more about their union, which would be a consummation devoutly to be wished. It will not necessarily mean much lower attendances at branch meetings.
  To be blunt—I suppose that I shall suffer for this, because one does these days if one says anything that comes anywhere near the truth—the plain truth of the matter, which all of my hon. Friends know, is that attending branch meetings, or, for that matter, many other meetings within the Labour movement appeals to a temperamental type. That is the plain truth. There are meetings attenders. There are people—God save them—who actually like going along to take part in these incredible non-conformist rituals. I somehow do not think that they will stop attending just because there are postal ballots. Indeed, I honestly believe —and there is a lot of evidence for this; I could cite evidence from other countries—that it will generate additional interest. That is the second thing it will do.
  The third thing it will almost inevitably do is to put all the pressure on the critics of trade unions to put their own house in order. As far as I can see, that is the last really outstanding complaint against trade unions—other than the complaint that they do the job which their members in fact expect them to do. Except for that small minority which expect trade unions to want wage cuts and worse conditions, the only substantial argument

  1859
  that seems to exist against them is that there is some doubt about their internal democracy. Remove that, and then inevitably, as hon. Members of the Opposition have been frank enough to confess, the spotlight will switch to the other side of industry and other institutions in this country, which will inevitably in the end be required to be no less democratic and participatory than the trade union movement would be if it had this option available.
  It is not a very great thing for which to ask. It will not make a dramatic difference. However, it wipes away a very small but spreading stain. I hope that my right hon. Friend, who has always been enormously concerned in everything to do with democracy and participation, will, even if he cannot accept the clause, give some hope to those of us who see much of benefit in this idea.
  Sir Edward Brown: I want to comment on one particular matter. The government of this country is within this House of Commons and not within the trade union movement. That ought to be established throughout the country.
  The hon. Member for South Ayrshire (Mr. Sillars) has mentioned certain situations regarding the trade unions. I take the view that we must accept what is the threat at present—to be turned over to Communism. I spent over 40 years as a trade unionist and know something about trade unions, so I shall repeat that because it is essential. My union branch was taken over by Communists. These officials were elected to national office and went on from there. There is a dire threat to this country.
  Out of the 10½ million people registered within the TUC at present, less than 1 per cent. attend branch meetings. Therefore, there is an urgency about the new clause, although I disagree with my hon. Friends about the way in which they have drafted it. I believe that the consultations should take place with every trade union organisation and not merely with the TUC. The TUC is an advisory body. The organisations of trade unions have their own autonomy. Therefore, this matter should be discussed with each of the trade unions. The clause is one of the things which may bring that about.
  1860
  The hon. Member for South Ayrshire went on to talk about a lurch to the Right. Let me tell him this: I am ready to lurch to the Right. We have had a great advance on the Left, which the hon. Gentleman has already seen within his own movement. The House of Commons has got some of those lurchers to the Left sitting on the Labour benches, and we have seen the expression of a Government party within the Government party only last week.
  That is the danger. If we in this place are not active in the saving of democracy, we shall lose it. The clause is one of the ways by which we can bring democracy about within the trade union movement of 10½ million. I remind the House that there are 14 million other workers not registered with the TUC who form a large part of public opinion and do not like to see what is happening within the TUC and its affiliated organisations. Therefore, if we want something very fair we should offer what is in the clause to each of them. That is to give the right for people to select their leaders.
  5.45 p.m.
  As chairman of the central branch of ASSET in the years 1947, 1948 and 1949, I saw that branch taken over in this way. We have seen ballot-rigging exposed within the ETU. We saw it in Scotland recently. We saw the decision of the President of the AUEW, who had no authority to change the rules and had to change them back again because the wrong was exposed.
  Therefore, it is clear that there should be complete acceptance of the clause by the House, which has responsibility to the nation and not to the trade union movement. The trade union movement is a lawful assembly which is given its rights under rules laid down by the House of Commons. We should make absolutely certain that we govern and that the trade unions do not govern us.
  The Bill has been drafted by parliamentarians on instructions from the TUC and the affiliated organisations. This is one of the things about which we should be very careful as we go through the Bill clause by clause. We must see that we get a good Bill for the sake of industrial relations.
  I warn hon. Members that if we in this House do not protect democracy, this is

  1861
  our last chance. Lurching to the Left is one thing. Lurching to the Right is another thing. Democracy stands in the middle. If we want democracy, we do not lurch to the Left or to the Right. We stand where we have already stood, for the nation's sake.
  The Secretary of State for Employment (Mr. Michael Foot): I respond, first, to the remarks of the right hon. Member for Lowestoft (Mr. Prior), who said, in the presence of a rather smaller number than we have now, that he hoped that the debates would be sharp and swift and that speeches would be short. I am sure that he was especially directing his remarks at myself, and I shall certainly take his instructions on the question. I shall be as swift as possible in dealing with the matter. I agree with the right hon. Gentleman in his hope that we can proceed in this way. I am not complaining about the length of this debate on a most important subject, but I hope that we can proceed rapidly while giving proper time for all the debates.
  The whole Committee proceedings were conducted very properly, perhaps partly because of my absence, but chiefly because my hon. Friend the Minister of State was in charge of the Bill. I believe that hon. Members in all parts of the House will agree that no Member of the House is more capable of conducting a complicated Bill through the House of Commons than my hon. Friend the Minister of State. I think that the House owes him a great debt of gratitude for the way in which he has dealt with the Bill.
  I promise that I shall intrude into the debates only on rare occasions during the day or the night. However, I thought that I should respond to what the right hon. Gentleman and others have said about this matter, which was raised by Opposition Members and by my hon. Friends.
  We have given careful consideration to the whole proposal. The reply I am making may be disappointing to Opposition Members, but we have considered it carefully. We have had consultations on the matter and have come to our conclusion on the basis of this consideration.
  First, I certainly agree that the right hon. Gentleman has sought to make the clause as inoffensive as possible. He has
  1862
  taken into account the sensitivities that have been expressed. I am not saying that he has not sought to do that. If it were to have added to it the first amendment in the name of my hon. Friend the Member for Manchester, Blackley (Mr. Rose) it would also have a further safeguard.
  Even so, there are difficulties in the proposal. The amendment says that
  "The Secretary of State may, after consulting the Trades Union Congress"—
  there is something in the point made by my hon. Friend the Member for Coventry, North-East (Mr. Park) on that matter—
  "make such arrangements as he considers appropriate".
  That means that the Secretary of State for Employment may at any time make proposals for introducing postal ballots and providing for financial arrangements to support them.
  I am sure that it is well understood throughout the House and the country that the present Secretary of State would not misuse his powers. I am sure that the clause would not have been drafted as it is if the Opposition had had any doubts about that. But Secretaries of State eventually go. The decades roll by; the aeons pass; and changes eventually occur. It is conceivable that in some unknown future a Conservative Minister might eventually arrive again at the Department of Employment. He would then have this instrument at his disposal, and could use it at the time of his own choice to indicate what he thought about what might be happening in the trade union movement. If he were to use it at the moment to which some of my hon. Friends referred, its use could be damaging to the trade union movement.
  The right hon. Gentleman said that people outside would misunderstand if we did not accept his proposal now. I am not quite sure what he meant. Perhaps he meant that the newspapers would report our debates as if in some way by refusing a proposal about postal ballots we were injuring the possibilities of democracy. I think that that is how most of the newspapers might report our proceedings. But they would be wrong to do so. However, that is what we have

  1863
  to contend with in dealing with these matters, because the trade union movement is constantly subjected to misrepresentation and vilification, particularly on these aspects of the matter. It is constantly represented that the only way in which to sustain democracy in the trade unions, or in particular trade unions, is by resorting to or encouraging particular forms of postal ballot, when we know perfectly well from our previous discussions that there are very different procedures in different unions, and that postal ballots in themselves are by no means a guarantee of democracy.
  My hon. Friend the Member for Birmingham, Ladywood (Mr. Walden) gave us his views about democracy over a wide field. I agree with him about the nineteenth century, although I am not so sure about his views on the twentieth century. As far as I could see, he did not bring them entirely up to date. He said that there was a suspicion, and that we must carry out the proposal to remove that suspicion.
  In a sense, although I am sure that my hon. Friend did not intend it, his speech helped to feed that illegitimate suspicion, because he suggested that it is the absence of postal ballots in the election of trade union officers that is the deficiency in democracy. That is not the case. It would be improper for the House to pass a measure which seemed to pass judgment on the way in which individual unions elected their officers. I am not prepared to be a party to saying that trade unions which decide to elect their officers by different methods are injuring democracy by so doing. That would be contrary to all the evidence.
  No hon. Member could argue, taking one union after another, that those which had postal ballots were the more democratic. There are different styles and fashions and different choices by different unions on how to conduct their elections and other affairs. They are right to have those choices. It is not the business of the House to lay down rules on how they should do it. We all agree about that. It is also not the business of the House to make choices which feed illegitimate suspicions.
  If we were to accept the clause, particularly in the circumstances of the time, it would do exactly what has been des-
  1864
  cribed: it would help to create misunderstandings and feed misunderstandings. It would help people to believe that the test of democracy in the trade unions was whether they had postal ballots, and that that was the view of the House. I do not believe that it should be the view of the House. It should be the view of the House that these matters should be left to the individual unions.
  I know that under the provisions of the clause it may be said that it is left to the individual union to choose whether it wishes to use the facilities. There is some force in that argument, but I am saying that in the circumstances now, in the circumstances of this debate and the way in which the clause has been presented, the suggestion is that full participation can be secured only if unions are encouraged to change their present arrangements, to change more and more to the method of the postal ballot to conduct their elections.
  The choice should be left to the unions to make freely. But we should bear in mind that if the trade union movement told us "We would like to have such facilities, because of the rising postal costs"—the cost is a matter of considerable importance—there are other bodies throughout the country which could legitimately say "If the postal ballots facility is to be given to the trade union movement, we should also have it". There are other institutions for which it could be said that we think it essential, in the interests of democracy, to encourage postal ballots by providing the finance.
  All these matters should be considered together, if they are to be considered. The issue should not be presented as if it is a judgment on the way in which individual unions conduct their business. They have the right to free choice. We on this side of the House believe in the diffusion of power. We do not believe that it is the business of Parliament to dictate to the unions how they should conduct their individual affairs.
  Sir Raymond Gower: Why does the right hon. Gentleman convey the impression that the clause in some way preempts the choice of the trade unions, when obviously the main reason for it is that the postal ballot has been seen to be more expensive and it is, therefore, desirable that a financial accommodation

  1865
  should be made by Parliament for that more expensive method if it is freely selected by a particular union?
  Mr. Foot: I do not want to repeat my whole argument, but I believe that to accept the clause in present circumstances at this time, against the present background of events, would give rise to exactly the misunderstandings to which the right hon. Gentleman referred. That is why we should leave the choice to the unions.
  Mr. Jonathan Aitken: Will the Secretary of State confirm that he has actually encouraged the National Union of Journalists, of which he and I are both members, to have a postal ballot in order to deal with an attempt by certain elements to uphold a minority conference decision and so secure an unfair majority? If the right hon. Gentleman has encouraged it in this individual instance, will he clarify the reason why he is against it as a general principle?
  Mr. Foot: As I said earlier, I was not criticising those unions that use postal ballots to elect their officers or to make decisions on policy as the National Union of Mineworkers does for many of its major policies. Not merely am I in favour of the ballot in the NUJ; I am strongly in favour of the ballot now being conducted in the National Union of Mineworkers. I say that about the NUJ as a member of the union and also as a member of the Government. I say it about the NUM as a member of the Government. What the House would be doing in the circumstances proposed here would be passing judgment on the manner in which different trade unions elect their officers. In my opinion that is an unfair and illegitimate judgment for us to make. I hope that the House will not accept the clause.
  6.0 p.m.
  I do not question the good faith with which the clause has been proposed. I am presenting the reasons why I think it would not assist the relationships between the House of Commons, Parliament and the trade union movement if we were to accept the clause in these circumstances. If the trade union movement or individual trade unions wish to come forward and say "We want this facility, and we hope that the House
  1866
  will give consideration to it," that is a different matter. That is something that I believe we should be prepared to accept. However, that is not the question before us.
  I say to my hon. Friends that I understand the wide variety of views that they have expressed upon this. I understand the purpose behind the Early-Day Motion which has been tabled, but I ask the House not to accept the clause at the moment. If the trade unions, collectively or individually, were to come forward and ask for this facility, that would be a different question and the more democratic way of proceeding. I did not agree with everything said by my hon. Friend the Member for Ladywood but I did agree with him when he said that the House of Commons has made many errors in the way in which it has dealt with the trade union movement. From the evidence we have had, from the information we have and from the discussions relating to this subject which we were charged to hold I believe we would make an error if we proceeded to adopt the clause. My advice, based on our consultations and considerations, is that we should ask for the clause to be withdrawn or should vote against it.
  Mr. Urwin: Is my right hon. Friend giving an undertaking to those of us who in some way or other support this clause that he or Ministers in his Department will undertake to have full discussions with trade unions, primarily the TUC, to ascertain whether they wish to take advantage of this?
  Mr. Foot: I certainly give that undertaking. I have already had consultations which confirm the view that I am now presenting. They were informal consultations. If any individual or the General Council of the TUC wishes to have further consultations on this we would be prepared to have them. It is one thing to have the trade union movement or individual unions asking for this facility but quite another thing for the Government to say that this facility will be provided irrespective of whether the trade union movement wants it. That is the choice. On that basis I hope that either the Opposition will be prepared to withdraw the clause or that we shall proceed on the basis that I have suggested.
  Mr. Barney Hayhoe: We have had a good debate with the speeches being short and to the point. The purpose of this clause is to empower the State to provide financial assistance to help defray the cost of postal ballots in trade union elections, making it absolutely clear that the unions will decide whether such ballots will be held and the type of ballot that should be held. The organisation would be for the unions. There would be no compulsion. It is an offer of assistance and no more.
  Attempts have been made to misrepresent the purpose and the motives of the clause. I suppose that such attempts indicate only too well the thinness of the arguments deployed against it. We have seen the old-fashioned technique of erecting a skittle simply to knock it down. The hon. Member for Newton (Mr. Evans) asked whether we were concerned about whether a union would have appointed or elected officers That is something for the union to decide. The hon. Member also referred to branch meetings. He knows only too well that the whole of the evidence is that there are often small attendances at branch meetings. People are often elected to attend branch meetings not on the basis of their place of work but on the basis of where they live. Sometimes the attendance at such meetings is not very good. There is a reference to this in paragraph 634 of the Donovan Report.
  The Government would in no sense be instructing unions how to conduct their affairs if the clause was adopted. There is nothing in it dealing with compulsion or instruction. What the hon. Member for Newton was saying about this was total nonsense. I found it difficult to comprehend his surprising misrepresentation, or perhaps it was misunderstanding of the whole matter, because he participated in the earlier debates in Committee when all of this was made clear. Perhaps he was following the example of the Secretary of State, who so often shows us how easy it is to misrepresent arguments put forward by Conservative Members. He was as expert as ever today in putting an unreasonable slant on the argument.
  The hon. Member for Houghton-le-Spring (Mr. Urwin) sponsored Early-Day Motion No. 492 signed by a substantial
  1868
  number of Members. It is odd that it seems to be held to be a hostile act for someone from another party to sign such a motion. That at least was the impression given not by the hon. Member but certainly by some of his colleagues. We must judge these arguments upon their merits. The speech made by the hon. Member for Houghton-le-Spring showed clearly what was the purpose behind the motion. It was, as he said, an honest, objective and straightforward effort to improve matters. That is the purpose of our clause.
  There is no witch-hunt and no attempt to interfere with union rules. My hon. Friend the Member for Harrow, East (Mr. Dykes) pointed to the advantages which would flow from increased participation in elections if the clause were carried and if unions cared to take advantage of it. The arguments of my hon. Friend were sharply underlined by the speech of the hon. Member for Birmingham, Ladywood (Mr. Walden). The hon. Member for Coventry, North-East (Mr. Park) spoke of the clause as altering trade union rules. There were overtones of this in other speeches. The clause has nothing to do with trade union rules. Trade unions decide what their rules are to be. This clause puts no pressure on the unions to alter the rules.
  My hon. Friends the Members for Barry (Sir R. Gower) and Hazel Grove (Mr. Arnold) underlined that point and made it abundantly clear that the clause is permissive. It represents an offer of help to be taken or not as a union decides. The hon. Member for St. Pancras, North (Mr. Stallard) said that the adoption of the clause would lead to the Government controlling unions. That is a flight of fancy. A union decides whether to accept the offer of assistance.
  Mr. Stallard: If the hon. Gentleman intends to repeat what I said, he ought to do it accurately. He speaks about misrepresentation and then misrepresents what I said. I asked whether he or his hon. Friends thought that the trade unions were so naive as to imagine that if this public money was made available to them, the next stage would not be a demand from the people paying the piper to call the tune. There would be a move towards further intervention in trade union affairs because ratepayers and taxpayers were paying for this.
  Mr. Hayhoe: I shall leave hon. Members to make up their own minds whether I misrepresented the hon. Gentleman. I do not think that I did. However, the record will show.
  The monetary assistance will be on offer. It will be up to the union to decide whether to accept it. No one will be forced to accept it. Nothing will be imposed on the union.
  We heard a sour and weak argument from the hon. and learned Member for Leicester, West (Mr. Janner). He began by condemning the proposal in the context of guilt by association. He inferred that nothing proposed by the Opposition could be sensible or helpful in these matters. However, he redeemed himself by judging the proposal on its merits, coming to the helpful conclusion that it was a sensible proposition, deserving of support.
  The hon. Member for South Ayrshire (Mr. Sillars) questioned the motives of his political opponents. We do not complain about that as we know that the hon. Member spends a fair amount of time questioning the motives of his political friends. He produced the red herring that as a result of this proposal we would provide for postal ballots for the leaders of political parties. He argued that everyone should be allowed to participate in a postal ballot on a decision of the moment except the members of the Labour Party in Newham, North-East. I can deal with his contribution on those lines.
  The hon. Gentleman then came out with the remarkable proposition that hounding of the trade unions would occur as a result of the provisions of the new clause. If an offer of financial assistance with no strings attached is hounding, I wish that someone would hound me.
  Mr. Sillars: I did not say that people would be hounded as a result of the new clause. However, some Opposition speakers used the new clause as a platform from which to remount their old hobby-horse of hounding the trade unions. That was what I said.
  Mr. Hayhoe: I heard no mention of hounding. Neither a scintilla of evidence nor any argument has been produced to suggest that anyone is hounding the trade unions or that the new clause could be used to hound them.
  1870
  The hon. Member for Ladywood said that the trade unions must determine these issues for themselves and that the House of Commons should not seek to impose conditions. He made perceptive remarks about trade union sensitivity, with which I do not disagree. He stated that the proposal was helpful, that it was not anti-democratic and that he wished to see greater participation in elections. All those are sensible matters. The hon. Gentleman referred to the cost, which he pointed out could be substantial. The Opposition raised that point in previous debates. Although the cost could be substantial, the proposal could be worth while. The hon. Gentleman made a valuable speech. His anti-Tory gibes helped to commend the good sense of the rest of his speech.
  We heard an unconvincing reply from the Secretary of State. He spoke of the new clause as passing judgment on trade unions. That is poppycock. It is a dishonest argument. The right hon. Gentleman made the hollow offer that if a trade union asked for help, he would give it. That is an arrogant attitude. Knowing the pressure on the legislative process, would it not be wiser for us to include this worthwhile provision in the Bill? I shall not again deal with the arguments which the right hon. Gentleman produced in one of our earlier debates when he led us to believe that the Government would bring forward their own proposals.
  Amendment (a) could be accepted. The spirit of that amendment is in line with what we believe the new clause contains.
  I hope that the House will reject the blandishments of the Secretary of State and vote for the new clause. We are debating an important matter. This new clause will not solve the problems of the trade unions. It will not automatically make all trade union leaders responsible, neither will it moderate or stop all strikes. However, it will be helpful. It would be an achievement if Parliament passed a helpful piece of legislation which would solve some of our problems.
  Question put, That the Clause be read a Second time:—
  The House divided:Ayes 241, Noes 276.
  [For Division List 312 see col. 1985–90.]
  Question accordingly negatived.

New Clause 2

  PROTECTION AGAINST DISCIPLINARY PRO CEEDINGS FOR TRADE UNION MEMBERS TAKING PART IN A TRADE DISPUTE
  '(1) An employee to whom this section applies, who takes part in a trade dispute shall not, by reason of so taking part, be the subject of any disciplinary proceedings whatsoever which could, but for this section, be brought against that person by such a body or association as is mentioned in subsection (2) below and with which he, or his employer, is registered, enrolled or to which he or his employer is otherwise affiliated.
  (2) This section applies to an employee who, or whose employer, is registered or enrolled with, or otherwise affiliated to, any body which confers on him, or his employer, an occupational qualification or otherwise indicates that he or his employer has attained such a degree of proficiency, knowledge, skill or expertise as to fit him or his employer to follow a particular profession or calling'.—[Mr. Ronald Brown.]
  Brought up, and read the First time.
  Mr. Ronald Brown: I beg to move, That the clause be read a Second time.
  The clause is self-explanatory. It is designed to overcome the difficulties which face solicitors employed by a local authority when that authority is involved in an industrial dispute. Here I must declare my interest, being parliamentary adviser to a trade union and to NALGO, and I therefore speak on their behalf.
  The situation which the clause seeks to put right came about because of an industrial dispute in which solicitors were trying to exercise normal democratic rights in pursuing the aims and objectives of their association with a view to to improving wages and conditions of employment. The solicitors were faced with a dilemma. If they failed to support their association, the association would consider that it was not getting its just dues in the sense that it had decided by a majority to take action. If, on the other hand, the solicitors supported the association, they were liable to be disciplined by the Law Society. It seems quite improper that any individual employed by a local authority or similar organisation should be subjected to these unreasonable pressures.
  6.30 p.m.
  I know that discussions have been taking place over a long period to deter-
  1872
  mine the Law Society's attitude, but to the best of my knowledge it has said firmly that it objects to solicitors taking part in any form of industrial action. It still reserves its right in such circumstances to haul before its own disciplinary committee a member who has taken part in industrial action. To date, I do not think that this has happened. That is because no one has reported a solicitor for having taken part in an industrial dispute. However, the fact remains that the Law Society has a power which I consider to be unreasonable.
  In the clause, I have tried to lay down a reasonable balance between allowing an individual, be he a solicitor or a member of another profession who belongs to a professional organisation, to exercise his democratic rights in pursuing the interests of himself and his friends where he works and ensuring that he does his job properly according to the edicts of his profession.
  I do not believe that the new clause can be seen to be a diminution of the standards to be expected of a practising solicitor. I believe that it should commend itself to the House and that it would right a real wrong. Above all else, it would allow many professional people to have the same rights, the same privileges and the same freedoms as the rest of us in exercising their right to engage in an industrial dispute if they saw fit to do so.
  The Under-Secretary of State for Employment (Mr. Harold Walker): I fully recognise the problem that my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) has raised. He is seeking to tackle a complex problem. As he put it, professional men who belong to a trade union may well be caught between conflicting obligations. If they take industrial action on the instructions of their union, they may be disciplined by their professional body. If they refuse to take part in industrial action, they may well be disciplined by their union. This is a problem that has emerged much more sharply in recent years with the growth of white collar unionism, and it seems likely to become more acute.
  I am sure that the House will see the importance of seeking to remove any restrictions on the right to strike. That

  1873
  is a matter which we have all regularly upheld.
  My hon. Friend has been candid with the House and has made it clear that his new clause arises from an example of this difficulty in local government in which he was involved. I am sure he will know that I have been involved in discussions centring on the problem both with representatives of NALGO and in meetings with representatives of the Law Society. Following those meetings there was discussion between the parties. I understand that the outcome of the discussions has been some kind of declaration by the Law Society which has received a warm welcome from NALGO.
  I understand the view that no matter how welcome and progressive a step the Law Society's new position may be, there may well be other professions entitled to similar assurances so that they are not caught in the Catch 22 situation to which my hon. Friend referred. I think that the difficulties that have arisen, which I hope are now largely resolved, with local authority solicitors are not necessarily difficulties that may arise with other professions.
  My hon. Friend will recognise that the terms of his new clause go right across the board. He will be aware that different kinds of problems may arise in the medical and engineering professions, for example. It is extremely difficult to try to lay down general principles—particularly on the statute book—that adequately and satisfactorily meet the varying circumstances of the different professions. It is my conviction, particularly in the light of the discussions to which I referred, in which I have been involved and which had such a useful outcome, that the best way of proceeding is along the lines of following the discussions that took place with NALGO and the Law Society. Perhaps the best and most constructive way of proceeding is to get the parties concerned in each situation, as and when it may arise, to seek to work out between themselves some kind of agreement or arrangement.
  I have had no approach nor representation to suggest that there is at the moment an acute problem facing any of the other professions. However, if such a problem arises—and it may arise in local government—what we have been able to achieve with NALGO and the
  1874
  Law Society we will seek to achieve again. I am equally sure that the ACAS will be willing to make its resources available for the parties.
  Mr. John Page: I have been listening carefully to the Under-Secretary, but he has been going a little fast for my rather slow brain on this warm afternoon. Will he say a little more about his negotiations with NALGO? I am hoping to take part in this debate, and the negotiations that he has described are important as regards the speech I hope to make.
  Mr. Walker: I am sorry that I went too fast. Probably the hon. Gentleman knows that it is my habit to do so, although it may be a bad habit.
  My hon. Friend the Member for Hackney, South and Shoreditch referred to a situation that had arisen concerning solicitors employed by local authorities who were members of the appropriate section of NALGO. He asked why there should be a conflict between their obligations to the union and their obligations to the Law Society, a professional body. As my hon. Friend rightly said, negotiations have been going on for a long time. We had discussions with the parties and sought to encourage them to reach some kind of voluntary understanding. I understand that the Law Society has prepared a declaration on its attitude towards the conduct of its members who become involved in the sort of situation that my hon. Friend described. Apparently the Law Society's declaration is regarded as highly satisfactory by NALGO.
  I am saying that other professions may well find that the best way to proceed is by means of negotiation and agreement rather than for us to try to lay down on the statute book general principles that will be difficult to match with the differing circumstances and problems that arise with different professions. I am suggesting that the better approach might be to seek some kind of understanding. I am sure that my right hon. and hon. Friends in the Department would be available to assist as "midwives" if such problems arose in respect of other professions. Clearly the ACAS might be able to assist with such problems. It might be that there is scope for codes of conduct. They could be

  1875
  considered and prepared by ACAS. Those are preferable options to trying to lay down in statute form something which may land us in difficulties. In the light of my remarks, I hope that my hon. Friend may feel able to withdraw his clause.
  Mr. John Page: I feel that the hon. Member for Hackney, South and Shore-ditch (Mr. Brown) has raised a most important and significant matter. In his interesting speech he referred to the position of solicitors and their relationship with NALGO. As the Under-Secretary of State has said, the area in question is spread much wider than matters concerning solicitors and includes almost all professional people. As has been said, there could be a conflict of duty and ethic between a trade union in a trade dispute and the duty and ethic of the professional man and his professional institution. That is something which the hon. Member for Hackney, South and Shoreditch is trying to remove by means of the new clause.
  The hon. Gentleman is saying that if in an industrial dispute the professional man's professional susceptibilities are involved, they should be disregarded. That is a dangerous philosophy to follow at any stage. It is very similar to the removal of the right of a conscientious objector in wartime to refuse to serve in the Armed Services. Are we to refuse an objection on conscientious grounds in what might be called a situation of industrial war? There is an analogy here between the position of editors and the National Union of Journalists.
  My view is that the wise thing to do is not to remove the rights and the accepted responsibilities of the professional man but to give him the umbrella of a trade union under which he can shelter if there is an industrial dispute. I am thinking of the situation of solicitors in local government. Furthermore, what view would the Minister take about the position of a doctor in the service of a local authority who might be in difficulties in his relationship with NALGO but whose responsibility lies more to the British Medical Association? I am not sure that the clause should suggest that the oath taken by a doctor should be nullified and that his appearance before his professional medical body would not be
  1876
  relevant if in an industrial dispute he contravened that oath.
  We must also consider the wish of trade unions to try to achieve maximum membership, particularly in industrial organisations where professional and nonprofessional people are employed. Some companies have reached agreement that they should be fully unionised. In that case, the only refuge for the union man may lie with a white collar union, such as TASS. There is an example from the Rolls-Royce factory in Bristol where draughtsmen and others in TASS refused to accept work given to them by professional engineers in other unions.
  I am thinking particularly of the United Kingdom Association of Professional Engineers. The Daily Telegraph carried a report of that dispute and ended by saying:
  "The spokesman from UKAPE said, 'This is a bid to smash a group of professional grades. TAS aims to represent all staff, from shop floor to boardroom, whether they like it or not'".
  This matter must be taken seriously. If the protection in a professional sense is removed by the clause from the professional man, he will not have much chance to stand out against the larger unions.
  The second example which I should like to give involves NALGO and the water service for England and Wales. That service employs about 1,700 professional engineers, 900 of whom are paid-up members of UKAPE. In the whole of the water authorities NALGO has 11,000 members in the non-professional and clerical grades. However, even though UKAPE has 50 per cent. of the membership of professional engineers, it is denied representation on the National Water Council for purposes of collective bargaining because NALGO refuses to sit down with that association.
  The Minister informed the House that discussions had taken place between the Law Society and NALGO and implied that the outcome was highly satisfactory to NALGO. Was the meeting also considered to be highly satisfactory to the Law Society and to solicitors employed by the local authorities?
  Mr. Ronald Brown: The hon. Gentleman has wandered into the area dealt with by the Trade Union and Labour

  1877
  Relations Act. The clause does not impinge on that issue. We are dealing with the rights of people to take such actions as they wish without being subjected simultaneously to disciplinary action by a professional body.
  6.45 p.m.
  Mr. Page: The hon. Gentleman should look at the other side of the coin. The professional man knows that if he offends against the rules of his professional association, he will be hauled before that body. That provides a defence for him in a case involving pressure by the big battalions such as NALGO or any other union with which he may be concerned.
  I was attracted by the Minister's suggestion of a code of conduct. That matter should be explored. I hope that the signpost put up by the Minister will be examined by the professional bodies. There need not be any great fuss or row about this proposition. However, I do not think the clause should be allowed to be part of the Bill because I believe that we are not yet ready for its proposals. I shall be happy to read in the newspapers in the months ahead that the Minister has met the various engineering and other professional bodies together with the TUC and has reached agreement with the aim of safeguarding professional men in this modern world.
  Mr. Hayhoe: Although the Minister put this matter in the context of discussions between the Law Society and NALGO, I believe that there are many wider issues concerning doctors and the engineering profession. There is also the question of the code of conduct observed by professional men and women and the possibility that in times of industrial action such a code may conflict with the rules of the union to which the person belongs.
  The clause seems to suggest that priority should be given to the union rule book over a code of conduct set up by the professional body. I am sure that the Minister was correct to say that it is not easy to deal with these matters by legislation and that it is much better to seek to resolve it in discussions between the unions and the professional bodies.
  I welcome the agreement between NALGO and the Law Society, if only because the chief executive of my local
  1878
  authority has been involved. I know that he and others in his profession are worried about the situation. The wider question needs further study. I hope that this debate will be read by ACAS officials and that they will examine this point. The conflict of interest has now become more explicit with the growth of white collar unionism and the extension of the traditional, manual trade unions into new areas of activity in which professional and white collar workers are employed. It is important that we find ways to resolve this problem. I do not regard the clause as the right way, but ACAS may help to find the solution.
  Mr. Ronald Brown: I am grateful to my hon. Friend for the very courteous way in which he answered me. I have some sense of scepticism, because the Law Society has hemmed and hedged all its agreements so far with caveats. I am sure, too, that my hon. Friend has tried extremely hard, and in the knowledge that the Law Society will perhaps have its attention drawn to this debate, I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 3

  SUPERINTENDENT REGISTRARS AND OTHERS TO BE DEEMED EMPLOYEES AND REGIS TRAR GENERAL TO BE DEEMED EMPLOYER.
  '(1) For the purpose of regulating the terms and conditions of employment of superintendent registrars, registrars of births and deaths and their respective deputies, they shall be deemed to be employees of the Registrar General who shall be deemed to be an employer and, accordingly, the Registration Service Act 1953 shall have effect subject to the amendments set out in subsection (2) below.
  (2) The Registration Service Act of 1953 shall be amended as follows—
  (a) in subsection (3) of section 6, after the words "and shall" there shall be inserted the words "for the purpose only of regulating the terms and conditions of his employment, be deemed to be an employee of the Registrar General who shall be deemed to be the employer of every such registrar;
  (b) for subsection (4) of section 6, there shall be substituted the following subsection—
  "(4) In this section 'employee' and 'employer' have the same meanings respectively as in the Employment Protection Act 1975";

  1879
  (c) in section 8(2), the words "who shall hold" to the end of the section shall omitted;
  (d) in paragraph (f) of section 13(2), the words from "so, however" shall be omitted. —[Mr. Ronald Brown.]
  Brought up, and read the First time.
  Mr. Ronald Brown: I beg to move, That the clause be read a Second time.
  This is a peculiar situation which, again, I raise on behalf of NALGO. The problem of registrars has been an outstanding one for a long time, because they belong to an archaic institution. They are paid by the county council as if they were employees of the county council, but they are statutory office holders, and, therefore, they are not employed persons. When they wish to take any action in an industrial situation they are immediately liable to both civil and criminal sanctions for any breach of their duties. Obviously, these registrars feel that they are subjected to restrictions which prevent them from being able to resort to the normal processes of industrial action and bargaining available to other workers.
  One step towards achieving equality of status with other workers would be for them to be treated as employees rather than as office holders. I have tried to draft words which would allow them to be
  "deemed to be employees of the Registrar General who shall be deemed to be an employer".
  I believe that would then resolve the difficulties in which registrars, senior registrars and superintendent registrars find themselves.
  Mr. John Page: Will the hon. Member say whether he has been able to be in touch with numbers of individual registrars and superintendent registrars, and whether there is universal acceptance of this plan?
  Mr. Brown: I could not claim that there is universal acceptance, because I have not seen a great number of them, but the advice and help I have had leads me to believe that this is the feeling of registrars in the general sense, without saying that everybody is in favour of it.
  They have argued to me that for superannuation purposes they are deemed to be employees, so there is already provision made to bring them into con-
  1880
  formity with their brethren who are working in other areas of society. I am not asking for something unreasonable or unusual. I cannot believe that the House will consider it reasonable to continue with this archaic process—of playing a game, pretending that they are statutory office holders being paid by local government, but at the same time being deemed to be employed persons in relation to their superannuation fund.
  The wording of the clause may not be technically perfect, but I hope my hon. Friend will find himself able to accept the principle and will undertake to look at it. If he will do that and bring something forward I shall be more than happy.
  The Minister of State, Department of Employment (Mr. Albert Booth): The first effect of the new clause is to change the Registration Service Act 1953 by altering the status of registration officers so that for the purpose of regulating their terms and conditions of employment they can be regarded as employees of the Registrar General. It would also remove from the Registration Service Act provisions which enable the Registrar General to remove registration officers from office at will. The intention of the amendment, taking these two effects together, is to give registration officers the same degree of employment protection as other workers, including the right to withdraw their labour without fear of legal proceedings or disciplinary action by the Registrar General.
  The main intention of the proposed amendment is to give registration officers the right to strike. The functions normally exercised by one employer are, in the case of registration officers, divided between the local authorities, who appoint and pay the officers and provide them with offices, and the Registrar General, who controls their professional activities and who alone holds the power of dismissal. As no true employer-employee relationship exists between these officers and either the local authorities or the Registrar General, and because the Marriage and Registration Acts place certain duties directly on the officers, the officers would not be protected by the provisions of the Trade Union Acts if they took industrial action, and officers who agreed to stop work

  1881
  might even be held to be guilty of conspiracy.
  I make no criticism of the wording of this amendment because I appreciate how difficult it is to frame law to deal with the objective which I am sure my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) and I have in common. When we drafted the Bill we hinged all the rights of employees on the basis of the relationship between employees and an employer, and when one comes across a very strange category of employment like this it poses enormous difficulties. Unfortunately, the amendment is inadequate to achieve the objective.
  As registration officers have duties placed on them personally by the Marriage and Registration Acts the amendment would not protect them from civil action by aggrieved members of the public, and the courts might order officers to perform their statutory duties or award damages for the consequences of any failure.
  The salaries of registration officers are by the Registration Service 1953 payable by the local authorities and are determined by means of a local registration scheme made by the local authority. The amendment would appear to lead to a situation where the Registrar General would be exposed to industrial action aimed at persuading him to fix salary scales that he would be unable to enforce. Further amendment to enable him to impose salary scales on local authorities would be contrary to present policies of relaxing central control over these functions.
  For all these reasons I believe that we need to have much more extensive consultation and inquiry into this problem before we can frame law which would be satisfactory to achieve the objective of my hon. Friend.
  Notwithstanding the objections to this amendment which have just been outlined the Government wish to make it clear that they are well aware of the dissatisfaction among some registration officers about that aspect of their terms of employment which prevents them from withdrawing their labour and share their concern in this matter.
  1882
  Before any decision can be reached, however, on whether anything can or should be done to alter the status of registration officers it will be necessary for a comprehensive review of the position to be undertaken by the Secretary of State for Social Services, in consultation with other Government Ministers, the Registrar General, the associations of local authorities, the Society of Registration Officers and other interested bodies. This will be directed towards seeing whether it is possible to bring registration officers into line with other public servants, while preserving all the essential national features and requirements of the administration of the marriage laws, the registration of births, deaths and marriages and other vital events, and the compilation of national statistics.
  7.0 p.m.
  Therefore, I ask my hon. Friend to withdraw his clause, but only on the basis that we will institute a comprehensive review, to be set on foot with Department of Health and Social Security Ministers in consultation with other Government Ministers and the Registrar General, to examine the status of registrars to see whether any change is possible and desirable.
  Having studied the Bill my hon. Friend will realise that we have tried to make it a very comprehensive measure. We have tried to deal with a wide range of matters involving employment protection. I am always reluctant to concede that we cannot cover anyone straight away by it, and that will be understood by those hon. Members who served on the Standing Committee. However, in this case I admit that we have been defeated in our ultimate objective. I am only too glad that my colleagues at the DHSS, including the Secretary of State, are keen and willing to conduct this thorough and comprehensive survey of the problem in the hope of finding a satisfactory solution.
  Mr. Leon Brittan: We have considerable sympathy with the reasons behind the clause. We understand that registrars feel that they are treated differently from other people in the Government service. At the same time, in considering this problem we also feel that registrars are in a special position, not only because of the complexities

  1883
  and the form of their employment, to which the Minister referred, but also because of the nature of their jobs and the fact that they are involved with members of the public at the most intimate and personal moments in their lives. We know that if they were accorded a status different from the one they have, they would bear that in mind in deciding whether to exercise their new-found freedom to engage in industrial action. However, we think that this special position is a factor which should be borne in mind in the consultations which are to take place.
  In any event, no final decision need be reached at the moment, because the Minister has illustrated the complexity of the form of employment involved and has to our satisfaction explained why it is impossible to deal with the matter in this Bill, although we feel at the same time that it is desirable that it should be dealt with by means of the consultations which he described. For these reasons, we too hope that the hon. Member for Hackney, South and Shoreditch (Mr. Brown) will find it possible to withdraw his clause.
  Mr. John Page: I was interested to hear what the Minister said and I am glad that there is to be an investigation into this matter. I have been approached by a registrar who says that he prefers the present position and does not wish to take on the status of an employee. I hope that when the discussions take place the outcome will be that registrars have the right to elect to remain in their present position.
  I do not see that an industrial dispute can do anything to stop a birth or a death, but it could stop a marriage. I hate to think of people queueing outside the registry office at Harrow only to be told that there is an industrial dispute and that the registrar will not be turning up. That might cause a great deal of sadness and the possible loss of a husband or wife.
  Mr. Ronald Brown: I am obliged to my hon. Friend the Minister of State for the seriousness with which he has taken my proposal. I am happy to accept his assurance, and I look forward to the work of the committee to which he referred. I hope that justice will be done to registrars. I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 4

  PROTECTION OF PENSION, ETC., RIGHTS'
  '(1) Where an employee—

  (a) participates in an occupational pension scheme, and

  (b) as a result of a trade dispute, the benefits accruing to him under that scheme

  are less than his full pension benefits; he shall, upon making the appropriate contribution at any time within twelve months from the date when the trade dispute ceases to exist be entitled to his full pension benefits
  (2) In subsection (1) above—
  "the appropriate contribution" means an amount equal to the contribution which, but for the trade dispute in question, would have fallen to be paid into the resources of the scheme by or on behalf of the employee:
  "full pension benefits" means the benefits which would, but for the trade dispute in question have accrued to the employee'.—[Mr. Ronald Brown.]
  Brought up, and read the First time.
  Mr. Ronald Brown: I beg to move, That the clause be read a Second time.
  This again is a small but very important item. It concerns the situation where local government officers are involved in an industrial dispute. Under both the superannuation schemes which they currently operate, they are excluded from reckonable service during the whole of the time they spend on an industrial dispute. If there is a strike and they are not at work, that is taken away from their reckonable service for pension.
  I believe that this is wrong and an unwarrantable interference. If they go into an industrial dispute and withdraw their labour, they must bear responsibility for it and lose the pay which would otherwise accrue to them. But it seems quite wrong to make them continue to pay for it in their pensions after they have retired.
  My proposal puts no onus upon the employer. All I suggest is that, where officers decide to withdraw their labour as the only possible way to resolve a given situation, afterwards they should be permitted to replace the otherwise lost reckonable time by buying in the specific time. In other words, I propose that they should pay their own contributions plus those of their employer for the

  1885
  period they were in dispute. This places the onus on the individual. It is his responsibility if he goes into an industrial dispute. Equally, it is his responsibility if he wishes to buy back the reckonable service that he has lost. It does not involve his employer in any additional cost. I am not suggesting that his employer should pay for him. On the contrary, the responsibility is clearly on the individual concerned.
  I hope that my hon. Friend will find it possible to accept the clause. It deals with a unique situation which has persisted for too long. It is time, in this excellent piece of legislation, that we put the matter right.
  Mr. Booth: With the Social Security Pensions Bill nearing the end of its passage through Parliament, the Government appreciate the great importance for employees of occupational pensions provision. The Department of Employment, with its concern for industrial relations, is highly conscious of the fact that when a dispute is terminated it is desirable that employers, workpeople and their representatives should return as quickly as possible to a normal working relationship and that any continuing effects of a dispute such as a permanent adverse effect on pensions should be avoided if at all possible.
  But the provision of occupational pen-son cover is in our view essentially a matter for negotiation between employers and employees, and there is no statutory obligation on employers to provide schemes. This must influence our approach to legislation in the area which the new clause of my hon. Friend the Member for Hackney, South and Shore-ditch (Mr. Brown) suggests.
  It is difficult in principle to distinguish the strike situation envisaged in the new clause from other types of situation in which occupational pension scheme rules might well not provide for pension rights to accrue, for example, where a woman has to stay away from work to look after a member of the family. It is for the employers and employees who are jointly concerned with their particular schemes to decide whether there should be any facility for purchasing pension rights in such circumstances.
  The provision suggested by my hon. Friend is, on first reading, straightforward.
  1886
  When it is considered in more depth, however, it can be seen that there is a wide variety of pension schemes and that there are difficulties in deciding how to finance a gap in contributions. Even in contributory schemes it is often impossible to say what an employee would have to pay, since the employer's obligation generally consists not only of a fixed contribution as mentioned in the rules but often of a liability to pay additional resources from time to time whenever necessary to maintain the pension fund in a certain condition. In non-contributory schemes it might prove impossible to say what amount an employee should pay. Therefore, it would be impracticable to impose on the generality of schemes an arrangement expressed in such unqualified terms as appear in the new clause. If there were particular types of scheme in particular types of employment where the feasibility of such arrangements was not open to question, no doubt the point could be taken up at the negotiating table.
  We have given some thought to the issue of how pension rights are determined and the nature of schemes in the recognition provisions of the Bill. I made it clear on Second Reading that hon. Members should appreciate that when we talked of enforcing rights of recognition we were talking not only about establishing a right to negotiate on wages and holidays but about a mechanism or a vehicle whereby independent trade unions could extend from that sort of negotiating position to one in which they could cover a matter such as pensions.
  In the light of the considerable reappraisal which must be made of industrial pension schemes and in the light of the legislation that has been passed, it will be surprising if a number of trade unions do not use the provisions of the Bill if they are not conceded rights to negotiate on pension matters. I hope that, by another means within the Bill, we have established a mechanism for resolving the problem raised by the new clause by enabling people to negotiate about pension schemes initially.
  I must indicate to my hon. Friend that I should prefer him to withdraw his new clause. If he cannot do so, I must ask the House to resist it because in my view the proposition contained in the new

  1887
  clause would not be universally applicable and would create serious difficulties in establishing certain industrial pension schemes. I am certain that that would be neither my hon. Friend's wish nor the wish of the House. I am certain that it is the wish of my hon. Friend that the right to negotiate on these matters should be achieved. I hope he will appreciate that the recognition provisions of the Bill create such a right and that this might well be the way in which the matter can be properly determined.
  7.15 p.m.
  Mr. Ronald Brown: I am grateful to my hon. Friend. He was described a moment ago by the Secretary of State as having a very powerful persuasive voice in Committee. He is exercising that powerful persuasion on me. I have put forward three new clauses and I have not won one. Therefore, my hon. Friend is doing very well. I understand what he has said and I am grateful for his courtesy. I accept his advice, and I beg to ask leave to withdraw the motion.
  Motion and clause, by leave, withdrawn.

New Clause 7

  PEACEFUL PICKETING
  '(1) (a) It is hereby declared that a person exercising the right (in this section referred to as 'peaceful picketing') conferred on him by section 15 of the 1974 Act (peaceful picketing) may, at the place where he is attending, seek by peaceful means to persuade any other person (whether in a vehicle or not) to stop for the purpose of peacefully obtaining or communicating information from or to that other person or persuading him to work or abstain from working;
  (b) any person who persuades any other person (whether in a vehicle or not) to stop shall use all endeavours insofar as is reasonably practical, having regard to the breadth of the highway, the number of persons desirous of stopping and the facilities for persons or vehicles to halt off the highway, so that the person or the vehicle in which he is travelling, as the case may be, does not halt at a point on the highway which obstructs the passage of other users thereof.
  (2) Any person peacefully picketing shall be entitled to attend on any highway or at any other place to which the public normally have access without this constituting any offence or involving any civil liability though such person may have occasion to remain stationary or to pass or repass in order to exercise the
  1888
  right referred to in subsection (1) of this section.
  (3) Those peacefully picketing shall not be guilty of any offence or be liable to any civil proceedings by reason of their exhibiting on or at the side of such highway or other place referred to in subsection (2) of this section or of suspending over such highway or other place (provided this does not obstruct the passage of vehicles or persons) of painted notices explaining and commenting on the trade dispute in question provided always that such notices do not constitute a criminal libel.
  (4) In the application of this section to Scotland, reference to the highway shall be construed as a reference to any public right of way.
  (5) In this section the term peaceful picketing shall mean the attendance of such numbers of pickets as may be reasonable having regard to the number of persons normally employed in the premises being picketed, the number of persons or vehicles normally seeking access to or egress from such premises and the number of possible entries thereto and exits therefrom. Without prejudice to the generality of this provision a picket stationed in the vicinity of any entrance to or exit from any premises being picketed or at any other point not less than one hundred yards from another picket so stationed and which does not exceed in numbers six persons shall not be regarded as unreasonable for the purpose of this section'.—[Mr. Rooker.]
  Brought up, and read the First time.
  Mr. J. W. Rooker: I beg to move, That the clause be read a Second time.
  I shall have no problem, Mr. Deputy Speaker, in applying your dictum on brevity, because if my hon. Friends' meeting upstairs does not end soon there will not be anyone in the Chamber to speak.
  I shall not repeat the point that I made in Committee concerning aspects of peaceful picketing from the standpoint of obstruction of the highway. It was a long debate. I took 45 minutes to develop the point, but I do not intend to do that now. The arguments for providing measures to solve some of the problems of peaceful picketing and obstruction of the highway are self-evident to all hon. Members. In Committee I listened to the arguments put forward by my hon. Friend the Minister of State and by Opposition Members. I have taken advice from a former hon. and learned Member of this House and have redrafted the clause, which now appears as new Clause 7.
  I wish that the Government had taken the same approach as I did. I wish that after the clause was lost they had left

  1889
  the Committee, had meaningful consultations and come forward with something else. However, in the result a back bencher has had to move the clause again. I do not think that the reason for that lies with my right hon. and hon Friends on the Front Bench. My argument basically concerns the Home Office. It is there that we shall find the reason why the Government probably will not support me.
  I have been a Member of Parliament for 18 months. I have been searching for the sensitive, careful, liberal approach that I was told would emanate from the Home Office. I am still looking for it. I do not believe that the Home Office is the guardian of our civil liberties. Evidence to the contrary over the past 18 months is non-existent. I attribute to the Home Office the most ulterior of motives for not taking action on this issue. I am convinced that in the near future it wants to use the new organisation which it has set up to combat mass picketing. I am convinced that it wants to see whether it actually works. The last thing it wants is to approve a change in the law which would do away with the need for mass picketing. I do not like it and I do not think that any of my hon. Friends like it. It goes without saying that Opposition Members do not go for mass picketing.
  When there is an industrial dispute and the pickets lawfully put there have the means to communicate to other people, whether on foot, bicycles, horse-cart or vehicles, it is wholly unnecessary that they should be caught on technical breaches of the highway. There is no reason whatsoever for more than three, four, or half a dozen people at the outside at any one time to be involved in a picket. I support any move by the police to limit this action. I seek the right to communicate, which many pickets thought they had. However, because of the various cases up and down the country during the past few years, they have realised that they have not got that right. Certain pickets have ended up before the courts. They have argued that they were just standing there not doing anything unlawful. The magistrate has said "Yes, but you were not a reasonable user of the highway. As such, you were obstructing the highway. You are fined £50." That is what has
  1890
  happened in the past. We have now redrafted the clause to cover that matter.
  Subsection (1) repeats half a dozen words of the former Clause 99. Subsection (1)(b) takes on board points made by both sides in Committee, especially the remarks of my hon. Friend the Minister of State which appear in column 1516 of the 28th Sitting of the Committee. I understand that it covers actual obstruction of the highway as opposed to technical obstruction. We do not want to create a situation where we have actual obstruction and people are told that they can do that only at places set aside for vehicles to be stopped and drivers to be communicated with and not be charged for the technical breaches with which they had been charged in the past. Subsection (2) rewrites the wording of the amendment as proposed in Committee, except that we have added the words
  "or might otherwise obstruct by-passing or re-passing thereon".
  The addition of these words is to cover the situation where the courts have held that a picket moving on the highway nevertheless causes obstruction. Having reread the arguments put forward in Committee, I believe that this drafting meets the criticism which has been made against me and my hon. Friends.
  Subsection (3) is primarily designed to deal with the private Acts of Parliament and municipal byelaws. For example, in the City of London a poster parade is illegal, but outside the City limits there is no reason why one should not take place. We must take account of the things that pickets would wish to do to communicate the details of a dispute.
  Subsection (4) of the clause reproduces the second paragraph of the original Clause 99, so I do not see how there can be any argument against that.
  Subsection (5) is designed to cover the numbers of pickets at a particular place. I hope that this will meet criticisms which came from the Opposition in Committee about pickets arriving from nowhere who have nothing to do with the dispute, who are not aware of the situation and who have gone along, as it were, as a rent-a-crowd. We are not stipulating that there should be only six pickets. The subsection is drafted so as not to limit the number to six.

  1891
  We are saying that if six pickets were allowed within 100 yards of the premises, bearing in mind their size and the number of vehicles going in and out—the police have plenty of experience of that kind of situation—by and large pickets would not complain and would be able to wave away the overtures of the rent-a-crowd pickets. They would not complain if up to half a dozen pickets were allowed at each entrance to or exit from particular premises with the right to communicate and without the threat of prosecution for technical breaches of obstruction of the highway. That would be acceptable to most pickets. It would certainly have been acceptable in most of the industrial disputes in which I have been involved on both sides of the fence. as it were.
  It is difficult to organise a picket. It is not the sort of thing into which people rush when there is a dispute at a factory. Many other things must be done if there is a dispute and people are laid off. For example, there is the guardian of the rest of the household who demands "Why go to the factory at six o'clock in the morning to form a picket line?" Contrary to popular belief, it is difficult to get people to picket early in the morning.
  If picketing could be organised in an orderly fashion so that people did not fall foul of the law for offences of which they were not aware, mass picketing and all that flows from it would be a thing of the past. The Home Office would then have no chance of putting into operation the proposals that it has made.
  I do not know whether my right hon. Friend will accept the new clause. If not, I shall ask my hon. Friends to support me in the Lobby so that we may show people outside that we tried to do something about this matter. When the Bill first came before the House it had a clause on peaceful picketing. After tonight it may not have such a clause. In that event, I hope that many people outside the House—the TUC, the trade unions and others—will ask why there is not such a clause in the Bill. I shall be the first to volunteer the information that I was among those who got rid of the clause in Committee. I shall be prepared to argue with any crowd at any meeting the reason for the new clause and to announce the roll call of hon.
  1892
  Members who supported me. At the same time I shall point out that the fault is not that of my right hon. Friend or the Department of Employment but that the finger should be pointed at the Home Office.
  If it comes to a vote on the new clause, I shall consider it to be a vote of no confidence in those who run the Home Office whose responsibility it was to fulfil the promise made in the October manifesto by the Labour Party that something meaningful would be put into the Bill to advance the rights of those taking part in a dispute.
  In the interests of keeping the debate short, I now close my remarks.
  Mr. Foot: I am not endeavouring to bring the debate to an end. However, I think it might be of assistance if I comment now on my hon. Friend's speech and the new clause. We can then proceed to consider the best course for the House to take. I do not think that my intervention at this stage will abbreviate the debate, but we may be able to curtail the discussion. I am not in any way seeking to prevent other hon. Members from participating in the debate if they wish to do so.
  It is a fact that when we first produced the consultative document on the Employment Protection Bill or the consultative document on the Trade Union and Labour Relations Bill way back in March or April 1974 we included the view that we would seek to alter the law on picketing to carry out the obligations and undertakings on this subject which we had given in our manifesto and during the election campaign. Those consultative documents were issued on behalf of the Government. Therefore, we in the Department of Employment have always taken the view that it was necessary to have some change in the law on picketing. That is the view that we have taken since March 1974. That view has not been concealed from the House of Commons in any sense. It was included in our original consultative document. We considered whether we could deal with the matter in the Trade Union and Labour Relations Bill when it was introduced in May 1974. We found difficulties in reaching a conclusion on how we should carry into effect what we desired, and we are still faced with those difficulties.

  1893
  I know that it is extremely disappointing for my hon. Friends and many people outside the House who are especially concerned about this matter that we should have failed to find a solution to the problem. We have been searching for a solution. I promise my hon. Friend that we shall go on searching. We shall make a fresh search in the light of the new clause which he has proposed to see whether we can find a solution to the problem.
  There are still some difficulties in the new clause. I do not know whether my hon. Friend will alter his view on how he will advise the House at the end of this debate, but it may be helpful if I give the Government's view on the difficulties in the new clause as drafted. I shall do so on the basis that we proceed to discuss the matter afterwards.
  I should like to comment on the particular items and aspects of the different subsections of the new clause. I acknowledge from the start that my hon. Friend and those who have put their names to the new clause have approached the matter in a constructive spirit. They have taken account of what was said in Committee and sought to devise a new clause which meets some of the objections which were raised.
  Subsection 1(a) re-enacts in substance Clause 99 of the Bill, which was defeated in Committee, but with one significant change. Clause 99 made clear that the act of attempting to persuade persons or vehicles to stop by peaceful means falling short of obstruction of the highway was protected. The new clause leaves out the reference to means
  "falling short of obstruction of the highway".
  That omission of itself does not confer on pickets the right to obstruct the highway. Section 121 of the Highways Act 1959 provides:
  "If a person, without lawful authority or excuse, in any way wilfully obstructs the free passage along a highway he shall be guilty of an offence".
  Subsection (1) of the new clause would not provide sufficient "lawful authority or excuse" to override that provision.
  However, taken with subsection (2) there is the possibility that immunities for pickets against obstruction charges are here provided, although the extent of such immunities would be uncertain.
  1894
  Subsection (2), first, would protect the act of attendance at the place, be it on the highway or elsewhere. That is unnecessary. Section 15 of the Trade Union and Labour Relations Act already does that. Secondly, it protects the act of passage and repassage. That also, in our view, adds nothing to safeguards for peaceful picketing. Passage and repassage are a normal user of the highway.
  Thirdly, the subsection declares that no criminal or civil liability is to arise if a picket has "occasion to remain stationary" in pursuance of his right to seek to persuade others to stop. This must raise a legal doubt whether a picket has immunity for obstruction of the highways, regardless of what is said in the Highways Act. No doubt that is the intention of the new clause. The legal position would be very uncertain and could lead to some difficult and troublesome judgments.
  7.30 p.m.
  However, if pickets were held to be able to obstruct the highway without risk of prosecution, that would create the difficulties we have been seeking to overcome. Any provision which conflicts with the duty of the police to prevent obstruction and breach of the peace raises these problems. We cannot adopt the view that one group of individuals should have rights to stop others, thus conflicting with the rights of others to pass unimpeded on the highway.
  If this subsection is not held to protect pickets against obstruction charges, however, it achieves nothing. It would only add to the confusions in the law on picketing—the confusions which all of us on this side agree must be removed. Confusion does prevail and we do not regard the present law as satisfactory.
  Hon. Members will, no doubt, argue that if subsection (2) protects pickets against obstruction charges no harm can result because subsection (1) puts them under an obligation to try, so far as reasonably practicable, to avoid causing obstruction of the highway. The spirit of this subsection is appreciated, but it is not enought of a safeguard for the position of the police. The clause does not, of course, ever say that any obstruction caused may only be "reasonable". It says that the pickets' efforts to prevent obstruction must be reasonable. If these

  1895
  reasonable efforts fail, or it is not reasonably practicable not to cause obstruction, pickets would presumably then have unlimited protection for causing any degree of obstruction, and also, under subsection (2), for occasioning breaches of the peace. The difficult problem, of retaining adequate discretion for the police to act while assisting pickets to communicate, which the Government are still considering, remains, and is not adequately resolved by the amendment.
  Subsection (3) of the new clause is unnecessary. So long as pickets means of communication are not defamatory and cause no obstruction they are already protected.
  Subsection (5) is another attempt by my hon. Friends to ease some of the difficulties raised in previous discussions. It is an attempt to deal with the problem of mass picketing. It has certain technical defects which would not enable us to accept it in its present form, but in any case, it is clearly part of a package, the main item of which retains some of the difficulties I have sought to describe. There must also be some doubts about whether legislation to control numbers of pickets will in practice make matters easier for the police, who have to enforce the law, particularly when the criteria for enforcement are based on assessments of what is "reasonable". Control on numbers of pickets, like assistance to pickets in stopping vehicles in order to communicate with their occupants, is probably most effectively and flexibly dealt with by agreement between police and pickets, either in individual cases or in accordance with a general voluntary code of conduct worked out between those concerned.
  My hon. Friends have clearly sought to deal with some of the objections that have been previously raised, and it is in this spirit that we have approached the new clause. I have sought to describe some of the difficulties which have prevented us from bringing forward the sort of proposals we hoped to produce. We wanted to secure the agreement of the trade union movement and the police who will have to carry out some difficult functions. So far it has not been possible to resolve this dilemma in a way which could enable us to present to the House proposals for a solution. We are still searching, and
  1896
  trying to get the solution. We are committed to doing so. That has been the position of the Department and the Government since last March or April, and the fact that we have not yet secured a solution demonstrates the difficulties involved.
  I cannot make any commitment that we shall be able to secure a solution before the Bill becomes law, but we will make another effort to do so. We had lengthy discussions before the introduction of this Bill, and we will make fresh efforts before its last stages, but we cannot accept the new clause in its present form.
  I accept that if my hon. Friend wishes to press his view he is perfectly entitled to do so. He and my other hon. Friends have, undoubtedly, worked out their plan with great care, and nobody is entitled to say this is a new clause that has not sought to deal with the problem seriously. We will look at it in that light, but I cannot make any commitment. We are still confronted with the difficulties I have outlined.
  Mr. Carol Mather: The Secretary of State is right to proceed with caution in this matter. The public would not welcome the clause. The hon. Member for Birmingham, Perry Barr (Mr. Rooker) is on weak ground, having voted against the Government in Committee. He now seeks to put forward this much stronger clause, but he might have got half way by accepting the Government's amendment in Committee.
  This new problem which has arisen is causing great public anxiety and concern. No one wants to see a repetition of the events at Shrewsbury or the Saltley Coke Depot. I do not think we should weaken the powers to contain and control demonstrations of this kind. If the Trade Disputes Act had not been taken off the statute book, it would be easier to control some of these demonstrations, because the right of workers in different industries to combine in action would not exist.
  It is our duty to understand and support those responsible for law enforcement. As the Secretary of State pointed out, it is the duty of the police to prevent obstruction and breaches of the peace. This kind of clause will make their job much more difficult and the whole situation far more confused. The

  1897
  Home Secretary receives advice from the police on how they would be able to manage in these circumstances. Chief officers have told him that they would find it extremely difficult indeed.
  The amendment would give a striker greater powers than the ordinary citizen and greater powers than the ordinary Service man, who is not allowed to hold up traffic in the road outside his camp in order to allow a Service vehicle to get out. He cannot do that without the assistance of the police. I found myself in that position when I was serving in the Army. I had a column which I wanted to get out of the camp gate, and I stepped out into the road to stop the traffic in order to do so. The police appeared and said that I had no right to stop the traffic.
  The amendment would, therefore, give a striker greater powers than are possessed by Service men in uniform. It would bestow powers upon the striker equal to the powers which the police possess to stop people on the public highway. I hope, therefore, that the House will not accept the amendment. It would create additional confusion in industrial relations. It would weaken law enforcement and might lead to fresh incidents such as those I have referred to, which cause such difficulty and concern. I therefore have no hesitation in voting against the clause.
  Mr. Paul B. Rose: The hon. Member for Esher (Mr. Mather) suggested that my right hon. Friend should proceed with caution, but some of us on the Labour side are concerned that there is no proceeding at all. Undertakings have been given in the past that the law on peaceful picketing would he looked into and rectified to take account of the fact that people no longer ride about on horses, and that essential supplies are moved by means of lorries. The law must be brought up to date to meet this new situation of modern transport. I would have thought that it was time that the Department of Employment and the Home Office came up with an answer.
  It is not good enough to say to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) that there are various objections. There are always objections to any form of drafting, and I
  1898
  would have expected my right hon. Friend to have produced by now an alternative form of drafting to accommodate that new situation.
  There could be nothing worse than the present imprecision of the law. The law has not prevented difficulties arising over picketing. It has not prevented mass picketing. Subsection (5) of the clause would appear certain to guarantee that there would not be mass picketing. Hadrian would not have kept his wall particularly well if there had been pickets 100 yards apart with a maximum of six. If that system had been employed by the legions of old no doubt the Picts would be in control at Westminster now. However, to say that that encourages mass picketing is entirely unfair. One depends in this matter upon the attitude of those involved—of the pickets on the one side and of the police on the other. There is the problem that there is the right to pass and repass on the highway, but there must be a right in a democratic society to communicate information for the purposes of furthering a trade dispute. The right to pass and repass applies as much to those who are picketing as to others on the highway. These two factors must be balanced. The problem is that inevitably picketing involves stopping people temporarily, and one cannot picket unless one stops another person.
  The enormous merit of the clause is that, firstly, it deals with peaceful picketing and defines it. It provides that those who picket must use their endeavours to cause vehicles to halt off the highway, thereby limiting the obstruction of those passing by. What could be more reasonable than that? The question is: what if they fail in those endeavours? But what if they fail under the present law? At least the new clause gives some precision and definition and establishes the right to communicate in a situation where frequently there are pickets at a factory entrance wishing to speak to persons inside the cab of a lorry. It is not good enough to continue with laws which were drafted when the furthest distance one might be away from a person was when he was on the back of a horse. The law should provide for reasonable communication with people in motor vehicles, and that is necessary if there is not to be a greater danger of the breakdown of order.

  1899
  My hon Friends who support the clause have acted responsibly and have drafted a framework within which it could be possible for pickets to go about their peaceful business.
  7.45 p.m.
  Mr. Urwin: The Secretary of State said that he was in some difficulty about accepting the clause, which has been signed by 44 Labour Members. There are those of us who can begin to understand the reasons for his caution. Nevertheless, about 120 Labour Members are sponsored by trade unions and they represent a very large body of people any one of whom could be involved in picketing at any moment. At any time they could find themselves, either by direct intention or by implication, as one of a body of people exercising the right to picket. In this context, and bearing in mind some of the experiences of the recent past, it is almost inconceivable to think that we are enacting legislation which excludes the kinds of thing that my hon. Friends seek to include in the Bill.
  I hope that my right hon. Friend will give me a forthright answer to my question. When does he expect to bring forward, if the provision is not to be put in this Bill, another piece of legislation which would meet the requirements of my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker)? It is well within the bounds of possibility that while it would be impossible to gag my right hon. Friend or his colleagues, he is, metaphorically speaking, handcuffed. When may we expect the Home Secretary, for example, to come up with amendment to the conspiracy laws which might provide the opportunity we seek of giving effect to the aims of this new clause?
  It is not fair to say to Labour Members that this is not the time to include in a new Act of Parliament provisions along the lines that my hon. Friend has sought to introduce. My right hon. Friend must be more forthcoming or face the prospect of a substantial number of Labour Members voting against the Government. That would not include me. In 11 years I have never voted against the Government, and it will be a sad day when I do. However, there is always the first time and I can afford to indulge in the luxury of selectivity. I ask my right
  1900
  hon. Friend the Secretary of State not to drive me into the Lobby against him on this occasion. If there is not a satisfactory answer, I may have to indulge in the other luxury of abstention.
  Mr. John Evans: I shall be brief and not detain the House too long. My right hon. Friend the Secretary of State has given an undertaking that he will make a fresh search. I hope he will accept that that is rather like throwing a bucket of water over us.
  As my right hon. Friend and many hon. Members know, my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) and I submitted the bones of the new clause after Second Reading, because during the Second Reading debate we expressed our disquiet about Clause 99. There has been ample opportunity on Second Reading, during the Committee stage and today to return to the form of words which would have been acceptable to many Labour Members. I find it extremely difficult to understand at this juncture why that form of words has not been put forward today, because we deliberately abstained on the amendment tabled by the right hon. Member for Lowestoft (Mr. Prior) when he moved that Clause 99 should be deleted. We abstained in the clear belief that the Government would be forced to come back and clarify the position on picketing. It was with considerable dismay that we discovered that the Government had come back with nothing.
  The brief of my right hon. Friend the Secretary of State can only be described as a nit-picking one drawn up by the Home Office and not by his Department. I have listened on many occasions over many years to my right hon. Friend. I hope he will forgive me if I say that his speech was the worst one I have ever heard him make. It certainly was not his speech.
  It is the Government's duty to come forward with legislation. We have read the debates carefully and we have tried to meet all the objections raised in Committee. The truth is that someone in the Government has constantly fudged this issue and refused to deal with the matter of conspiracy. The House will appreciate that we have tabled a proposal on that matter, but for some reason which I am not well enough informed in

  1901
  the ways of the House to understand, it has not been called. I make no quarrel with that, but we believe that our amendment met all the objections.
  On 17th July in Committee my hon. Friend the Minister of State said in reply to a comment of mine:
  "the police must be recognised as having two duties made upon them. They must have the duty to uphold the law passed by Parliament. They must also have the duty of preventing breaches of the peace." [Official Report, Standing Committee F, 17th July 1975; c. 1516.]
  We have tried to clarify the law because the law is in a state of chaos. I have served upon picket lines on a number of occasions. They were all peaceful pickets, but because they were in connection with the shipbuilding and ship repair industry they were always effective picket lines.
  At present the law is determined by the local senior police officer. He decides what the relationship shall be among the police, the pickets, the people seeking to gain entry into the factories and the lorry drivers. In most industrial areas the police co-operate with the strikers and pickets. This often continues for quite some time and there are no problems. The picket line is always peaceful. Sometimes the senior officer is posted elsewhere and another police officer takes his place who interprets the law differently. Consequently the pickets cannot understand why the law appears to have changed. We know that the law has not changed. What has often changed is the police officer who was interpreting the law. That is why we have tabled the clause.
  I agree with the comments made by my hon. Friend the Member for Houghtonle-Spring (Mr. Urwin) about dealing with the trade union aspect of this problem. As a supporter of the Government, and having sat through 30 sittings of the Committee, I cannot understand why the Government are not using the Employment Protection Bill to clarify the law. It is the ideal vehicle. I am a back bencher, but if I cannot understand it how are the thousands of people outside ever to understand why the Government did not use this important piece of legislation to clarify the matter? There is no doubt that we have the dead hand of reaction of the Home Office sitting
  1902
  tightly on the new clause. It is a scandal that this important Bill is not being used to clarify something which at times can cause a great many problems.
  The new clause is an attempt to solve the problems of affairs such as occurred at Saltley and problems of mass and flying pickets. If we cannot solve the problem by clarifying the law in a perfectly legitimate and straightforward way which everyone can understand, no one will have cause to complain if at some future date strikers believe that they are not getting a fair deal from the authorities, the police or the Government and they resort to flying pickets and mass picketing. I would submit that the responsibility for that would rest firmly upon the Government.
  I hope that my right hon. Friend the Secretary of State will retract what he said and accept the clause.
  Mr. Patrick Mayhew: I agree with the hon. Member for Newton (Mr. Evans) that Clause 99, which was in the original Bill, was no more than a fudging of this issue. It sought to pretend, under the guise of declaring the law for the avoidance of doubt, that the law as it exists confers a right, which is not the case. It was implicit in Clause 99, now no longer part of the Bill, that the law conferred the right to seek to persuade, but, rightly or wrongly, that right has not been part of the law.
  The law has been settled on this point since 1906, and it has conferred a right to attend for the purpose of communicating or obtaining information or for the purpose of persuading, but it has not gone further. The reason for that is the conflict between two opposing interests. On the one hand there is the interest of the trade unionist or the employee who seeks to persuade people to support him. That was recognised and given some force long before 1906. On the other hand, there is the interest of the ordinary member of the public to be allowed to go about his lawful occasions. That is an important and valuable right and one not lightly to be interfered with. That was lucidly and shortly expressed by Lord Salmon in another place in the recent case of Hunt v. Broome. Perhaps I can weary the House

  1903
  with two or three sentences from what the learned law Lord said. He said:
  "Everyone has the right to use the highway free from the risk of being compulsorily stopped by any private citizen and compelled to listen to what he does not want to hear. No doubt it is permissible, either by words or signs, to ask any man to stop on the highway and then to ask him to listen to what you have to say. He is free, however, to stop or go on as he pleases. If he does stop and then decides that he does not wish to listen or that he has heard enough, he cannot be compelled to stay."
  8.0 p.m.
  I have considerable sympathy with those who say that the law allows them to combine to give added force to their point of view in an industrial dispute. They see that for a hundred years the law has allowed them to be exempt from the ordinary provisions of the conspiracy law, for example. I agree with the point forcibly expressed in Committee that the mass of trade unionists in an industrial dispute reckon that there is not much point in having a right given one by the law to combine for the purpose of persuading if in this modern day of the motor car and the lorry, as distinct from the horse and cart, one cannot get a vehicle stopped.
  I see the force of that. It leads, I believe, to this result. The pickets, the trade unionists in question, say "If the law gives us a right to attend to seek to persuade, the law cannot be so stupid as not to give us the opportunity to get our point across." At present neither the 1906 Act nor the 1974 Act does that.
  As I hope I have made clear, I have considerable sympathy—I suppose that this will be regarded as a typical lawyer's hedge—with both sides of the argument. Picketing is now, unhappily, a fact of industrial life. I agreed with my hon. Friend the Member for Esher (Mr. Mather) when he said that there was very considerable public alarm at mass picketing. It is mass picketing which is the worst manifestation of the inadequacy of the law at present, and the worst manifestation of the harm that is done to our law as a whole by bad industrial relations.
  I want to express what is possibly an heretical point of view, coming from someone who sits on the Opposition side of the House. I think that it is right that we should at least bring ourselves
  1904
  to consider whether we should not confer upon the police the right, in certain picketing situations, to stop a vehicle for a limited and reasonable time so that a picket may seek to persuade the driver. If this were the law, it would do away with the need for mass picketing. That, indeed, would have to be a condition of this amendment of the law. Mass picketing is by far the worst manifestation of the harm done by bad industrial relations and the worst aspect of the whole question.
  I would be prepared to consider very carefully whether we ought not to confer upon the police what they have not got at present—the right to stop a vehicle for a limited period so that the picket may have the right to do that which he has the right to seek to attend to do; namely, to persuade.
  Mr. Mather: if a picket had that right to ask the police to stop a vehicle on the public highway, that would give the picket powers greater than those of the ordinary citizens. The ordinary citizen has no power to say to the police that he has a reason for wishing a vehicle to be stopped. I think that this proposal is wrong. We should not have it.
  Mr. Mayhew: I quite agree that it would place the picket in a position different from and more advantageous to the position in the example taken by my hon. Friend of being unable to go out into the road and stop vehicles to allow his convoy of Army vehicles to get out on to the road. But there are virtues in the law which are perhaps greater than that of consistency. There are occasions on which one has to make individual laws to meet individual circumstances. I would insist that there would have to be a ban on mass picketing. I would define mass picketing extremely stringently. Six, which is the proposal in the new clause. is probably a couple too many.
  All I am saying is that this matter deserves the most careful consideration. I am sorry that it has not had that careful consideration by the Government. At this late stage I cannot understand why the original Clause 99 should seek to declare the law as to picketing when it was subsequently admitted that the Government had not given sufficient thought to the matter. The gallant attempts to grapple with the problem in the new clause do not come anywhere near what

  1905
  the law should require. In subsections (2) and (5) there are provisions which are far too vague and would give rise to considerable difficulties. I shall not bore the House with my views about them.
  The purpose of my intervention—which I am afraid has been too long—is to indicate that one must look with rather fresh eyes at the whole of this terribly difficult problem, dealing with it as a fact of industrial life. I am sorry that the Government have not given enough thought to it.
  Mr. Prior: Passions sometimes tend to get raised on this particular subject. So far we have had a very quiet and a good debate. We discussed this matter at some length in Committee. It is quite right that we should discuss it in the House again tonight, because it is a matter of very great concern to people outside the House and to people outside the trade union movement.
  A large number of people feel that the law is in need of reform. Some would take the view that the law is in need of reform to prevent mass picketing. Anyone who actually witnessed what went on, for example, at the Saltley coke works and other activities around that time will know very well that this was not a position which ought to be sustained in a free society. There was great concern at that time and a feeling that, certainly as regards mass picketing, the law needed reform.
  Therefore, up to a point, when the Secretary of State came forward in about March or April of last year with a proposal which he thought at that time could perhaps have been introduced as a code of practice, which would have followed the lines taken by the miners in the 1974 dispute, we were favourably disposed towards looking at it in that light, particularly as on that occasion the miners confined themselves to a small but specific number of strikers. They wore armbands to make certain that everyone knew they were members of the National Union of Mineworkers. That avoided some of the problems of flying pickets, and the "rent-a-picket" problem which we had had previously. Certainly the whole atmosphere was a good deal more orderly than it had been on previous occasions.
  1906
  Therefore, it was perhaps with some disappointment that at that time, when we came to move amendments to the Trade Union and Labour Relations Bill, the Secretary of State said that he was not ready to come forward with any proposal. The right hon. Gentleman said that again tonight.
  I must say to some of his hon. Friends who have spoken in the debate that I think that the Secretary of State was right in his answer. What is more, if they are to address their remarks to the Home Secretary, in many ways it would be better if they did address their remarks to the Home Secretary—although I hope very much that the Secretary of State will defend his right hon. Friend in lusty fashion. However, there is no doubt that many of his hon. Friends were having a good go at the Home Secretary. [HON. MEMBERS: "The Home Office".] I cannot believe that I am wrong, but if I am, I am open to be contradicted by any Labour Member.
  My hon. Friend the Member for Esher (Mr. Mather) raised the problems of the rights of individuals to proceed on the highway or about their lawful business. That was the point that the Minister of State took up in Committee, when he said:
  "In conferring a right to stop a vehicle to persuade its driver or any other occupant, how far is one entitled to interfere with the right of the driver? There must be a point at which a driver has a right to proceed upon the highway. In establishing one right, one is reducing another."—[Official Report, Standing Committee F. 17th July 1975; c. 1515.]
  I believe that to be the nub of the problem.
  The amendment, towards which my hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew) sought to be sympathetic, seeks for the first time to limit the number of persons involved in a picket. It seeks to limit them to six, although subsection (5) of the clause says earlier:
  "In this section the term peaceful picketing shall mean the attendance of such numbers of pickets as may be reasonable having regard to the number of persons normally employed in the premises".
  Therefore, six is not to be the maximum number. Any number can be employed picketing, although the normal and not unreasonable number is six.
  Mr. Rooker: The right hon. Gentleman has read the interpretation reasonably correctly, but the new clause speaks of six pickets 100 yards apart. Obviously we are talking about more than six in total, depending on the number of exits from and entrances to the premises. We are not saying that the total of six at any one exit or entrance is reasonable.
  Mr. Prior: It can be more than six. There is nothing in subsection (5) to stop there being more than six in any one place. As my hon. and learned Friend pointed out, six is probably too many in any case. The clause is not specific.
  Mr. Arthur Lewis: The right hon. Gentleman is always fair and reasonable. Does he not agree that at Fords, for example, there could be 60 or 70 pickets? That would not be too many. I do not know how many entrances and exits there are there. My hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) is right. There could be two pickets at each of 20 or 30 gates at Ford's, which would not be excessive.
  Mr. Prior: If there are many exits and entrances, the case for more pickets is made out. It shows how difficult it is to be precise in legislation. But what we would not support, and what would flabbergast the country, is the passage of legislation which legalised some of the activities that went on two or three winters ago.
  Mr. John Lee: Is there not an inescapable inference that by defining peaceful picketing one is limiting, and in all probability excluding, the activities which the right hon. Gentleman has condemned?
  Mr. Prior: That is what one would hope, but, as I have pointed out, that is not what subsection (5) says. Therefore, it needs a considerable tightening. That is why we thought that the proposal to introduce a code of precise rules was the only way in which to proceed. That was the spirit of our amendment in Committee and Report stages of the Trade Union and Labour Relations Bill last year.
  8.15 p.m.
  As the clause is drafted, it is not one that the police could enforce, as the Sec-
  1908
  retary of State has made absolutely clear. The Secretary of State says that he is still considering ways in which it might be possible to improve and more carefully and closely define the law. I believe that it would be hard to find a suitable and reasonable way to decide when a picket should have the right to stop a lorry driver and when he should not. I accept the arguments about our having moved out of the horse-and-cart age. We all do. But if we accept that point, we on this side of the House want to see precise conditions laid down about the number of pickets, the type of pickets and their code of conduct, and to avoid flying pickets and mass pickets. We do not believe that the clause can do that, and, therefore, my right hon. and hon. Friends will not be able to support it.
  Mr. Foot: The hon. and learned Member for Royal Tunbridge Wells (Mr. Mayhew) said that the Government had given insufficient thought to the matter. For many months we have had conversations, arguments and discussions on it. I trust that during that process some thought has been applied to it as well.
  Our failure to appear before the House with a solution to the problem is not due to any lack of effort to secure one. We tried to assist, although we knew that it could not be regarded as a full solution, by Clause 99, which was knocked out in Committee. The hon. and learned Gentleman quoted Lord Salmon as saying that there was no right to persuade, but Lord Reid said in the same case that attendance must include the right to try to persuade anyone who chooses to stop and listen. Later he said that the right to attend for the purpose of peaceful persuasion would be meaningless unless this was implied.
  Clause 99 attempted to express Lord Reid's views in that sense. We thought that it would be of some assistance, but it was knocked out by a variety of circumstances in Committee. We believe that that was a pity, although we do not claim that it was a solution to the problem and to the various other problems discussed by my hon. Friends and others in this debate.
  I acknowledge the strength of feeling expressed by my hon. Friends in the debate and by their signatures to the amendment. I have spoken in the past

  1909
  about the representations of the General Council of the TUC. They have been very much on the lines of the clause. The General Council wishes us to proceed in that direction, and there is no doubt about its feelings either.
  My hon. Friend the Member for Houghton-le-Spring (Mr. Urwin) asks "If we cannot deal with the matter in an Employment Protection Bill, when can we deal with it?" I fully appreciate his view. I still hope that we may have the chance to deal with it in the Bill. But it is understandable that hon. Members should tell me in the strongest possible terms, as my hon. Friend the Member for Newton (Mr. Evans) did, that they find it difficult to understand why we have not yet been able to find the solution. For the reasons I gave earlier, we have not so far been able to do so. There is a dilemma and difficulty, and we have been trying to overcome it. Discussions have gone on in the attempt to do so.
  I understand the strength of my hon. Friend's feelings. He may seek to force the clause to a Division, and that is his right. I regard his clause, as do the Government, as a constructive attempt to deal with this matter. We cannot accept it in its present form. There has to be a further search to see whether something can be built upon it. Certainly the clause is not just a reiteration of what was said in Committee. It is a genuine and constructive attempt to deal with the problem. It is in that light that we look upon it. This debate may have a good effect on the situation.
  Within the period still left to us before the Bill reaches the statute book—there is one stage left—we will make another search to see whether we can find another solution. I cannot promise that we will secure that solution. In view of the lengthy discussions we have already had in seeking to find a solution, it is more difficult to be certain that we will be successful. We will make another effort and will look at my hon. Friend's clause in that light. I cannot make any further commitment because to do so would be to mislead the House.
  If by any chance we still cannot secure an understanding which can be included in the Bill, we will have to continue with the search because as a party we are committed to reform the law of picketing.
  1910
  That is in our manifesto. I do not seek in any way to escape from that commitment. We have said candidly that we do not regard the proposals made by the Government so far as a fulfilment of that commitment. We will have to go further to secure fulfilment of that manifesto commitment.
  Mr. Lee: Those who support this clause do not doubt my right hon. Friend's sincerity. Could he tell us in a sentence what is the nub of the difficulty which inhibits him from dealing with the matter in this Bill?
  Mr. Foot: Perhaps my hon. Friend will read my earlier contribution. One of my hon. Friends was kind enough to say that it was the worst speech I had ever made. Believe me, I have made worse ones than that, and many hon. Members can verify that. If my hon. Friend will study the comments I made on the original proposal, he will see the nub of the question. He will see that it was the belief of the police that this would give powers of obstruction which could lead to difficulties. It is that conflict of opinion that we seek to overcome. There may be ways of doing this, including the possibility mentioned earlier of the police having the right to stop vehicles. We considered all of that with great care. It would mean that the police would have to be present on every occasion when picketing took place. There are other difficulties of that nature.
  Each of those possibilities has been considered. We will make another search in good faith to try to find a solution which can be included in the Bill. If we cannot do so, we will bring one forward on a future occasion.
  Mr. Prior: We would agree with what the right hon. Gentleman has said about obstruction. My hon. Friends and I are interested in the idea of restricting the number of pickets, of getting away from flying pickets and mass pickets. We hope that in any solution which the right hon. Gentleman may bring forward he will bear that in mind.
  Mr. Foot: My hon. Friend has made some proposals. I do not say that we are committed to them. His clause is bound up with the whole package. The mass picketing part may not be the

  1911
  insoluble issue. There are much greater difficulties.
  Mr. Rooker: I want to help my right hon. Friend. In the forthcoming battle with those civilised, sensitive libertarians in the Home Office, it would be better for him to have a Division List under his arm. I shall not, therefore, withdraw the motion.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 91, Noes 335.
  [For Division List 313 see cols. 1989–92.]
  Question accordingly negatived.

New Clause 9

  APPLICATION TO HOUSE OF LORDS AND HOUSE OF COMMONS
  '(1) This Act shall apply to officers, officials and employees of the House of Lords and House of Commons as it applies to employees of the Crown, and for the purposes of this Act the employer of these persons is deemed to be, in the case of persons employed in the House of Lords, the Clerk of the Parliaments, and in the case of persons employed in the House of Commons the Speaker of the House.
  (2) The Clerk of the Parliaments and the Speaker may delegate all or any of their functions under this Act for such time or for such purposes to such persons they may designate as appropriate.'—[Mr. Rose.]
  Brought up, and read the First time.
  Mr. Rose: I beg to move, That the clause be read a Second time.
  The clause stands in my name and in the names of 29 of my hon. Friends. It seeks to remedy the unfortunate anomaly which arises from the history of this House and the Palace of Westminster, in particular the way in which it affects the status of servants of the House under the House of Commons (Officers) Act 1812.
  The clause implies no criticism of the current office holders or of any of those who are charged with the difficult problems and heavy responsibilities involved in providing the services of the House. It is often said that no trade unionist would countenance the hours and conditions of hon. Members, but at least hon. Members have the right to choose, and we can alter our conditions, given
  1912
  the political will and the motivation. That is not true of servants of the House or servants of the House of Lords.
  In moving the amendment, I accept that analogous treatment with the Civil Service is supposed to obtain for House of Commons employees, but the Civil Service Estacode contains rights which do not apply to servants of the House in that they are applied selectively by the Staff Board—that is, the Clerk Administrator with the four deputy departmental heads.
  Only yesterday an unfortunate incident occurred when a member of the staff of the House was summarily dismissed. I make no comment on that because it would be entirely wrong to prejudge an issue about which we cannot know the facts. We are disturbed that there is the feeling that members of the staff should not have fewer rights than those enjoyed by ordinary employees in the Civil Service in respect of appeals procedures, with ultimate recourse, if necessary, to an industrial tribunal. In total, the Bill extends the scope of application of the industrial tribunals in a number of ways. The new clause will apply that extension to servants of the House. Currently there is uncertainty among members of the staff because the Estacode applies only in selective cases. There is not set procedure which applies to those employed by the two Houses.
  The purpose of the clause is to place members of the staff in the same position as they would hold if they were civil servants. The problem that we face is that the rules of order are such that we cannot take retrospective action in the sense of giving to members of the staff by means of the Bill, notwithstanding the clause, the rights and protection that apply in respect of the 1971 and 1974 Acts, the office, shop and railway premises legislation and various other pieces of legislation. However, it would be a major advance if we were to apply this measure to servants of the House, in that it would be the first step towards their receiving parity of treatment with members of the Civil Service. It would also be a first step towards their receiving the kind of protection that is afforded generally by means of other legislation.
  I regard the clause as only a step in the right direction, limited as it is by the

  1913
  rules of order in respect of the matters to which many of us would have liked it to apply, not least in respect of unfair dismissal. Civil servants have their own internal machinery for the ultimate right to take their case, under the unfair dismissal provisions, before a tribunal. That happens rarely, but the right is there as an ultimate recourse. That is something that should apply no less to those employed by the House.
  It must be recognised that in the Bill there are derogations in respect of recognition of trade unions and disclosure of information by the Crown which reduce the legal, if not the practical, protection of servants of the House. That applies even if the clause is acceptable. However, to equate the servants of the House with civil servants would be a significant advance. Regardless of how kindly, fair and indulgent current employers may be, such conditions can never be a fair substitute for legal rights that are properly enshrined in an Act of Parliament and made accessible to employees.
  My hon. Friend the Minister of State has been extremely helpful. I know that he has earned the admiration of my hon. Friends for the manner in which he has conducted the Bill, but not least for the approach that he has adopted towards this matter. On Second Reading on 28th April my hon. Friend said:
  "I am sure, however, that the House will agree that it would be indefensible if, in matters covered by this legislation, parliamentary staffs were in any less favourable a position than staff employed by a Government Department."
  After saying that special consideration was being given to that matter, he said:
  "I am able to give the House a firm assurance from the House authorities that they will ensure that, as far as is constitutionally possible, the staff here are treated similarly to civil servants in these matters. If it were the wish of the House that this undertaking should be embodied in a formal way, we would see how this might best be done."—[Official Report, 28th April 1975; Vol. 890, c. 45.]
  It might best be done by accepting the clause, which commands a wide degree of support.
  The problem that my hon. Friend has recognised stems from the anomalous position of the Palace of Westminster and its employees as embodied in the 1812 legislation. As my hon. Friend the Minister of State has said, that gives the Serjeant
  1914
  at Arms and the Clerk of the House the power to dismiss staff without notice, with no redress or appeal. It is not suggested that this is done every day of the week, but we suggest that the situation is not acceptable.
  8.45 p.m.
  On 23rd June I asked the Secretary of State for Employment
  "whether he will introduce legislation to apply employment protection and health and safety legislation to servants of the House of Commons in such a manner that they will be on the same legal footing as civil servants."
  The Under-Secretary of State replied:
  "During the Second Reading debate on the Employment Protection Bill my hon. Friend the Minister of State gave an assurance on behalf of the House authorities that parliamentary staffs would, so far as constitutionally possible, be treated similarly to civil servants. … I am at present considering in consultation with the House authorities and the Leaders of both Houses, the possibility of formally applying legislation to parliamentary staffs to the same extent as it applies to civil servants."—[Official Report, 23rd June 1975; Vol. 894, c. 61.]
  I hope this evening that the Minister of State will give the House the pleasure, for once, of accepting a clause which is close to the hearts of many hon. Members. We are aware of the difficulties that arise in respect of the House of Commons, the staff of which is now around 500 and has to undergo the peculiar hours of work in this place and its strange departmental structure. This is a remarkable anomaly. Despite the general advance in industrial law and the protection offered to employees over a wide range of matters, not least the excellent advances offered in the Bill, excluded from the scope of the various Acts are employees of the House who assist us in our business of getting legislation through the House, if only to the extent of providing us with snacks at 3 or 4 o'clock in the morning, in conditions which would certainly be unacceptable to those who work in other parts of industry and in commerce.
  It is bad enough that those employees should be excluded from legislation such as the Contract of Employment Act, the Trade Union and Labour Relations Act, the Equal Pay Act, the Race Discrimination Act, and the Sex Discrimination Bill, but to exclude those employees from the provisions of the Employment Protection Bill—a Bill which is intended to extend

  1915
  protection to employees everywhere—is a startling anomaly and a paradox which is not acceptable to Labour back benchers.
  I invite my hon. Friend the Minister of State to say that this House as a good employer should be keen to set an example. This is not asking a great deal, and it is the first step in the direction of wider application of the various Acts which protect those who serve this House and who serve the nation in getting our legislation on the statute book.
  Mr. Rooker: I support the provisions of the clause. I addressed the House on this subject yesterday afternoon on a Ten-Minute Rule Bill relating to the Royal Palace of Westminster. The main plank of my argument was that the protective labour laws which we were seeking to enact for 20 million working people should operate in this House. I sincerely hope that the Minister of State will be able to accept the clause since the Bill which I introduced yesterday was not opposed by any hon. Member.
  Mr. William Hamilton: On every conceivable ground the Government ought to accept the spirit in which the clause has been moved, if not the exact words, and I think that my hon. Friend will do that.
  It must be inconprehensible to workers outside this House that here we are legislating for their protection but we do not legislate for the employees within this Place. These remarks may, strictly speaking, be out of order, but if I hurry I might get away with it.
  If we were to look further at the appointment of these employees, as well as the way in which their working conditions are controlled, we might get somewhere. The question is a much wider one than would appear from the problems posed by my hon. Friend in dealing with the clause. Right from the top to the bottom this place needs a damned good clean-out, but we cannot do it within the scope of the clause.
  My hon. Friend referred to the matter of the member of the staff who was summarily dismissed. I do not know for what reason it was, but if that happened at Seafield colliery in Fife the entire pit would have been out. But we accept
  1916
  an incident of this sort. I do not know who authorised whomsoever dismissed that person, but I think we have a right to know and that the person who was dismissed ought to have a right to appeal against that dismissal. There ought to be much more democratic control by ourselves of this establishment.
  Members of Parliament are in some cases regarded as employees by some of the staff, who are selected on a basis of nepotism which is completely indefensible in this House. I should like the Government, not necessarily in answering the arguments on this clause but on some future occasion, to announce that they will set up a sub-committee of bloody-minded Members like myself to deal with these matters, because they are all related to the clause that my hon. Friend has moved.
  Mr. Greville Janner: May I join my hon. Friend's proposed committee of bloody-minded Members? I am sure that it will be an all-party committee. We have some bloody-minded people in the Opposition—certainly on this issue, if not on others. All hon. Members ought to feel extremely strongly on this issue, and they ought to be both ashamed and embarrassed at the way in which the staff of this building have to carry on their duties.
  There is an old saying that it is the shoemaker's children who most often go unshod, and in this House it is our staff for whom we do not legislate. We take great care and pride in trying to see that other people's staff are looked after, but the conditions of our own staff are carefully pushed into the background.
  I believe that my hon. Friend was being too kind and fair and indulgent when he said that those who run this building at the moment are kindly, fair and indulgent to those they employ. I consider that the way in which some of the people who work in this building have to endure their days and nights is quite disgraceful.
  I shall give two examples. The police, who give such tremendous service to us, have a mess which I have been trying to get them out of for months. Sewage overflows into the place in which they eat. It has happened not once but four times in the last few weeks. Each time they are told that the drains have been cleared

  1917
  out and that it will be all right. But still the police are not moved. In the Strangers' Cafeteria—to which you have been known to go on occasion, Mr. Deputy Speaker—the temperature sometimes rises to as high as 100 degrees. People are working in there all the time but hon. Members can go out and enjoy the glories of the Terrace when having their meals and drinks. They can look at the river in comfort while the staff of the House have to live and work in temperatures which would not be permitted for staff in other places.
  This is a very moderate and sensible clause. I hope very much that the Government, if they cannot accept its wording, will give an assurance that the staff of this House will be brought within the scope of benevolent legislation designed to provide decent working conditions for other people. We cannot leave our own staff out of our minds any longer.
  Mr. Arthur Lewis: I should like first to pay a sincere tribute to my hon. Friend the Member for Manchester, Blackley (Mr. Rose), who has always given an enormous amount of time and effort on behalf of what I would term the working people generally, and particularly with regard to labour relations and Bills concerned with labour relations. He has done yeoman service, because if half the things that go on in this place regarding the very poor pay of our lower-paid and middle-paid staff and their appalling conditions were generally known, there would be an outcry in the country.
  I suggest that the Shadow Leader of the House should invite the Press to tour the House so that newsmen might be shown some of the ways in which we treat our staff and the appalling conditions in which they have to work. I think that Press representatives could write some hair-raising articles, and people really would be shocked.
  Therefore, anything that my hon. Friend the Member for Blackley can do to help by way of his clause is to be welcomed. I am sure that the Minister of State will accept the clause unreservedly. I hope that in this case he will not say that the clause is not worded as he would like. With his legal knowledge and experience, I am sure that my
  1918
  hon. Friend will have framed it in good legal phraseology.
  We all know, however, that when civil servants advising Ministers want to block any proposal, they always suggest that the amendment in question is not worded in quite the right way. We know, too, that they hate to think of the staff of this House being in any way allied to them.
  In this case, I am sure that my hon. Friend has framed his clause in sound legal phraseology and that it will be accepted without question.
  Mr. Booth: The clause seeks to apply the provisions of the Bill to all the staff of this House in the same way as it will apply to Crown employees.
  First, perhaps I may refer to a little of the history of this matter as it affects this House. The authorities of the House approached my Department to see whether the provisions of earlier legislation in this area could be applied directly to the staff of the House. The technical problems at that time appeared to be considerable, and when the matter again arose in the context of this Bill it was thought appropriate to deal with the question by analogy. On Second Reading I gave an undertaking that the Government would enter into further discussions with the appropriate authorities to see how best the objectives to which the House authorities fully subscribed of covering their staff by the provisions of employment protection legislation could be met.
  However, the clause also seeks to apply the provisions of the Bill to the staff of another place. I am sure that it would not be the wish of any hon. Member here to seek to intervene in the essentially domestic concerns of the second Chamber in a two-Chamber legislature. We can in this House quite legitimately consider our own internal arrangements and the position of our own staff, but I think that we should leave it to Members of the other place to deal with the position of their staff in such a manner as seems appropriate.
  I might add that the appropriate Committee of the other place has resolved already that the provisions of this Bill and of associated legislation should be applied to its employees by analogy.
  The new clause seeks to achieve its purpose by taking Mr. Speaker to be the employer of all persons employed

  1919
  within the five Departments and by enabling him to delegate his functions as he sees fit. This is an ingenious solution to some of the problems we have encountered hitherto and it is among the possible solutions which we have been considering. However, particularly in view of the circumstance surrounding the tabling of the clause, I think it would be appropriate for me to request the sponsor to withdraw it in order that the Government may give the question further consideration, in the light of opinions expressed in the debate today, with a view to ensuring that appropriate arrangements may be made before the Bill finally passes into law.
  9.0 p.m.
  Mr. Hayhoe: The Minister of State has referred to the circumstances in which the clause was tabled. Indeed, on yesterday's Order Paper, which gave notice of the clause, the sponsoring names were not as they appear today. I discovered that my name appeared as sponsoring one of the new clauses, as well as the names of some of my hon. Friends. A misunderstanding must have occurred because, as I indicated to the hon. Member for Birmingham, Perry Barr (Mr. Rooker), whose name was then heading the list of sponsors, I believed the general approach of the clause to be entirely reasonable, but I felt constrained to withdraw my name as it had been put down without my authority. I understand that that was the view taken by other hon. Members.
  Having heard the Minister of State, I am sure it is the intention of all hon. Members that the provisions of labour legislation should be applied to those working within the House as we make sure that they are applied to those outside. It would probably need to go rather further because the matters raised about the police canteen, sewerage and heating are covered not by the Employment Protection Bill but by other legislation. From what the Minister of State has said, I understand that there is a general move forward to ensure that all these matters are put into a proper form. I do not believe that this is the occasion for those who wish to exert some power over the other place to put forward their arguments, because such arguments it seems
  1920
  to me are ill-deployed at a time when we are trying, by agreement, to move through a heavy load of amendments on the Bill and to let the House rise at a reasonable time. Perhaps those who wish to pursue, albeit within the rules of order, matters which are to some extent—I put it no higher than that—peripheral to the main purpose of the Bill might contemplate that they are prolonging the sitting of the House. Moreover, they may not be serving all that well the interests which all of us have in mind.
  We could presumably go into a long argument whether this proposal should by the decision of this Chamber be imposed upon the House of Lords. I should not have thought that that would be a good use of our time. The debate has shown that there is support in all parts of the House for something along these lines. I support the Minister of State's call to the mover of the clause to withdraw it so that proper action can be taken at a later stage.
  Mr. Rooker: On a point of order, Mr. Deputy Speaker. This is the first time in 18 months that I have raised a point of order. I seek your advice, Mr. Deputy Speaker, on the basis of what the Minister has said. If an amendment or a new clause is put down to a Bill and those hon. Members whose signatures are attached to it know nothing about it at the time and subsequently withdraw their names from the clause, but then re-table it by replacing their names, with the Clerk knowing that everything was legitimate and themselves agreeing with the clause, can you confirm that that new clause is in order?
  Mr. Deputy Speaker (Mr. George Thomas): If it had not been in order it would not have been called.
  Mr. Rose: I can clarify how this situation arose. My hon. Friend the Member for Oxford (Mr. Luard) originally took the clause to the Table Office. On the back of a sheet of paper was a list of names of persons to be approached to sign it. He omitted to sign it himself and it appeared in the names of other Members but not in his own name. He has asked me to alopogise. I understood that he would not be present, but I see that he is.

  1921
  My hon. Friend should be spared any embarrassment, because he has performed a valuable service to the House. Had he not taken the new clause to the Public Bill Office, we would not have had the opportunity of having this debate and of hearing my hon. Friend the Minister give his undertaking. Indeed, we should not have heard the hon. Member for Brentford and Isleworth (Mr. Hayhoe) endorse the principle that not only should the Bill apply to employees of this House but that the whole range of protective legislation relating to health, safety, unfair dismissal and so on should be applicable. I thank my hon. Friend the Member for Oxford. Notwithstanding the omission of a signature, which many of us do on cheques perhaps, my hon. Friend has performed a valuable service.
  It has been suggested that the new clause should be withdrawn. One reason given for that course was that the House of Lords should decide for itself. I find that almost as extraordinary a proposition as suggesting that health legislation should be applied by ICI only if ICI wishes to apply it.
  In the first instance this Chamber must pass legislation. Although the House of Lords has certain limited powers in the way that it may amend legislation, they are powers with which some of us would not agree in any event. As I said, in the first instance this House has to pass legislation. It should not accept the principle that the House of Lords can ride roughshod over its employees or that it has some independent authority separate from Parliament as a whole. The House of Lords is part of Parliament in any event.
  To say that this matter should apply only by analogy with respect to employees is not good enough. That is the present position. It applies by analogy but without the force of law behind it. Therefore, there is always the danger of a capricious interpretation. When the force of law does not apply and there is no ultimate appeal, say, to an industrial tribunal in a case of unfair dismissal, notwithstanding good intentions, misunderstandings can arise and there is no ultimate legal redress. There is not the safeguard of a permanent understood code as there is in the Civil Service through the Estacode. For that reason,
  1922
  I am reluctant to leave the matter there. However, I have a great deal of faith in my hon. Friend.
  Mr. Booth: With your permission, Mr. Deputy Speaker, I should like to indicate that the explanation of the mystery surrounding the initial tabling of the new clause can be of great assistance to us. The House should know that my right hon. Friend and I attach considerable importance to the matter covered by the new clause. In the course of seeking to find a solution we were involved in discussion of the matter with others concerned, including the authorities of both Houses, until late last night. Therefore, the difficulty which arose may have coloured attitudes or influenced decisions. Now that the matter has been cleared up, it may be less difficult to make progress. The view that has been strongly pressed, to proceed by analogy, may not be good enough. I again appeal for withdrawal of the new clause, on the grounds that—
  Mr. Deputy Speaker: Order. Is the Minister intervening in his hon. Friend's speech or seeking to address the House again?
  Mr. Booth: I am seeking to address the House again, Mr. Deputy Speaker.
  Mr. Deputy Speaker: But the hon. Member for Manchester, Blackley (Mr. Rose) is addressing the House.
  Mr. Booth: I apologise, Mr. Deputy Speaker.
  Mr. RoseI think that I follow the gist of what my hon. Friend was saying. I have the utmost faith in him and his good intentions. I was not privileged to serve on the Standing Committee, but those hon. Members who did have paid tribute to my hon. Friend and the way in which he handled matters. I know that his heart is in the right place with regard to these proposals although others are less enthusiastic about them.
  Because of that, and that alone, I would not seek to press the matter or embarrass my hon. Friend. I accept his undertaking and hope that, in the not too distant future, there will be a Bill that goes far beyond the new clause and takes in by analogy all protective legislation advantage of which can be taken by other workers but not by the employees

  1923
  of the House. I resent the suggestion from an Opposition Member that by intervening, we have damaged the interests of the people in this House because they may be detained a little longer. I am sure there have been many more trivial matters on which they have been detained, and I think this is one of the matters on which they would be happy to be detained.
  Mr. Booth: The peculiar position arises that the House is legislating for its own people and the House is the only body that can change legislation. I hope we might forget our differences of view about the second Chamber arrangement and that we might be at one when the matter is discussed in another place and that proceedings there might resolve the matter.
  Question put and negatived.
  Mr. R. C. Mitchell: On a point of order, Mr. Deputy Speaker. Is it possible for a supply of the selected amendments to be placed somewhere where they will be available to hon. Members? They are normally put in the "No" Lobby, but such is the interest in this Bill that they have all been taken.
  Mr. Deputy Speaker: I understand that the usual circulation has been undertaken. There should be copies in the Lobby, but I will have inquiries made.

New Clause 10

  PAYMENT OF COMPENSATION OUT OF REDUNDANCY FUND IN CERTAIN CASES
  '(1) This section applies to any complaint made to an Industrial Tribunal under section 46 or 64 of this Act, or under paragraph 17 of Schedule I to the 1974 Act (Unfair Dismissal).
  (2) When the Tribunal makes an award of compensation on a complaint to which this section applies, if, immediately upon the making of the award, the employer, against whom it is made, notifies the Tribunal in writing that the action was taken by or on behalf of the employer, or, as the case may be, the complainant was dismissed by the employer after such pressure as is referred to in section 47(2) above had been exerted and that, but for such pressure, that action would not have been taken or the complainant would not have been dismissed and if the Tribunal is satisfied that the facts are so notified by the employer are true, it shall give the employer a certificate to that
  1924
  effect specifying the amount of compensation awarded and shall forward a copy of that certificate to the Secretary of State.
  (3) Upon receipt by the Secretary of State of such a copy of such a certificate and a request in writing from the employer in that behalf certifying that he has paid the amount of the compensation so awarded to the complainant, the Secretary of State shall pay to the employer out of the Redundancy Fund the amount of that compensation.'—[Mr. Brittan.]
  Brought up, and read the First time.
  Mr. Brittan: I beg to move, That the clause be read a Second time.
  Since the passage of the Industrial Relations Act 1971 there has been a remedy for unfair dismissal, and since the Employment Protection Bill began its passage through the House we have embarked on the task of adding to the law a provision whereby if disciplinary action short of unfair dismissal was taken against an employee, he would have redress. Under the Trade Union and Labour Relations Act 1974, Schedule I, paragraph 19(5) and Clauses 47(2) and 48(5) of this Bill, if an employer has been influenced in his unlawful action by coercion or threats of coercion or industrial action by a trade union, that cannot be taken into account when the question of unfair dismissal or disciplinary action comes before an industrial tribunal.
  If a trade union exerts pressure on an employer in respect of an individual in a way contrary to the law, he will find himself in a position where the individual concerned will have a course of action against him before an industrial tribunal and there is nothing the employer can do about it. He has no redress against the trade union, even though the only reason he had taken the action was the threat of strike action by the trade union if he had not done so.
  9.15 p.m.
  We think that that is a very unfair situation, because it means that an employer has been driven to act contrary to the law because he can do nothing in view of the overwhelming pressure exerted upon him by the trade union. When a comparable point was raised in Standing Committee it was said that the employer should not be in the position where nothing could be done about the situation, because he should not have taken that action against the individual

  1925
  concerned. That is an unrealistic argument in the case of a small employer who is faced with the threat of industrial action which he might not be able to resist, and in which he therefore acquiesces, sacking the employee as required by the trade union.
  The second argument against giving any sort of redress to an employer in this situation was that the whole thing was unreal, that it would never happen. A limited number of such cases arose under the provisions of Section 119 of the Industrial Relations Act, which enabled an employer to take action in such a situation.
  It does not lie in the mouth of the Government to say that this situation is unreal and could not occur, because they think it sufficient of a risk for it to be necessary to include provisions such as Clause 47(2) and Clause 48(5) in the Bill to guard against precisely this eventuality. Of course, we accept that this is not a situation which will necessarily arise often, but we take the view that it would be wrong and unfair for an employer faced with such pressure to have no recourse whatever.
  In Committee we suggested a procedure whereby it would be possible to join the trade union concerned in the proceedings and to have a determination against the trade union if the tribunal came to the conclusion that in taking unlawful action against an individual an employer had done so largely because the trade union had compelled him to do so.
  That proposal was strongly objected to by the Government for reasons which we could not accept. We are not seeking to reinstate that provision in this case, but to deal with the situation in a different way, which will not involve any kind of legal proceedings against a trade union or any other kind of action against a trade union. The alternative method of approach suggested in the new clause is that in the sort of situation I have described a tribunal could make use of the fact that the employer had been compelled to take an unlawful action against an individual because of the coercive pressure of industrial action. Once a tribunal had so certified, the Secretary of State, on receipt of a copy of the certificate of the tribunal, would request in writing from the employer confirmation that he had
  1926
  paid the amount of the compensation awarded to the complainant, and in those circumstances the Secretary of State should pay to the employer out of the redundancy fund the amount of that compensation.
  In other words, we are seeking to transfer to the State an obligation because we do not wish to engage in the difficult area of action against trade unions in this situation. We take the view instead that where an employer has been driven to act unlawfully against his own wishes he is faced with no alternative but to have a strike or act contrary to the law.
  In those circumstances, if it is thought, in the general interests of industrial relations, undesirable that the employer should be able to have recourse direct to the trade union, he should instead be able to claim compensation from the redundancy fund. I should have thought that this was an uncontroversial way of dealing with a problem which, although it is likely to arise rarely and, therefore, will not impose a large financial burden upon the State, is likely to arise sufficiently often for it to be referred to in this legislation and for it to arise in circumstances of manifest injustice unless it is dealt with in the way which the clause proposes.
  Mr. Booth: The effect of the new clause, if carried, would be to enable an employer to gain a certificate from a tribunal to confirm that action taken against an employee, in contravention of the employee's rights in relation to trade union membership and activity or the employee's unfair dismissal, would not have occurred if it had not been for pressure exerted by industrial action or the threat of industrial action; and to enable an employer who presented such a certificate to the Secretary of State for Employment to recover the whole amount of the compensation award paid to the employee from the redundancy fund.
  The new clause would enable employers to transfer liability for their own unfair treatment of employees to the redundancy fund whenever they took action in response to industrial action.
  We see in the new clause a bastard offspring of Section 119 of the now-repealed Industrial Relations Act. Just

  1927
  over a year ago, when we were debating the re-enactment of the unfair dismissal provisions of that Act in the Trade Union and Labour Relations Act, the Opposition tried to save Section 119 from repeal. This new clause tabled for our consideration tonight shows that they have still not abandoned their affection for a procedure which would in some ways relieve an employer from what he considers to be an employer's liability for actions on unfair dismissal where any question of industrial action or threat of it is involved.
  Many of the objections to the Section 119 procedure and that of joining trade unions in unfair dismissal action on an allegation by employers that they were responsible for the employer's actions apply to this new clause. I fully recognise that the compensation would have to be paid not by a union but from the Redundancy Payments Fund. I do not believe that that in any way alters the principle. Of course, the union would have to be involved if this procedure were to be followed.
  It would clearly be wrong for the tribunal to decide to issue such a certificate as is suggested here without first of all hearing representations regarding the union's action or alleged action. It would be wrong not to give the union a right to be represented before the decision of the tribunal was taken. The decision of the tribunal on whether or not to issue the certificate would be a judgment on the action or alleged action of the union. Therefore, it would be wrong to see this as being any different in principle from what we considered on at least two previous occasions in this House.
  However, there are also other objections to the course proposed in the new clause. By enabling employers to escape financial liability for their actions it would encourage them to yield to pressure from industrial action which they might not otherwise do. Therefore, I am fairly confident that Opposition Members will not be too disappointed to learn that we shall object in principle to what is being proposed here.
  Also, it would be wrong to seek to justify using the redundancy fund to finance an employer's unfair treatment
  1928
  of his employees. That is not the purpose for which the redundancy fund was set up. Although it might be the case, as the hon. Member for Cleveland and Whitby (Mr. Brittan) said, that there might be very few calls upon the fund for this purpose, it would still not be proper for this House to agree to an arrangement to use that fund for a purpose for which it was not created. For these reasons, I hope that the House will reject the new clause.
  Mr. Brittan: The hon. Gentleman normally shows himself responsive to reason, but on this occasion so deadly in his mind has been the legacy of the Industrial Relations Act that it has obscured the argument we have been putting forward on the new clause and prevented him from seeing the logic of our case. It has led him to fall into a number of fallacies, which I shall not underline although I must refer to the fact that it was suggested that employers would easily be inclined to take unfair action which would give rise to liability because they could then get the money back out of the redundancy fund.
  The hon. Gentleman plainly could not have read the new clause if he came to that conclusion. If he had read it he would have seen that it says that the tribunal has to be satisfied that
  "but for such pressure, that action would not have been taken or the complainant would not have been dismissed."
  The tribunal has to be satisfied of that, and the employer cannot simply shuffle off his obligations. He has to prove before a sceptical tribunal that it is only because of the action that has been taken by the trade union that he has taken the action against the individual.
  Mr. Booth: On an even more careful reading of the clause, does the hon. Gentleman agree that the tribunal has to be satisfied not that there is action but only that there was a threat of such action?
  Mr. Britton: That makes no difference. The threat is what is important, obviously. It is even more difficult to be satisfied of a threat than to be satisfied of the action. Therefore, the onus of proof upon the employer is all the greater.
  It seems to me that the Minister of State has misrepresented what is required

  1929
  by the new clause in saying that this is an excuse for employers to transfer liability. There are other objections to what he has said. In the interests of progress, I shall not elaborate on them. I advise my right hon. and hon. Friends to support the new clause in the Division Lobby.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 224, Noes 261.
  [For Division List 314 see cols. 1993–8.]
  Question accordingly negatived.

New Clause 11

  SMALL BUSINESSES
  'This Act shall not apply to employers and employees where the number of employees is 12 or less'.—(Mr. David Mitchell.)
  Brought up, and read the First time.
  Mr. David Mitchell: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker: With this we shall discuss new Clause 13—limited application to small businesses:
  'This Act shall not apply to employers and employees where there are 12 or less employees in respect of sections 16 to 33 inclusive, sections 35 to 44 inclusive, sections 49 to 54 inclusive, and section 89.'
  We shall also take Government Amendment No. 92, and the following amendments:
  No. 193, in Clause 107, page 86, line 21, at end insert:
  '(2A) The following provisions of this Act do not apply to employment by an employer where the number of employees is 12 or less, that is to say sections 16 to 33 inclusive, sections 35 to 44 inclusive, sections 49 to 54 inclusive, and section 89.'
  No. 194, in page 86, line 39, at end insert:
  '(5A) The following provisions of this Act do not apply to any employment in an undertaking in which immediately before the effective date of termination there were in the aggregate (including the dismissed employee) less than four employees who had been continuously employed for a period of not less than thirteen weeks, whether they are, or had been, all employed at the same place or are, or had been, all employed at the same place or are, or had been, employed at different
  1930
  places, that is to say, sections 38 to 46, 55, 64 to 70.'.
  Mr. Mitchell: Small businesses provide over one-third of the employment in our economy outside the public sector. Small businesses are of importance to employment prospects. I know that worry is felt by all hon. Members on the subject of the rising level of unemployment. The figures have crept up from 700,000 to over 1 million unemployed, and is expected to reach 1½ million by early next year.
  One of the biggest problems facing the Government, one about which we are all worried, is what can be done to prevent the unemployment figures from increasing. The Bill far from protecting employment, will increase unemployment in the small business sector.
  I hope that the Minister will give an indication of the estimates which have been made by the Department of the number of jobs which will be lost as a result of the Bill. I should like to know how those estimates are made. It is easy for the Minister to shrug his shoulders and say that there will be no effect on employment, but we know that there will be an effect. The question is how carefully the Minister has assessed and analysed the situation, and on what figures he has based his conclusion.
  There are three reasons why small firms are going out of business at an increasing rate. The first is that small businesses are enmeshed in a web of controls which frustrate their owners' efforts and take up time which owners would prefer to devote to running their businesses. They cannot keep pace with the paper work involved in Government legislation, controls and regulations. There is a long list. I refer to hire-purchase controls, the profit regulations, census returns, consumer protection, labelling regulations, trade descriptions, wages councils, Factories Acts, PAYE, training boards, contracts of employment, multiple VAT rates and the Remuneration, Grants and Charges Bill, which is almost on the statute book, and by which additional regulations for small businesses will be added next week.
  We are now faced with the Employment Protection Bill. It may appear as though the regulations are of no great importance to small business men and that they can be ignored. That is not

  1931
  true. For example, under Clause 43, if a small business man fails to notify a temporary employee of his dismissal in writing, he must pay compensation. That is one example of how important it is for the small business man to read and understand the effect of these regulations.
  Mr. Russell Kerr Mr. Russell Kerr Can they write?
  Mr. Mitchell: The hon. Gentleman may make bright quips from a sedentary position about whether the small business man can write. However, the problem facing the small business man is that so much of his time is taken up with reading and filling in forms for Government Departments that he is prevented from getting on with his work in his business.
  9.45 p.m.
  Many serious problems arise. If a female employee has gone on maternity leave, the replacement worker cannot be offered permanent employment. The type of person who works for a small business does not normally like doing temporary work. In London there are plenty of temporaries, but in rural areas it is difficult to get temporary employees. When a female employee leaves to have a baby the probability is that her job will be taken by a permanent employee and eventually she will have to take another job, probably with another firm.
  The first reason for small businesses going out of business is the mass of legislation, with which they cannot cope. The Bill adds to that mass of legislation. The second reason is that they are going bankrupt. According to the figures published on Monday, the number of bankruptcies in the first quarter of this year compared with the first quarter of last year was up by over 40 per cent. That is a massive, if not unprecedented, increase in the number of bankruptcies among small businesses. They are going down like ninepins, and as they go down their employees add to the dole queue.
  I know that the Minister shares my concern about the number of unemployed. I am trying to bring home to him the effect that this legislation will have in adding to the number of unemployed.
  Considerable financial burdens will be imposed upon small businesses by the legislation. In introducing the Bill in the Second Reading debate the Minister
  1932
  dismissed the cost as if it were of small importance. He said that the legislation would cost between £100 million and £120 million over the country as a whole. He went on to say that that was £5 per employee per year. That implies that the cost to a firm which employs 10 people would be about £50 a year, but the reality is that, although the average cost might be £5 and the average cost to a small business employing 10 people might be £50, there are no average persons. Every one of us here is an individual: none is average. No small firm with 10 employees will be average. It cannot insure. It cannot pay £5 and shrug off its responsibility. It will have to pay up if caught.
  Supposing an hon. Member's secretary becomes pregnant and she goes off to have a baby. The hon. Member will have to pay, say, £40 a week for six weeks' maternity leave, and that will amount to £240. The cost there will be not £5 but £240, and similarly with a small business. The cost for a firm with 10 employees will not be £50. Let us suppose that because of a strike in a firm which is supplying a small business there is temporarily no work. Again, the cost for a firm employing 10 people is not £50 but £400 a week.
  The Minister must accept that there is an enormous difference between the average factory employing 1,000 people and a small business. The Minister is right in saying that for 1,000 people the cost will be an average of £5 a head. If a woman leaves to have a baby her absence can be covered quite easily as the staff can be shuffled and the woman's job will be available when she returns to work, but in the two, three or four-man business there can be no shuffling. The cost for that sort of business will be considerable. However, there is another cost outside financial terms—namely, the messing about in running a small business.
  Let us suppose that an employee is the manager of a betting shop and decides to go on to the local council. Formerly the manager would have said "I am considering going on to the local council." The answer probably would have been "It cannot be fitted in on this job". The manager would then have known where he stood. The position now

  1933
  is that he will be able to go to his employer and say "I require the time off, and at 3.30 I shall be leaving to do council business".
  What happens when the 3.30 winner comes in and the manager is not available to pay out? There may be some hon. Members who have an occasional bet, but I must admit that I am not a great supporter of the betting trade. However, given the circumstances that I have outlined, those who placed their bets would be somewhat disconcerted to find a notice saying "Closed, gone to the local council for my council business" when they went to collect their winnings.
  Mr. A. J. Beith: Or there could be a notice saying "Pleace collect from the council offices".
  Mr. Mitchell: I have dealt with the sort of practical problem that affects small businesses. Such problems do not have such an effect on large businesses, which can move managers round and produce a relief manager. Small businesses employing eight, 10 or 12 people do not have any relief staff. They are not carried in that size of business.
  What worries me and many of my hon. Friends is the impracticability of many of the Bill's provisions that affect small businesses. I wonder how many bodies the Government consulted before they introduced this measure. They do not seem to be aware of the consequences of much of their actions. I know that the Government consulted the National Chamber of Trade and that they were recommended by the chamber that the Bill should have a cut-off at 10. It is academic that the amendment provides for 12 instead of 10. It is all very well consulting people, but if no notice is taken of the advice that is given there is no point in going through the charade of consulting in the first place. Was the Smaller Businesses Association consulted? Perhaps the Minister will tell us about the association's views and recommendations.
  One of the matters that have been put to me most forcefully by those with practical experience of running small businesses is that there were many firms which used to have sick employees carried on the payroll in the days before the contract of employment legislation was
  1934
  placed on the statute book. However, once the matter was given a legal basis they said to themselves "I shall not commit myself to that." The result was that as a matter of policy there was no sickness carry-over beyond a short, limited period. In other words, many firms went for the legal minimum instead of the practical give and take of the friendly working relationship which exists between employer and employee in most small businesses. That reduction in benefit illustrates the difference between the small firm and the large firm.
  The matter is highlighted in the case of a man who becomes a JP or local councillor. He may well work in a small business and may equally well be on Christian name terms with his employer. The employer may say "Joe I am jolly glad; good luck with it. We will work it out about finding the time that you need." Now, instead of it being a matter of luck, the boot is on the other food. The employee is entitled to say to the employer "I must take time off when my local authority meets, and that is that." This is a matter of concern in any small business. It was said in Committee by the hon. Member for South Ayrshire (Mr. Sillars) that the small business sector is probably least able to stand any squeeze. He implied that it would flood the labour market with a substantial number of young people. I agree with that view.
  The number of small businesses which are going out of commission is increasing rapidly. Bankruptices are at a record level. A number of businesses are choosing to go out because they cannot carry the burden of legislation, controls and regulations. That number is increasing rapidly. How many small businesses will go out of commission as a result of this additional burden? This is part of the total burden, and that burden is far too heavy. The financial burdens will accelerate the number of small businesses which fall by the wayside. Therefore, we should oppose the imposition of any such burden on the existing small businesses.
  Mr. Bulmer: I support the arguments of my hon. Friend the Member for Basingstoke (Mr. Mitchell). Yesterday the Leader of the Liberal Party challenged the Lord President of the Council about the number of bankruptcies among small businesses and said that 4,000 went out of

  1935
  business each year and were not being replaced. He was not challenged on that figure. The Lord President referred to the efforts made by the Government to ginger up the information centres for small businesses.
  If the right hon. Gentleman cares to come to my constituency he will find rural areas of depopulation. In the villages the small employers—the garage, the village store or the market garden—are all being threatened out of existence following enormous increases in costs. Those increases in costs have been disproportionate. In my area in the last two and a half years we have had rate increases of about 300 per cent. We have to face the luxury of buying Welsh water. Furthermore, the cost of rural transport has increased because of the dramatic increase in oil prices.
  My hon. Friend the Member for Basingstoke has mentioned the various impositions which the Government have put on the small employer in respect of the number of forms which he must complete. Local government has introduced similar burdens, and the effort required by elderly people to fill in VAT, and other tax forms is a major consideration and is perhaps not easily understood by those who ask for the forms to be completed. There is a loss of will among elderly people on whom a rural community often depends. There are fears among the same people about capital transfer tax and other measures which are to be introduced by the Labour Government. Therefore, on the debit side that aspect has to be considered.
  On the credit side, what is there to be taken into account? There has been a small increase in wages but it nothing like approaches the national average. For people living on retirement pensions there has been no increase in discretionary spending, and anybody who depends upon dividends has suffered from the freeze. The small employers have to face a series of extra responsibilities which they are in no position to discharge. We would not quarrel with the fact that many of them are statutory obligations, but time is of the essence. There is a consequential effect on employment, and in rural areas the result will be nothing short of catastrophic.
  1936
  My hon. Friend referred to many of the problems faced by small businesses, and I shall summarise some of them. The first concerns guaranteed pay. The small employer has no protection against the strikes in a nationalised industry which deprive him of the elementary services on which his activities depend. He very often has not the cash—
  It being Ten o'clock, the debate stood adjourned.
  Motion made, and Question put,
  That the Employment Protection Bill may be proceeded with at this day's Sitting, though opposed, until any hour.—[Mr. Dormand.]
  The House divided: Ayes 256, Noes 210.
  [For Division List 315 see cols. 1997–2002.]
  Question accordingly agreed to.
  Question again proposed, That the clause be read a Second time.
  Mr. Bulmer: Another unfortunate effect will be that more people will be on the "lump" and that the small rural builder will be unable to afford to carry staff whom he might otherwise be able to keep through the winter.
  I invite the Minister to say whether, if he were running a small village shop, he could afford to pay maternity benefit out of the income from that shop, faced as he would be, as the owner of the shop, with increased nationalised industry prices and all the other increases in costs which I have outlined. [Interruption.]
  Mr. Speaker: Order. There are many conversations going on and I am having difficulty in hearing the hon. Member for Kidderminster (Mr. Bulmer).
  Mr. Bulmer: Therefore, I ask the Minister to try to look at the problems of the rural community rather differently, perhaps, from the way in which he is accustomed to looking at industrial affairs and industry in general. There are many aspects of the Bill which are perfectly acceptable in large-scale industry but which in the countryside will present real problems. There is no doubt, as my hon. Friend the Member for Basingstoke has said, that temporary employees do not exist and it is virtually impossible to find somebody to come in for

  1937
  nine months of the year to do a particular job. It is also extremely unfair on somebody who may be available to do that job and who would wish to settle in it. The whole question of time off is—
  Mr. D. E. Thomas: The hon. Gentleman is arguing strongly the case of the rural employer. Will he take into account the case of the rural employee and the need for the rural employee to be allowed the same kind of protection under the Bill as the urban employee?
  10.15 p.m.
  Mr. Bulmer: The first protection that the rural employee wants is job security. That lies largely in the hands of the Minister of Agriculture.
  There is considerable uncertainty surrounding what might be regarded as reasonable time off in the circumstances for, say, one of three employees who wished to become a justice of the peace. The time required by that job could mean that he would be unable to fulfil the position for which he was originally engaged.
  1938
  Reasons for dismissal in small communities could provide areas of difficulty. Often people know each other extremely well, and, whatever reason may be given, it is likely to be the wrong one.
  There is also the effect on rural areas adjacent to large and prosperous urban areas of Schedule 11 and Clause 89. Much of what I have said is true of market towns. They are suffering from different pressures. The small shopkeeper suffers from competition with the multiple, and, in a curious way, price control has increased that competition. Redevelopment has also brought its problems.
  I fear that there is a tendency to assume that employers have bottomless purses. I think that in the next 12 months it will be clear to everybody that that is not so.
  The rural employer is becoming a rare breed. It is vital for the health of the community that he should be preserved. If the Government had accepted the suggestion which we made that there should be a Minister for small businesses, it is inconceivable that they would not have supported the clause.
  Mr. John Loveridge: I want to add a few comments in support of my hon. Friend the Member for Basingstoke (Mr. Mitchell), whose new clause suggests that exemption should be given to small firms with 12 or fewer employees.
  The small firm is at a great disadvantage today. Enormous quantities of legislation have come out in recent years, particularly latterly, which affect all small business men. These people often learn as they try to expand their small businesses. They have to learn their businesses and about new business as they go along. They do not have sales departments, forecasting departments for finance, or even manufacturing departments. All these things and the requirements of administration have to be studied by these men as their businesses grow. They cannot do everything themselves, yet they must. Even in small businesses like my own which employ more than 12 persons and have some form of secretarial help, great difficulties are experienced in meeting the constant administrative burdens imposed by new legislation. The difficulties are even greater for the very small business man.
  The bankruptcy figures show that some firms have gone bankrupt merely, it seems, because the men running them have not learned to forecast their liquidity ahead. They do not know enough about it. Yet they must learn about it not only for their own self-interest but because of their duty to those from whom they buy supplies and, indeed, to their own staff.
  The new agencies which have been set up throughout the country will help the small business man, but nothing will help him over his time. He is desperate for time. He works very long hours, often with the help of his family, well into the night. It is not just this Act of Parliament which will affect him; it is the accumulation of many Acts of Parliament which place such impossible burdens upon him.
  Imagine the situation of the farmer who perhaps has to go out at night to look for cows which have escaped from his fields. How on earth is that man to add yet another set of legal require-
  1940
  ments to his burden and still carry on effectively dealing fairly with those he employs and those to whom he supplies goods? It is not only VAT and PAYE that he has to contend with. There are a whole number of burdens upon him. Imagine the small shopkeeper who has payments to meet under the maternity provisions of the Bill, —and these are not the only obligations he must meet. How will he deal with the period when his staff are off work.
  The whole position is one of increasing difficulty for small businesses. They provide so much of value to our country, both economically and in other ways. They preserve an independence of spirit which is of value and is recognised on both sides of the House as being of value. I hope that the Government will consider giving the very limited exemption proposed in the new clause.
  Mr. John Cope: I support my hon. Friend the Member for Basingstoke (Mr. Mitchell) and his new clause. My hon. Friend the Member for Upminster (Mr. Loveridge) has just referred to the extra burdens being imposed on small businesses at this time.
  During the Committee stage the Under-Secretary referred to various other examples of onerous provisions from which small businesses were originally to be excluded by the Government. He mentioned the Equal Pay Act and the Race Relations Act and said that the Government had originally intended that they should be excluded. He used this as an argument in favour of doing the same thing with regard to this Bill and including small businesses. But that is a clear argument in precisely the opposite direction. It is the piling on of burden after burden which brings small businesses to their knees. Administrative burdens and financial burdens are being piled on top of inflation—the biggest burden of all—and these are the extra straws loaded on to the camel's back. Every extra straw weakens all camels and brings some of them to their knees.
  Earlier, the hon. Member for Feltham and Heston (Mr. Kerr) intervened from a seated position during the speech of

  1941
  my hon. Friend the Member for Basingstoke and asked of small shopkeepers "Can they write?" That was a gratuitous insult to them. The question is not whether they can write but how far into the night they must go on writing in order to fulfil the requirements of the Government and keep pace with the legislation which is being placed upon them.
  Shopkeepers will be greatly affected by the maternity provisions of the Bill. They are among the largest employers of female labour. I believe that the maternity provisions will in practice discriminate against young married women. Many employers will be reluctant to hire women who might leave to have a baby. Who can blame them for being reluctant? They will not entirely avoid these risks these days by hiring an unmarried woman instead of a married woman. We all know that. However, they will take a greater risk by hiring a young married woman who is more likely to have a child.
  Obviously it cannot be made a condition of employment concerning either married or unmarried women that while in employment they should not have a baby. But employers will realise that this is a risk and that it will cost them more money. They will therefore tend to pay less to a woman who is in this position and who exposes them to this risk.
  My hon. Friend the Member for Basingstoke referred to the position of the Member of Parliament who has to hire a secretary. I refer in no way to any particular Members' secretaries, and certainly not to my own. I think that my hon. Friend understated the expense which might fall upon a Member of Parliament if he found himself in the position that his secretary was having a baby. He put the cost at £240, which might be the total amount of wages he would have to pay for work not done. But that is not the end of the expense to the employer. He must hire alternative secretarial services, presumably from one of the agencies. They are much more expensive than hiring a regular secretary. An alternative course would be to hire a second secretary to replace the one who had left temporarily.
  Sir Edward Brown: Will my hon. Friend comment on the situation which arises where the first secretary gets herself pregnant and a Member takes on a
  1942
  second secretary who also gets herself pregnant, and so the situation continues ad infinitum?
  Mr. Cope: I would say—[Interruption.] The hon. Member for Isle of Ely (Mr. Freud) suggests that you might get a mileage allowance in those circumstances, but it seems to me that it would be wrong to describe you as being in that position, Mr. Deputy Speaker.
  Mr. Deputy Speaker (Sir Myer Galpern): I do not know what position I am supposed to be in, but I remind the hon. Member that we are not discussing the Abortion Bill.
  Mr. Cope: I had better move on, therefore, to the next part of my argument. It amazes me that the Government should have put forward Amendment No. 92, because in Committee they accepted the proposals which the amendment seeks to delete. The amendment in Committee was made without a Division. Will the Minister explain why the Government did not oppose it? Were they convinced at the time by the arguments, and have they since changed their mind?
  The greatest irony in one sense for small businesses is the aspect of time off to serve on councils. Many small businesses feel that they are carrying an unfair burden in respect of the rates, and in many cases their complaint is justified. I shall not develop now the argument about how rate assessments work unfairly on small businesses because that would be out of order, but they already feel this. In addition, they are now being asked—not merely asked, but told—to allow their employees time off in order to attend meetings of councils and, presumably, of their committees. This is an extra burden which small businesses should not be asked to carry. That is why I support the new clause and the amendments.
  10.30 p.m.
  Mr. Mather: I support my hon. Friend the Member for Basingstoke (Mr. Mitchell) in having put across so eloquently the case of small businesses and the self-employed. I support my hon. Friends who have also put across in very strong terms the case of this very important section of our community which will be so penalised by the Bill. After all, if it is an Employment Protection

  1943
  Bill it should relate to the protection of non-unionised labour as well as unionised labour.
  I find that in my constituency, which is not a rural area, more and more high street shops are closing. I do many tours of the shopping areas to find out the particular problems of small shopkeepers. The story is always the same. It concerns the burden of taxes and paperwork and the fact that most high street shops have a fixed catchment area and cannot increase that area or the number of their customers yet their overheads are rising all the time. The latest burden is the increased rates. They are being squeezed to death.
  I shall not follow my hon. Friend the Member for Gloucestershire, South (Mr. Cope) in his maternity stakes and his references to secretaries. He suggested that there might be a case for a mileage allowance. On the other hand, it might be an allowance for nights spent away from home. I do not know which would be the more suitable in the circumstances.
  However, the point is that the Government have not faced up to this matter, which will affect large areas of the working population in ways which I am sure were not intended. It will cause absolute chaos. There is real danger of a breakdown in the retail system. The big firms are dependent on small shops as outlets for the distribution of their goods. If this process continues and if more and more burdens are loaded upon small business men, we shall be in serious danger of a breakdown.
  In my constituency there are other problems which are putting small shopkeepers out of business—the problems of traffic and of parking. That is something quite different. In reading the clauses of the Bill, however, one wonders how all the headings will apply to the ordinary high street shop. One has only to glance at one or two clause headings for the mind to boggle in wondering how they will be worked out. There are 83 pages of schedules to the Bill. How will these be interpreted by those about whom we are talking? How will the Bill be administered and controlled? Who is to police the enforcement of the Bill as regards these people? Will it require vast armies of inspectors, or will the police themselves have a role to play?
  1944
  In mentioning the police I ought to mention the enormous burdens which have been loaded upon their shoulders. At a recent police training college course it was said that in the last 10 years there have been 76 major pieces of legislation which they alone have to interpret and try to enforce.
  I do not think that the Bill was intended to cover businesses with fewer than 12 employees. I hope that the Minister will look at it again for the sake of the enforcement of the Bill and to avoid bringing the law into disrepute.
  Sir Raymond Gower: I hope that the Government will look at this matter not merely with sympathy but with the intention of taking action. That would be an earnest of their attitude towards small businesses. There is a temptation for Governments, of both political complexions, to think in terms of the big battalions, to believe that big units are best. This country, like other countries, has suffered from that thinking and may suffer even more in future. It is not without significance that some of the most successful countries in the world, including Switzerland and Japan, have many small industries serving and servicing the larger industries.
  We take at our peril any steps which damage the smaller units. The Government's attitude towards this clause is important in explaining their approach to the future of the small units from which larger units can grow. It is not only a question of conserving the small units. We want to see larger units emerging. It is difficult to start any business nowadays. It must be a heart-breaking job to begin a new, small undertaking.
  I recognise that the number of 12 employees may not be a perfect means of judging such a unit. Nevertheless, any unit as small as that could in most cases be justly described as a small business—the sort of business that cannot bear the varied and increasing burdens that are being imposed upon it by new legislation. It is in that context that I hope we shall send a message from the House tonight to the effect that small businesses have a future—we hope an improving future—and will be able to make a significant contribution to the recovery of the economy.
  Mr. Harold Walker: The hon. Member for Basingstoke (Mr. Mitchell) seeks in his new clause to exclude small firms and their employees from the provisions of the Bill either in whole or in part. For the purposes of the clause he defines small firms as firms with 12 or fewer employees. We had a good run over this course in Committee and I do not want to inflict on the House the arguments used then except to say, that we have a great deal of sympathy with the problems of small businesses. I hope it is not being suggested by Tory Members that the problems of small businesses, such as parking and going out to tend the cows in the field at night, arise from this Bill or from the actions of the present Government.
  While there have been powerful and eloquent arguments about the interests of small businesses, I could have wished that they had been interspersed with arguments about the interest of the employees of these concerns, about whom we have not heard a word except in one intervention by a Conservative Member.
  Wholesale exemption of the kind proposed is a clumsy way of going about trying to help small firms. If adopted, the new clause would be deeply resented by large numbers of people to whom the hon. Member for Basingstoke drew attention and who would be affected.
  At one time during the speech of the hon. Member for Gloucestershire, South (Mr. Cope)—when he referred to maternity provisions—I thought that my Department should be renamed the Ministry of Labour. I said in Committee that on the whole the attitude of the Government was to move towards the elimination from social legislation of such exemptions as we are discussing. The only area where a small firms exemption remains is the present draft of the Sex Discrimination Bill, which excludes from the provision on discrimination against employees employment where the number of persons employed by the employer, added to the number employed by any associated employers, does not exceed five. The Secretary of State has powers in that Bill to vary that provision by order. There was a small firms exclusion in the Race Relations Act 1968 but it has been phased out.
  1946
  We have no evidence of any small firms exemption in Europe. The general pattern of legislation in EEC countries is to apply this kind of individual protection to all employees.
  Mr. Bulmer: In Italy special provisions are made for the rural areas.
  Mr. Walker: Generally in the EEC there is no small firms exemption of this kind. We must anticipate the possibility of difficulties in the context of any likely EEC moves towards harmonisation. It is my understanding that there is no EEC directive on this subject which contains an exclusion of this kind, no matter what the behaviour of individual member countries might be.
  There are other difficulties, including the question of the dividing line between small firms and the remainder. The Opposition argue, with some justification, that the heavy burdens imposed on small businesses as a result of a series of legislative measures of different Governments have affected their competitive position. Their effect is roughly the same on all small businesses. The competitive position of small businesses as between each other should not have been substantially affected.
  If it is said that larger firms have special staff to look after matters which small businesses must cope with on their own, and that these are added burdens for the small business man, I under stand that. I sympathise with small business men who must cope with those problems. But are the Opposition saying that one category of small employer should somehow be discriminated in favour of, to benefit his competitive position vis-à-vis all other employers? If so, they are asking in principle for a subsidy.
  Mr. Mayhew: There are many small business men who will be unable to continue to employ their present workforce unless the discrimination which the Minister so deplores is granted to them. That is our point.
  Mr. Walker: If the hon. and learned Gentleman is asking for deliberate discrimination in favour of small firms, we shall bear that in mind. He reflects the view of the Opposition that one group of business men should be discriminated against in favour of others. I do not share that view.
  Mr. David Mitchell: The Minister has missed the point. The burden of performing these tasks, which must be borne by small and large businesses alike, falls heaviest on small businesses. The discrimination is made necessary as a result of the imposition of so many burdens on businesses.
  Mr. Walker: We must consider the cut-off point and the effect of the discrimination on people on either side of it. In Committee the Opposition sought to exclude units of four or fewer employees. The hon. Gentleman now seeks to set the threshold limit at 12.
  We were asked whether we had received representations from organisations representing business men. We received many representations, although we did not receive representations from the specific organisation to which the hon. Member for Basingstoke referred—the Small Businesses Association. We had representations from the Retail Consortium, a number of trade federations and the Small Firms Council of the CBI. Many of these organisations gave differing views. The National Federation of Meat Traders pressed for exemption for firms employing fewer than 10 people. In this capricious and arbitrary way the Opposition would deny the benefits and rights of this legislation to millions of workers.
  10.45 p.m.
  Mr. Loveridge: Is it not true that the staff working in these businesses are in a sense a part of the business? It has been suggested that the Opposition have taken only the interests of employers to heart, but that is not so. Our interest is with these firms taken as a whole, including those who work in them, who often work on the most friendly terms with the employer. It is the staff's interest as well as the interest of the employers that we put forward our plea.
  Mr. Walker: I shall not make the mistake with the hon. Gentleman that I made with the hon. Member for Rochdale (Mr. Smith) in Committee in referring to him as a small business man. But on the assumption that the hon. Gentleman employs units of four or 10—or whichever arbitrary figure is chosen—will he confirm that he has consulted his employees and sought their views on whether they want to be excluded? That applies
  1948
  equally to all Opposition Members who have taken part in the debate. Will they assure me that they have sought the views of their employees and that their employees want to be excluded from the provisions of the Bill in the way they seek?
  Mr. Loveridge: If the Minister will allow me, I must disclaim a personal interest here, because my businesses are larger than those mentioned. What I am saying applies to these smaller firms.
  Mr. Walker: The hon. Gentleman does not speak from a direct interest in small firms, but I hope that he will consult the employees on whose behalf he is presumably speaking and also the employees of smaller firms. The House would have benefited from an indication of the views of the employees of small businesses.
  If I recall correctly, the hon. Member for Basingstoke said that one-quarter of the working population worked in small firms. I do not dissent from that figure. I am prepared to take his word—
  Mr. David Mitchell: The criterion of small businesses employing one-third of the working force in the country outside the public sector comes from the Bolton definition of 200 employees. I was describing small businesses in general. I have no figures in relation to firms with 12 employees.
  Mr. Walker: I accept the hon. Gentleman's figures. My Department has no figures for employees in small firms, but the Census of Employment indicates that the total number of employees in units employing between one and four employees is 1·1 million, and in units employing between five and 10 employees 1·6 million, representing 5 per cent. and 7 per cent. respectively of the total labour force. That means that there are probably about 3 million employees in units employing between one and 10 persons. That is a very large slice of the total working force.
  The amendments go further by setting the threshold at 12 persons. That gives some idea of the scale of exclusion which Opposition Members are seeking. They seek to exclude that substantial slice of the working force from the benefits, rights and provisions of the Bill. I repeat that

  1949
  there are problems. That is undeniable, but the problems can be exaggerated.
  I shall refer to one or two provisions in the Bill which permit flexibility and will help small firms. First, the provisions on time off for trade union and public duties incorporate safeguards for employers' interests which take account of individual circumstances and should prove helpful to small businesses. The employer's duty under the new clause is limited to what is reasonable in all circumstances.
  The provisions on time off for trade union duties and activities will be supported by detailed guidance to be issued in a code of practice by the ACAS. As regards time off for public duties, regard shall be had to many other factors such as the circumstances of the employer's business and the effect of the employee's absence.
  As regards the maternity provisions, the Bill provides that to qualify for reinstatement an employee must notify the employer of her intention to return to work before leaving for confinement. The employee will also be required to give the employer at least a week's notice before resuming work after confinement. Additionally, the employer will be able to postpone the employee's return for up to another four weeks on notifying his reasons to the employee should he need more time to find a suitable post. These provisions will give the small employer a little more room for manoeuvre.
  Sir Raymond Gower: Has the Minister considered the fact that in many cases some employees may be worse off? Has he recognised that some of the very small firms employing three or four people will studiously avoid employing a girl, for example, because of the sort of obligation he has just mentioned? Such provisions could operate and militate against the interests of the employee. Has the hon. Gentleman considered that?
  Mr. Walker: That has not been the experience of other European countries which are ahead of us in this kind of protective legislation.
  I was making the point that there are provisions in the Bill which will be helpful to small business men. I refer to the short-term employment exclusion which applies in respect of guarantee payments
  1950
  and the procedure for handling redundancies. Such provisions will help the many small employers in industries such as agriculture and horticulture and where-ever there is a need to use casual labour for limited periods to cope with peaks of demand or seasonal fluctuations.
  I stress that there are problems. There will be problems in implementing many parts of the Bill, but they should not be deterrents to the need for action, nor should we exaggerate them. I believe that some of these matters have been exaggerated.
  The provisions of the Bill, when enacted, will be introduced by order. It will be for my right hon. Friend to activate them. I have no doubt that he will have fully in mind in introducing the relevant provisions the economic circumstances applying at the time and the way in which they will bear on those who have to carry the burdens. I am sure he will have in mind the problems of small businessmen.
  I am bound to say that to deny the rights and protection of the Bill would seem to be an arbitrary and capricious way of proceeding. To do so would be to deny the Bill's rights and protection to possibly millions of workers. That would be wrong and indefensible. We cannot divide workers into first-and second-class citizens in the way suggested in the new clause and as suggested in Conservative Members' speeches. I urge the House to reject the new clause.
  Mr. David Model: We have had a most interesting and useful debate on the problems of small businesses. The whole House will be grateful to my hon. Friend the Member for Basingstoke (Mr. Mitchell) for introducing the new clause. He has given us a chance to discuss the problems of small businesses in the summer of 1975 in detail.
  The Minister began by saying that he was sympathetic towards our case, but he then used a most interesting phrase in quoting from the Bill—namely, "reasonable in all the circumstances". Indeed, what is meant by that phrase? It is because of the present circumstances and difficulties for small businesses that my hon. Friend introduced the new clause. The circumstances are very difficult for small businesses.

  1951
  I hoped that the Minister would go much further towards meeting our anxieties bearing in mind all that was said in Committee. We are sorry not to see the hon. Member for South Ayrshire (Mr. Sillars) present because in Committee he waxed eloquently on the problems of small businesses in his constituency and the burdens that would be imposed upon them if the Bill went through unamended. For instance, he said:
  "Small employers in my constituency could not face the burdens imposed by this legislation and it is unfair to impose on them a burden of this nature when we know they cannot undertake it. We have drawn lines before …"—[Official Report, Standing Committee F, 24th June 1975; c. 728.]
  I am glad to see the hon. Member for Liverpool, Garston (Mr. Loyden) present, because in Committee, as reported at col. 734, he touched on the difficulties of small businesses and maternity payments. However, we all regret the absence of the hon. Member for South Ayrshire because we hoped to have an ally tonight, having had one in Committee.
  My hon. Friend the Member for Basingstoke has pointed out the enormous difficulties of small businesses with inflation and their difficulties with legislation when they do not have the facilities to make sure that the legislation is easily understood. My hon. Friend the Member for Kidderminster (Mr. Bulmer) pointed out the difficulties for small businesses when there is a strike among suppliers and how difficult it is to make a guaranteed payment. My hon. Friend spoke about giving time off to do public duties, but at the heart of the arguments was the increase in the number of bankruptcies which has overshadowed the debate. In the first quarter of 1974 there were 1,320 bankruptcies and in the first quarter of 1975 the number was 1,938. There is no evidence from the economic state of the country that the figures will get any better. They will get worse, and we shall continue to find that there are great difficulties for small businesses.
  Much mention was made of the difficulties of alternative employment in rural areas when small firms fold up. The point was rightly made of the danger of discriminating against married women employees in small businesses if the Bill went through with the incorporation of
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  Amendment 92, which we thought the Government would not insist upon, having granted the point to us in Committee.
  As larger companies have increasingly got into difficulties and been forced to lay off people, it has often been small businesses which have provided employment for people who have been displaced because a larger company has got into difficulties.
  Mention was rightly made of the increase in rates which small businesses face this year and will face next year. There is no evidence that the Layfield Committee is speeding to a conclusion that will bring relief to small firms.
  If new Clause 11 is not accepted, there is bound to be a further increase in unemployment. The risk is great. We ask what damage a further increase in unemployment will do to society in general. It will do substantial damage to the Government and to society. Why should the Government make matters worse by not accepting the new clause? We do not want to make matters worse. We want to make them better by making it easier for small businesses to operate and less likely that they will go into liquidation. We have moved new Clause 11 because of our growing concern not to make matters worse. That is why I urge my hon. Friends to vote for the clause.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 191; Noes 211.
  [For Division List 316 see cols. 2001–4.]
  Question accordingly negatived.

Clause 1

  ADVISORY, CONCILIATION AND ARBITRATION SERVICE
  Mr. Brittan: I beg to move Amendment No. 1, in page 2, line 10, leave out from first 'of' to end of subsection and insert:

  '(a) assisting the peaceful settlement of trade disputes and other questions arising between employers and employees by offering and providing conciliation and arbitration,

  (b) helping the safeguarding of individual rights of employees whether it is threatened by employers, trade unions, organisations of them or by fellow employees, and

  1953

  (c) encouraging the improvement of collective bargaining and, where necessary and appropriate, its extension and development and the reform of collective bargaining machinery.'

  Mr. Deputy Speaker: With this, we are to discuss Amendment No. 2, in line 10, leave out 'collective bargaining' and insert
  'conciliation and arbitration in place of industrial action'.
  Mr. Brittan: Both amendments seek to amend the definition of the duty of the Advisory, Counciliation and Arbitration Service. We seek to support them for two reasons. First, we think that the definition of the duty of the service contained in the Bill as it stands at present is adequate, because it is insufficient and limited in its scope. Secondly, we think that, as a result of events since the original publication of the Bill, it has become somewhat out of date. The first amendment relates to the inadequacy of the definition. The second relates to its being out of date.
  To say that the service should be charged with the general duty of promoting the improvement of industrial relations and then to single out the duty of encouraging the extension of collective bargaining and the development and, where necessary, the reform of collective bargaining machinery is too one-sided an approach. We do not believe that collective bargaining, however, important it may be in normal times, is the be all and end all of industrial relations. It is a part, and an important part, of industrial relations, but it by no means the only part. Certainly it is not the only part of industrial relations with which the ACAS should be concerned if it is to be of the maximum value.
  Therefore, in Amendment No. 1 we seek to add various other matters which it shall be the general duty of the ACAS to further. We believe, for example, that it can play a useful role in assisting the peaceful settlement of trade disputes and other questions by offering and providing conciliation and arbitration, as its name suggests. The definition in Clause 1(2) does not prevent the service engaging in conciliation and arbitration, but we think that should be highlighted in the definition at least as much as the extension and reform of collective bargaining itself.
  1954
  11.15 p.m.
  Similarly, we think that great importance should be attached to the safeguarding of the individual rights of employees whether threatened by employers, trade unions, organisations of employers or of fellow employees. We think that in any of these cases the Advisory, Conciliation and Arbitration Service, in the discharge of the functions allotted to it, should place a high requirement on the preservation and defence of the rights of individuals against threats from wherever they may come. We believe that if the definition at the outset of the Bill is to reflect adequately what the service should do, these changes should be made.
  I turn now to Amendment No. 2, which deals with the changes in the situation in the country which have arisen since the Bill first came before the House. We suggest in Amendment No. 2 leaving out "collective bargaining" and inserting
  "conciliation and arbitration in place of industrial action".
  It is no use blithely carrying on with this legislation and totally ignoring the realities of what is going on in the world at large and in the Government. We have a situation where only this week the Government are to all intents and purposes in the process of abolishing collective bargaining for a year. The £6 per week maximum which, in effect, will be a universal £6, whatever the Government may say about that, makes nonsense of talk about collective bargaining. Although we have been given the prospect of an extension of the Government's policy in a different form at the end of one year, one way or another the idea, if the Government have their way, that collective bargaining in anything approaching the form in which it has existed in the past in this country will continue to exist is clearly baseless.
  It is only right when passing legislation of this kind at least to pay some heed to what is going on in other areas of legislation. To pay full heed to the new policy would involve altering, amending or abandoning large chunks of the Bill. We should at least recognise the realities and descend from the world of illusion and idealism to the extent of accepting the amendment. We should recognise that for the moment at least—there will, of course, be opportunities for the Government to introduce further

  1955
  legislation should the situation change—the rôle of collective bargaining is, if not totally dead, significantly diminished.
  We believe that the amendments would give a clearer, fuller, more balanced and fairer picture of what the Advisory, Conciliation and Arbitration Service can and ought to be asked to do and will at the same time take account of the new realities which have come into existence since the Bill first came before the House.
  Mr. Booth: These amendments propose changes in the definition of the duty of the Advisory, Conciliation and Arbitration Service.
  The Government are opposed to Amendment No. 1 because the new words proposed for the definition of the duty of the service do not properly reflect intentions as to the function of the ACAS, with which to some extent they are incompatible.
  Paragraph (b) is unacceptable as it would give ACAS the inappropriate task of safeguarding the rights of individuals. It is true that the ACAS conciliation officers have functions under Clause 2(4) and Clause 99 concerning certain statutory rights of individuals, but the industrial tribunals to which complaints lie have the responsibility for safeguarding the rights of individuals. The rights of individuals are not dealt with in Part I of the Bill, the clauses of which concern collective bargaining and related matters. The objection to subsection (c) is that it demotes and dilutes the provision for extension of collective bargaining which the Government regard as an important means of improving industrial relation. Its extension and development are, in the amendment, qualified by the words "where necessary and appropriate", in contrast to the words in the Bill as printed. Also "the improvement of collective bargaining" is an ambiguous phrase.
  On Amendment No. 2, the Government wish the ACAS to give particular attention to the extension of collective bargaining as a primary means of improving industrial relations. One of its major functions will be to deal with conciliation and arbitration and the thousand and one other issues that have to be resolved in relationships between employer and employee. We feel that an
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  improvement must be achieved in the long run if the service is to work satisfactorily.
  There are two areas in which improvements have to be carried out. The first is where collective bargaining arrangements are not yet established and the second is where the arrangements have fallen into disrepair and become out-dated and ineffective.
  I reject the implication in the speech of the hon. Member for Cleveland and Whitby (Mr. Brittan) that we should tailor the objectives and duties of the service to the current economic situation. We have tried to lay down in the Bill a statement of duties for the service that will serve our nation for many years—possibly into the next century. This is a milestone in our consideration of these issues. To tailor it to a financial and economic situation that has developed over a short period would be detrimental rather than beneficial, even in the short term. It is a highly inadvisable solution.
  Mr. John Page: I did not have the luck to serve on the Standing Committee, and in my absence the Minister of State has not improved. I used to think of him as a chap who should go far. He was courteous and gave sensible answers to straight questions. I was amazed when he said the ACAS would not fit into Amendment No. 1 because it was inappropriate. The amendment suggests that there should be advice, conciliation and arbitration. If this is not accepted, perhaps the service should be called the Collective Bargaining Improvement Service or something more factual. To wrap it up in this strange envelope is amazing. The Minister of State said the Bill was a milestone. It seems to me more like a millstone.
  Mr. Mayhew: The speech of the Minister of State fell far short of what was required in a reasoned reply to the amendments. This part of the Bill is dedicated to the improvement of industrial relations—that is the heading of Part I—and such a task could not be more admirable or more topical. Foremost in the Government's arms against the sea of industrial troubles is the ACAS. It has to be immaculate in its independence and in its impartiality, and it is invested with a sacred charge, a general duty in that the clause refers to the improvement of industrial relations.

  1957
  But it is, alas, going about that the Bill is biased and one-sided, and not even-handed, as the Government tell us. It is said that its whole cast and bias is in favour of the trade unions. The fact that we are continually being told that it is part of the price for securing the agreement of the unions to the social contract may have something to do with it. Or the fact that every significant provision increases the strength of the unions may have something to do with it. Whatever the reason, the unfortunate impression seems to have got around—and very wounding it seemed to be to junior Ministers who advanced the Government's case in Committee—that this is an unfairly biased Bill. Nothing could be more damaging to the true purposes of the Bill, which is to promote the improvement of industrial relations.
  By some slip of draftsmanship the only opportunities given for this general duty of promoting the improvement of industrial relations are the extension of collective bargaining and the development and, where necessary, the reform of collective bargaining machinery. No doubt the highly partial bias that this conveys to the reader of the clause is, as the Bill is drafted, purely accidental. Why should those two avenues of approach, so narrowly separated, be the only ones which are set out as examples of opportunities of the general duty which the service has of promoting industrial relations?
  In the amendment we provide the Government not only with an opportunity but with a means of setting this unfortunate impression right. What could be more germane to the improvement of industrial relations than the opening words of the amendment
  "assisting the peaceful settlement of trade disputes"?
  What could be more central than
  "offering and providing conciliation and arbitration"
  or the
  "safeguarding of individual rights of employees".
  no matter by whom they are threatened? All these objectives are to be found within the terms of the amendment. What could be more appropriate than
  "encouraging the improvement of collective bargaining and, where necessary and appropriate, ts extension and development and…reform"?
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  The package in the amendment is something no one could disagree with. Even more important, it is one which imparts absolutely no hint of bias or partiality in favour of the unions or the employers. It does not give a tilt to the way in which the ACAS should go about its business.
  I listened with amazement to the Minister of State. He said that his objection to the amendment was that it did not reflect the interest of the Government in collective bargaining, that it demoted and diluted the importance of collective bargaining. Our objection is that the clause permits and concentrates the importance of collective bargaining to the exclusion of all else. It gives the impression that the Bill is biased, and that can do only harm. We believe that the amendment removes from the clause the flavour of favouritism with which, by complete inadvertence, I am sure, it is so contaminated at the moment.
  11.30 p.m.
  Mr. Hayhoe: We debated this matter at length in Committee, and the Minister was under considerable pressure to make some changes in subsection (2). Indeed, he gave an indication, though not an undertaking—this is reported at column 68 of the Committee Hansard—that he did not necessarily feel that the parliamentary draftsmen had the words right, that the words in paragraph (a) of our amendment here, in effect, were words which he thought unexceptionable, and he would see whether they could be incorporated in the Bill.
  As far as I can judge, the Minister's efforts have been of no avail. He has not met the points which were made with such force and clarity in Committee. It is disadvantageous to the launching of the ACAS that such changes have not been made. I hope that the Government will look at this matter again. It is highly desirable that we have words in Clause 1 which draw away from the criticism expressed by my hon. and learned Friend the Member for Royal Tunbridge Wells (Mr. Mayhew), that the Bill is seen as partial in its objective.
  The matter could be put right by some alteration in the wording. Obviously, the Minister is in no mood to make a change now, but I hope that he will be prepared to look again at the arguments presented in Committee and again

  1959
  tonight with a view to making changes, when and if the Bill is considered in another place, which would not in any sense detract from the positive side as it is at present but would produce an evenly balanced measure.
  Perhaps an even balance may be a disadvantage in the Secretary of State's eyes, but let him set aside his own desires in this matter and look more widely. As the Minister of State said, the ACAS may well be there when all of us are gone. It behoves us, therefore, to look with a little more neutrality to the future and try to get the wording of the objectives right now. A greater effort should and could be made, and I hope that the Minister will make it.
  Amendment negatived.

Clause 5

  INQUIRY
  Mr. Hayhoe: I beg to move Amendment No. 3, in page 4, line 6, at end insert:
  'Where an inquiry relates to industrial relations in a particular industry, undertaking or part of an undertaking the Service shall, before entering on the inquiry, publish the scope of the intended inquiry and give a reasonable opportunity to those concerned to express their views in relation to the inquiry'.
  This amendment also follows an assurance given by the Minister in Committee, reported in col. 162 of Hansard The arguments are well set out there. I am sorry that the hon. Gentleman does not seem to have come forward with an amendment to cover the matter, but perhaps he will give an indiciation of what he has in mind.
  Mr. Booth: I wish to make clear the Government's attitude on the broader question of the duty of the ACAS. We do not regard promoting the improvement of industrial relations as a one-sided matter. Indeed, we consider that promoting the improvement of industrial relations is a function which benefits both employers and employees. We do not see this in any way as biased, and we had hoped that that view would commend itself to the many hon. Members
  1960
  who take a deep interest in and have a true appreciation of the importance of industrial relations.
  As the hon. Member for Brentford and Isleworth (Mr. Hayhoe) said, when we discussed this matter in Committee, on Amendment No. 43 to Clause 5, he and his hon. Friends expressed anxiety about the ACAS undertaking inquiry without first consulting the parties concerned, and I gave an undertaking that I would discuss the matter with the ACAS with a view to giving the House an absolute assurance that there would be prior consultation in these matters.
  I am glad to report to the House now that the ACAS has given an assurance that as respects inquiries relating to industrial relations in a particular industry, undertaking or part of an undertaking, it has been the invariable practice to consult all those know to have an interest in the matter to be inquired into, to explain to them the scope of the proposed inquiry, to give them an opportunity of expressing their views, and to take those views into account before deciding to proceed with the inquiry.
  The service gives a further assurance that this practice will continue to be followed when inquiries are in future conducted under the provisions of Clause 5. The service would not, however, wish to be committed to publishing the scope of an intended inquiry generally before seeking the views of interested parties on it. This is clearly a wise precaution in case initial soundings produce an unfavourable reaction and the proposal for the inquiry is abandoned.
  I hope that hon. Members will agree that I have met my undertaking to the Committee, and will welcome and appreciate as I do, the assurance of the ACAS, and that they will withdraw the amendment.
  Mr. Prior: The Minister of State has met the main point that we raised in Committee, and there is wisdom in the course that the ACAS intends to pursue.
  Mr. Hayhoe: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 6

  CODES OF PRACTICE
  Mr. Booth: I beg to move Amendment No. 4, in page 4, line 22, after 'matters', insert:
  'in relation to the application of the following provisions of this Act,'.
  The effect of this amendment, coupled with Nos. 5 and 6, is to make it clear that matters on which the ACAS has to produce codes of practice are only those within the scope defined by later clauses and which the code will support; that is to say, those of disclosure and on time off for trade union duties and activities. The amendment meets the concern expressed in Committee about the scope of the codes laid down in Clause 6, and I hope that it will, therefore, be acceptable to the House.
  Amendment agreed to.
  Amendments made: No. 5, in page 4, line 24, after 'information', insert:
  ',in accordance with sections 17 and 18 below,'.
  No. 6, in page 4, line 26, leave out paragraph (b) and insert:
  '(b) the time off to be permitted by an employer—

  (i) to a trade union official in accordance with section 49 below; and

  (ii) to a trade union member in accordance with section 50 below '.—[Mr. Booth.]

  Mr. Madel: I beg to move Amendment No. 7, in page 4, line 36, after 'shall', insert:
  'consult, as appropriate, with the TUC and the CBI and taking into account any advice given by them'
  Mr. Deputy Speaker: With this amendment we are also taking Government Amendments Nos. 8 and 9, Amendment No. 10, in page 5, line 10, after 'above', insert:
  'or, if either House requires one or more amendments to the draft'.
  and Amendment No. 11, in page 5, line 11, leave out 'and the Code' and insert:
  'incorporating such amendments (if any), as the Code, amended Code, as the case may be'
  Mr. Madel: In Committee my hon. Friend the Member for Brentford and Isleworth (Mr. Hayhoe) expressed some anxiety about the need for the TUC and
  1962
  the CBI to be consulted before a code of practice was issued. That is reported in column 292 of Hansard. The Minister of State answered that, but we should like an extra assurance that there will be full consultation with those affected by the codes of practice before they are made.
  We are grateful to the Government for having met us by Amendment No. 9. In Committee, at column 294 of Hansard, the Under-Secretary said that all that was wrong with one of our amendments was a point of drafting, and he agreed to meet us on Report, as he has done by Amendment No. 9.
  We have suggested Amendments Nos. 10 and 11 because the Government said in Committee that they would try to meet us on this matter. The Minister said that he was prepared to "look at this"—column 299 of Hansard. He said that he could not give an absolute assurance, but that he would look at the matter again. When the Government hint that a matter will be looked at again, it is the duty of the Opposition to see whether the "looking at the matter" has been taken any further. That is the purpose of Amendments Nos. 10 and 11. We should be grateful for some comment on our original anxieties expressed by Amendment No. 7.
  Mr. Booth: I have given careful consideration to the points involved in Amendment No. 7. I hope that those who have tabled that amendment will accept that it is not necessary to pursue this matter, basically because both the TUC and the CBI will be represented on the ACAS but that that will not in itself prevent them from making separate representations on any proposals of the Service.
  Therefore, we feel that to leave this point in no way inhibits them but does avoid the difficulty that we would have of meeting the representations which would undoubtedly follow from putting in the names of those bodies to have the names of a number of other bodies added. We would also not like to create any false impression that by naming these two bodies we were intending them to have any prior claim to consideration of representations on a matter which was proposed by the service. Important as the TUC and CBI are—and who are we in this House to deny it?—there are a

  1963
  number of other bodies representing employers and employees whose views should be considered by the ACAS.
  As regards Amendments Nos. 10 and 11, I gave a hint in Committee because it was my intention that we should explore to the limit possibilities of using delegated legislation procedure to give the House control, as far as possible, over all the matters which are developed from this legislation. It has not proved possible to work out a way of dealing with the draft codes because there is no way under the procedure of the House for having amendments to pieces of delegated legislation. If we were to change the procedures of the House in that way, we would not want to do it in the first instance for changing the drafting of codes, which is a job we have laid upon another body. But, of course, it would be possible, if the House raised serious objections to a draft code before it, for that to be withdrawn and for the views of the House to be considered by the service.
  As the hon. Gentleman appreciates, we have met the requirements of the Committee in the way in which we have tabled Amendments Nos. 8 and 9. If these amendments are passed, the Secretary of State will be required, if he does not approve a draft code of practice, to publish details and his reasons for withholding approval.
  Mr. Madel: I beg to ask leave to wthdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendments made: No. 8, in page 4, line 40, after 'shall', insert '—(a)'
  No. 9, in page 4, line 41, at end insert:
  ';and
  (b) if he does not approve of it, publish details of his reasons for withholding approval'. —[Mr. Booth.]
  Mr. Booth: I beg to move Amendment No. 12, in page 5, line 12, leave out from 'may' to end of subsection and insert 'by order appoint'.
  The amendment is to remove unnecessary words and to redraft a point in the Bill.
  Amendment agreed to.
  Mr. Model: I beg to move Amendment No. 13, in page 5, line 20, after 'section', insert:
  1964
  'or taking effect under Part I of Schedule 1 to the 1974 Act'.
  In Committee the Minister said that he would answer the point involved on Report. It relates to the amendment moved in Committee, Amendment No. 67, by my hon. Friend the Member for Cleveland and Whitby (Mr. Brittan), as reported at column 306 of the Committee proceedings. Will the Minister comment briefly on this matter?
  Mr. Booth: The Bill as drafted provides for the service to issue codes of practice containing such practical guidance as the service thinks fit for promoting the improvement of industrial relations. The ACAS code or codes would supersede the Industrial Relations Act code under the provisions of Schedule 16, paragraph 4.
  The amendment would give the alternative to the ACAS of revising part of the Industrial Relations Act code. Without in any way casting reflections upon the authors of that code or any of its provisions, we would say that, having considered this, we do not consider it an appropriate alternative. We think that the service can and should, where it considers it appropriate, take parts of the Industrial Relations Act code and embody them in its own.
  11.45 p.m.
  On those other points, where the industrial relations code was specifically tied to provisions of the Industrial Relations Act which are no longer with us, it is better that they should lapse as soon as the service is able to develop its own code. There will be no temporary vacuum. The tribunals will still have the advice and the old code will remain until it is replaced. We urge that the House should accept that this would be the better of the two procedures.
  Mr. Madel: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Madel: I beg to move Amendment No. 14, in page 5, line 27, after 'Committee', insert:
  'or the Employment Appeal Tribunal'.
  Mr. Deputy Speaker: With this we can also discuss Amendment No. 15, in page 5, line 30, after 'Committee', insert' or the Appeal Tribunal'.
  Mr. Madel: At column 312 of our Committee proceedings the Minister of State referred to amendments which we had moved and said that he would reexamine the matter and, if there was any reasonable doubt, would be prepared to return on Report with an amendment or at least write to my hon. Friend the Member for Cleveland and Whitby (Mr. Brittan) before Report. I have not checked with my hon. Friend whether he has received a letter. He may have done. Perhaps the Minister of State can deal with the point.
  Mr. Booth: I have carefully checked this point and am convinced, on the advice of parliamentary counsel and others, that there is no doubt whatever that the Employment Appeal Tribunal would have to have regard to the code of practice as admissible evidence. I hope that, since I can give that assurance, it will be acceptable.
  Mr. Madel: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 11

  REFERENCE OF RECOGNITION ISSUE TO SERVICE
  Mr. Brittan: I beg to move Amendment No. 16, in page 8, line 41, after 'union', insert 'or an employer'.
  The amendment seeks to permit employers as well as employees to refer recognition disputes to the Advisory, Conciliation and Arbitration Service under the provisions of Clause 11. This is one of the matters which have caused the greatest concern in industry, as the representations we have received make clear. It is widely felt in industry that to have a provision which allows a recognition issue to be referred to the service by the employees—by the unions—but not by the employers is a one-sided, unfair approach to the problem.
  None of the explanations given in Committee has convinced us to the contrary. The main objection to the amendment appears to be that there are other provisions in the Bill enabling the matter to be dealt with by employers. In particular, in Committee reference was made to
  1966
  Clause 2 which enables conciliation to take place, to Clause 4 which enables advice to be given and to Clause 5, which enables inquiries to be made. All of those can, in the appropriate circumstances, be useful to employees and can be taken account of and put into operation in a situation where the essential debate and dispute relates to recognition.
  But such provisions are no substitute for a formal reference under Clause 11. Under such a reference the matter is fully investigated by the service and a formal recommendation can be made. That is quite a different matter from the advice, inquiry or conciliation referred to. It has been said on behalf of the Government, and might be said by them again tonight, that the only point of a reference under Clause 11 is if it imports with it the possibility of the use of the machinery referred to in Clause 16 for the compulsory reference of the matter to the Central Arbitration Committee if the employer does not agree to the recommendation made by the service.
  It is said that the procedure is inappropriate for a case that has been referred by an employer. With respect, I do not accept that that is in any way a conclusive argument, because even if it were considered inappropriate for there to be any comparable enforcement machinery whereby an employer could take some steps to encourage a recalcitrant employee who has refused to conform to the recommendations of the service to do so, I believe that there is an advantage in the employer at least having the power to brandish a full-scale recommendation of the service rather than merely having to rely on its good offices in providing conciliation or advice as is provided for in earlier parts of the Bill. Even if the Minister's argument was right, that would not be a reason for refusing to allow employers to refer matters to the ACAS for determination under Clause 11.
  This one-sidedness in drafting and application has been the cause of deep resentment in industry. Coming so early in the Bill, it has poisoned and coloured the attitude of many people in industry to the Bill. It has caused them to look at the remaining clauses of the Bill with much greater suspicion than would otherwise have been the case. That damage has already been done. It cannot wholly

  1967
  be rectified. However, it could be mitigated to some extent if the Minister were able, even at this late stage, to accept the amendment.
  Mr. Booth: In the light of our discussions in Committee I reconsidered the issue whether employers should be enabled to refer recognition issues to the ACAS in a way broadly similar to the provisions made under Clauses 11 and 12 for unions to seek recognition by a recalcitrant employer.
  As the hon. Member for Cleveland and Whitby (Mr. Brittan) referred to part of the argument which I used in Committee, I hope that he will not object if I point out that I used another argument. The employer is not in the same position as a union. He is in a position to decide whether to grant an application made by a union, or even one of two unions, to him for recognition, and, by doing so, to put the onus on a union's refusal to use the procedures laid down in the Bill. I reconsidered the point. In Committee I indicated that there were other ways in which the employer could use the provisions of the Bill to obtain guidance on recognition.
  Where a dispute could arise as a result of unions' conflicting recognition, the conciliation provisions in Clause 2 can be used. If the employer wanted advice he could use the provisions of Clause 4(1)(b). However, if he wanted to brandish a piece of paper and say "This is the view of the service on the question of whom I recognise", he would have to turn to Clause 5. There is some doubt whether an employer can be sure of obtaining that piece of paper. If he obtained an inquiry under Clause 5, the service, under the terms of Clause 5(2)(b), must send the draft of its findings to all the parties who appear to the service to be concerned, and take account of their views before deciding whether or not to publish it.
  There are those who take the view that this might be interpreted to mean that any of the parties concerned might have a veto if the ACAS took the view that if one objected it could not publish. I am by no means certain that the ACAS would take that view. It might consider that in spite of a certain objection or objections it should still publish in the interests of improving industrial relations.
  1968
  Because of those considerations and my unwillingness to admit that there is at least room for interpretation or doubt on the issue whether the employer could get the piece of paper containing the decision under Clause 5, we are in the process of considering whether employers could use the provisions of Clauses 11 and 12 as relevant.
  Many employers' recognition references will relate to inter-union disputes. That was common ground between us in the area in which we were concerned in Committee. Arrangements already exist for dealing with some disputes involving the TUC and the unions through the use of the Bridlington and Croydon procedures. Before putting anything into the Bill which might affect those procedures, the Government would want to complete consultations with the TUC. If, as a result of such consultations, a way can be found to accommodate satisfactorily both the voluntary TUC procedures and any new statutory procedures, the Government will consider bringing forward an appropriate amendment at a later stage of the proceedings on the Bill.
  Mr. Brittan: I am most grateful to the Minister for what he has just said. He has taken the matter considerably further forward. We are concerned only with the situation in which the Bridlington and Croydon procedures, in so far as we are talking about disputes to which they relate, are not working, perhaps because they have not been invoked by the unions concerned. Where those procedures are working we do not wish to stand in their way or impede them.
  If, therefore, the Minister will look into the use of Clause 11, at the same time making sure that there is no conflict with the Bridlington and Croydon agreements, we are more than content and shall look forward to hearing what the consultations produce. I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 12

  INQUIRY AND REPORT ON RECOGNITION ISSUE
  Mr. Booth: I beg to move Amendment No. 17, in page 9, line 41, leave out 'employees' and insert' workers'.

  1969
  This is one of a series of amendments which make it possible for an ACAS recommendation for recognition to apply to workers and not only to employees. The definitions of "worker" and "employee" are to be found in Section 30(1) of the Trade Union and Labour Relations Act. The "worker" definition is the wider one, as it covers certain people who work otherwise than under a contract of employment. I hope, therefore, that this amendment and those connected with it will commend themselves to the House.
  Mr. Hayhoe: As the definition of "worker" includes people who have a contract of service as opposed to a contract of employment and also others, why is the amendment thought to be necessary? Why should the recognition procedures be operative for them? It is difficult to see how people under commercial contracts who are offering a service will be affected.
  Mr. Booth: I recognise the importance of the question. My explanation was not adequate to cover the whole series of amendments which hang on this one. The reason is that there are those who contract to do work or to perform services for another party. In some instances where such people work in groups it is common for collective bargaining to take place in respect of the terms of their contracts. Examples are musicians in orchestras, some actors in West End theatres and freelance writers working for the BBC and ITA. If collective bargaining is refused by an "employer" failing to recognise a trade union representing such workers, it seems reasonable to allow an independent trade union to be able to use the recognition provisions of the Bill on its behalf.
  Amendment agreed to.
  12 midnight
  Mr. Booth: I beg to move Amendment No. 18, in page 10, line 9 leave out subsection (8).
  The effect of the amendment concerns a recommendation by the ACAS for recognition. The change is necessitated mainly by Amendment No. 17 and the amendments consequential upon it. It makes recognition provision available for workers as well as for employees. Recommendations in respect of workers
  1970
  have to become operative in the same way as other recommendations and, therefore, it is necessary to delete the subsection and carry through the consequential amendments with it. That is true of Amendments Nos. 18, 132 and 185.
  Amendment agreed to.

Clause 13

  APPLICATION FOR VARIATION OR REVOCATION OF RECOMMENDATION
  Mr. Booth: I beg to move Amendment No. 19, in page 10, line 28, leave out from beginning to 'may' in line 31 and insert:
  'has been made and has not been—

  (a) superseded by agreement, whether express or implied, between the employer and the union;

  (b) superseded by another recommendation under section 12 above; or

  (c) revoked on an application under this section,

  an application may be made under this section for the variation or revocation of that recommendation.
  (1A) Such an application'.
  The amendment makes a minor change by permitting an application for variation or revocation of a recognition recommendation to be made at any time after such a recommendation has been made, provided it has not been superseded or revoked, whether or not it has become formally operative within the meaning of Clause 15. I hope that the amendment commends itself to the House.
  Amendment agreed to.
  Amendment made: No. 20, in page 10, line 44, leave out paragraph (a) and insert:
  '(a) that the reconsideration of the recommendation is justified because circumstances have changed or further information has become available; or'.—[Mr. Booth.]
  Mr. Deputy Speaker: I think it will be for convenience of the House if I put the following Amendments as a group.

Clause 14

  INQUIRIES UNDER SECTIONS 12 AND 13
  Amendments made: No. 21, in page 11 line 25, leave out 'employees' and insert 'workers'.
  No. 22, in page 11, line 27, leave out first 'employees' and insert 'workers'.
  No. 23, in page 11, line 27, leave out second 'employees' and insert 'workers'.
  No. 24, in page 11, line 30, leave out 'employee' and insert 'worker'.
  No. 25, in page 11, line 37, leave out 'employees' and insert 'workers'.
  No. 26, in page 11, line 39, leave out 'employees' and insert 'workers'.
  No. 27, in page 12, line 11, leave out 'employees' and insert workers'.
  No. 29, in page 12, line 12, at end insert:
  '(6) An employer who is notified in accordance with subsection (5) above of the results of the ballot and who has workers among those invited to take part in the ballot shall arrange for those results to be notified to them.'.—[Mr. Booth.]

Clause 15

  COMPLAINT OF FAILURE TO COMPLY WITH RECOMMENDATION
  Mr. Booth: I beg to move Amendment No. 30, in page 12, line 13, leave out lines 13 to 18 and insert:
  '(1) A recommendation for recognition made by the Service under section 12 above, so far as it relates to employees, but not so far as it relates to workers who are not employees, shall become operative for the purpose of the following provisions of this Act—

  (a) in the case of an unconditional recommendation, at the end of the period of 14 days beginning with the date on which the Service's report under section 12 above is received by the employer; and

  (b) in the case of a conditional recommendation, at the end of the period of 14 days beginning with the date on which the Service, on the application of the union, notifies the employer of its opinion that the condition or all the conditions have been sufficiently complied with,

  and shall remain operative except in so far as it is—

  (i) superseded by agreement, whether expressed or implied, between the employer and the union;

  (ii) superseded by another recommendation under section 12 above; or

  (iii) revoked on an application under section 13 above,

  (2) Where a recommendation is operative, then at any time after the end of the period of two months beginning with the date on which it became operative,'
  The amendment inserts into Clause 15 a redrafted version of the former sub-
  1972
  section (8) of Clause 12 relating to circumstances in which a recommendation by the ACAS for recognition of a trade union is to become operative.
  Amendment agreed to.
  Mr. Deputy Speaker: The next amendment is No. 31, which is to be taken with Amendment No. 43.
  Mr. Brittan: These amendments, Mr. Deputy Speaker, relate to fundamental matters in the Bill—namely, to our opposition to the whole procedure whereby the penalty for failure to comply with a recognition recommendation or to disclose information is compulsory, unilateral arbitration. They are fundamental matters, and we do not think it appropriate to deal with them at this stage by way of amendment. Therefore, I do not propose to move the amendment.

Clause 16

  APPLICATION ARISING FROM FAILURE TO COMPLY WITH RECOMMENDATION
  Mr. Booth: I beg to move Amendment No. 32, in page 13, line 18, after 'may' insert ', after hearing the parties,'.
  This amendment is necessary to require the Central Arbitration Committee, if it finds a complaint agains an employer of failure to recognise a trade union wholly or partly well-founded, to hear the parties before deciding whether to make an award as to terms and conditions of employment.
  It is necessary to be absolutely clear for the important rights of the use of arbitration against employers in terms and conditions, that any complaint of this nature should be fully resolved. I hope it will commend itself to the House.
  Amendment agreed to.

Clause 17

  GENERAL DUTY OF EMPLOYERS TO DISCLOSE INFORMATION
  Mr. Booth: I beg to move Amendment No. 33, in page 14, line 30, leave out 'employees' and insert 'workers'.
  The effect of the amendment is similar to that of a previous amendment. This widens the duty of employers to disclose information so that it applies to workers and not just to employees.
  Amendment agreed to.
  Mr. Booth: I beg to move Amendment No. 34, in page 14, line 35, leave out '12(8)' and insert '15'.
  This is consequential to Amendment No. 30, which transfers the provisions of the Bill concerning an operative recommendation for recognition to Clause 15.
  Amendment agreed to.
  Amendments made: No. 35, in page 14, line 36, leave out '18' and insert '19'.
  No. 36, in page 14, line 39, at end insert:
  '(2A) Where a request for information is made by trade union representatives under this section, the request shall, if the employer so requests, be in writing or be confirmed in writing'.—[Mr. Booth.]

Clause 18
  RESTRICTIONS ON GENERAL DUTY UNDER SECTION 17
  Amendment made: No. 37, in page 15, line 18, leave out from 'would' to second 'the' in line 19 and insert 'cause substantial injury to'.—[Mr. Booth.]
Clause 19

  COMPLAINT OF FAILURE TO DISCLOSE INFORMATION
  Mr. Booth: I beg to move Amendment No. 40, in page 16, line 36, leave out 'purporting to be'.
  Mr. Deputy Speaker: With this we can take Amendment No. 41, in page 16, line 36, leave out
  purporting to be signed by or on behalf of'
  and insert 'signed by', and Government Amendments Nos. 42, 108 and 109.
  Mr. Booth: The Government amendments are necessary to ensure that if the signature of a Minister on a certificate about national security is called in question, it is possible to require proof of its validity in proceedings before the Central Arbitration Committee.
  Amendment agreed to.
  Amendments made: No. 42, in page 16, line 40, at end insert:
  ';and a document which purports to be such a certificate shall be taken to be such a certificate unless the contrary is proved.'.—[Mr. Booth.]

Clause 21

  DETERMINATION OF CLAIM AND AWARD
  Amendments made: No. 44, in page 17, line 21, after 'employees', insert:
  '(but not workers who are not employees)'.
  No. 45, in page 17, line 31, after 'may', insert', after hearing the parties,'.—[Mr. Booth.]
  Further consideration of the Bill, as amended, adjourned.—[Miss Margaret Jackson.]
  Bill, as amended (in the Standing Committee), to be further considered this day.

ADJOURNMENT
Motion made, and Question proposed, That this House do now adjourn.—[Miss Margaret Jackson.]

HOTEL AND CATERING INDUSTRY (PAY)
12.9 a.m.
Mr. Bruce George: It is a great pleasure to be embarking on this adjournment debate at this relatively civilised hour, and not at breakfast time, as was originally feared. I wish to raise the question of low pay in the hotel and catering industry. I first raised the issue some months ago, as I believed that workers in the industry are among the lowest paid in the country.
The debate seeks to deal with a large body of men and women who work hard, long hours but earn poverty wages. However one defines "low pay"—whether by the old method of the National Board for Prices and Incomes by regarding workers as among the bottom 10 per cent. of wage earners, or whether by regarding the "low paid" as those who receive two-thirds of the national average wage or, say, £30 a week, which is the norm accepted by the Government and the TUC—it can truly be said that without doubt workers in the hotel and catering industry fare very badly indeed.
This view has been confirmed by two recently published reports. The first by Brown and Winyard, was published by the Low Pay Unit and entitled "Low

1975
Pay in Hotels and Catering". The second is a report published by the Hotels and Catering EDC and is entitled "Manpower Policy in the Hotels and Restaurant Industry". Both are damning reports and point to the seriousness in the hotel and catering industry of the low wages which are at present being paid. There were earlier reports brought out by the Commission on Industrial Relations between 1971 and 1973 to which I shall refer.
We are dealing with an industry which is vital to our economy. We are not talking about the odd Wimpy bar or hotel scattered around the country. The EDC puts the matter in this way in a foreword:
"The hotels and catering industry is a major sector of the economy, employing 7 per cent. of the total British labour force. It makes a big contribution to the balance of payments and to the welfare of the country…".
We all want to see a healthy and prosperous industry, but we also demand fair play for those who are vital to this industry—namely, the industry's work force. Fair play is certainly not what that work force has attained. At present official estimates show that some 1,300.000 workers are employed in the industry, but the industry is under-unionised. The result of the low unionisation is an absence of collective bargaining.
To compensate for the situation a system of wages machinery has been established. There are four major wages councils—the Licensed Residential Establishment and Licensed Restaurant Wages Council; the Unlicensed Place of Refreshment Wages Council; the Licensed Non-Residential Establishment Wages Council; and the Industrial Staff Canteen Wages Council.
The wage rates laid down by the councils are exceedingly complicated and should be simplified. The Low Pay Unit attempted to work out what a man was entitled to and gave up in failure. The rates are complicated. But two factors are incontrovertible. The first is that wages council rates are deplorably low for the industry. Secondly, even though these levels are low, many establishments in this country do not pay even those minimum wage levels. Many establishments are committing illegal acts by
1976
paying below the minimum rate laid down by the wages councils.
The rates of pay in the hotel and catering industry vary from job to no job, from region to region and from employer to employer. There are many excellent employers who pay way above the wage council rates. But there are barmen, bar staff and other hotel workers who earn £20 a week—and many who earn even less. When I stated the issue publicly six months or so ago and mentioned the minimum wage for barmaids of 35p per hour, I received scores of letters from bar staff saying "It is nice to know what the minimum is, because we are working in large chains of hotels and breweries and receiving less than the minimum".
These bar staff and hotel staff work long and, by definition, unsocial hours, with split shifts, and the work can be heavy. For example, cellarmen. Staff can very easily be dismissed by their employers and are often abused by customers, particularly as the evening wears on, in hotels and pubs. They are at the beck and call of the public, and in many cases they may even be molested. For this hard work they are badly rewarded. It is not being over-dramatic to say that in many cases workers in the hotel and catering industry are one short step removed from slave labour. They should be paid a living wage. At present they are not getting this.
About half of the men and over 90 per cent. of the women employed in this industry are earning way below £30, and I and many hon. Members deplore this.
The report of the Economic Development Corporation says on page 4:
"In April, 1973, therefore, the average manual male worker in hotels and catering would have been in the lowest 13 per cent. of all manual men as regards average weekly earnings."
The corporation produced a figure for women which was just about as disastrous. The EDC report also mentions that the absolute gap between the earnings of those employed in hotels and catering and those in all other industries actually widened between 1973 and 1974.
The Government have recognised that the picture is desperately unsatisfactory, and that even more attention must be paid to it.

1977
What can be done? There is a lot of merit in the idea of a statutory minimum wage, and workers in the industry would benefit accordingly. One could also suggest that wages councils themselves, in their periodic reviews of salaries in this industry, could raise the levels considerably.
There are those in the industry who say that it cannot afford any substantial raising of salaries, but, as Jack Jones said not long ago, if the industry is not capable of paying a living wage, there are many hotels and institutions within this industry that ought not to be allowed to continue. If an industry cannot pay a living wage it should go to the wall.
Wages council rates could be raised. This would meet, no doubt, a lot of opposition from those representatives on the wages councils who are from the hotel and catering industry. These rates should be raised and the new rates should be rigidly enforced.
I pay tribute to the inspectors who go round checking on the rates paid but I believe they should be increasingly vigilant and that the regulations should be more rigidly enforced. They should bring to book far more swiftly the recalcitrant employers who are disobeying the wages council rates.
Every support should be given to trade unions which are attempting to organise workers in the industry. There are some unions which have had limited success so far—the General and Municipal, the Transport and General and USDAW—but they are facing seemingly insuperable barriers in getting this industry properly unionised. There is an incredibly high rate of staff turnover. The EDC report has said that if the turnover rate is 80 per cent. per year, as it could be, the loss to the industry could be of the order of £22 million a year. Someone has costed the loss to an employer of a worker at about £100 per recruit, so this figure is very high.
Why is the turnover rate so high in the hotel and catering industry? A major factor must be the low rates of pay that this work force receives. Other factors are the difficulties of trade unions in getting a work force to be unionised. There is a high incidence of casual workers and of women, who are needlessly slow and lax in joining a trade
1978
union. Also, especially in the London area, there is a high incidence of foreign workers. They come from lands where trade unions, to put it politely, are not particularly strong. Another factor leading to difficulty in unionisation is the smallness of establishments and the fact that they are incredibly dispersed. Lastly, employers in small enterprises increasingly can appeal to the loyalty of their employees in not pressing for higher wage rates and joining unions.
In this industry, the trade unions are fighting battles which were won in other industries 100 years ago. I hope that they will be more successful, because if people join trade unions and press for higher wages, they will receive a living wage and render the concept of wages councils superfluous.
A fourth thing which could be done to improve the lot of these 1.3 million workers is that there should be more rigid enforcement by inspectors. I note that a CIR report of some two years ago said that in one area which it investigated about 10 per cent of all enterprises visited paid less than the minimum rate laid down by the wages council. The NEDC report published in May said that in another area of a wages council the figure was as high as 36 per cent. In other words, 36 per cent of the enterprises in a specific area of responsibility of a wages council were not paying even the miserly rate laid down by the wages council. So rigid enforcement and stiff penalties are imperative.
I refer now to the myth of fringe benefits. It is claimed by many in the industry that there are ancillary benefits, and that the low wages are not a satisfactory guide to the standard of living enjoyed by its work force, because some employees have housing laid on and many have free meals. I do not accept this.
Then there is the issue of tipping. The more one investigates the problem of tipping in the industry, the more one realises that figures are not available to give a proper view of what percentage of a person's income can be attributed to tips. Evidence is scanty. I regard tipping as degrading. Even if there is a high level of tipping in an enterprise the tips received need to be pretty high to bridge the gap between the wages paid

1979
and the basic minimum wage which should be enjoyed. The Tavistock Institute and the EDC report of 1969 revealed that tipping had decreased efficiency and profitability and, indeed, had increased recruitment problems and caused embarrassment to customers.
In my view, tipping should be abolished. The service charge should also be abolished. I feel sure that people would be prepared to pay for the service provided in such a way as to do away with tipping and service charges. I have come across many instances where people have paid a service charge and tipped on top of it. I understand, too, that a tip is the property of the employer. It is not necessarily passed back to his work force.
I applaud the efforts which have been made by the Government to raise the wages of the lower paid. I applaud their efforts to raise the benefits to those who are not able to work—the elderly, the disabled and the unemployed. But I believe that it is our primary task, as members of the Labour Party, to eliminate poverty, and I ask my hon. Friend to use his powers to ensure that the wages paid in this vital industry are appropriate to the task performed by those engaged in it. The people do a difficult job in difficult hours. They are badly rewarded. This is a situation which I should like to see reversed.
12.24 a.m.
The Under-Secretary of State for Employment (Mr. Harold Walker): I listened with great interest to all that my hon. Friend the Member for Walsall, South (Mr. George) said. I am grateful to him for raising this important subject, and I welcome much of what he said.
My hon. Friend began by making it clear that much of what he said depended heavily on the report of the Low Pay unit. Since section 1 of the Low Pay Unit's report relies heavily on statistics obtained from my Department, I can safely say that it does not present any new facts. But I cannot agree with the unit, as I will show, on some of the conclusions drawn in its report from these figures.
However, nobody will disagree that the hotel and catering industry is a low-
1980
pay area and that it has become almost a tradition that both basic rates and earnings are at or near the bottom of the league tables. In the greater part of the industry minimum rates are set by wages councils. The mention of wages councils immediately triggers off thoughts of low pay. But wages councils exist in the industry only because of a lack of organisation, and, of course, pay levels would probably be even lower in their absence. That wages councils are still needed to set at least a base for pay levels in this industry was accepted by the Commission on Industrial Relations, which investigated and reported on the industry a few years ago. The Commission recommended that the wages councils might be dispensed with only in the industrial and staff canteens sector. It did, of course, make recommendations in other reports, principally to the two sides of the industry, on improving their organisation. So for most of the hotel and catering industry we can expect the wages councils machinery to continue for some time to come. I can only attempt to show what we have done and hope to do to improve the situation.
First, on the CIR recommendations to abolish the Industrial and Staff Canteen Undertakings Wages Council, we have published a notice of our intention to abolish the council. Some objections have been received and these are now being investigated by a commission of inquiry appointed by the Secretary of State.
The performance of wages councils has, until recently, left much to be desired. But settlements over the last nine months or so have indicated a much livelier appreciation on their part of the plight of the low-paid workers within their scope, and significant progress has been made. All four wages councils in catering have now reached settlements in the current cycle, although not ail have yet been implemented. To take but one example, the Licensed Residential Establishment Council has made proposals raising the minimum for a barman from £18.18 to £27.75. No one can deny that for some low-paid workers this is a very significant step in the right direction.
My hon. Friend will know that the Employment Protection Bill, which we have been debating tonight, contains provisions designed not only to improve

1981
the wages councils system by bringing it more into line with procedures in joint industrial councils but to encourage organisation in this sector. Notwithstanding the difficulties to which my hon. Friend referred, the greatest benefits to be won by these workers will come through better organisation and eventual abolition of the statutory wage-fixing machinery. That is why we have included provisions in the Bill which will enable wages councils to fix terms and conditions of employment in addition to pay and holidays and speed up the procedures. In future, wages councils will be able to make their own orders without reference to the Secretary of State. That will enable wages councils to move to a half-way house of a statutory joint industrial council to encourage the move towards full voluntary machinery where this could be difficult in a single step.
Turning to the particular problems of the hotel and catering industry, it is not unnatural that this industry has attracted some attention from a number of directions over several years. It was a Labour Government who referred the question of improving industrial relations in hotels and catering to the CIR in 1969. The National Economic Development Office also published a report in May this year, entitled "Manpower Policy in the Hotels and Restaurants Industry", one chapter of which is devoted to terms and conditions of employment.
I turn now to the reports of both the Low Pay Unit and the NEDC. The former draws on the CIR reports and the new earnings survey results to a considerable extent. It also draws conclusions from interviews that the unit carried out over 56 workers—34 full-time and 22 "casuals". This seems a very small sample on which to base conclusions in such a very large industry. NEDC analysed some results from the new earnings survey and carried out a postal survey in order to obtain a more detailed breakdown for separate occupational groups. It states that the data from these two sources provide an acceptable picture of earnings and hours in the industry at June 1973. The same conclusion is reached that low pay is prevalent. Using "low pay" criteria of 60p per hour for men and 55p for women it estimates that 49 per cent. of manual men and 88 per
1982
cent. of women were low paid, compared with 11 per cent. and 53 per cent. respectively in all industries and services. The LPU used criteria of 75p and 50p for men and women respectively and concluded that 70 per cent. and 70 to 80 per cent. were low paid. The LPU points to long working hours, but the NEDC concluded that in the licensed residential and restaurant sector men worked two hours less than and women about the same hours as were worked by men and women in all industries. Neither survey, it says
"confirms the wide-spread impression that hours of work in hotels and catering are exceptionally long".
It adds that
"the fact that the great majority of staff work shifts and over 60 per cent. work split shifts may explain why the industry has an image of working not only awkward shifts but also long hours".
The NEDC clears another point—it was unable to show that there are significant differences between earnings of workers in large companies and other establishments. The absence of information on this in the CIR report incurred criticism from the LPU.
On the matter of infractions, the LPU's estimate that as many as 130,000 workers in hotels and catering were being paid less than the statutory minimum in 1974 is not supported by the figures available from the Wages Inspectorate. Because all complaints are investigated and routine inspections are biased towards those establishments more likely to be underpaying, the establishments visited are not a representative sample and the results cannot be "grossed up" to provide an industry-wide picture. This is not to say that we are satisfied about the present rate of infractions in the industry. My hon. Friend will know that the Employment Protection Bill seeks to improve the effectiveness of the Wages Inspectorate by enabling the Secretary of State to call for returns from selected employers, which will indicate where the areas of infraction lie and enable the inspectorate to concentrate on these areas and to effect an overall improvement in results.
The Low Pay Unit has made a number of policy recommendations, including the fixing by the Government of a statutory moving low-pay target for wages councils.

1983
I have already explained during the proceedings on the Employment Protection Bill that the Government firmly adhere to the view that voluntary collective bargaining is preferable to statutory control, and, as I have already said, the provisions in the Employment Protection Bill are designed, by giving wages councils greater freedom and making them more like joint industrial councils, to help towards abolition. The dilemma is, as I pointed out in Committee, that imposing new statutory requirements on wages councils may serve to hamper the development of collective bargaining arrangements. I believe that the most effective way forward is through better organisation on the two sides of industry, as was advocated by the CIR in its various reports.
In casting some doubt on the Low Pay Unit's findings and recommendations I am not suggesting that we are satisfied with or complacent about the present position. Far from it. Indeed, I hope I have said enough to indicate that we are determined to provide for the more effective operation of wages councils and more rapid progress towards collective bargaining arrangements not only in the hotel and catering industry but throughout the wages council sector. That is why we have included the provisions in the Employment Protection Bill to which I have referred.
Finally, the policies set out in the White Paper "The Attack on Inflation" are very relevant for the workers in the hotel and catering industries. These policies are designed to ensure that by the late summer of next year, the year-on-year increase in prices will be no more than 10 per cent. and by the end of next year it will be down to single figures. No groups suffer more from rapid inflation than the lowest-paid members of the community and no groups stand to benefit more from our attack on inflation than the low paid. The £6 pay limit which the TUC has agreed on will call for sacrifices from most to achieve the objectives that we have agreed with the TUC and CBI. But the pay limit takes the form of a flat rate because in this way the largest percentage increases will be focused on the lowest paid. Such an approach will be of particular benefit to the 3¼ million workers covered by wages councils.
1984
We have also—in paragraph 8 of the White Paper—set out transitional arrangements to ensure that the introduction of the policy will not give rise to inequity as it applies to wages councils because of the length of time between the date at which councils agree their proposals and the date on which increases come into effect. We have provided that all wages council proposals decided on before the date of publication of the White Paper—11th July—will be implemented even if the date of implementation is on or after 1st August. As it happens, this provision will benefit many workers in the hotel and catering industries because the Licensed Residential Wages Council is one council where proposals for substantial increases were agreed before 11th July but have not yet become operative. They will be implemented in full.
To sum up, while we cannot agree to all the interpretations of the facts and the recommendations in the Low Pay Unit's report on the hotel and catering industry, we agree with it that the present operation of the wages council machinery in this and other sectors needs to be improved. We believe that the greatest possible encouragement of voluntary collective bargaining offers the best way of tackling the present deficiencies. We have included provisions in the Employment Protection Bill with this end in view. In addition, the policies set out in the White Paper "The Attack on Inflation" will be of particular benefit to workers in the hotel and catering industry and throughout the wages council sector both because these workers stand to gain most from the attack on inflation and because the pay limit takes the form of a flat rate rather than a percentage.
I am grateful to my hon. Friend for giving me this opportunity of setting out our general strategy in the wages council sector. I hope he will agree in the light of what I have said that the Government are as concerned as he is with this issue and have already introduced proposals to tackle the problems to which he has so graphically referred this evening.
Question put and agreed to.
Adjourned accordingly at twenty-three minutes to One o'clock.

EMPLOYMENT PROTECTION BILL
Division Lists Nos. 312–6 [See cols. 1870, 1911, 1929, 1936 and 1952]

Division No. 312.]

AYES

[6.16 p.m.

Adley, Robert

Grimond, Rt Hon J.

Nott, John

Aitken, Jonathan

Grist, Ian

Oppenheim, Mrs Sally

Alison, Michael

Grylls, Michael

Osborn, John

Amery, Rt Hon Julian

Hall, Sir John

Page, John (Harrow West)

Arnold, Tom

Hall-Davis, A. G. F.

Page, Rt Hon R. Graham (Crosby)

Atkins, Rt Hon H. (Spelthorne)

Hamilton, Michael (Salisbury)

Pattie, Geoffrey

Awdry, Daniel

Hampson, Dr Keith

Penhaligon, David

Bain, Mrs Margaret

Hannam, John

Percival, Ian

Baker, Kenneth

Harrison, Col Sir Harwood (Eye)

Pink, R. Bonner

Banks, Robert

Harvie Anderson, Rt Hon Miss

Price, David (Eastleigh)

Beith, A. J.

Havers, Sir Michael

Prior, Rt Hon James

Bell, Ronald

Hawkins, Paul

Pym, Rt Hon Francis

Benyon, W.

Hayhoe, Barney

Raison, Timothy

Berry, Hon Anthony

Henderson, Douglas

Rathbone, Tim

Biffen, John

Heseltine, Michael

Rees, Peter (Dover & Deal)

Biggs-Davison, John

Hicks, Robert

Renton, Rt Hon Sir D. (Hunts)

Blaker, Peter

Holland, Philip

Ronton, Tim (Mid-Sussex)

Boscawen, Hon Robert

Hordern, Peter

Rhys Williams, Sir Brandon

Bottomley, Peter

Howe, Rt Hon Sir Geoffrey

Ridley, Hon Nicholas

Bowden, A. (Brighton, Kemptown)

Howell, David (Guildford)

Ridsdale, Julian

Boyson, Dr Rhodes (Brent)

Hunt, John

Rifkind, Malcolm

Brittan, Leon

Hurd, Douglas

Roberts, Michael (Cardiff NW)

Brotherton, Michael

Hutchison, Michael Clark

Roberts, Wyn (Conway)

Brown, Sir Edward (Bath)

Irvine, Bryant Godman (Rye)

Rodgers, Sir John (Sevenoaks)

Bryan, Sir Paul

Irving, Charles (Cheltenham)

Ross, Stephen (Isle of Wight)

Buchanan-Smith, Alick

James, David

Rossi, Hugh (Hornsey)

Buck, Antony

Jenkin, Rt Hon P. (Wanst'd & W'df'd)

Rost, Peter (SE Derbyshire)

Bulmer, Esmond

Johnson Smith, G. (E Grinstead)

Sainsbury, Tim

Carlisle, Mark

Johnston, Russell (Inverness)

St. John-Stevas, Norman

Carr, Rt Hon Robert

Jones, Arthur (Daventry)

Scott, Nicholas

Channon, Paul

Jopling, Michael

Shaw, Giles (Pudsey)

Churchill, W. S.

Kaberry, Sir Donald

Shaw, Michael (Scarborough)

Clark, Alan (Plymouth, Sutton)

Kellett-Bowman, Mrs Elaine

Shelton, William (Streatham)

Cockcroft, John

Kershaw, Anthony

Shepherd, Colin

Cooke, Robert (Bristol W)

Kilfedder, James

Silvester, Fred

Cope, John

King, Evelyn (South Dorset)

Sims, Roger

Cordle, John H.

King, Tom (Bridgwater)

Skeet, T. H. H.

Cormack, Patrick

Kirk, Peter

Smith, Cyril (Rochdale)

Corrle, John

Knight, Mrs Jill

Smith, Dudley (Warwick)

Crawford, Douglas

Knox, David

Speed, Keith

Crouch, David

Lamont, Norman

Spence, John

Crowder, F. P.

Langford-Holt, Sir John

Spicer, Jim (W Dorset)

Davies, Rt Hon J. (Knutsford)

Latham, Michael (Melton)

Spicer, Michael (S Worcester)

Dean, Paul (N Somerset)

Lawrence, Ivan

Sproat, Iain

Douglas-Hamilton, Lord James

Lawson, Nigel

Stainton, Keith

Drayson, Burnaby

Lester, Jim (Beeston)

Stanbrook, Ivor

Durant, Tony

Lewis, Kenneth (Rutland)

Stanley, John

Dykes, Hugh

Lloyd, Ian

Steel, David (Roxburgh)

Eden, Rt Hon Sir John

Loveridge, John

Steen, Anthony (Wavertree)

Edwards, Nicholas (Pembroke)

McAdden, Sir Stephen

Stewart, Donald (Western Isles)

Emery, Peter

MacCormick, Iain

Stewart, Ian (Hitchin)

Ewing, Mrs Winifred (Moray)

McCrindle, Robert

Stokes, John

Eyre, Reginald

Macfarlane, Neil

Stradling Thomas, J.

Fairbairn, Nicholas

MacGregor, John

Taylor, R. (Croydon NW)

Fairgrieve, Russell

Macmillan, Rt Hon M. (Farnham)

Taylor, Teddy (Cathcart)

Farr, John

Madel, David

Tebbit, Norman

Fell, Anthony

Marshall, Michael (Arundel)

Temple-Morris, Peter

Finsberg, Geoffrey

Marten, Neil

Thomas, Rt Hon P. (Hendon S)

Fisher, Sir Nigel

Mates, Michael

Thorpe, Rt Hon Jeremy (N Devon)

Fletcher, Alex (Edinburgh N)

Mather, Carol

Townsend, Cyril D.

Fletcher-Cooke, Charles

Maude, Angus

Tugendhat, Christopher

Fookes, Miss Janet

Mawby, Ray

van Straubenzee, W. R.

Fowler, Norman (Sutton C'f'd)

Maxwell-Hyslop, Robin

Vaughan, Dr Gerard

Fox, Marcus

Mayhew, Patrick

Viggers, Peter

Freud, Clement

Meyer, Sir Anthony

Wainwright, Richard (Colne V)

Fry, Peter

Miller, Hal (Bromsgrove)

Wakeham, John

Galbraith, Hon. T. G. D.

Mills, Peter

Walker-Smith, Rt Hon Sir Derek

Gardiner, George (Reigate)

Mitchell, David (Basingstoke)

Wall, Patrick

Gardner, Edward (S Fylde)

Moate, Roger

Warren, Kenneth

Gilmour, Rt Hon Ian (Chesham)

Monro, Hector

Watt, Hamish

Gilmour, Sir John (East Fife)

Moore, John (Croydon C)

Weatherill, Bernard

Glyn, Dr Alan

More, Jasper (Ludlow)

Wells, John

Godber, Rt Hon Joseph

Morgan, Geraint

Whitelaw, Rt Hon William

Goodhart, Philip

Morgan-Giles, Rear-Admiral

Wiggin, Jerry

Goodlad, Alastair

Morris, Michael (Northampton S)

Winterton, Nicholas

Gorst, John

Morrison, Charles (Devizes)

Wood, Rt Hon Richard

Gow, Ian (Eastbourne)

Morrison, Hon Peter (Chester)

Young, Sir G. (Ealing, Acton)

Gower, Sir Raymond (Barry)

Mudd, David

Younger, Hon George

Grant, Anthony (Harrow C)

Nelson, Anthony

Gray, Hamish

Neubert, Michael

TELLERS FOR THE AYES:

Grieve, Percy

Newton, Tony

Mr. Richard Luce and

Griffiths, Eldon

Normanton, Tom

Mr. Adam Butler.

1986

1987

NOES

Allaun, Frank

Fitch, Alan (Wigan)

Marks, Kenneth

Anderson, Donald

Fitt, Gerard (Belfast W)

Marquand, David

Archer, Peter

Flannery, Martin

Marshall, Dr Edmund (Goole)

Armstrong, Ernest

Fletcher, Ted (Darlington)

Mason, Rt Hon Roy

Ashley, Jack

Foot, Rt Hon Michael

Maynard, Miss Joan

Ashton, Joe

Ford, Ben

Mellish, Rt Hon Robert

Atkins, Ronald (Preston N)

Forrester, John

Mendelson, John

Atkinson, Norman

Fowler, Gerald (The Wrekin)

Mikardo, Ian

Bagier. Gordon A. T.

Fraser, John (Lambeth, N'w'd)

Millan, Bruce

Barnett, Guy (Greenwich)

Freeson, Reginald

Miller, Dr M. S. (E Kilbride)

Barnett, Rt Hon Joel (Heywood)

Garrett, John (Norwich S)

Mitchell, R. C. (Soton, Itchen)

Bean, R. E.

Garrett, W. E. (Wallsend)

Molloy, William

Benn, Rt Hon Anthony Wedgwood

George, Bruce

Molyneaux, James

Bennett, Andrew (Stockport N)

Gilbert, Dr John

Moonman, Eric

Bidwell, Sydney

Ginsburg, David

Morris, Alfred (Wythenshawe)

Bishop, E. S.

Gould, Bryan

Morris, Charles R. (Openshaw)

Blenkinsop, Arthur

Gourlay, Harry

Morris, Rt Hon J. (Aberavon)

Booth, Albert

Graham, Ted

Mulley, Rt Hon Frederick

Bottomley, Rt Hon Arthur

Grant, George (Morpeth)

Murray, Rt Hon Ronald King

Boyden, James (Bish Auck)

Grant, John (Islington C)

Newens, Stanley

Bradford, Rev Robert

Grocott, Bruce

Noble, Mike

Bradley, Tom

Hamilton, James (Bothwell)

Oakes, Gordon

Broughton, Sir Alfred

Hamilton, W. W. (Central Fife)

Ogden, Eric

Brown, Hugh D. (Provan)

Hardy, Peter

Orbach, Maurice

Brown, Robert C. (Newcastle W)

Harper, Joseph

Ovenden, John

Brown, Ronald (Hackney S)

Harrison, Walter (Wakefield)

Owen, Dr David

Buchan, Norman

Hart, Rt Hon Judith

Padley, Walter

Buchanan, Richard

Hattersley, Rt Hon Roy

Palmer, Arthur

Butler, Mrs Joyce (Wood Green)

Hatton, Frank

Park, George

Callaghan, Jim (Middleton & P)

Heffer, Eric S.

Parker, John

Campbell, Ian

Hooley, Frank

Parry, Robert

Canavan, Dennis

Horam, John

Pavitt, Laurie

Cant, R. B.

Howell, Dennis (B'ham, Sm H)

Peart, Rt Hon Fred

Carmichael, Neil

Hoyle, Doug (Nelson)

Pendry, Tom

Carter, Ray

Huckfield, Les

Phipps, Dr Colin

Cartwright, John

Hughes, Rt Hon C. (Anglesey)

Powell, Rt Hon J. Enoch

Clemitson, Ivor

Hughes, Mark (Durham)

Prescott, John

Cocks, Michael (Bristol S)

Hughes, Robert (Aberdeen N)

Price, C. (Lewisham W)

Cohen, Stanley

Hughes, Roy (Newport)

Price, William (Rugby)

Coleman, Donald

Hunter, Adam

Radice, Giles

Concannon, J. D.

Irvine, Rt Hon Sir A. (Edge Hill)

Richardson, Miss Jo

Conlan, Bernard

Irving, Rt Hon S. (Dartford)

Roberts, Albert (Normanton)

Cook, Robin F. (Edin C)

Jackson, Colin (Brighouse)

Roberts, Gwilym (Cannock)

Robertson, John (Paisley)

Corbett, Robin

Jackson, Miss Margaret (Lincoln)

Rodgers, George (Chorley)

Craigen, J. M. (Maryhill)

Janner, Greville

Rooker, J. W.

Crawshaw, Richard

Cronin, John

Jenkins, Hugh (Putney)

Roper, John

Crosland, Rt Hon Anthony

Jenkins, Rt Hon Roy (Stechford)

Rose, Paul B.

Cryer, Bob

John, Brynmor

Cunningham, G. (Islington S)

Johnson, James (Hull West)

Ross, Rt Hon W. (Kilmarnock)

Cunningham, Dr J. (Whiteh)

Johnson, Walter (Derby S)

Rowlands, Ted

Dalyell, Tam

Jones, Alec (Rhondda)

Sandelson, Neville

Davies, Bryan (Enfield N)

Jones, Barry (East Flint)

Sedgemore, Brian

Davies, Denzil (Llanelli)

Jones, Dan (Burnley)

Selby Harry

Davies, Ifor (Gower)

Kaufman, Gerald

Shaw Arnold (Ilford South)

Davis, Clinton (Hackney C)

Kerr, Russell

Sheldon, Robert (Ashton-u-Lyne)

Deakins, Eric

Kilroy-Silk, Robert

Shore, Rt Hon Peter

Dean, Joseph (Leeds West)

Kinnock, Neil

Short, Rt Hon E. (Newcastle C)

de Freitas Rt Hon Sir Geoffrey

Lambie, David

Short, Mrs Renée (Wolv NE)

Delargy, Hugh

Lamborn, Harry

Silkin, Rt Hon John (Deptford)

Dell, Rt Hon Edmund

Latham, Arthur (Paddington)

Silkin, Rt Hon S. C. (Dulwich)

Dempsey, James

Leadbitter, Ted

Sillars, James

Doig, Peter

Lestor, Miss Joan (Eton & Slough)

Silverman, Julius

Dormand, J. D.

Lever, Rt Hon Harold

Skinner, Dennis

Douglas-Mann, Bruce

Lewis, Arthur (Newham N)

Small, William

Duffy, A. E. P.

Lewis, Ron (Carlisle)

Smith, John (N Lanarkshire)

Dunlop, John

Lipton, Marcus

Snape, Peter

Dunn, James A.

Litterick, Tom

Spearing, Nigel

Dunnett, Jack

Loyden, Eddie

Spriggs, Leslie

Dunwoody, Mrs Gwyneth

Luard, Evan

Stallard, A. W.

Eadie, Alex

Lyons, Edward (Bradford W)

Stewart, Rt Hon M. (Fulham)

Edelman, Maurice

McCartney, Hugh

Stoddart, David

Edge, Geoff

McElhone, Frank

Strang, Gavin

Edwards, Robert (Wolv SE)

MacFarquhar, Roderick

Strauss, Rt Hon G. R.

Ellis, John (Brigg & Scun)

McGuire, Michael (Ince)

Summerskill, Hon Dr Shirley

English, Michael

Mackenzie, Gregor

Swain, Thomas

Ennals, David

Mackintosh, John P.

Taylor, Mrs Ann (Bolton W)

Evans, Fred (Caerphilly)

McMillan, Tom (Glasgow C)

Thomas, Jeffrey (Abertillery)

Evans, Ioan (Aberdare)

McNamara, Kevin

Thomas, Mike (Newcastle E)

Evans, John (Newton)

Madden, Max

Thomas, Ron (Bristol NW)

Ewing, Harry (Stirling)

Magee, Bryan

Thorne, Stan (Preston South)

Faulds, Andrew

Mahon, Simon

Tierney, Sydney

Fernyhough, Rt Hon E.

Mallalieu, J. P. W.

Tinn, James

1988

1989

Tomney, Frank

Weetch, Ken

Wilson, Alexander (Hamilton)

Torney, Tom

Weitzman, David

Wilson, William (Coventry SE)

Tuck, Raphael

Wellbeloved, James

Wise, Mrs Audrey

Urwin, T. W.

White, Frank R. (Bury)

Woodall, Alec

Wainwright, Edwin (Dearne V)

White, James (Pollok)

Woof, Robert

Walden, Brian (B'ham, L'dyw'd)

Whitehead, Phillip

Wrigglesworth, Ian

Walker, Harold (Doncaster)

Whitlock, William

Young, David (Bolton E)

Walker, Terry (Kingswood)

Willey, Rt Hon Frederick

Ward, Michael

Williams, Alan (Swansea W)

TELLERS FOR THE NOES:

Watkins, David

Williams, Alan Lee (Hornch'ch)

Miss Betty Boothroyd and

Watkinson, John

Williams, W. T. (Warrington)

Mr. Thomas Cox.

Division No. 313.]

AYES

[8.26 p.m.

Allaun, Frank

Heffer, Eric S.

Rodgers, George (Chorley)

Ashton, Joe

Hooley, Frank

Rooker, J. W.

Atkins, Ronald (Preston N)

Hoyle, Doug (Nelson)

Rose, Paul B.

Atkinson, Norman

Hughes, Robert (Aberdeen N)

Ross, Stephen (Isle of Wight)

Bean, R. E.

Hughes, Roy (Newport)

Ryman, John

Bennett, Andrew (Stockport N)

Johnston, Russell (Inverness)

Sedgemore, Brian

Bidwell, Sydney

Kilroy-Sllk, Robert

Selby, Harry

Buchan, Norman

Kinnock, Neil

Sillars, James

Callaghan, Jim (Middleton & P)

Lambie, David

Silverman, Julius

Canavan, Dennis

Latham, Arthur (Paddington)

Skinner, Dennis

Cartwright, John

Leadbitter, Ted

Smith, Cyril (Rochdale)

Clemitson, Ivor

Lewis, Arthur (Newham N)

Snape, Peter

Cook, Robin F. (Edin C)

Litterick, Tom

Spriggs, Leslie

Corbett, Robin

Loyden, Eddie

Steel, David (Roxburgh)

Cryer, Bob

McMillan, Tom (Glasgow C)

Swain, Thomas

Davies, Bryan (Enfield N)

McNamara, Kevin

Thomas, Dafydd (Merioneth)

Dean, Joseph (Leeds West)

Madden, Max

Thomas, Ron (Bristol NW)

Edge, Geoff

Maynard, Miss Joan

Thorne, Stan (Preston South)

Edwards, Robert (Wolv SE)

Mendelson, John

Tierney, Sydney

Evans, Fred (Caerphilly)

Miller, Dr M. S. (E Kilbride)

Torney, Tom

Evans, John (Newton)

Newens, Stanley

Watkins, David

Fernyhough, Rt Hon E.

Noble, Mike

Watkinson, John

Fitt, Gerard (Belfast W)

Ovenden, John

White, Frank R. (Bury)

Flannery, Martin

Parker, John

Wilson, Alexander (Hamilton)

Fletcher, Ted (Darlington)

Parry, Robert

Wilson, William (Coventry SE)

Garrett, John (Norwich S)

Penhaligon, David

Wise, Mrs Audrey

George, Bruce

Prescott, John

Young, David (Bolton E)

Grimond, Rt Hon J.

Price, C. (Lewisham W)

Grocott, Bruce

Richardson, Miss Jo

TELLERS FOR THE AYES:

Hamilton, James (Bothwell)

Roberts, Albert (Normanton)

Mr. John Lee and

Hart, Rt Hon Judith

Roberts, Gwilym (Cannock)

Mr. Ian Mikardo.

Hatton, Frank

Robertson, John (Paisley)

NOES

Adley, Robert

Brotherton, Michael

Crouch, David

Aitken, Jonathan

Broughton, Sir Alfred

Crowder, F. P.

Alison, Michael

Brown, Sir Edward (Bath)

Cunningham, G. (Islington S)

Amery, Rt Hon Julian

Brown, Hugh D. (Provan)

Cunningham, Dr J. (Whiteh)

Anderson, Donald

Brown, Robert C. (Newcastle W)

Dalyell, Tam

Archer, Peter

Bryan, Sir Paul

Davies, Denzil (Llanelli)

Armstrong, Ernest

Buchanan, Richard

Davies, Ifor (Gower)

Arnold, Tom

Buchanan Smith, Alick

Davies, Rt Hon J. (Knutsford)

Ashley, Jack

Buck, Antony

Davis, Clinton (Hackney C)

Atkins, Rt Hon H. (Spelthorne)

Budgen, Nick

Deakins, Eric

Awdry, Daniel

Bulmer, Esmond

de Freitas, Rt Hon Sir Geoffrey

Bagier, Gordon A. T.

Butler, Adam (Bosworth)

Delargy, Hugh

Baker, Kenneth

Butler, Mrs Joyce (Wood Green)

Dell, Rt Hon Edmund

Banks, Robert

Campbell, Ian

Dempsey, James

Barnett, Guy (Greenwich)

Cant, R. B.

Doig, Peter

Barnett, Rt Hon Joel (Heywood)

Carlisle, Mark

Dormand, J. D.

Beith, A. J.

Carmichael, Neil

Douglas-Hamilton, Lord James

Bell, Ronald

Carr, Rt Hon Robert

du Cann, Rt Hon Edward

Benn, Rt Hon Anthony Wedgwood

Carter, Ray

Duffy, A. E. P.

Benyon, W.

Clarke, Kenneth (Rushcliffe)

Dunnett, Jack

Berry, Hon Anthony

Cockcroft, John

Dykes, Hugh

Biffen, John

Cocks, Michael (Bristol S)

Eadie, Alex

Bishop, E. S.

Cohen, Stanley

Eden, Rt Hon Sir John

Blaker, Peter

Coleman, Donald

Edwards, Nicholas (Pembroke)

Blenkinsop, Arthur

Concannon, J. D.

Ellis, John (Brigg & Scun)

Booth, Albert

Conlan, Bernard

Emery, Peter

Boothroyd, Miss Betty

Cooke, Robert (Bristol W)

English, Michael

Boscawen, Hon Robert

Cope, John

Evans, Ioan (Aberdare)

Bottomley, Rt Hon Arthur

Cordle, John H.

Ewing, Harry (Stirling)

Bottomley, Peter

Cox, Thomas (Tooting)

Eyre, Reginald

Boyden, James (Bish Auck)

Craigen, J. M. (Maryhill)

Fairbairn, Nicholas

Boyson, Dr Rhodes (Brent)

Crawshaw, Richard

Farr, John

Bradley, Tom

Cronin, John

Faulds, Andrew

Brittan, Leon

Crosland, Rt Hon Anthony

Finsberg, Geoffrey

1990

1991

Fisher, Sir Nigel

Lewis, Kenneth (Rutland)

Roberts, Michael (Cardiff NW)

Fitch, Alan (Wigan)

Lewis, Ron (Carlisle)

Roberts, Wyn (Conway)

Fletcher-Cooke, Charles

Lipton, Marcus

Rodgers, Sir John (Sevenoaks)

Fookes, Miss Janet

Lloyd, Ian

Roper, John

Foot, Rt Hon Michael

Loveridge, John

Ross, Rt Hon W. (Kilmarnock)

Ford, Ben

Luard, Evan

Rossi, Hugh (Hornsey)

Forrester, John

Luce, Richard

Rost, Peter (SE Derbyshire)

Fowler, Norman (Sutton C'f'd)

Lyons, Edward (Bradford W)

Rowlands, Ted

Freeson, Reginald

McAdden, Sir Stephen

Sainsbury, Tim

Freud, Clement

McCartney, Hugh

Shaw, Arnold (Ilford South)

Fry, Peter

McCrindle, Robert

Shaw, Giles (Pudsey)

Gardiner, George (Reigate)

McElhone, Frank

Shaw, Michael (Scarborough)

Gardner, Edward (S Fylde)

Macfalane, Neil

Sheldon, Robert (Ashton-u-Lyne)

Gilbert, Dr John

MacFarquhar, Roderick

Shelton, William (Streatham)

Gilmour Rt Hon Ian (Chesham)

MacGregor, John

Shepherd, Colin

Ginsburg, David

McGuire, Michael (Ince)

Shore, Rt Hon Peter

Glyn, Dr Alan

Mackenzie, Gregor

Silkin, Rt Hon John (Deptford)

Godber, Rt Hon Joseph

Mackintosh, John P.

Silkin, Rt Hon S. C. (Dulwich)

Gould, Bryan

Macmillan, Rt Hon M. (Farnham)

Silvester, Fred

Gourlay, Harry

Madel, David

Sims, Roger

Gow, Ian (Eastbourne)

Magee, Bryan

Skeet, T. H. H.

Gower, Sir Raymond (Barry)

Mahon, Simon

Small, William

Graham, Ted

Mallalieu, J. P. W.

Smith, John (N Lanarkshire)

Grant, Anthony (Harrow C)

Marks, Kenneth

Spearing, Nigel

Grant, George (Morpeth)

Marquand, David

Speed, Keith

Grant, John (Islington C)

Marshall, Dr Edmund (Goole)

Spicer, Jim (W Dorset)

Gray, Hamish

Marshall, Michael (Arundel)

Spicer, Michael (S Worcester)

Griffiths, Eldon

Marten, Nell

Sproat, Iain

Grylls, Michael

Mason, Rt Hon Roy

Stainton, Keith

Hall, Sir John

Mates, Michael

Stanbrook, Ivor

Hamilton, James (Bothwell)

Mather, Carol

Stanley, John

Hamilton, W. W. (Central Fife)

Mawby, Ray

Steen, Anthony (Wavertree)

Hannam, John

Maxwell-Hyslop, Robin

Stewart, Ian (Hitchin)

Hardy, Peter

Mayhew, Patrick

Stewart, Rt Hon M. (Fulham)

Harrison, Col Sir Harwood (Eye)

Mellish, Rt Hon Robert

Stoddart, David

Harrison, Walter (Wakefield)

Meyer, Sir Anthony

Stokes, John

Harvie Anderson, Rt Hon Miss

Mills, Peter

Stradling Thomas, J.

Hattersley, Rt Hon Roy

Mitchell, David (Basingstoke)

Strang, Gavin

Hawkins, Paul

Monro, Hector

Taylor, Mrs Ann (Bolton W)

Hayhoe, Barney

Moonman, Eric

Taylor, R. (Croydon NW)

Holland, Philip

Moore, John (Croydon C)

Taylor, Teddy (Cathcart)

Horam, John

Morgan, Geraint

Tebbit, Norman

Hordern, Peter

Morgan-Giles, Rear-Admiral

Temple-Morris, Peter

Howell, Dennis (B'ham, Sm H)

Morris, Charles R. (Openshaw)

Thomas, Jeffrey (Abertillery)

Huckfield, Les

Morris, Rt Hon J. (Aberavon)

Thomas, Mike (Newcastle E)

Hughes, Rt Hon C. (Anglesey)

Morris, Michael (Northampton S)

Tinn, James

Hughes, Mark (Durham)

Morrison, Charles (Devizes)

Tomlinson, John

Hunt, John

Morrison, Hon Peter (Chester)

Tomney, Frank

Hunter, Adam

Mudd, David

Townsend, Cyril D.

Hurd, Douglas

Murray, Rt Hon Ronald King

Tuck, Raphael

Hutchison, Michael Clerk

Neubert, Michael

Tugendhat, Christopher

Irvine, Rt Hon Sir A. (Edge Hill)

Newton, Tony

Vlggers, Peter

Irving, Charles (Cheltenham)

Normanton, Tom

Wainwright, Edwin (Dearne V)

Irving, Rt Hon S. (Dartford)

Oakes, Gordon

Wainwright, Richard (Colne V)

Jackson, Colin (Brighouse)

Ogden, Eric

Wakeham, John

Jackson, Miss Margaret (Lincoln)

O'Halloran, Michael

Walden, Brian (B'ham, L'dyw'd)

James, David

Oppenheim, Mrs Sally

Walker, Harold (Doncaster)

Janner, Greville

Osborn, John

Walker, Terry (Kingswood)

Jenkin, Rt Hon P. (Wanst'd & W'df'd)

Page, John (Harrow West)

Walker-smith, Rt Hon Sir Derek

Jenkins, Hugh (Putney)

Page, Rt Hon R. Graham (Crosby)

Warren, Kenneth

John, Brynmor

Palmer, Arthur

Weetch, Ken

Johnson, James (Hull West)

Park, George

Weitzman, David

Johnson, Walter (Derby S)

Pattie, Geoffrey

White, James (Pollock)

Johnson Smith, G. (E Grinstead)

Pavitt, Laurie

Whitlock, William

Jones, Arthur (Daventry)

Pendry, Tom

Wiggin, Jerry

Jones, Barry (East Flint)

Percival, Ian

Williams, Alan (Swansea W)

Jones, Dan (Burnley)

Price, William (Rugby)

Williams, Alan Lee (Hornch'ch)

Jopling, Michael

Prior, Rt Hon James

Williams, W. T. (Warrington)

Kaufman, Gerald

Pym, Rt Hon Francis

Winterton, Nicholas

Kellett-Bowman, Mrs Elaine

Radice, Giles

Woodall, Alec

Kilfedder, James

Ralson, Timothy

Woof, Robert

Kirk, Peter

Rathbone, Tim

Wrigglesworth, Ian

Knight, Mrs Jill

Rawlinson, Rt Hon Sir Peter

Young, Sir G. (Ealing, Acton)

Knox, David

Rees, Peter (Dover & Deal)

Younger, Hon George

Lawrence, Ivan

Renton, Rt Hon Sir D. (Hunts)

Lawson, Nigel

Ridley, Hon Nicholas

TELLERS FOR THE NOES

Lester, Jim (Beeston)

Rifkind, Malcolm

Mr. Joseph Harper and

Lest or, Miss Joan (Eton & Slough)

Rippon, Rt Hon Geoffrey

Mr. James A. Dunn.

Division No. 314.]

AYES

[9.28 p.m.

Adley, Robert

Hamilton, Michael (Salisbury)

Page, Rt Hon R. Graham (Crosby)

Aitken, Jonathan

Hannam, John

Pattie, Geoffrey

Alison, Michael

Harrison, Col Sir Harwood (Eye)

Penhaligon, David

Amery, Rt Hon Julian

Harvie Anderson, Rt Hon Miss

Percival, Ian

Arnold, Tom

Havers, Sir Michael

Pink, R. Bonner

Awdry, Daniel

Hawkins, Paul

Powell, Rt Hon J. Enoch

Baker, Kenneth

Hayhoe, Barney

Price, David (Eastleigh)

Banks, Robert

Hicks, Robert

Prior, Rt Hon James

Beith, A. J.

Holland, Philip

Pym, Rt Hon Francis

Bell, Ronald

Hordern, Peter

Raison, Timothy

Benyon, W.

Howell, David (Guildford)

Ralhbone, Tim

Berry, Hon Anthony

Howell, Ralph (North Norfolk)

Rawlinson, Rt Hon Sir Peter

Biffen, John

Hunt, John

Rees, Peter (Dover & Deal)

Blaker, Peter

Hurd, Douglas

Rees-Davies, W. R.

Boscawen, Hon Robert

Hutchison, Michael Clark

Renton, Rt Hon Sir D. (Hunts)

Bottomley, Peter

Irvine, Bryant Godman (Rye)

Rhys Williams, Sir Brandon

Bowden, A. (Brighton, Kemptown)

Irving, Charles (Cheltenham)

Ridley, Hon Nicholas

Boyson, Dr Rhodes (Brent)

James, David

Rldsdale, Julian

Bradford, Rev Robert

Jenkln, Rt Hon P. (Wanst'd & W'df'd)

Rifkind, Malcolm

Brittan, Leon

Johnson Smith, G. (E Grinstead)

Rippon, Rt Hon Geoffrey

Brotherton, Michael

Johnston, Russell (Inverness)

Roberts, Michael (Cardiff NW)

Brown, Sir Edward (Bath)

Jones, Arthur (Daventry)

Roberts, Wyn (Conway)

Bryan, Sir Paul

Jopling, Michael

Rodgers, Sir John (Sevenoaks)

Buchanan-Smith, Alick

Kaberry, Sir Donald

Ross, Stephen (Isle of Wight)

Buck, Antony

Kellett-Bowman, Mrs Elaine

Rossi, Hugh (Hornsey)

Budgen, Nick

Kershaw, Anthony

Rost, Peter (SE Derbyshire)

Bulmer, Esmond

Killfedder, James

Sainsbury, Tim

Butler, Adam (Bosworth)

King, Evelyn (South Dorset)

Scott, Nicholas

Carlisle, Mark

King, Tom (Bridgwater)

Shaw, Giles (Pudsey)

Carr, Rt Hon Robert

Kirk, Peter

Shaw, Michael (Scarborough)

Channon, Paul

Knight, Mrs Jill

Shelton, William (Streatham)

Churchill, W. S.

Knox, David

Shepherd, Colin

Clark, Alan (Plymouth, Sutton)

Latham, Michael (Melton)

Sims, Roger

Clarke, Kenneth (Rushcliffe)

Lawrence, Ivan

Skeet, T. H. H.

Cockcroft, John

Lawson, Nigel

Smith, Cyril (Rochdale)

Cooke, Robert (Bristol W)

Lester, Jim (Beeston)

Speed, Keith

Cope, John

Lewis, Kenneth (Rutland)

Spence, John

Cordle, John H.

Lloyd, Ian

Spicer, Jim (W Dorset)

Corrie, John

Loveridge, John

Spicer, Michael (S Worcester)

Crouch, David

McAdden, Sir Stephen

Sproat, Iain

Crowder, F. P.

McCrindle, Robert

Stainton, Keith

Davies, Rt Hon J. (Knutsford)

McCusker, H.

Stanbrook, Ivor

Douglas-Hamilton, Lord James

Macfarlane, Neil

Stanley, John

Drayson, Burnaby

MacGregor, John

Steel, David (Roxburgh)

du Cann, Rt Hon Edward

Macmillan, Rt Hon M. (Farnham)

Steen, Anthony (Wavertree)

Dunlop, John

Madel, David

Stewart, Ian (Hitchin)

Dykes, Hugh

Marshall, Michael (Arundel)

Stokes, John

Eden, Rt Hon Sir John

Marten, Neil

Stradling Thomas, J.

Edwards, Nicholas (Pembroke)

Mates, Michael

Tapsell, Peter

Emery, Peter

Mather, Carol

Taylor, R, (Croydon NW)

Eyre, Reginald

Maude, Angus

Taylor, Teddy (Cathcart)

Farrbairn, Nicholas

Mawby, Ray

Tebbit, Norman

Farr, John

Maxwell-Hysiop, Robin

Temple-Morris, Peter

Finsberg, Geoffrey

Mayhew, Patrick

Thomas, Rt Hon P. (Hendon S)

Fisher, Sir Nigel

Meyer, Sir Anthony

Thorpe, Rt Hon Jeremy (N Devon)

Fletcher-Cooke, Charles

Miller, Hal (Bromsgrove)

Townsend, Cyril D.

Fookes, Miss Janet

Mills, Peter

Tugendhat, Christopher

Fowler, Norman (Sutton C'f'd)

Mitchell, David (Basingstoke)

van Straubenzee, W. R.

Fry, Peter

Moate, Roger

Vaughan, Dr Gerard

Gardiner, George (Reigate)

Molyneaux, James

Viggers, Peter

Gardner, Edward (S Fylde)

Monro, Hector

Wainwright, Richard (Colne V)

Gilmour, Rt Hon Ian (Chesham)

Moore, John (Croydon C)

Wakeham, John

Gilmour, Sir John (East Fife)

More, Jasper (Ludlow)

Walker-Smith, Rt Hon Sir Derek

Godber, Rt Hon Joseph

Morgan, Geraint

Wall, Patrick

Goodlad, Alastair

Morgan-Giles, Rear-Admiral

Warren, Kenneth

Gorst, John

Morris, Michael (Northampton S)

Wells, John

Gow, Ian (Eastbourne)

Morrison, Charles (Devizes)

Whitelaw, Rt Hon William

Gower, Sir Raymond (Barry)

Morrison, Hon Peter (Chester)

Wiggin, Jerry

Gray, Hamish

Mudd, David

Winterton, Nicholas

Grieve, Percy

Nelson, Anthony

Wood, Rt Hon Richard

Griffiths, Eldon

Neubert, Michael

Young, Sir G. (Ealing, Acton)

Grimond, Rt Hon J.

Newton, Tony

Younger, Hon George

Grist, Ian

Normanton, Tom

Grylls, Michael

Nott, John

TELLERS FOR THE AYES:

Hall, Sir John

Osborn, John

Mr. Fred Silvester and

Hall-Davis, A. G. F.

Page, John (Harrow West)

Mr. Richard Luce.

1994

1995

NOES

Allaun, Frank

Fletcher, Raymond (Ilkeston)

Millan, Bruce

Anderson, Donald

Fletcher, Ted (Darlington)

Miller, Dr M. S. (E Kilbride)

Archer, Peter

Foot, Rt Hon Michael

Mitchell, R. C. (Soton, Itchen)

Armstrong, Ernest

Ford, Ben

Molloy, William

Ashley, Jack

Forrester, John

Moonman, Eric

Ashton, Joe

Fowler, Gerald (The Wrekin)

Morris, Alfred (Wythenshawe)

Atkins, Ronald (Preston N)

Fraser, John (Lambeth, N'w'd)

Morris, Charles R. (Openshaw)

Atkinson, Norman

Freeson, Reginald

Morris, Rt Hon J. (Aberavon)

Bagier, Gordon A. T.

Freud, Clement

Murray, Rt Hon Ronald King

Bain, Mrs Margaret

Garrett, John (Norwich S)

Newens, Stanley

Barnett, Guy (Greenwich)

George, Bruce

Noble, Mike

Barnett, Rt Hon Joel (Heywood)

Gilbert, Dr John

Oakes, Gordon

Bean, R. E.

Ginsburg, David

Ogden, Eric

Benn, Rt Hon Anthony Wedgwood

Gould, Bryan

O'Halloran, Michael

Bennett, Andrew (Stockport N)

Gourlay, Harry

Ovenden, John

Bidwell, Sydney

Graham, Ted

Padley, Walter

Bishop, E. S.

Grant, George (Morpeth)

Palmer, Arthur

Blenkinsop, Arthur

Grant, John (Islington C)

Park, George

Booth, Albert

Grocott, Bruce

Parker, John

Boothroyd, Miss Betty

Hamilton, W. W. (Central Fife)

Parry, Robert

Bottomley, Rt Hon Arthur

Hardy, Peter

Pavitt, Laurie

Boyden, James (Bish Auck)

Harper, Joseph

Pendry, Tom

Bradley, Tom

Harrison, Walter (Wakefield)

Prescott, John

Broughton, Sir Alfred

Hart, Rt Hon Judith

Price, C. (Lewisham W)

Brown, Hugh D. (Provan)

Hattersley Rt Hon Roy

Price, William (Rugby)

Brown, Robert C. (Newcastle W)

Hatton, Frank

Radice, Giles

Brown, Ronald (Hackney S)

Handerson, Douglas

Richardson, Miss Jo

Buchan, Norman

Hooley, Frank

Roberts, Albert (Normanton)

Buchanan, Richard

Horam, John

Roberts, Gwilym (Cannock)

Butler, Mrs Joyce (Wood Green)

Howell, Dennis (B'ham, Sm H)

Roderick, Caerwyn

Callaghan, Jim (Middleton & P)

Hoyle, Doug (Nelson)

Rodgers, George (Chorley)

Campbell, Ian

Huckfield, Les

Rooker, J. W.

Canavan, Dennis

Hughes, Rt Hon C. (Anglesey)

Roper, John

Cant, R. B.

Carmichael, Neil

Hughes, Mark (Durham)

Rose, Paul B.

Carter, Ray

Hughes, Robert (Aberdeen N)

Ross, Rt Hon W. (Kilmarnock)

Cartwright, John

Hughes, Roy (Newport)

Rowlands, Ted

Castle, Rt Hon Barbara

Hunter, Adam

Ryman, John

Clemitson, Ivor

Irvine, Rt Hon Sir A. (Edge Hill)

Sedgemore, Brian

Cocks, Michael (Bristol S)

Irving, Rt Hon S. (Dartford)

Selby, Harry

Cohen, Stanley

Jackson, Colin (Brighouse)

Shaw, Arnold (Ilford South)

Coleman, Donald

Jackson, Miss Margaret (Lincoln)

Sheldon, Robert (Ashton-u-Lyn

Concannon, J. D.

Janner, Greville

Silkin, Rt Hon John (Deptford)

Conlan, Bernard

Jenkins, Hugh (Putney)

Silkin, Rt Hon S. C. (Dulwich)

Cook, Robin F. (Edin C)

John, Brynmor

Sillars, James

Corbett, Robin

Johnson, James (Hull West)

Silverman, Julius

Cox, Thomas (Tooting)

Johnson, Walter (Derby S)

Skinner, Dennis

Craigen, J. M. (Maryhill)

Jones, Barry (East Flint)

Small, William

Crawshaw, Richard

Jones, Dan (Burnley)

Smith, John (N Lanarkshire)

Cronin, John

Kaufman, Gerald

Snape, Peter

Crosland, Rt Hon Anthony

Kerr, Russell

Spearing, Nigel

Cryer, Bob

Kilroy-Silk, Robert

Spriggs, Leslie

Cunningham, G. (Islington S)

Kinnock, Neil

Stallard, A. W.

Cunningham, Dr J. (Whiteh)

Lambie, David

Stewart, Rt Hon M. (Fulham)

Dalyell, Tam

Latham, Arthur (Paddington)

Stoddart, David

Davies, Bryan (Enfield N)

Leadbitter, Ted

Strang, Gavin

Davies, Denzil (Llanelli)

Lee, John

Swain, Thomas

Davies, Ifor (Gower)

Lewis, Arthur (Newham N)

Taylor, Mrs Ann (Bolton W)

Davis, Clinton (Hackney C)

Lewis, Ron (Carlisle)

Thomas, Dafydd (Merioneth)

Deakins, Eric

Lipton, Marcus

Thomas, Jeffrey (Abertillery)

Dean, Joseph (Leeds West)

Litterick, Tom

Thomas, Mike (Newcastle E)

de Freitas. Rt Hon Sir Geoffrey

Loyden, Eddie

Thomas, Ron (Bristol NW)

Delargy, Hugh

Luard, Evan

Thome, Stan (Preston South)

Dell, Rt Hon Edmund

Lyons, Edward (Bradford W)

Tierney, Sydney

Doig, Peter

McCartney, Hugh

Tinn, James

Dormand, J. D.

McElhone, Frank

Tomlinson, John

Douglas-Mann, Bruce

MacFarquhar, Roderick

Tomney, Frank

Duffy, A. E. P.

McGuire, Michael (Ince)

Torney, Tom

Dunnett, Jack

Mackenzie, Gregor

Tuck, Raphael

Eadie, Alex

Mackintosh, John P.

Urwin, T. W.

Edge, Geoff

McMillan, Tom (Glasgow C)

Wainwright, Edwin (Dearne V)

Edwards, Robert (Wolv SE)

McNamara, Kevin

Walden, Brian (B'ham, L'dyw'd)

Ellis, John (Brigg & Scun)

Madden, Max

Walker, Harold (Doncaster)

English, Michael

Magee, Bryan

Walker, Terry (Kingswood)

Evans, Fred (Caerphilly)

Mallalieu, J. P. W

Watkins, David

Evans, Ioan (Aberdare)

Marks, Kenneth

Watkinson, John

Evans, John (Newton)

Marquand, David

Watt, Hamish

Ewing, Harry (Stirling)

Marshall, Dr Edmund (Goole)

Weetch, Ken

Faulds, Andrew

Mason, Rt Hon Roy

Weitzman, David

Fernyhough, Rt Hon E.

Maynard, Miss Joan

Wellbeloved, James

Fitch, Alan (Wigan)

Mellish, Rt Hon Robert

Welsh, Andrew

Fitt, Gerard (Belfast W)

Mendelson, John

White, Frank R. (Bury)

Flannery, Martin

Mikardo, Ian

White, James (Pollok)

1996

1997

Whitehead, Phillip

Wilson, Alexander (Hamilton)

Wrigglesworth, Ian

Whitlock, William

Wilson, Gordon (Dundee E)

Young, David (Bolton E)

Willey, Rt Hon Frederick

Wilson, William (Coventry SE)

Williams, Alan (Swansea W)

Wise, Mrs Audrey

TELLERS FOR THE NOES:

Williams, Alan Lee (Hornch'ch)

Woodall, Alec

Mr, James Hamilton and

Williams, W. T. (Warrington)

Woof, Robert

Mr. James A. Dunn.

Division No. 315.]

AYES

[10.0 p.m.

Allaun, Frank

Fitt, Gerard (Belfast W)

Mason, Rt Hon Roy

Anderson, Donald

Flonnery, Martin

Mellish, Rt Hon Robert

Archer, Peter

Fletcher, Raymond (Ilkeston)

Mikardo, Ian

Armstrong, Ernest

Fletcher, Ted (Darlington)

Millan, Bruce

Ashley, Jack

Foot, Rt Hon Michael

Miller, Dr M. S. (E Kilbride)

Ashton, Joe

Ford, Ben

Mitchell, R. C. (Solon, Itchen)

Atkins, Ronald (Preston N)

Forrester, John

Molloy, William

Atkinson, Norman

Fowler, Gerald (The Wrekin)

Moonman, Eric

Bagier, Gordon A. T.

Fraser, John (Lambeth, N'w'd)

Morris, Alfred (Wythenshawe)

Barnett, Rt Hon Joel (Heywood)

Freeson, Reginald

Morris, Charles R. (Openshaw)

Bean, R. E.

Garrett, W. E. (Wallsend)

Morris, Rt Hon J. (Aberavon)

Benn, Rt Hon Anthony Wedgwood

George, Bruce

Murray, Rt Hon Ronald King

Bennett, Andrew (Stockport N)

Gilbert, Dr John

Newens, Stanley

Bidwell, Sydney

Ginsburg, David

Noble, Mike

Blenkinsop, Arthur

Gould, Bryan

Oakes, Gordon

Booth, Albert

Gourlay, Harry

Ogden, Eric

Boothroyd, Miss Betty

Graham, Ted

O'Halloran, Michael

Bottomley, Rt Hon Arthur

Grant, George (Morpeth)

Ovenden, John

Boyden, James (Bish Auck)

Grant, John (Islington C)

Palmer, Arthur

Bradley, Tom

Grocott, Bruce

Park, George

Brown, Hugh D. (Provan)

Hamilton, W. W. (Central Fife)

Parker, John

Brown, Robert C. (Newcastle W)

Hardy, Peter

Parry, Robert

Brown, Ronald (Hackney S)

Harper, Joseph

Pavitt, Laurie

Buchan, Norman

Harrison, Walter (Wakefield)

Pendry, Tom

Buchanan, Richard

Hart, Rt Hon Judith

Penhaligon, David

Butler, Mrs Joyce (Wood Green)

Hattersley, Rt Hon Roy

Prescott, John

Callaghan, Jim (Middleton & P)

Hatton, Frank

Price, C. (Lewisham W)

Campbell, Ian

Hooley, Frank

Price, William (Rugby)

Canavan, Dennis

Horam, John

Radice, Giles

Cant, R. B.

Hoyle, Doug (Nelson)

Richardson, Miss Jo

Carmichael, Neil

Huckfield, Les

Roberts, Albert (Normanton)

Carter, Ray

Hughes, Rt Hon C. (Anglesey)

Roberts, Gwilym (Cannock)

Cartwright, John

Hughes, Mark (Durham)

Roderick, Caerwyn

Clemitson, Ivor

Cocks, Michael (Bristol S)

Hughes, Robert (Aberdeen N)

Rodgers, George (Chorley)

Cohen, Stanley

Hughes, Roy (Newport)

Rooker, J. W.

Coleman, Donald

Hunter, Adam

Roper, John

Concannon, J. D.

Irvine, Rt Hon Sir A. (Edge Hill)

Rose, Paul B.

Conlan, Bernard

Irving, Rt Hon S. (Dartford)

Ross, Stephen (Isle of Wight)

Cook, Robin F. (Edin C)

Jackson, Colin (Brighouse)

Ross, Rt Hon W. (Kilmarnock)

Corbett, Robin

Janner, Greville

Rowlands, Ted

Cox, Thomas (Tooting)

Jenkins, Hugh (Putney)

Ryman, John

Craigen, J. M. (Maryhill)

Johnson, James (Hull West)

Sedgemore, Brian

Crawshaw, Richard

Johnson, Walter (Derby S)

Selby, Harry

Cronin, John

Johnston, Russell (Inverness)

Shaw, Arnold (Ilford South)

Crosland, Rt Hon Anthony

Jones, Alec (Rhondda)

Sheldon, Robert (Ashton-u-Lyne)

Cryer, Bob

Jones, Barry (East Flint)

Short, Rt Hon E. (Newcastle C)

Cunningham, G. (Islington S)

Jones, Dan (Burnley)

Silkin, Rt Hon John (Deptford)

Cunningham, Dr J. (Whiteh)

Kaufman, Gerald

Silkin, Rt Hon S. C. (Dulwich)

Dalyell, Tam

Kerr, Russell

Sillars, James

Davies, Bryan (Enfield N)

Kilroy-Silk, Robert

Silverman, Julius

Davies, Denzil (Llanelli)

Kinnock, Neil

Skinner, Dennis

Davies, Ifor (Gower)

Lambie, David

Small, William

Davis, Clinton (Hackney C)

Latham, Arthur (Paddington)

Smith, Cyril (Rochdale)

Deakins, Eric

Leadbitter, Ted

Smith, John (N Lanarkshire)

Dean, Joseph (Leeds West)

Lee, John

Snape, Peter

Delargy, Hugh

Lewis, Ron (Carlisle)

Spearing, Nigel

Dell, Rt Hon Edmund

Lipton, Marcus

Spriggs, Leslie

Doig, Peter

Litterick, Tom

Stallard, A. W.

Dormand, J. D.

Loyden, Eddie

Steel, David (Roxburgh)

Douglas-Mann, Bruce

Luard, Evan

Stewart, Rt Hon M. (Fulham)

Duffy, A. E. P.

Lyons, Edward (Bradford W)

Stoddart, David

Dunn, James A.

McCartney, Hugh

Strang, Gavin

Dunnett, Jack

McElhone, Frank

Swain, Thomas

Eadie, Alex

MacFarquhar, Roderick

Taylor, Mrs Ann (Bolton W)

Edge, Geoff

McGuire, Michael (Ince)

Thomas, Dafydd (Merioneth)

Edwards, Robert (Wolv SE)

Mackenzie, Gregor

Thomas, Jeffrey (Abertillery)

Ellis, John (Brigg & Scun)

Mackintosh, John P.

Thomas, Mike (Newcastle E)

English, Michael

McMillan, Tom (Glasgow C)

Thomas, Ron (Bristol NW)

Evans, Fred (Caerphilly)

McNamara, Kevin

Thorne, Stan (Preston South)

Evans, loan (Aberdare)

Madden, Max

Thorpe, Rt Hon Jeremy (N Devon)

Evans, John (Newton)

Magee, Bryan

Tierney, Sydney

Ewing, Harry (Stirling)

Mallalieu, J. P. W.

Tomlinson, John

Faulds, Andrew

Marks, Kenneth

Tomney, Frank

Fernyhough, Rt Hon E.

Marquand, David

Torney, Tom

Fitch, Alan (Wigan)

Marshall, Dr Edmund (Goole)

Tuck, Raphael

1998

1999

Urwin, T. W.

Wellbeloved, James

Wilson, William (Coventry SE)

Wainwright, Edwin (Dearne V)

Welsh, Andrew

Wise, Mrs Audrey

Wainwright, Richard (Colne V)

White, Frank R. (Bury)

Woodall, Alec

Walden, Brian (B'ham, L'dyw'd)

White, James (Pollok)

Wool, Robert

Walker, Harold (Doncaster)

Whitehead, Phillip

Wrigglesworth, Ian

Walker, Terry (Kingswood)

Whitlock, William

Young, David (Bolton E)

Ward, Michael

Willey, Rt Hon Frederick

Watklns, David

Williams, Alan (Swansea W)

TELLERS FOR THE AYES

Watkinson, John

Williams, Alan Lee (Hornch'ch)

Mr, James Hamilton and

Watt, Hamish

Williams, W. T. (Warrington)

Miss Margaret Jackson.

Weetch, Ken

Wilson, Alexander (Hamilton)

Weltzman, David

Wilson, Gordon (Dundee E)

NOES

Adley, Robert

Griffiths, Eldon

Morgan-Giles, Rear-Admiral

Aitken, Jonathan

Grlmond, Rt Hon J.

Morris, Michael (Northampton S)

Alison, Michael

Grist, Ian

Morrison, Charles (Devizes)

Arnold, Tom

Grylls, Michael

Morrison, Hon Peter (Chester)

Awdry, Daniel

Hall, Sir John

Mudd, David

Baker, Kenneth

Hampson, Dr Keith

Nelson, Anthony

Banks, Robert

Hannam, John

Neubert, Michael

Beith, A. J.

Harrison, Col Sir Harwood (Eye)

Newton, Tony

Bell, Ronald

Harvie Anderson, Rt Hon Miss

Normanton, Tom

Berry, Hon Anthony

Havers, Sir Michael

Nott, John

Biffen, John

Hawkins, Paul

Osborn, John

Biggs-Davison, John

Hayhoe, Barney

Page, John (Harrow West)

Blaker, Peter

Hicks, Robert

Pattie, Geoffrey

Boscawen, Hon Robert

Holland, Philip

Percival, Ian

Bottomley, Peter

Hordern, Peter

Pink, R. Bonner

Bowden, A, (Brighton, Kemptown)

Howell, David (Guildford)

Powell, Rt Hon J. Enoch

Boyson, Dr Rhodes (Brent)

Howell, Ralph (North Norfolk)

Price, David (Eastleigh)

Brittan, Leon

Hunt, John

Prior, Rt Hon James

Brotherton, Michael

Hurd, Douglas

Pym, Rt Hon Francis

Brown, Sir Edward (Bath)

Hutchison, Michael Clark

Raison, Timothy

Bryan, Sir Paul

Irvine, Bryant Godman (Rye)

Rathbone, Tim

Buchanan-Smith, Alick

Irving, Charles (Cheltenham)

Rawlinson, Rt Hon Sir Peter

Buck, Antony

James, David

Rees, Peter (Dover & Deal)

Budgen, Nick

Jenkin, Rt Hon P. (Wanst'd & W'df'd)

Rees-Davies, W. R.

Bulmer, Esmond

Johnson Smith, G. (E Grinstead)

Renton, Rt Hon Sir D. (Hunts)

Butler, Adam (Bosworth)

Jones, Arthur (Daventry)

Renton, Tim (Mid-Sussex)

Carlisle, Mark

Jopling, Michael

Rhys Williams, Sir Brandon

Carr, Rt Hon Robert

Kaberry, Sir Donald

Ridley, Hon Nicholas

Churchill, W. S.

Kellett-Bowman, Mrs Elaine

Ridsdale, Julian

Clark, Alan (Plymouth, Sutton)

Kershaw, Anthony

Rifkind, Malcolm

Clarke, Kenneth (Rushcliffe)

Kilfedder, James

Rippon, Rt Hon Geoffrey

Cockcroft, John

King, Evelyn (South Dorset)

Roberts, Michael (Cardiff NW)

Cooke, Robert (Bristol W)

King, Tom (Bridgwater)

Roberts, Wyn (Conway)

Cope, John

Kirk, Peter

Rodgers, Sir John (Sevenoaks)

Cordle, John H.

Knight, Mrs Jill

Rossi, Hugh (Hornsey)

Corrie, John

Knox, David

Rost, Peter (SE Derbyshire)

Crouch, David

Latham, Michael (Melton)

Sainsbury, Tim

Crowder, F. P.

Lawrence, Ivan

Shaw, Giles (Pudsey)

Douglas-Hamilton, Lord James

Lawson, Nigel

Shaw, Michael (Scarborough)

Drayson, Burnaby

Lester, Jim (Beeston)

Shelton, William (Streatham)

du Cann, Rt Hon Edward

Lewis, Kenneth (Rutland)

Shepherd, Colin

Dykes, Hugh

Lloyd, Ian

Silvester, Fred

Eden, Rt Hon Sir John

Loveridge, John

Sims, Roger

Edwards, Nicholas (Pembroke)

Luce, Richard

Skeet, T. H. H.

Eyre, Reginald

McAdden, Sir Stephen

Speed, Keith

Fairbairn, Nicholas

McCrindle, Robert

Spence, John

Farr, John

Macfarlane, Neil

Spicer, Jim (W Dorset)

Finsberg, Geoffrey

MacGregor, John

Spicer, Michael (S Worcester)

Fisher, Sir Nigel

Macmillan, Rt Hon M. (Farnham)

Sproat, Iain

Fletcher, Alex (Edinburgh N)

Madel, David

Stainton, Keith

Fletcher-Cooke, Charles

Marshall, Michael (Arundel)

Stanbrook, Ivor

Fookes, Miss Janet

Marten, Nell

Stanley, John

Fowler, Norman (Sutton C'f'd)

Mates, Michael

Steen, Anthony (Wavertree)

Fox, Marcus

Mather, Carol

Stewart, Ian (Hitchin)

Freud, Clement

Maude, Angus

Stokes, John

Fry, Peter

Mawby, Ray

Stradling Thomas, J.

Gardiner, George (Reigate)

Maxwell-Hyslop, Robin

Tapsell, Peter

Gardner, Edward (S Fylde)

Mayhew, Patrick

Taylor, R. (Croydon NW)

Gilmour, Rt Hon Ian (Chesham)

Meyer, Sir Anthony

Taylor, Teddy (Cathcart)

Gilmour, Sir John (East Fife)

Miller, Hal (Bromsgrove)

Tebbit, Norman

Godber, Rt Hon Joseph

Mills, Peter

Temple-Morris, Peter

Goodhart, Philip

Mitchell, David (Basingstoke)

Thomas, Rt Hon P. (Hendon S)

Townsend, Cyril D.

Gorst, John

Moate, Roger

Tugendhat, Christopher

Gow, Ian (Eastbourne)

Monro, Hector

van Straubenzee, W. R.

Gower, Sir Raymond (Barry)

Moore, John (Croydon C)

Vaughan, Dr Gerard

Gray, Hamish

More, Jasper (Ludlow)

Viggers, Peter

Grieve, Percy

Morgan, Geraint

Walker-Smith, Rt Hon Sir Derek

2000

2001

Wall, Patrick

Winterton, Nicholas

Warren, Kenneth

Wood, Rt Hon Richard

TELLERS FOR THE NOES:

Whitelaw, Rt Hon William

Young, Sir G. (Ealing, Acton)

Mr. W. Benyon and

Wiggin, Jerry

Younger, Hon George

Mr. Russell Fairgrieve

Division No. 316.]

AYES

[11.0 p.m.

Adley, Robert

Havers, Sir Michael

Pattie, Geoffrey

Aitken, Jonathan

Hayhoe, Barney

Penhaligon, David

Alison, Michael

Henderson, Douglas

Percival, Ian

Arnold, Tom

Hicks, Robert

Price, David (Eastleigh)

Awdry, Daniel

Holland, Philip

Prior, Rt Hon James

Bain, Mrs Margaret

Howell, David (Guildford)

Pym, Rt Hon Francis

Baker, Kenneth

Howell, Ralph (North Norfolk)

Ralson, Timothy

Beith, A. J.

Hunt, John

Rathbone, Tim

Bell, Ronald

Hurd, Douglas

Rawlinson, Rt Hon Sir Peter

Biffen, John

Hutchison, Michael Clark

Rees, Peter (Dover & Deal)

Biggs-Davison, John

Irvine, Bryant Godman (Rye)

Renton, Rt Hon Sir D. (Hunts)

Biaker, Peter

Irving, Charles (Cheltenham)

Renton, Tim (Mid-Sussex)

Boscawen, Hon Robert

James, David

Rhys Williams, Sir Brandon

Bottomley, Peter

Jenkin, Rt Hon P. (Wanst'd & W'df'd)

Ridley, Hon Nicholas

Bowden, A. (Brighton, Kemptown)

Johnson Smith, G. (E Grinstead)

Rippon, Rt Hon Geoffrey

Brittan, Leon

Jopling, Michael

Roberts, Michael (Cardiff NW)

Brotherton, Michael

Kaberry, Sir Donald

Roberts, Wyn (Conway)

Brown, Sir Edward (Bath)

Kellett-Bowman, Mrs Elaine

Rodgers, Sir John (Sevenoaks)

Bryan, Sir Paul

Kershaw, Anthony

Ross, Stephen (Isle of Wight)

Buchanan-Smith, Alick

Kilfedder, James

Rossi, Hugh (Hornsey)

Buck, Antony

King, Evelyn (South Dorset)

Rost, Peter (SE Derbyshire)

Budgen, Nick

King, Tom (Bridgwater)

Sainsbury, Tim

Bulmer, Esmond

Kirk, Peter

St. John-Stevas, Norman

Butler, Adam (Bosworth)

Knight, Mrs Jill

Shaw, Giles (Pudsey)

Carlisle, Mark

Knox, David

Shaw, Michael (Scarborough)

Carr, Rt Hon Robert

Latham, Michael (Melton)

Shelton, William (Streatham)

Clark, Alan (Plymouth, Sutton)

Lawrence, Ivan

Shepherd, Colin

Clarke, Kenneth (Rushcliffe)

Lawson, Nigel

Silvester, Fred

Cockcrott, John

Lester, Jim (Beeston)

Sims, Roger

Cope, John

Lloyd, Ian

Smith, Cyril (Rochdale)

Corrie, John

Loveridge, John

Spence, John

Douglas-Hamilton, Lord James

Luce, Richard

Spicer, Jim (W Dorset)

Drayson, Burnaby

McAdden, Sir Stephen

Spicer, Michael (S Worcester)

du Cann, Rt Hon Edward

MacCormick, Iain

Sproat, Iain

Dykes, Hugh

McCrindle, Robert

Stainton, Keith

Eden, Rt Hon Sir John

Macfarlane, Neil

Stanbrook, Ivor

Edwards, Nicholas (Pembroke)

MacGregor, John

Stanley, John

Ewing, Mrs Winifred (Moray)

Macmillan, Rt Hon M. (Farnham)

Steel, David (Roxburgh)

Eyre, Reginald

Fairbairn, Nicholas

Madel, David

Steen, Anthony (Wavertree)

Fairgrieve, Russell

Marshall, Michael (Arundel)

Stewart, Donald (Western Isles)

Farr, John

Marten, Neil

Stewart, Ian (Hitchin)

Farr, John

Mates, Michael

Stokes, John

Fisher, Sir Nigel

Mather, Carol

Stradling Thomas, J.

Fletcher, Alex (Edinburgh N)

Mawby, Ray

Tapsell, Peter

Fletcher-Cooke, Charles

Maxwell-Hyslop, Robin

Tebbit, Norman

Fowler, Norman (Sutton C'f'd)

Mayhew, Patrick

Thomas, Rt Hon P. (Hendon S)

Fox, Marcus

Meyer, Sir Anthony

Townsend, Cyril D.

Freud, Clement

Miller, Hal (Bromsgrove)

Tugendhat, Christopher

Gardiner, George (Reigate)

Mills, Peter

van Straubenzee, W. R.

Gardner, Edward (S Fylde)

Mitchell, David (Basingstoke)

Viggers, Peter

Gilmour, Rt Hon Ian (Chesham)

Moate, Roger

Walker-Smith, Rt Hon Sir Derek

Gilmour, Sir John (East Fife)

Monro, Hector

Wall, Patrick

Godber, Rt Hon Joseph

More, Jasper (Ludlow)

Warren, Kenneth

Goodhart, Philip

Morgan, Geraint

Weatherill, Bernard

Gorst, John

Morgan-Giles, Rear-Admiral

Wells, John

Gow, Ian (Eastbourne)

Morris, Michael (Northampton S)

Weish, Andrew

Gower, Sir Raymond (Barry)

Morrison, Charles (Devizes)

Wtiltelaw, Rt Hon William

Grimond, Rt Hon J.

Morrison, Hon Peter (Chester)

Wiggin, Jerry

Grist, Ian

Mudd, David

Winterton, Nicholas

Grylls, Michael

Nelson, Anthony

Wood, Rt Hon Richard

Hall, Sir John

Neubert, Michael

Young, Sir G. (Ealing, Acton)

Hampson, Dr Keith

Normanton, Tom

Hannam, John

Nott, John

TELLERS FOR THE AYES:

Harrison, Col Sir Harwood (Eye)

Osborn, John

Mr. Anthony Berry and

Harvie Anderson, Rt Hon Miss

Page, John (Harrow West)

Mr. W. Benyon.

NOES

Allaun, Frank

Barnett, Rt Hon Joel (Heywood)

Bottomley, Rt Hon Arthur

Anderson, Donald

Bean, R. E.

Bradford, Rev Robert

Archer, Peter

Benn, Rt Hon Anthony Wedgwood

Buchan, Norman

Armstrong, Ernest

Bennett, Andrew (Stockport N)

Butler, Mrs Joyce (Wood Green)

Ashton, Joe

Bidwell, Sydney

Callaghan, Jim (Middleton & P)

Atkins, Ronald (Preston N)

Blenkinsop, Arthur

Campbell, Ian

Atkinson, Norman

Booth, Albert

Canavan, Dennis

Bagier, Gordon A, T.

Boothroyd, Miss Betty

Cant, R. B.

2002

2003

Carmichael, Neil

Hooley, Frank

Parry, Robert

Cartwright, John

Horam, John

Pavitt, Laurie

Clemitson, Ivor

Hoyle, Doug (Nelson)

Pendry, Tom

Cocks, Michael (Bristol S)

Huckfield, Les

Phipps, Dr Colin

Cohen, Stanley

Hughes, Mark (Durham)

Powell, Rt Hon J. Enoch

Coleman, Donald

Hughes, Robert (Aberdeen N)

Prescott, John

Concannon, J. D.

Hughes, Roy (Newport)

Price, C. (Lewisham W)

Conlan, Bernard

Irvine, Rt Hon Sir A. (Edge Hill)

Price, William (Rugby)

Corbett, Robin

Irving, Rt Hon S. (Dartford)

Radice, Giles

Cox, Thomas (Tooting)

Jackson, Colin (Brighouse)

Richardson, Miss Jo

Craigen, J. M. (Maryhill)

Jackson, Miss Margaret (Lincoln)

Roberts, Albert (Normanton)

Crawshaw, Richard

Janner, Greville

Roberts, Gwilym (Cannock)

Cronin, John

Jenkins, Hugh (Putney)

Roderick, Caerwyn

Crosland, Rt Hon Anthony

Jenkins, Rt Hon Roy (Stechford)

Rodgers, George (Chorley)

Cryer, Bob

Johnson, James (Hull West)

Rooker, J. W.

Cunningham, G. (Islington S)

Johnson, Walter (Derby S)

Rose, Paul B.

Cunningham, Or J, (Whiten)

Jones, Alec (Rhondda)

Ross, Rt Hon W. (Kilmarnock)

Dalyell, Tam

Jones, Barry (East Fliat)

Rowlands, Ted

Davies, Bryan (Enfield N)

Kaufman, Gerald

Ryman, John

Davies, Denzil (Llanelli)

Kerr, Russell

Sedgemore, Brian

Davis, Clinton (Hackney C)

Kilroy-Silk, Robert

Selby, Harry

Deakins, Eric

Kinnock, Neil

Shaw, Arnold (Ilford South)

Dean, Joseph (Leeds West)

Latham, Arthur (Paddington)

Sheldon, Robert (Ashton-u-Lyne)

Delargy, Hugh

Leadbitter, Ted

Sillars, James

Dell, Rt Hon Edmund

Lee, John

Silverman, Julius

Doig, Peter

Lewis, Ron (Carlisle)

Skinner, Dennis

Dormand, J. D.

Litterick, Tom

Snape, Peter

Douglas-Mann, Bruce

Loyden, Eddie

Spearing, Nigel

Duffy, A. E. P.

Luard, Evan

Spriggs, Leslie

Dunlop, John

Lyons, Edward (Bradford W)

Stallard, A. W.

Dunn, James A.

McCartney, Hugh

Stewart, Rt Hon M. (Fulham)

Dunnett, Jack

McCusker, H.

Stoddart, David

Eadie, Alex

McElhone, Frank

Strang, Gavin

Edelman, Maurice

MacFarquhar, Roderick

Thomas, Dafydd (Merioneth)

Edge, Geoff

McGuire, Michael (Ince)

Thomas, Jeffrey (Abertillery)

English, Michael

Mackenzie, Gregor

Thomas, Mike (Newcastle E)

Evans, john (Newton)

Mackintosh, John P.

Thomas, Ron (Bristol NW)

Ewing, Harry (Stirling)

McNamara, Kevin

Thorne, Stan (Preston south)

Faulds, Andrew

Madden, Max

Urwin, T. W.

Fernyhough, Rt Hon E.

Magee, Bryan

Wainwright, Edwin (Dearne V)

Fitch Alan (Wigan)

Marks, Kenneth

Walden, Brian (B'ham, L'dyw'd)

Flannery, Martin

Marquand, David

Walker, Harold (Doncaster)

Fletcher, Ted (Darlington)

Marshall, Dr Edmund (Goole)

Walker, Terry (Kingswood)

Foot, Rt Hon Michael

Mason, Rt Hon Roy

Ward, Michael

Ford, Ben

Mellish, Rt Hon Robert

Watkins, David

Forrester, John

Mikardo, Ian

Weetch, Ken

Fowler Gerald (The Wrekin)

Millan, Bruce

Wellbeloved, James

Freeson, Reginald

Mitchell, R. C. (Solon, Itchen)

White, Frank R. (Bury)

Garrett, w. E (Wallsend)

Molloy, William

White, James (Pollok)

George, Bruce

Molyneaux, James

Whitehead, Phillip

Gilbert, Dr John

Moonman, Eric

Whitlock, William

Ginsburg, David

Morris, Alfred (Wythenshawe)

Willey, Rt Hon Frederick

Gould, Bryan

Morris, Charles R. (Openshaw)

Williams, Alan (Swansea W)

Gourlay, Harry

Morris, Rt Hon J. (Aberavon)

Williams, Alan Lee (Hornch'ch)

Graham, Ted

Murray, Rt Hon Ronald King

Wilson, William (Coventry SE)

Grant, George (Morpeth)

Newens, Stanley

Wise, Mrs Audrey

Grant, John (Islington C)

Noble, Mike

Woodall, Alec

Grocott, Bruce

Oakes, Gordon

Woof, Robert

Hardy, Peter

Ogden, Eric

Wrigglesworth, Ian

Harper, Joseph

O'Halloran, Michsel

Harrison, Walter (Wakefield)

Ovenden, John

TELLERS FOR THE NOES

Hart, Rt Hon Judith

Palmer, Arthur

Mr. James Hamilton and

Hattersley, Rt Hon Roy

Park, George

Mr. John Ellis.

Hatton, Frank

Parker, John

Second Reading Committee
Wednesday 30th July 1975

The Committee consisted of the following Members:

Mr. Victor Goodhew (in the Chair)

Awdry, Mr. Daniel (Chippenham)

McMillan, Mr. Tom (Glasgow, Central)

Campbell, Mr. Ian (Dunbartonshire, West)

O'Halloran, Mr. Michael (Islington, North)

Clegg, Mr. Walter (North Fylde)

Page, Mr. R. Graham (Crosby)

Davidson, Mr. Arthur (Parliamentary Secretary to the Law Officers' Department)

Pavitt, Mr. Laurie (Brent, South)

Douglas-Mann, Mr. Bruce (Mitcham and Morden)

Silverman, Mr. Julius (Birmingham, Erdington)

Durant, Mr. Tony (Reading, North)

Welsh, Mr. Andrew (South Angus)

Eyre, Mr. Reginald (Birmingham, Hall Green)

Wise, Mrs. Audrey (Coventry, South-West)

Gow, Mr. Ian (Eastbourne)

Lewis, Mr. Ron (Carlisle)

Miss S. A. Coussins, Committee Clerk.

LOCAL LAND CHARGES BILL [Lords]
10.30 a.m.
The Parliamentary Secretary to the Law Officers' Department (Mr. Arthur Davidson): I beg to move,
That the Chairman do now report to the House that the Committee recommend that the Local Land Charges Bill [Lords] ought to be read a Second time.
As the Committee will appreciate, the Bill is designed to reform a technical area of land law, which serves a public need. It is an important area of land law. It implements the recommendations of the Law Commission's Report on Local Land Charges and substantially reproduces the draft Bill annexed to that report. Perhaps at this stage I may pay tribute once again to the Law Commission for producing an excellent report and a draft Bill which is another step in clarifying, simplifying and rationalising the law and making it easier for ordinary members of the public to understand and benefit.
The local land charges system has its roots in the last century when local authorities started to obtain statutory powers to carry out certain works on land and to recover the cost of doing so by means of a financial charge over that land. These local charges are of a public nature and are usually distinguishable from ordinary land charges, such as restrictive covenants and other charges or burdens on land which are enforceable by private individuals. Local land charges are registrable in registers kept in the offices of local authorities and ordinary land charges are registrable centrally by the Land Registry.
The legal consequences of registration, or lack of registration, however, are substantially the same for both types of charge: purchasers are bound by a charge which has been registered and take the land free of any charge which has not been registered. The law relating to both types of land charge was

2007
consolidated by the Land Charges Act 1925. Since then, various improvements to the ordinary land charges system have been made, culminating in the Land Charges Act 1972, which consolidates the law with regard to ordinary land charges. The development of the local land charges system, on the other hand, has been in a more piecemeal and patchwork fashion. Its parent enactment is the sole surviving part of the Land Charges Act 1925, now set out in Schedule 4 to the 1972 Act.
The 1925 Act is largely geared to the financial charges to which I have referred. But since 1925, registration in the local land charges register has been adopted by numerous statutes as a convenient device for notifying purchasers of matters which are not true local land charges in the sense I have indicated. Many of these are restrictions or burdens created by Government Departments or other public bodies. The formulae appearing in these statutes are by no means uniform, and over the years complications have set in. Although the system was examined by the Stainton Committee in 1952, its report has lain largely dormant and I am sure the Committee will appreciate that a proper overhaul of the system is long overdue. It has been neglected by successive Governments. This Bill now meets that need.
I shall briefly outline the principal changes to be effected by the Bill. Clauses 1 and 2 redefine local land charges by positive and negative categories. It is sometimes difficult to determine whether a matter is registrable and to know the consequences of registration or non-registration. Clauses 1 and 2 help to dispel these doubts for, broadly speaking, the Bill applies a new framework to everything which is a local land charge and this framework does not apply to anything which is not a local land charge.
Clause 3 has the effect of transferring to the local authorities themselves the present responsibility for registration imposed upon individual officers. It also makes flexible provision for the form in which the index to the register may be kept.
Clause 5 imposes appropriate duties on authorities to register charges or, as the case may be, to apply for them to be registered. The clause helps to clear up the obscurity of the present law about the duties of authorities in registration and
2008
provides a firm basis for the new and crucial provisions about compensation contained in Clause 10, to which I now turn.
Clause 10 provides that failure to register a local land charge, or failure to disclose a registered local land charge, will not affect its enforceability but will entitle the purchaser in certain circumstances to compensation. The Committee will appreciate that the existing position regarding failure of registration and disclosure is one of confusion and uncertainty. Many registrable matters bind a purchaser even if they are not, in fact, registered and the purchaser may have no redress despite the tact that he was kept in ignorance of the charge when he searched the register.
Even where the purchaser takes free of an unregistered charge, his protection may be an illusion since the local authority is often free to re-impose the charge. Yet where the charge cannot be re-imposed, a project of public importance or indeed, of importance to an individual in the long run may be frustrated through a technical failure in the registration system.
This state of affairs is plainly unsatisfactory. What is needed, and what Clause 10 provides, is a rational solution to the problem of balancing the public interest in the enforcement of a charge against the need of the innocent purchaser to be compensated for loss resulting from a failure in the system, and not due to any failure of his.
The other provisions of the Bill, to which I need not refer, either re-enact existing law or make minor modifications. I hope that I have given a general picture of the Bill and I commend it as a useful measure of reform.
10.38 a.m.
Mr. Graham Page: I, too, wish at once to pay a compliment to the Law Commission on its report, which has been of great help to any one coming fresh to the Bill and trying to see what reforms are advised and how they have been drafted.
The Parliamentary Secretary fell, I suggest, into the same error as the noble and learned Lord the Lord Chancellor when he presented the Bill in another place. As the noble and learned Lord is a Government spokesman, I believe that

2009
I shall be in order in quoting him. He said:
"My Lords, this is a technical Bill designed to improve one part of our conveyancing machinery, itself a technical field. I apologise to noble Lords for inflicting such a monstrous technicality on the House at this hours."—[Official Report, House of Lords, 24th June 1975; Vol. 361 c. 1374.]
I only pause to comment that the hour was only 7.28 p.m. which is hardly monstrous to us. It is not just a monstrous technicality. Local land charges and the local land charges registry are a necessary and common obstacle in the purchase of a home, and, indeed, in the purchase of any property.
I may be going back in history, but 50 years ago it was not usual to find that one's house was encumbered by some local land charge. Nowadays it would be extraordinary to find that it was not encumbered by a local land charge. Fifty years ago, until the great law of property reform was carried through in 1925, one did not even bother to search in the local land charges register before signing the contract, the major local search between contract and completion, until the case of re Forsey and Hollebone's Contract to which the Law Commission referred. I recollect that when I was a student I had a limerick about it, which I shall not repeat in this Committee. That case came along and, as the commission described it
"By virtue of section 198 of the Law of Property Act 1925, registration of a local land charge … constitutes actual notice of the charge to all persons and for all relevant purposes."
Thus the good lady who entered into a contract in that case, entered a contract which said "free of encumbrances". Between contract and completion her solicitor made the search and discovered that there was a land charge register, and she was bound by it.
That was in 1927, and thereafter the practice was always to search in the local land charges registry to see whether there was a land charge on the property before entering into a contract to purchase. There gradually grew up the practice from the realisation that the local land charges register did not disclose everything. Local authorities had a habit of making proposals which did not require registration until they reached an advanced stage. Purchasers were buying property relying on the local land charges
2010
search and then finding between contract and completion that the local authority had carried out some proposal, perhaps after completion, to build a road through the back garden, or something of that sort.
So there grew up the practice of what the Law Commission calls supplementary inquiries, commonly referred to as inquiries with searches. These were inquiries of the local authorities to discover whether there was anything which would encumber the title to the property which did not, at that stage, require registration.
I shall return to those supplementary inquiries later, because they are not dealt with in the Bill and I intend to suggest that perhaps they should be so dealt with. I have not declared an interest, but I suppose it is obvious that I am a solicitor. Solicitors were brought up on the strict rule that if it is not registered, it is void. If it is registered, it is valid without necessarily knowing anything about it.
A person dealing with property is assumed to know the contents of the Local Land Charges Register and there for buys with notice of any encumbrance that was on that register. The result is that if a local authority fails for some reason to register a local land charge, or if there is some mistake in the search which does not disclose a local land charge which has been in fact registered, that local land charge is void and the public lose.
The Law Commission is weighing the advantages and the losses here. Should we continue to force this loss on to the public by reason of some error in not registering the local land charge, or is there some other way to compensate the purchaser or other person dealing with the land who did not know about the local land charge, when it is discovered that the property should have been made subject to a local land charge?
The Law Commission came down on the side of compensation for the purchaser rather than invalidation of the charge.
One might have said that this was a little unfair to the purchaser. It might be asked why should not the public be the losers as it was their agent, the local authority, which failed to make the registration. But the Law Commission

2011
comes out firmly as saying that compensation is sufficient, that there is no need to invalidate the charge and that compensation may be paid to the person for the fact that it is there without his knowing that it is there, or without his having an assumed knowledge that it is there. So in Clause 10, as the Parliamentary Secretary has said, compensation is provided for any error or any failure to register or to notify the registration of the local land charge.
But the Law Commission and the Bill go on to divide local land charges into two categories, one which might be called land charges proper and the other, as the Parliamentary Secretary said, items which are not true land charges. I am very doubtful about this division. I lean towards registering everything in the local land charges registry so that anybody dealing with a property will be able to see to what the property is subject. To have certain encumbrances on the property kept off the register considerably confuses the matter.
I should not wish to bring some of the items enumerated in Clause 2 on to the Local Land Charges Register. Indeed,
"a prohibition or restriction … between a lessor and a lessee"
obviously remains within the lease and does not need to be registered. The item to which I draw particular attention is in Clause 2(e), which removes from the register something which is already placed on the register, namely, the planning restrictions.
One relies on the local land charges register to know whether the property is subject to any planning restrictions. Indeed, one supplements that in the supplementary inquiries by asking the local authority for particulars not only of planning permissions that have been granted but of those refused.
It is important for a purchaser to know the planning history of the property before he buys. If he is hoping to convert a large dwelling house into several flats, it is important to know that a few months earlier an application to do so was turned down. One therefore looks not only for restrictions placed by a planning permission which has been granted, but also for information about planning applications which have been refused.
2012
The Law Commission says that these should not be registered as local land charges. They have to be put in a town planning register which is provided under Section 34 of the Town and Country Planning Act 1971, and the purchaser may look there. The town planning register under that Act is not an efficient register. Local authorities maintain it in varying degrees of possibility of search—they vary from place to place—there is no system of search in the town and country planning register of planning permissions as there is in the local land charges registry.
If in future every purchaser must make his search in the land charges register and then go to the planning register—the register of planning permissions granted—that will duplicate the work and there is no proper machinery by which one can deal with the planning register. All that the planning register has to have at present is a brief statement of the planning application and, finally, lodged somewhere—and in practice I assure The Committee that this is almost impossible to find in the local authority archives—the actual planning permission granted.
I am doubtful whether it is right to remove Clause 2(e) from the local land charges register. The Law Commission advises it on the basis of a case of Rose v. Leeds Corporation many years ago which said vaguely that some of these planning restrictions were not proper for registration as local land charges. I wish that the Law Commission had gone the other way and overruled Rose v. Leeds Corporation and said that these should all be registrable as land charges in future.
I would seek at a later stage in the Bill to offer alternative amendments here, either to have all the planning information as a local land charge, so that anyone wanting to know about the planning need only search one register, or to set up a proper search procedure for the planning register. If we are to rely on that for informing the purchaser, it cannot be left as it is without a proper search procedure. That is one point on the division between "land charges proper" and "not true land charges".
The other point is that there are a number of cases which are omitted from the land charges proper and which a purchaser or a mortgagee dealing with

2013
the property would certainly wish to know In particular, there are compulsory purchase orders. I do not think that one would find a compulsory purchase order registered anywhere. After all, that is the most vital information for any purchaser or mortgagee.
Secondly, as at least one hon. Member on the Government side of the Committee will know, we inserted a great many cases of registration as a local land charge in the Community Land Bill. This was the great compromise in that Committee. When the Minister wanted to impose designation of various items, we suggested that he should stick it in the local land charges registry and nobody would know about it. I am not sure how the timing of the Royal Assent to these two Bills will run, but we must take all those matters under the Community Land Bill—if that reaches the statute book—into account. Therefore, I shall wish at a later stage to examine Clause 1 very carefully, as well as Clause 2, to see that Clause 1 includes all that a purchaser or mortgagee would wish to know.
I now return to the supplementary inquiries. As I explained, by making a local land charge search one does not obtain all the information which a purchaser would want about the property which he is purchasing. Therefore, over the years—I used to devise my own supplementary inquiries to the local authorities—the practice gradually grew up covering supplementary inquiries. This was taken over by the Law Society which settled the formal inquiries with the local authority associations. Those inquiries now have two parts. Part I is the ordinary one, and Part II has a lot of out of the ordinary questions for the answers to which one pays a special fee.
The custom and practice of the local authorities in answering these preliminary inquiries is to put a rubber stamp at the bottom of the inquiry saying that the local authority takes no responsibility for the accuracy of the answers.
It is preposterous that a public body should contract out of any liability for negligence in such cases.
In practice, I have had more than one case—I should tot them up to about eight or ten—where that has been stamped on the bottom of supplementary inquiries. Some vital point about, say, a compul-
2014
sory purchase acquisition, or road, or some matter seriously affecting the property but not the subject of a local charge has been omitted, or the answers to questions have been wrong. The purchaser has bought the property and in some instances it has become absolutely useless to him, not the sort of property which he wanted to buy. But he has no comeback for the negligence of the local authority in answering those supplementary inquiries.
I should like the answers to supplementary inquiries put on exactly the same legal footing as searches in the register. The local authority answering them should be responsible for negligence and should not be able to contract out by putting a rubber stamp on the bottom of the answers.
I began by saying that this was not really a technical Bill. I hope I have not been too technical about it. It is something which will affect the practice of conveyancing, which for most people is one of the most important events in their lives because it is the procedure whereby they buy their homes.
We have to be careful to see that we are guarding against the prospective buyer buying a pig in a poke. Everything must be done to let him know what encumbrances there are on a property. If there is an encumbrance which is a local land charge, and which ought to be registered as a local land charge but which is not, he should have compensation. It is not merely that it is invalid, which could be settled by compensation.
To that extent I commend the Bill. There are problems that I have briefly mentioned to which I hope we shall be able to find a reasonable solution later.
10.58 a.m.
Mr. Bruce Douglas-Mann: Like the right hon. Member for Crosby (Mr. Page), I must declare an interest as a solicitor. I cannot, however, rival his experience either in conveyancing or in Ministerial responsibility for the matters with which this Bill is concerned. I would substantially agree with what the right hon. Member has said about three major aspects of the Bill.
Like him, I agree with the Law Commission's recommendation that it should not be the public who suffer if the local authority fails to register a land charge,

2015
but that the charge should remain enforceable although subject to compensation. I have some reservations about whether the level of compensation likely to be available under the provisions of Clause 10 will generally be adequate. This applies to all compensation whether it is for personal injuries or anything else.
In the examples with which I am familiar the effect of a local land charge which has not been registered, or of an incorrect reply to a supplement inquiry, can wholly destroy a purchaser's desire to have that particular house or substantially diminish it without it significantly affecting its market value. There are a great many examples one could cite, mainly the development likely to take place in the immediate vicinity of a house that may not significantly affect the market value, but may significantly affect the desire of the purchaser to have it. As with all such compensation, the only measure of compensation will be the difference between the value of the house with that land charge and the value of the house without it, and the personal preferences of the purchaser will be quite immaterial in that respect.
A much more important point is the exclusion of the large category of items that have been registrable as land charges in the past and that are the very things about which the purchaser of a house wishes to know. Schedule 1 shows enactments which are now excluded from registration. I go back over 20 odd years of practising, not substantially as a conveyancer, but doing a certain amount of it all the time. Very few of the items which have turned up in my local searches and which have ever bothered me are not now excluded from registration as a consequence of the effect of the Bill. Matters like registration under the Highways Act, a charge to maintain roads, registration under the Housing Act of a control order, registration of all the various items set out in Schedule 1, are the very things that one primarily looks for.
I instance under the Housing Act 1974 the declaration of an area to be a housing action area, general improvement area, and so on. That vitally affects a purchaser and those are items which should still be registered on the local land charges register. They are matters which
2016
the local authority should be under an obligation to disclose. If it does not disclose them, it should pay compensation in default.
As the right hon. Member for Crosby said, there was a period—it is no longer a practice—when local authorities were taking to replying with a rubber stamp to the supplementary inquiries submitted with local land charges searches saying that they did not accept any responsibility for the accuracy or inaccuracy of the replies. I am glad to say that that has gone by the board. It has gone by the board not as a consequence of any statute, but simply by agreement between the Law Society and the local authority associations. It could be reinstated at any time.
The Bill makes the only statutory obligation the obligation to register a certain very limited class of land charges. I cannot think offhand of what it would be likely to fish up as a consequence of any search under this register. Obviously, there are certain financial obligations which are imposed on property which will remain registrable, but the major issues about what one wishes to know are put into the supplementary inquiries. They are wholly omitted from the Bill and are involved questions to which the local authorities have no statutory responsibility to reply.
I feel considerable anxiety about this aspect of the Bill—the exclusion of the duty to register a very large number of those items which in the past have been local land charges, and the fact that there is no statutory obligation upon local authorities to answer the supplementary inquiries which are submitted by the purchaser or which are frequently submitted by a vendor in anticipation that he will show it to a prospective purchaser. Unfortunately, it is not a very widely accepted practice amongst solicitors acting for vendors when they are proposing to sell property by auction to carry out searches beforehand. The wiser do because it frightens off a lot of purchasers if the searches are not available.
Although it is provided in Clause 10(3)(d) that
"an official search is material if, but only if—

(i) it is made after the commencement of this Act, and

2017

(ii) it is requisitioned by or on behalf of the purchaser or …"

is shown to the purchaser before the relevant time, that does not impose the same obligation. Its effect is that responsibility for failure to make a search of the local land charges register carried out by a vendor preparatory to a sale is transferred. It gives the purchaser the right to enforce a claim for compensation.
Does that apply to supplementary inquiries? I do not think that it does. Under supplementary inquiries a person's entitlement to recover compensation for mis-information supplied or for the lack of information, lies primarily in contract to the purchaser through his solicitor who has paid a fee for this information and the local authority which has failed to provide it. Therefore, where the purchaser carries out the search that gives him a claim for compensation.
What about the situation in which the vendor has made the inquiries before contract? The purchaser has to rely on the principle of Hedley, Byrne & Co., Ltd. v Heller, which is not a situation the purchaser would reasonably wish to be in. As did the right hon. Member for Crosby, I must apologise to the Committee for involving it in technicalities. But they are important technicalities, potentially affecting 51 per cent. of householders who own their own houses.
I am not at all content that the aspects which I have raised in my remarks have been dealt with adequately in the Bill. I hope that at a later stage the Minister will be able either to satisfy me about them, or to propose amendments which will put my doubts at rest.
11.7 a.m.
Mr. Davidson: Both the right hon. Member for Crosby (Mr. Page), whose experience in these matters is great, and my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) apologised for dealing with what they said were technical matters, but, as they rightly said, these go to the heart of the Bill and concern every purchaser who wants to make sure that he buys a house unencumbered as far as possible, and at least knows what are the encumbrances. I am sure that, as the right hon. Gentleman said, they are matters to which we shall return at a later stage of the Bill. I hope that the Committee will forgive
2018
me if I do not deal with them at length now.
The right hon. Member for Crosby mentioned that the Bill did not deal with a matter to which my hon. Friend also referred, namely, planning inquiries, and that that information is available on special planning registers. I accept that the planning registers are in need of improvement, but at this stage it appears to me and to my advisers that the Bill cannot deal with planning registers.
The right hon. Gentleman hinted that there should not be duplication. In fact planning registers, deficient as they may be, set out details and perhaps they should be more fully dealt with—
Mr. Graham Page: It is not a question of just searching in two registers, as the Law Commission would have us do and as the Bill sets out, namely, to search in the local land charges register and the planning register, but a purchaser must search in a lot of other places. The personal land charge and the land charges registry against the person need to be searched.
If it is a company, the person has to search for the charge against the company. One may even be searching in case of bankruptcy. We do not go back to the old tithe searches, when we used to crawl about the floor in a large room in Red Lion Square, with objects that looked like the curling stones used for the Scottish ice sport. We rolled out a map and crawled across the floor. Thank heavens we have given that up! I do not want to go back to innumerable registers. If we could concentrate on one, it would be a great help.
Mr. Davidson: The Law Commission's object, as the right hon. Gentleman realises was to prevent duplication by taking out of local land charge registers matters which were clearly more fully registered in planning registers. However, since the right hon. Gentleman has said that he intends to return to the matter later, perhaps we can deal with it then.
He mentioned compulsory purchase orders. He is quite right: obviously they have a great effect upon the value of houses and those who are about to buy houses. Certainly there would be a very good case to be made out for making them registerable, but, as he will

2019
appreciate, this is basically a structural Bill which does not aim to determine policy about registration matters. I have no doubt that my right hon. Friend the Secretary of State for the Environment will look at the matter and I hope that he will have something to say about it, in which case we shall return to it later.
As the right hon. Gentleman and my hon. Friends will realise, the Law Commission dealt at great length with the subject of supplementary inquiries and took the view that they should not be included in the Bill. As the Bill is based upon the Law Commission's report, I will not go further than what the Law Commission said.
The right hon. Gentleman said how wrong it was that local authorities were not liable for negligence or supplying inaccurate answers. I would refer him

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Goodhew, Mr. Victor (Chairman)

McMillan, Mr.

Campbell, Mr.

O'Halloran, Mr.

Davidson, Mr.

Page, Mr. Graham

Douglas-Mann, Mr.

Pavitt, Mr.

Eyre, Mr.

Wise, Mrs.

Lewis, Mr. Ron

to paragraphs 78 and 79 of the report, which deal with that matter. While I do not wish in any way to be complacent about it, the picture the Law Commission has painted is that the matter is not as serious, and that the local authorities are not as abandoned, as he has made out.
I do not know whether there are any other points which the Committee wishes to raise, but if there are, perhaps the right hon. Gentleman and my hon. Friend could return to them at the Committee stage.
Question put and agreed to.
Resolved,
That the Chairman do now report to the House that the Committee recommend that the Local Land Charges Bill [Lords] ought to be read a Second time.
Committee rose at fourteen minutes past Eleven o'clock.

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

DAIRY PRODUCTION IN THE SOUTH-WEST
Lord CLIFFORD of CHUDLEIGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have any statement to make about the position of dairy produce factories in South-West England, some of which are closed, are about to close or are on part-time working.
Lord STRABOLGI: My Lords, the Milk Marketing Board for England and Wales have decided to stop supplying milk for butter production for the time being in order to maintain the supply of milk to the liquid market and to sustain production of other dairy products, particularly fresh cream and cheese.
Lord CLIFFORD of CHUDLEIGH: My Lords, is it not a scandal that the dairies of England have come to this sorry state of affairs? Is it not tantamount to criminal negligence that the advice given over the last 18 months by the NFU, the CLA, and the Milk Marketing Board about the dairying industry in the South-West has been ignored? To go from the general to the particular, why close down Hemyock, with a population of 2,000, putting 70 breadwinners out of work, and continue with building a new factory just over the hill at Wellington?
Lord STRABOLGI: My Lords, I of course do not accept what the noble Lord has said in the earlier part of his supplementary questions. This is a commercial decision taken by the Board in the light of the present supply situation, one in which the Government were not involved.
1008
The Government are anxious to see an increase in milk production which will make more supplies available for the greater manufacture of milk products, including butter.
Earl FERRERS: My Lords, can the noble Lord say what the Government are doing to bring this about? Is he aware that this year 60 million gallons of milk less are being produced than were produced last year? If the Government do not do something about the matter, not only will there be a shortage of butter and cheese, but also cream and liquid milk.
Lord STRABOLGI: My Lords, the increase in the guaranteed price announced last week should help to restore the confidence of the milk producers and reverse the recent decline in milk production. The Milk Marketing Boards will be guaranteed over 2p a gallon more—that is 6 per cent. more—from September, and the improvement from September will come I think at a crucial time and will help producers to meet the higher costs over the winter months.
Lord BALERNO: My Lords, are the Government aware that a 6 per cent. increase in the price of milk in no way covers the extra expenses which are involved in the production of milk, and that therefore there will be more factories closing and there will be still less milk in 1976 than in 1975?
Lord STRABOLGI: My Lords, the Government have underlined in very difficult circumstances the importance which they attach to the contribution which the dairy sector makes not only to the agricultural industry but to the national economy. The Government remain ready to consider further adjustments should these be necessary to assure our agricultural industry of a fair return.
Lord MACKIE of BENSHIE: My Lords, the Minister will have the figures. Can he give them for the rise in costs as against the rise in prices?
Lord STRABOLGI: My Lords, I can give the figures for total milk supplies. The latest estimate, for July, is that sales will be down by 4 per cent., which is 10 million gallons. This decline is partly due to unfavourable weather, and it is

1009
also a result of the continuing decline in the dairy herd.
Lord MACKIE of BENSHIE: My Lords, that was not the question. The Ministry of Agriculture have the figures, and the noble Lord must have them, of the rise in cost.
Lord STRABOLGI: My Lords, I am afraid that I have not got those figures. They do not arise from the Question on the Order Paper, but I shall of course go into the point and let the noble Lord know.
The Earl of KIMBERLEY: My Lords, what is the cost of keeping the factories of the West country going by finding an alternative source of milk, possibly from Ireland?
Lord STRABOLGI: My Lords, we will of course take note of what the noble Earl has said.
Lord PARGITER: My Lords, can the noble Lord say precisely to what extent production in the other EEC countries has affected our own production here, or our desire not to produce here?
Lord STRABOLGI: My Lords, we are of course mainly dependent on imported supplies of butter. The home production at the moment is about 7 per cent. of our consumption. It is, however, the Government's intention, as outlined in the White Paper, that by 1980 our own production should be considerably greater than that, and that we should probably not be dependent to more than about 50 per cent. on imported supplies.

RACE RELATIONS AND IMMIGRATION
2.41 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their attitude towards the recommendations of the Report of the Select Committee of the House of Commons on Race Relations and Immigration.
Lord WELLS-PESTELL: My Lords, the Government welcome the Report on the organisation of race relations administration which the Committee has produced. The Government will give most careful consideration to the Select Committee's recommendations and will respond as soon as possible. Noble Lords will, I hope, agree that it would not be helpful for me to seek to comment in the meantime on the detailed recommendations which the Select Committee has made.
Lord BROCKWAY: My Lords, while thanking the Minister for that reply, may I ask whether he would agree that the disturbing features of this Report are, first, the indications of the extent of racial feeling and discrimination, particularly on the part of teenagers; and, secondly, the cynicism which exists now among immigrant communities about the existing administration? Without going into the nature of the future authorities, would it not be desirable that each should have powers similar to those given in the Sex Discrimination Bill for preventive activity, and for some representation of the immigrant communities?
Lord WELLS-PESTELL: My Lords, the Government are aware of all the matters raised by my noble friend, and it is because of the complexity of these matters that the Government want time to consider the comments, observations and suggestions which the Select Commitee has made. I understand that it is hoped to use the Sex Discrimination Bill to remedy some of the difficulties facing us at the moment.
Lord AVEBURY: My Lords, is it still the intention of the Government to produce a White Paper in September?
Lord WELLS-PESTELL: My Lords, it is the intention of the Government to produce a White Paper. All the other reports issued by the Select Committee in the past, with the exception of one, have resulted in White Papers appearing in about a year. It is certainly the intention of the Government to do so on this occasion. September is a date not known to me and I should think it most unlikely.

PARLIAMENTARY BUILDING AND WHITEHALL AREA
Lord PANNELL: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government, in view of their decision to abandon the new Parliamentary Building, what other proposals they have for using the site and whether further consideration, possibly through another inquiry, is to be given to the future of the Bridge Street, Richmond Terrace and Broad Sanctuary sites.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, on Bridge Street, my right honourable friend the Lord President, in his Statement of 16th July in another place, suggested that in present circumstances the best way of providing additional accommodation for Members of Parliament would be the adaptation of existing buildings on the Parliamentary Building site, and undertook that the Government would submit proposals to the Services Committee.
On Richmond Terrace, I announced in reply to a Question from my noble friend on 4th March that we had decided the facades should be preserved; and a feasibility study is currently being carried out into the best way of providing office accommodation within them. The study will also consider the relationship of this development to options for the future development of the area between Richmond Terrace and the Parliamentary Building site. As to Broad Sanctuary, the Government recognise the importance of this inique site and are currently considering its future. Eventual decisions on all these sites will, of course, have to take account of the prevailing economic situation. We have no proposals for another inquiry.
Lord PANNELL: My Lords, is my noble friend aware, in view of the history of the development of the Whitehall area, that I consider her Answer a rather dusty one? The history of this site—
Several Noble Lords: Question!
Lord PANNELL: My Lords, is my noble friend aware that in the history of
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this site opportunities were missed as far back as 1945 in regard to Broad Sanctuary and the Abercrombie plan? There was a plan issued in 1964—
Several Noble Lords: Question!
Lord PANNELL: I am still in an interrogatory frame of mind, my Lords. Is my noble friend aware that the Martin plan was commissioned by Mr. Geoffrey Rippon in 1963 and I was called on to implement it in 1964? So in view of bitter experience, I hope your Lordships will grant me some indulgence.
Several Noble Lords: Hear, hear!
Lord PANNELL: In that case, my Lords, may I ask whether my noble friend is aware that the whole history is one of missed opportunities and bungled undertakings and that the House of Commons—
Several Noble Lords: Too long.
Lord PANNELL: Is my noble friend aware that the House of Commons—
Several Noble Lords: Enough. Order!
The LORD PRIVY SEAL (Lord Shepherd): My Lords, I hope my noble friend will appreciate that he has gone a little beyond the indulgence of your Lordships' House. Therefore, I hope he will put his supplementary question in a short way, bearing in mind that approximately 30 Members of this House wish to take part in the debate which follows.
Lord PANNELL: My Lords, I do not trouble your Lordships' House overmuch and I usually speak about things within my knowledge—
Several Noble Lords: Question!
Lord PANNELL: My Lords, may I therefore ask the Minister whether the Government will consider setting up another inquiry, because, although a week may be a long time in politics, planning for the capital city needs a rather longer view?
Baroness BIRK: My Lords, my noble friend asked a number of questions. I appreciate his concern, and that of all past Ministers of Works. Perhaps it is a good thing we no longer have a Ministry of Public Building and Works, because, directly one Minister makes a plan, out

1013
go the Government and in comes another Minister with another plan. As for the Buchanan-Martin Report, on which my noble friend rests the burden of his protest and case, he is surely aware that in 1966, a month after he ceased to be in office—I imagine he must have known about it and agreed to it—a further inquiry was set up under the late Sir Robert Matthew and this recommended, against the Buchanan-Martin Plan, that there should not be a complete clearance. Indeed, the feeling now is that if the plan by which my noble friend sticks so loyally and nostalgically had been carried out, we should have had a complete mess in the middle of the Whitehall area.
Lord PANNELL: On the contrary, my Lords; we have the mess now.
2.49 p.m
Lord PANNELL: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government

(a)what is the cost to date for work on the abandoned Parliamentary building and what is the figure of compensation to the architects and

(b)how much has been spent on the Norman Shaw (North) Building to adapt it for the use of Members of Parliament.

Baroness BIRK: My Lords, I will inform my noble friend of the amount of compensation to be paid and of any other charges as soon as negotiations with the architects have been completed. The total commitment to date on the conversion of the Norman Shaw (North) building is £2,883,832.
Lord PANNELL: My Lords, is not this an example of spending money in dribs and drabs rather than going in for long-term planning; and is it not a fact that any noble Lord going along Bridge Street will see a lot of scaffolding and a slum that was earmarked years ago for a more noble building? Is my noble friend further aware that, though I appreciate her great enthusiasm for the job in hand, this is an extremely bitter experience for Members on both sides to live
1014
through and to see all the opportunities being lost?
Baroness BIRK: My Lords, I appreciate the way my noble friend feels, but I would point out that we are in a very grave economic crisis and that the decision on the buildings taken in another place was made entirely on the question of cost and economy.
Lord PARGITER: My Lords, could my noble friend tell me whether we are to have a survey of cost effectiveness to see what all these expensive buildings are worth in terms of manpower and per head?
Baroness BIRK: My Lords, we are not having any further inquiries. We have had so many inquiries on all this that it is quite possible to pick out any figures which are needed. If my noble friend wants anything further perhaps he will be good enough to write to me about it.
Lord PANNELL: My Lords, could we have an assurance that the sites will not be sold to private developers?
Baroness BIRK: Yes, my Lords. At the moment there is simply no chance of the sites being sold to private developers. It is a question of how to use them in the best way, bearing in mind, as my noble friend reminded us, the question of cost effectiveness.

COURT LINE LIMITED
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, with the leave of the House, at a convenient moment after 3.30 p.m. my noble friend Lord Shepherd will repeat a Statement on Court Line.
REMUNERATION, CHARGES AND GRANTS BILL
Brought from the Commons earlier this day and printed pursuant to Standing Order No. 48; read 1a.
MILFORD HAVEN CONSERVANCY BILL
Read 3a, with the Amendments, and passed, and returned to the Commons.
BRITISH RAILWAYS (No. 2) BILL
Read 3a, with Amendments, and passed, and returned to the Commons.

THE ATTACK ON INFLATION
2.53 p.m.
Lord SHEPHERD rose to move, That this House takes note of the White Paper on The Attack on Inflation (Cmnd. 6151). The noble Lord said: My Lords, I am sure that during our debate today we shall hear several different views expressed. There is one thing, however, on which I anticipate almost universal agreement, and that is that today the main economic problem which this country faces is inflation.
Of course, there are other major problems and challenges. We need to stimulate industrial investment and productivity. We need more industrial retraining and to be able to move working people from dead-end jobs into work which has a positive purpose and a secure future. Formidable problems confront us in the fields of health, education and social welfare; in transport and housing policy, in energy use, conservation and the protection of the environment. Nevertheless, I repeat that the main problem is inflation. Unless this is reduced and controlled, we cannot hope to overcome the other problems which I have outlined, nor to meet the challenges which they present. A substantial reduction in the rate of inflation is essential if we are to achieve our other economic and social goals, to help create a society which offers equal opportunities to its younger members, security to its older members and a decent standard of living for all.
Inflation has been justly described as a cancer. Although I profess no medical expertise, when we talk of a cancer we are talking of something which corrupts healthy and living organisms, which saps vitality and which ultimately kills the object on which it feeds. We have such a cancerous growth now in our society which threatens ultimately to destroy the economic and social institutions of this country. These cannot survive for long a rate of inflation of over 25 per cent.
Our present rate of inflation threatens jobs. This cannot be allowed at any time,
1016
but more particularly at the present moment in the light of the appalling unemployment figures announced last week by my right honourable friend the Secretary of State for Employment. And let there be no misunderstanding on this score. Over the coming months we can only expect the figures to get worse before they get better.
Our rate of inflation is over twice that of our main competitors. It therefore destroys our international competitiveness so that we lose exports and import more. It reduces investment since businessmen are fearful of the future and unwilling to proceed with plans for expansion. It therefore damages growth—the economic growth we need if we are to enjoy a better standard of living and better social provision in such areas as education, health and housing, as well as defence, to which the House attaches so much importance.
Finally, inflation gnaws at the very roots of social cohesion. People become anxious about its effects and scramble to find ways of overcoming them. The strong and well-organised might be able to cope, but usually at the expense of the frailer members of our society, the old, the handicapped and the poorly paid. This can serve only to widen the divisions within our society and to breed envy, cynicism and fear. Eventually, even the strong will destroy themselves.
On 11th June, your Lordships debated a Motion on the economic and political situation put down by the noble Lord, Lord Byers. On that occasion, I said that the Government would take urgent new measures to deal with our economic problems as they became necessary and at a time that we judged to be right. That time has now come. The result is the White Paper, The Attack on Inflation, which we are debating today.
Doubtless there will be those on both sides of the House who will argue this afternoon that the Government's new measures are necessary because of the failure of the Social Contract. It is certainly true that the Social Contract has not succeeded as well as the Government would have liked, although I believe it has achieved more than many commentators, and the noble and learned Lord, Lord Hailsham, are prepared to grant. In particular, it has helped the Government to rebuild the proper and

1017
necessary relationship with organised labour.
No one, I think, would question the fact that the Government have done all they could to fulfil their side of the Social Contract. This has, I am sure, helped us in the new and grave situation which has now arisen, since it has enabled the Government to work out the policies described in the White Paper with the co-operation of the TUC. The Government came under heavy criticism for the time that was taken for the policy to be announced. But this time was used to secure the maximum agreement of both sides of industry for the provisions contained in the White Paper. There may be differences on points of detail. But we are all agreed on the overall objective and the general strategy to meet it.
I hope that none of your Lordships will underestimate the degree of consent which has been achieved. Such consent is vital in a democracy if we are to succeed with an anti-inflation policy of this severity which will affect everyone, directly or indirectly. I am sure your Lordships will agree that the time taken to secure this degree of consent was time well spent, since it provides for a far greater degree of confidence that the policy will be successful.
My right honourable friend the Prime Minister described the decision of the TUC General Council to support a voluntary incomes policy as "historic". Indeed it was, and the recent decisions by such other major unions as the mineworkers and railwaymen to support the White Paper are evidence of the groundswell of support which it is now securing.
The White Paper is therefore a positive and genuine attempt to have government by consent in what is perhaps the most difficult and personal area of policy—that concerning a man's pay and his own standard of living. The problem then is the total problem of inflation. In this White Paper the Government propose that the whole country should tackle it not just in one area, but in its totality. As I have said, unless we do this, there is little prospect of our being able to achieve our other policies. Our target is to cut the year-on-year increase in prices to 10 per cent. by the end of next summer, and below that by the end of 1976. Just as inflation has no one cause,
1018
no one manifestation, and no one effect, so it has no one cure.
The Government propose, in the White Paper, the following total package of measures to achieve that target. First, there is the pay limit of £6 per week, which is a maximum figure, not an entitlement. Some have questioned whether such a limit is really necessary. After all, in 1973–74 much of the increase in prices was due to rises in the price of world commodities, particularly oil. In the past 12 months, however, the situation has changed. Commodity prices have eased, and very high pay increases have been the main reason why prices have increased as much as they have, and why they have risen so much more than those of our competitors.
The main thrust of our attack on inflation at the present time, therefore, must be pay restraint, since pay increases must be moderated if we are to meet the target we have set ourselves. To get inflation down to 10 per cent. over the next year requires a vigorous compliance with the £6 pay limit. The TUC have agreed with this. I have already told the House of the great efforts which the Government have made to ensure that we can meet this target by agreement and by consent.
Annexed to the White Paper is the guidance which the TUC have invited negotiators to apply to their pay negotiations over the next year. The Government welcome this guidance, calculated, as it is, to achieve our common target, and welcome the real effort to proceed by consent, in the common interest, which it represents. The guidance is framed so as to be simple and comprehensible to everyone, and to call for sacrifices in proportion to people's ability to bear them. It is intended to be fair, and to be seen to be fair.
The pay limit will be an extra £6 a week for adult workers, except for the final stage of the achievement of equal pay for women, and certain prior commitments which are defined. There will be no special cases. The Government are asking Parliament, in Clause 1 of the Remuneration, Charges and Grants Bill, which has just been introduced, to relieve employers of contractual obligations to give remuneration in excess of the limit. To keep it simple, and to ensure that it meets the 10 per cent. target, the £6

1019
limit must be a simple addition to earnings: it should not carry through to overtime or shift premiums. It will be applied pro rata for part-time workers and juveniles.
As I have said, it is a ceiling for wage increases, not an automatic entitlement. It will be more helpful to the lower paid, and call for progressively more sacrifice from those who already have higher incomes.
Lord GEORGE-BROWN: My Lords, will the noble Lord forgive me if I interrupt for one moment? Could he quantify that? When we have worked the £6 through what does the noble Lord reckon will be the addition to our present inflation?
Lord SHEPHERD: My Lords, the basis of the £6 is that we should cut our inflation to 10 per cent. by—
Lord GEORGE-BROWN: No, my Lords; I am sorry but that was not the question I asked—the misunderstanding may be my fault. I asked what is to be the total amount which we will add to the inflation we have this year by paying our workforce on the complicated structure which the noble Lord has mentioned—£6 and something else? The noble Lord must have quantified this. How much will it add to this year's inflation?
Lord SHEPHERD: My Lords, the purpose of this policy is to cut inflation, not to add to it. But there may be something behind the noble Lord's question which I have not fully taken on board. If the noble Lord will permit me to complete my speech, I shall then carefully consider what he said and ask my noble friend Lord Beswick to deal with it when he makes the reply for the Government—
Several Noble Lords: Oh!
Lord SHEPHERD: I do not see why I should not ask my noble friend to do some difficult things from time to time. I have said that this is a ceiling for wage increases and not an automatic entitlement, and it will help the lower paid. Where incomes are over £8,500 there will be no increase whatsoever. The Government know that these features give rise to complications in some cases. We know that the flat rate will mean a disproportionately higher addition to wage costs in
1020
some sectors of importance to the consumers.
In particular, there is the problem of resuming more normal processes of pay determination once we have succeeded in getting inflation under control—what is called the "re-entry" problem. This is a matter to which great attention will need to be given during the next few months. But our target is this dramatic reduction in the rate of inflation. For that we need one common approach, easily understood and easily monitored, to bring home to all of us the dramatic nature of what we have to do, and the simple, observable fairness of our plan. This is a simple, but essentially fair, plan for our people.
The Government accept the responsibility for applying it in those cases where they are themselves the employer. The operation of pay research in the Civil Service is therefore suspended, and the Government will ask the relevant review bodies similarly to comply with the pay limit in their recommendations.
Turning to those sectors where the Government are not themselves the employer, the White Paper sets out the sanctions which we shall use to ensure that the same limit is applied. This is clearly necessary if the common approach is to be fair and seen to be so. In the public sector, the chairmen of the nationalised industries have already undertaken to observe the limits. But we have also made it clear that the Government will not finance excessive settlements in the nationalised industries—whether through subsidies or by allowing extra borrowing or increased charges. We do not need any additional formal powers to do this. The existing sanctions are sufficient and we shall not hesitate to enforce them in particular cases should this prove necessary. Excessive pay awards in these cases, therefore, will lead to lost jobs.
So far as the local government sector is concerned, for some groups—teachers and police—the Government are already directly involved in pay settlements. Where national settlements affecting local authority employees exceed the limit, the Government will not provide rate support grant on the excess. In the case of excessive settlements by individual local authorities, we are inviting Parliament to provide powers to reduce grant paid to such authorities by the whole amount of

1021
such settlements, and not just the excess. This is set out in Clause 4 of the Remuneration, Charges and Grants Bill.
We have also made it clear that we can, and will, if necessary, offset the cost of excessive pay increases by using the powers which exist to control the borrowing of individual local authorities. These are the sanctions. We hope and expect that they will not need to be used, and we shall be discussing in the new Joint Consultative Council and the Convention of Scottish Local Authorities, not only the observance by local government of the pay limit but also the scale of staffing of the local authorities.
In the private sector, the Government have no direct control over pay. But other Government powers exist, which we have made it clear that we shall use if there are any cases in which private employers do not observe the pay limit. Most importantly, there already exists a legal price control over most goods and services produced for the home market. We shall go to the heart of the problem of inflation by taking steps to prevent excessive pay settlements from being passed on in higher prices.
Applications to increase prices will have to be accompanied in future by details of any pay settlement underlying the application and, where the Secretary of State certifies to the Price Commission that a settlement exceeds the limit, the whole of that pay increase will be disallowed for price increases. Since this sanction goes further than the existing price control powers, we are inviting Parliament in Clause 3 of the Bill to provide the necessary additional legal powers. In addition, the Government will not give discretionary assistance under the Industry Act to firms which have broken the pay limit, and the new National Enterprise Board will also take these considerations into account. Moreover, the Government will also have regard to an employer's observance of the pay limit in their own purchases of goods and services.
My Lords, I now turn to prices. For a start, the Government will, of course, maintain the strict price controls already operating. Beyond this, and in addition to the sanction through the Price Code against pay increases in excess of the limit which I have already mentioned,
1022
the Government are taking a number of specific steps. In particular, we shall be discussing with the CBI and the Retail Consortium how to stabilise certain prices which are especially important in the family budget.
Successful action presupposes stabilising the costs, notably the wage costs, which these prices reflect. But once it is clear that the pay limit is being effectively observed, we aim to ensure that prices for such goods do not rise by more than about 10 per cent. over the next year. Next, food prices and rents are particularly important in times of inflation, and keeping them down is particularly important for pay restraint. The White Paper explains that, in order to help low income families and pensioners during the period of this policy, the Government will slow down the phasing out of food subsidies.
The Government will also give further assistance to local authorities so that rents on average do not rise faster than prices generally. The powers to enable us to do this are contained in Clauses 5 and 6 of the Remuneration, Charges and Grants Bill. As my right honourable friend the Chancellor of the Exchequer has emphasised, this rent subsidy will not be payable after 1976–77. It is a special subsidy, for one year, to help meet the needs of our anti-inflation policy.
We will redouble our efforts to ensure that better information is provided to consumers, through the establishment of more consumer advice centres, and by speeding up the programme of price display and unit pricing.
We should have liked to go further. We should have liked to begin this new attack on inflation with a total freeze on prices for a period. But we have to recognise the economic facts of life if we are to deal with them. Nearly three years of strict price control mean that there is no slack to take up between costs and prices. And with big increases in pay and other costs now in the pipeline, an immediate price freeze could only mean even less investment, new bankruptcies, more unemployment—working, in fact, directly contrary to our objectives.
In terms of the nationalised industries' prices, these are in many cases very sensitive to pay increases, so that it is particularly true of them that pay restraint will lead to an easing of cost pressures and

1023
so to a lower rate of price increases. However, we shall continue our policy of phasing out nationalised industry price subsidies to reduce the public sector deficit which is also important in our total attack on inflation.
My Lords, much has been said about public expenditure. The White Paper explains the new measures which the Government are taking to control public spending. These are necessary to deal with the effects on inflation itself on public spending; to ensure that the demands it generates, on resources and public funds, do not undermine the other measures we are taking to get inflation under control; and to enable us to get that movement of resources into exports and investment which is essential if we are to combine growth with full employment; that is, if we are all of us to make the most of our skills and labour, and enjoy the fruits of doing so.
At a time of rapid inflation and big changes in relative prices, we cannot continue to rely solely on the present system of planning and control in volume terms. It needs reinforcement in appropriate services by control on the amount of money which the Government pass out in the year ahead. To do this, the Government will introduce a more extensive system of establishing cash limits on certain public expenditure programmes. This will mean that, apart from programmes where cash limits are clearly inappropriate—such as social security benefits, which must depend on the rates approved and the numbers qualifying for them—any tendency of one element in a programme to increase unduly will normally have to be reconciled with other priorities within that same programme.
At the same time, our arrangements for the monitoring and control of the expenditure of local authorities and nationalised industries in particular, are being improved, for example through the new Consultative Council. In addition, the Government are reviewing public expenditure in the medium term, with a view to continuing the reduction of the public sector borrowing requirement which was initiated in the Chancellor's Budget in April. The Chancellor then took measures to reduce the borrowing requirement by about £1,200 million in 1976–77. This would mean public expenditure
1024
next year below its level this year. He also made it clear that, beyond next year, there was at best only very restricted room for overall growth in public expenditure. We must leave room for exports and investment so that we are able to take advantage of an upturn in the world economy when it comes.
But I must emphasise that we shall not be provoked into making panic cuts. Noble Lords opposite are calling for such cuts, many of which—for example, the rapid phasing out of food and rent subsidies—would merely aggravate the problem of inflation. Others would increase unemployment, since there is no problem of excess demand in this country today. On the contrary, we have far too many unemployed and many of our factories are working well below capacity. We shall take our decisions deliberately and carefully, in the light of our regular reappraisals of public expenditure programmes and of all the relevant factors. The 1975 Public Expenditure Survey is now in progress and the results will he published in due course in the usual White Paper.
My Lords, I should like in conclusion to say a few words about the reserve powers mentioned in the White Paper. The measures outlined in the remainder of the White Paper carry the broad agreement of the TUC and the CBI. Despite reservations on particular points, both agree on the objective and the general strategy to meet it. We believe that the whole country wishes to join in a united effort to conquer inflation by consent and by agreement. But there will be measures to strengthen the policy. These are contained in the Remuneration, Grants and Charges Bill, the Second Reading of which will follow this debate.
The Bill supports the policy in three areas: relief from contractual commitments; selective reductions in rate support grants for offending local authorities; and disallowance of excess settlements under the Price Code. We very much hope that the very existence of these measures, combined with the support of the great majority of working people, will be sufficient to ensure that the policy is a success, and that our target of reducing the rate of inflation to single figures by the end of next year is met. However, if compliance with the policy is not forthcoming, the Government have

1025
made clear in the White Paper that they would not hesitate to introduce a legal power of compulsion.
As the House knows, it is to meet this eventuality that the Government have prepared legislation which can be applied to particular cases and make it illegal for an employer to exceed the pay limit. Although we hope it will not be required, the Government will ask Parliament to approve this legislation if that should be necessary.
My right honourable friend the Chancellor of the Exchequer has already described in another place the nature of the powers which we hold in reserve. First, the legislation would give the Government legal powers enforceable against individual employers who exceed the pay limit. Second, they would not provide for criminal sanctions on work-people in order to enforce the limit. Third, the Bill would provide for compulsory notification of intended wage settlements. Finally, it will enable the Government in cases of particular firms, or groups of firms, to reduce future pay to a level consistent with the White Paper. I emphasise "future pay".
May I end, my Lords, by asking a question. Granted that the measures outlined in the White Paper have ragged edges, that they will give rise to anomalies and make for a very difficult "re-entry" period, my question is: what alternative policy do noble Lords, or others who may be critical, have to offer which would command the same degree of consent as that set out in the White Paper, and therefore offer the same chance of success?
I have outlined the Government's policies for dealing with the main economic problem which confronts this country today. We must conquer inflation. Sacrifices will have to be borne. But there is a great prize to be won. We are confident that the measures which the Government propose, with the full-hearted backing of the working people of this country, will enable this prize to be won. My Lords, I beg to move.
Moved, That this House takes note of the White Paper on The Attack on Inflation (Cmnd. 6151).—(Lord Shepherd.)
3.23 p.m.
Lord CARRINGTON: My Lords, the noble Lord, Lord Shepherd, has, as usual, made a sensible and moderate speech and there is much in what he said with which everybody in the House will agree. But noble Lords opposite must not suppose that we on this side of the House have such a short memory: we can recollect the speeches made by the Party opposite in Opposition, particularly during the period of November 1973 to February 1974, and at two General Elections. Even the least cynical of us have to clean our spectacles and adjust our hearing aids to make sure that we are hearing and seeing right, or per perhaps seeing the right person. An enterprising person has compiled a list of Labour quotations about the economy, made during the past two years. It ought to be sub-titled, "Harold and Denis's Adventures in Cloud Cuckoo-land" In these pages there is certainly a good deal of material for those who do not believe in the consistency of politicians; there is a quotation for everybody's taste. They certainly show that the record of the Labour Party over these past two years is nothing to be very proud about.
Having said that—and the temptation to continue is almost irresistible—I shall leave it there, for there is in the Conservative Party, as well as elsewhere, a great deal of joy when a Labour sinner repents. It may be—and I shall elaborate on this a little later—that we on this side of the House do not believe that the Government have gone far enough in the measures they propose. It may be that we are uncertain about their capacity or their firmness of purpose. But there will be no one in the House who will not support the Government in what they are seeking to do, not any one of us who does not hope that they will succeed, for on that success depends the future of all of us, whether we vote Labour, Conservative, or not at all. Therefore, in the fairly brief remarks I intend to make, I should like to consider the attitude of the Government and the British people to the problems which face us, and I should like to make one or two reflections. I will leave to my noble and learned friend Lord Hailsham of Saint Marylebone the discussion on the question of legislation and back-up powers.

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The first thing that we have to understand, humiliating though it may be, is that we have become a pensioner nation. I doubt whether we have lived so much on "tick" since the reign of Charles II. We have become used to living far beyond our means, and now, as every subeditor in Fleet Street is telling us, the sky is dark with chickens returning to their roosts. Unhappily, that psychology has penetrated very deep. It is surely symptomatic, as some commentators have pointed out, that we talk about the non-oil deficit on our balance of trade as though somehow it was an unreal statistic, a mere book entry, that it did not represent a real cut in our national standard of living. One might just as well talk about the non-wheat or non-banana deficit. The fact is that at the end of the day we have to earn enough ourselves—earn, not borrow—to pay for our oil, our wheat and our bananas.
The second example concerns the balance of trade. Quite rightly, everyone joins in praising the efforts of our exporters; we had a debate about it the other day. But do not let us decieve ourselves, because while the value of our exports has gone up by about 1 per cent., in volume terms they have fallen by 28 per cent. in the first two quarters of the year—faster than the fall in world trade. The figures look superficially better than that because prices have risen so rapidly. But we are gradually pricing ourselves out of world markets with an inflation rate running two, three and sometimes four times as high as that of our competitors. Of course do not let us talk ourselves down; but, equally, do not let us run away from the truth about ourselves.
The other day, the Daily Mirror set out a number of these truths in some frightening tables which showed how our own industrial performance compared to that of other countries. For example, British industry is the most overmanned in Europe and our nationalised industries, in particular, lag far behind their competititors on the Continent. We waste men and machines by producing much less with the same labour and capital input as countries like Germany and France. One result is that while we suffered our worst balance of trade deficit last year, the Germans had a surplus of about the same magnitude as our deficit.
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There are many reasons for our bad economic and industrial performance—Governments, management, unions and so on. But I cannot help thinking that another important reason is the growth in the Government sector in comparison with the private sector.
The wealth of this country—and of any country—depends almost entirely on the production of what the economists call tradeable services. It is the tradeable services which have to pay for the non-tradeable services, the services which Governments get involved in providing. In the 1960s the non-tradeable portion of our economy increased more quickly than in any other major Western developed country. Our Government took on more and more, and spent more and more. That has been particularly true over the past year, at the same time as our real wealth has been cut back.
Against that background of a nation earning too little and a Government spending too much, two deeply significant changes have taken place, and I lay no claim to originality in pointing them out. First, there has been a shift of power within the community. In an increasingly sophisticated and technological industrial society, small groups in key sectors of the economy can, if they wish, insist on the rest of the country paying them over the odds for the service they provide. And, because government represents the will of the whole community, the national mandate, whatever policy it pursues, it will find itself in conflict with sectional groups and sectional mandates as soon as it tries to act in the interests of the whole country. Therefore, the power exercised by relatively small groups has a considerable effect and impact on the authority of Government. It affects any Government's ability to carry through an economic policy which seeks to do more than just meet the claims (on inevitably limited resources) of the most powerful groups.
Two facts have made the situation even more difficult than it would otherwise have been. The growth of the public sector has removed many of the commercial sanctions against excessive pay demands, and the success of militancy has blunted the efforts of the moderates which were in any case much too limited. We have not yet had an answer to the question posed in February 1974. There has

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also been a shift in world economic power towards the producer countries at the expense of the consumers, markedly so in the case of oil. It is probably sufficient to note that the world recession that followed the October 1973 war, the energy crisis and the increase in prices, are thought to have reduced the industrial output of the developed countries by one-fifth below previous trends. But while one part of our problem is caused by world factors, I believe that it is wrong and self-deluding to talk now as though we are facing a world crisis which it is beyond our capacity to resolve on our own. We are in a real sense facing our own crisis, brought on by our own action and lack of action. After all, every other major industrial country faced the same potentially dangerous inflation rate as us, but unlike them we lacked the political will to deal with the causes of inflation.
In the 12 months to February 1974, prices in this country went up by 13 per cent.—about the average of our competitors. But in the 12 months to April this year, prices went up by 22 per cent.—and, of course, the figures have become much worse since then. While our rate of inflation got worse, in other countries it abated—Germany down, Japan down, Denmark down. It is surely therefore fair to say that their problems have become less severe because of the policies which their Governments have pursued, and that our problems have become more severe for precisely the same reason. To those who say, "Yes, but unemployment has been higher in those countries", I would only say this: We have had the inflation and now we are getting the unemployment. "Inflation", as the Prime Minister has said—and I agree with him—"is the father and mother of unemployment".
My Lords, I am not so foolish as to think that all our troubles are to be laid at the door of 16 months of Labour Government. Of course they are not—any more than they are to be laid at the door of the previous Conservative Government. They are compounded of a number of different factors—some quite outside our control, some inherited and difficult to eradicate. And, of course, the Conservative Government made mistakes. I hope indeed that when we are returned to Office we shall have learned
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from those mistakes. It is right then that we should contemplate what the Labour Government have done in the last 16 months, which has in my judgment contributed substantially to the worsening of our situation in the hope that they, too, will learn from the mistakes which they have made.
What have they done in these last 16 months? First, there has been a massive increase in public expenditure. Total public spending this year will be over £53 billion, £20 billion above the level of expenditure in 1973–74. This represents a 21 per cent. increase over 1974–75 and a more than 60 per cent. increase over 1973–75. While public spending has increased at this calamitous rate, production has been static or has actually fallen. The output of British industry is now lower than it was during the three-day week. What is more, the oil crisis has cut the value of our stagnant and falling production by 4 per cent. So there has been a yawning gap between what we produce and what we spend. The Government have had to bridge that gap by running up a horrific borrowing requirement of more than £9 billion, and quite possibly as much as £12½billion. Even if the Government are successful in borrowing rather than printing the money to finance a deficit of that size, the money they attract will only be diverted away from industry and from such things as house building. I know that whenever one talks about public spending and Government borrowing being too high, one is usually attacked for wanting fewer new hospitals, fewer new schools and fewer social services. But the truth is that at the moment we have this hideously bloated level of public spending, at the same time as hospitals, schools and social service programmes are being hacked to pieces. The Government have not been pouring out money on a greatly improved National Health Service or education service. No, my Lords, the money has gone into subsidies, into paying for the massive wage increases which were blessed by the Social Contract, and into meeting the increased prices that the Government's own policies were making inevitable.
We have massive public expenditure, but we are not building more hospitals. We have vast food and rent and transport subsidies, but prices are going up by 25 per cent. We have—as a growing number

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of even Left-wing commentators are prepared to admit—the very poor, in effect, subsidising the better off, because of the refusal to concentrate help rather than spread it indiscriminately. This is the mad world we live in now, and restoring sanity is going to be a painful business.
My Lords, two things have occupied the Labour Party since they assumed Office. First, there was the Social Contract about which the Leader of the House had something to say. I shall not have much to say about it. It sounded all right, but it was not. But as it is dead and buried, perhaps we had better leave it there. Secondly, there was an industrial policy which argued that what was wrong with the British economy was that it had not had a sufficient dose of Socialism. Most observers would argue, a good deal more persuasively, that what is principally wrong is that it has had far too much. But the Labour Party were concerned, as perhaps never before, with the question of the ownership of industry, harbouring what to me is the curious notion that State control somehow leads to dynamism and efficiency—an idea not wholly rational to those of us who have some contact with nationalised industries.
And so industry has had to endure not only heavier taxes, a tightening of the Prices Code, a squeeze on profitability and hence future investment, and a Government which would not give a strong lead on wages and even expected employers who were not themselves a party to the Social Contract to police it, but also the biggest nationalisation programme since the late '40s. Even at this moment we are debating in this House the Industry Bill, which will do a great deal to weaken our mixed economy and nothing whatever to help check inflation. If we are going to make a success of a mixed economy, then the Government have to reassure industry and commerce about their intentions, and must enable sufficient profit to be earned to invest in the future. Without confidence or money, how can industry survive; and if industry does not survive none of us will survive either.
We on these Benches have been putting the general case for some time. We have called for public spending cuts, and your Lordships may remember that one of our last acts in Government was a reduction of £1,200 million in public expenditure.
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We have urged the Government month after month to reduce the size of the borrowing requirement. We have urged them to be bolder and more vigorous in trying to restrain wages, and we have told them time and again that our mixed economy simply cannot survive any more attacks upon its foundations.
The details of the Government's proposals are well known, but some of us have doubts—and serious doubts—about whether the Government are going far enough. I am not saying that their policies, resting as they will to a great extent on the increase in unemployment, will not succeed in reducing the rate of inflation to 10 per cent. by next years. They may well do that, if they can be made to stick; and I very much hope that they will succeed. Incidentally, I wish the noble Lord, Lord Beswick, the very best of luck when he is answering the question put by the noble Lord, Lord George-Brown. What I question is whether we should not have set ourselves the more ambitious target of trying to eliminate inflationary expectations in the course of the next wage round. Even in pursuing the Government's chosen target, there will have to be an overall cut in personal incomes for the first time since the war. I am a little surprised that the Government did not ask for a slightly larger cut with the prospect in return of our being able to move forward again—admittedly cautiously and slowly—rather sooner than we shall be able to do under present plans.
What the Government are really saying now is that we have several years of hard slog ahead of us. I think that it may have been both politically and economically more sensible to ask people to give rather more in the next year for Britain, on the understanding that the end of that year would offer a much brighter future. The British people, when faced with facts, given honestly and frankly, are quite prepared to accept the consequences—far more so, I think, than many politicians realise. I do not believe that our difficulties will be cured until we have a national realisation of the problems we face and of the consequences of failure, and until we have a national resolve to succeed. A heavy responsibility therefore falls upon the Government. To seek to please and to appease one section of the community

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at the expense of the other will make this all the more difficult.
In a very unhappy phrase in the Labour Party Manifesto at the last Election it was said that,
"there was no meeting point between the Labour Party and those who have a different philosophy."
I do not agree with that for one moment; for all of us are, above all, interested in the survival of this country. Of course, we are not going to agree about everything, but I should have thought it was not impossible for the Government to lay down a system of essential priorities which most of us, apart from extremists, would accept. Of course, it means sacrifice on the part of the Government, and I accept that. It means that they will have to sacrifice some of their Socialism and some of their nationalisation plans, or at any rate to postpone them. But unless we achieve a measure of national cohesion, it will not be possible to do those very disagreeable things which all of us know are going to be necessary.
Baroness WOOTTON of ABINGER: My Lords, the noble Lord has asked whether the Labour Party will sacrifice part of its nationalisation programme. What sacrifices are to be made on the other side?
Lord CARRINGTON: My Lords, we should be perfectly prepared to listen to any suggestions about sacrifices which the noble Baroness would want us to make, but since we are not in the Government it would be extremely difficult for us to sacrifice anything. I am not suggesting that anybody should govern other than noble Lords opposite. We know that public expenditure must be cut: we all know that. We know that our standard of life is going to fall and that life is going to be difficult for the next two or three years; and we know that there is going to be more unemployment. How much better it will be if we can survive it by means of an agreed system of priorities which we all recognise to be fair. Nothing is going to be solved by anyone if we are going to stick by our own Party dogmas. I am not sure that at this moment the great majority of people of this country really understand the gravity of the situation which faces us, and I do not know that one can entirely blame
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them for that. Recent wage increases have not only cushioned a large section of the community against inflation, but they have actually made some people better off. If that situation were founded on reality rather than fantasy, there could be no complaint. But the day of reckoning is coming, and it is up to all of us to give a lead in bringing home the realities of our position.
I do not believe that the character of the British people has changed in these last 30 years. An element of that character has always been an inability to realise until the last moment how serious things are, but when awakened to the reality to respond with common sense and resolution. Sometimes I wonder whether, when faced with a challenge and a bit of austerity, given leadership and a sense of purpose, the British people do not enjoy life even more than they do in times of prosperity. So we have to be honest with people. We must tell them that sacrifices are necessary and spell out to them what the fight against inflation will mean for every family. We must trust in the sanity and responsibility of our people. Adlai Stevenson once said: "The average man is a great deal above the average". We, as politicians, have a special responsibility to show that we also think that the nation above all is the important thing that rules and guides our actions.
My Lords, there is a great deal at stake: our prosperity, our place in the world and perhaps—it is not too fanciful—even Parliamentary democracy itself. Let us place our trust in the basis of democracy, the common sense of the citizen. If we do that, we stand the best chance of beating inflation before inflation beats us.

COURT LINE LIMITED
3.47 p.m.
Lord SHEPHERD: My Lords, with the leave of the House, I should like to repeat the Statement that is being made in another place by my right honourable friend the Secretary of State for Trade. The Statement is as follows:
"As the House will recall, following the collapse of Court Line I appointed Inspectors on 22nd August 1974 under Section 165 of the Companies Act to

1035
inquire into all the circumstances relating to the collapse of this firm. Subsequently, following the approach by individual MPs on behalf of their constituents, the Parliamentary Commissioner decided to undertake investigations of allegations of maladministration arising from the Statements made by Ministers prior to the firm's collapse. Both these Reports were published at 3 o'clock this afternoon and are now available in the Library.
"I would like to take this opportunity of expressing the Government's gratitude to Sir Alan Marre and the Inspectors and to pay tribute to the thoroughness of both Reports.
"Neither Report makes any criticism of the decisions taken by the Government in the handling of the issues. Indeed they pay tribute to both officials and Ministers for the speed and sense of responsibility with which they reacted to the situation as it developed.
"Both PCA and the Inspectors do, however, criticise in certain respects the Statements made to Parliament on 26th June and 1st July by the then Secretary of State for Industry on behalf of the Government. They accept that the Statements were made in good faith and reflected the confidence which the Government genuinely felt at the time about the prospects of the business based on a careful assessment of the best information available to it, but they consider that the Statements went further than was justified in reassuring the public about the continuation of the company's operations for the rest of the summer season last year. The Government note and respect the criticisms made in both Reports but the Government considered then and still believe that the Statements made were right in the difficult circumstances at the time.
"The Government have carefully considered in the light of the Reports whether any further measures to assist those affected are called for. This is not a case in which any legal liability arises. The Government's Statements were not phrased or intended to give a formal guarantee and did not do so. Furthermore, the House will recall that the Government decided last September to legislate to compensate those Court Line and other holidaymakers who had
1036
a reasonable expectation that they were protected by adequate bonding arrangements but who nevertheless suffered loss as a result of the failure of their tour operator. The Air Travel Reserve Fund Act 1975 has accordingly established a fund to which the Government have offered a £15 million interest free loan and from which the Court Line and other holidaymakers to which I have referred are being reimbursed and future holidaymakers will benefit. The Government have, therefore, concluded that no further payment out of public funds would be justified.
"However, wider issues of public policy are involved. Very difficult questions of judgment are always involved in deciding how much or how little should be said publicly in situations of this nature, particularly when there is a risk that a wrong emphasis in a Statement may bring a company down. This is a matter of continuing concern to all Governments."
My Lords, because of the importance of this matter I understand that in another place an opportunity for a debate will arise. That is the conclusion of the Statement.
3.51 p.m.
Lord BELSTEAD: My Lords, the Statement which the noble Lord the Leader of the House has made arises from two Statements which the Secretary of State for Energy made when the right honourable gentleman was Secretary of State for Industry last year concerning Government help for Court Line, in which the right honourable gentleman added an assurance that members of the public who were booking holidays through Court Line would, in effect, be all right. Although the Statement which the noble Lord has read out records that the Parliamentary Commissioner for Administration's Report pays tribute to the Government for the sense of speed and responsibility with which they reacted to the Court Line situation as it developed, paragraph 87 of this Report, which has been published for only an hour, justifies the view which was expressed in both Houses of Parliament—very strongly in another place, far less strongly in your Lordships' House—that the Secretary of State for Energy's Statement had misled members of the public because of the assurance he gave to

1037
holidaymakers. Everyone makes mistakes and life would be extremely difficult if we did not recognise that, and that is really a matter for another place.
However, having got a Parliamentary Commissioner for Administration's Report, which concludes in paragraph 87 that the Minister has misled the public, it seems incredible that in the next breath the Government are rejecting the Ombudsman's findings. Can the noble Lord the Leader of the House give me the information about whether a Government have ever before rejected a report from the Parliamentary Commissioner for Administration? Then, the end of the Statement deals with rather more complicated matters connected with the Air Travel Reserve Fund Bill. May I ask whether the Government will rethink what they are saying in the Statement and consider introducing an Amendment to that Bill to ensure that in these circumstances those holidaymakers who suffered through Court Line's collapse will now be compensated by Government grants and not, as the Bill provides, by levies on future holidaymakers?
Earl AMHERST: My Lords, I also should like to thank the Minister for making this interesting Statement, the detail of which has only just become available. We should like to reserve our criticism of this Statement as I note that we are to have a debate on the subject, fairly soon I hope, and when that time comes we shall have had time to digest what this Report says. I should like also to support the noble Lord who has just sat down in saying that the Government should consider an Amendment to the legislation whereby payment to these people is made from Government grant and not from the Reserve Fund. In the meantime, may I ask the noble Lord one question. How many of these unfortunate people who have suffered from this disaster have since been reimbursed, and if they have not been, how long will it take before they are?
Lord SHEPHERD: My Lords, I would say to the noble Lord, Lord Belstead, that I think he was wrong. The Government have not rejected this Report. They pay tribute to it and have given an explanation of their position. The words in the Report, which the noble Lord has only just seen, do not say that Mr. Bennmisled.
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The problem of the Statement and supplementary answers is that, if one were overcautious and took full care, one could well create so much doubt in the public mind and in the City—the feeling that the Government knew sufficient but were not willing to express anything but caution—that there would immediately be a run on that company, with very severe loss to those who were already on holiday and had themselves already contracted. I suggest the Report requires careful consideration. It raises considerable difficulties for Governments, the present or any future Government, in dealing with matters of this kind in a public place. There is also the fact that at the time in question Hansard was not being published and all the public were able to know of what was going on was from reports in the newspapers.
In regard to the suggestion of the noble Lord, Lord Belstead, that the Government should provide further funds to the existing £15 million, so that the burden is not in future borne by a levy, our understanding is that for 1974, taking Court Line and others, the total loss is likely to be some £8 million, of which Court Line's is between £5½ million and £6 million. The feeling is that there are adequate resources for this fund and no need for a further injection of monies. In regard to the noble Earl's question, I understand there have been some legal difficulties in the authentication of claims, but that payments to those who have suffered will shortly be made by the authorities of the Fund.
Lord BRUCE of DONINGTON: My Lords, will my noble friend inform the House whether the Parliamentary Commissioner had an opportunity of investigating the circumstances in which a highly confidential report, prepared by a very eminent firm of chartered accountants and with a restricted circulation, came to be published in a magazine called Accountancy Age, published by the Haymarket group of companies in which Mr. Michael Heseltine has had an interest?
Lord SHEPHERD: My Lords, I fear that I have no knowledge of that article or of the circumstances, but if it is a matter for the Parliamentary Commissioner it is for him as an independent official to take it up.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, will not the noble Lord confirm that the Companion to Standing Orders expressly states that it is highly improper for a Member of this House to mention by way of criticism a Member of the other place; and will the noble Lord, as Leader of the House, kindly explain that point to his noble friend, who is perhaps not so familiar with the Companion as are those of us who have been here longer?
Lord SHEPHERD: My Lords, I must say in fairness that I do not know whether there was any imputation in what my noble—
Lord HAILSHAM of SAINT MARYLEBONE: Oh!
Lord SHEPHERD: I am expressing my own view, my Lords; the noble and learned Lord is entitled to his. There have been occasions when we disagreed on some of his own imputations on some of my right honourable or honourable friends in another place. I hope that the noble and learned Lord will leave to me these decisions on advice to Members of the House.
Lord HAILSHAM of SAINT MARYLEBONE: But surely, my Lords, the observance of Standing Orders is something for the whole House. Are we not entitled to expect from the noble Lord the Leader of the House strict firmness and impartiality as between the two sides when a clear breach has been committed?
Lord SHEPHERD: My Lords, the noble and learned Lord is now suggesting that I act unfairly as between one side of the House and another, but I should not have thought that was a fact.
Lord BRUCE of DONINGTON: My Lords, is my noble friend aware that no imputation was intended in so far as Mr. Michael Heseltine was concerned; but is he also aware that I have drawn public attention to this fact and invited comment on it publicly quite a long time ago?
Lord SHEPHERD: My Lords, if my noble friend has referred to it in public I do not know under what circumstances,
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and I think we had better leave the matter there.
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord aware that the understandably kindly way in which he tried to deal with the excess of the Minister of Energy, his colleague in the Government, could give the impression that the Government compound that excess? Here we have had what I imagine is an unprecedented rebuke to a Cabinet Minister by an impartial inquiry, and it is a pity if the Government, who one would understand would not want to be a party to it, give the impression by the way they accept this Report that perhaps they are not so disturbed about it as other people would be. Has the Lord Privy Seal any hope at all that the Minister who has received this rebuke is likely to have learned any lessons from it in the way he has acted since?
Lord SHEPHERD: My Lords, if before making such supplementary statements the noble Lord would read the Report he might find it of use. The fact is that this was a Government responsibility: there were more Ministers involved in the matter than the then Secretary of State for Industry. It was a Government responsibility, and that is why I have repeated the Statement myself this afternoon.
Earl FERRERS: My Lords, can the noble Lord say on what grounds the Government think it right or prudent that when a firm goes bankrupt they should use public money to reimburse those who happen to have purchased the wares of the company before it went into liquidation?
Lord SHEPHERD: My Lords, again I suggest that the noble Earl should refresh his memory on the circumstances of Court Line. The reason why the Government acted with great swiftness in this matter was to save 9,000 working men's jobs in the North-East. It was nothing to do with the holiday section, although that was a matter of interest; it sprang from the whole ramifications of Court Line. That is why the Government acted with the speed they did, in order to save 9,000 jobs in the North-East.

THE ATTACK ON INFLATION
Debate resumed.
4.3 p.m.
Lord BYERS: My Lords, perhaps we might now return from the choppy seas of the Court Line to the attack on inflation. My main reaction when the Government announced their intention to try to control inflation was, I must admit, one of tremendous relief, that at last, after so many months, there was a genuine recognition that something had to be done, and done quickly. Therefore, despite the inadequacies of the policy and the haste with which it has obviously been thrown together, we, from these Benches, offer full support to the Government and, indeed, full support when, as we believe, they will have to be both tougher and more specific in their policies. I believe it is essential for both Houses of Parliament to be seen to be solidly behind this attempt to get inflation down to tolerable levels. A recent survey by Mr. Daniels of PEP (and I served on that Committee) on inflation shows that the climate of public understanding and opinion is very favourable to the measures announced by the Government, and that a substantial majority of people now feel that they suffer personally from inflation and they want something to be done about it.
What is more, for a large variety of reasons according to Mr. Daniels, people see no scope for the exercise of voluntary restraint in their wage and salary demands, and they look to the Government to ensure that restraint is applied evenly and equitably across the community. Eighty per cent. of the people agree that there should be such a policy and 58 per cent. of them do so strongly. Support is stronger in the manual working households than among people in white collar households, and therefore the climate is right for the Government to be tough and to be seen to be supported by both Houses of Parliament.
This is one reason why I do not understand the reluctance of the Government to publish their statutory reserve powers. This creates a belief that the Government are trying on a monumental bluff, and there is only one thing, that a Briton does with a bluff, and that is to call it. I think this is highly dangerous. It is not
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the right climate to create: it is far better for everyone to know what happens if they try to cheat on a voluntary policy, and in my view the Government will have tremendous support for dealing toughly with cheats and queue-jumpers in the circumstances in which we find ourselves. Much as we support the Government in their decision to take these measures we must express some doubt about the effectiveness of the policy in its first form. As I have said, it seems to have been hastily put together—probably between two Chequers week-ends, I should think—and there are a number of things which I believe are wrong with it and which ought to be put right.
The monitoring system, if it exists, is quite tenuous and I think it will break down fairly easily. It is doubtful whether a policy such as this will work without an independent, non-politically motivated Prices and Incomes Board. I believe this is something we may have to face. I doubt whether re-entry will be possible without sonic form of relativities board, and I think we ought to be using the short time we have available to set up machinery for the transition from the £6 limit to something less restrictive.
This haste is demonstrated by the way in which pensions as non-wage benefits have been dealt with in the Bill to which this evening we are to give a Second Reading, taking the remaining stages tomorrow. As the House knows of my interest in this matter, I hope your Lordships will bear with me for a moment because I think something drastically wrong has been perpetrated. I have never really known such confusion and loose thinking as has taken place on this matter since the White Paper was published. Explanations and interpretations have had to be dragged out from Departments and from Ministers; often they have been contradicting one another, and seldom have they been clear.
The latest Statement in another place yesterday, by the Secretary of State for Employment has, if anything, made matters worse. I am quite sure this was not intentional. It is simply that the Secretary of State and his Department do not appear to have understood the implications of what he actually said to the House—at least. I hone this is so, because I do not believe that he would intentionally

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do this. The Secretary of State said yesterday:
"It is not our wish to impose a moratorium on the negotiations on pension improvements designed to meet the Government's own legislation."
By that he meant the Social Security Pensions Bill, to which Royal Assent will be given in only a few days' time. Tremendous work has been put in to get this Bill on to the Statute Book and to get better pensions for people, and I am sure the Secretary of State would be one of the first to want that to happen. He then went on to say:
"The Government intend that employers and anions may continue to discuss and negotiate pension improvements for implementation from 31st July, 1976, provided they do no more than to meet the minimum statutory requirements for contracting out under the Social Security Pensions Bill "—[Official Report, Commons, 29/7/75; col. 1637.]
It is this insistence on the minimum which makes no sense at all and I should like briefly to explain to the House why that is so. Under the new pensions Bill, employers have either to put their employees into the State scheme or provide them with an occupational pension. In order to contract out of the State scheme the employers have to provide certain minimum benefits. In practice, good employers will provide something much better than that and the trade unions will certainly demand something better than the minimum which is prescribed for contracting out.
The Government policy up to now has been to encourage a partnership between the State and the good occupational scheme, and Mrs. Castle and Mr. O'Malley have done a very great job in that direction. But now the Government are insisting, if we can believe that statement to be correct, that nothing can be negotiated by way of an occupational scheme which is better than the minimum required for contracting out. In other words, the floor has become the ceiling as far as new and improved pension schemes are concerned. The occupational scheme can provide no better benefit or any greater flexibility than the earnings-related State scheme, which makes a nonsense. Although the Government profess to want to encourage negotiations there is nothing to negotiate about and there is no incentive to contract out. That cannot be the intention, and
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I think this will be confirmed when the trade unions, who are now very keen on pensions, read what the Secretary of State for Employment said yesterday and understand the full implications of it.
The people who are going to suffer are not the higher paid. Most of these are already in good occupational schemes, and exemption has been agreed for them. That is fine. It is going to hit the manual workers and the female employees, who up to now have been excluded from pension schemes These are the people we expected to come into good occupational schemes on something far better than the minimum requirements for contracting out.
In addition, under the new policy enunciated last night, only future service can count for pensions. Those retiring in the next few years will get no chance of building up a pension based on total service, only on future service. The same problem arises on widows' pensions, because by limiting the new and improved schemes to the minimum requirements for contracting out, many widows will suffer. May I give an example. There are a number of schemes where the husband has a good pension, but there is no widows' pension at present Normally, the scheme would be improved—and this is what we expect to happen in the next few months—to provide a widow with half her husband's pension. But under the new policy the widow is limited to one half the minimum pension and this could be quite derisory if one examines it. This is indefensible.
The Government's main case is that to allow contributions to be used for new and improved schemes above the minimum required for contracting out would add to labour costs. But many of these contributions can be made from profits, and many can be made without asking for increased prices. In any event, payments towards pensions represent savings; they are deferred pay, savings which can be used for investment rather than for consumption, which is what happens when one pays cash out for wages. I hope the Government will reconsider this at this late stage, because I am minded to put down an Amendment tomorrow which will try to put this right. I believe a great deal of damage will be done if it is not.
The MINISTER of STATE, DEPARTMENT of INDUSTRY (Lord Beswick): My Lords, I have sympathy with what the noble Lord, Lord Byers, was saying, but can he help us a little more? He himself said that pensions are deferred pay. This is precisely the problem. If you have deferred pay in one sector, how do you say it is fair to those who do not have the same pension benefits in another? How do you prevent a company from having some sort of phoney deferred pay system in order to get round the £6 limit?
Lord BYERS: My Lords, it is not a question of getting round the limit. It is not a question, in my view, of people wanting to have phoney arrangements. The point is that this money goes as a contribution into a fund. It does not go into the pay packet of the worker. This is what we are trying to do, to cut down the inflationary power of additional wages. The deferred wage is not paid out until a man is 65, or a woman is 60, and by that time I hope we shall have solved this problem. Does that satisfy the noble Lord opposite?
Lord BESWICK: My Lords, up to a point it does, but the noble Lord has not answered the question about fairness as between one category and another.
Lord BYERS: My Lords, it is not a question of fairness between one category and another. The example I gave would be to try to get fairness. Let us take the case of a manual worker not in a pension scheme, but the company has a pension scheme, a very good scheme, and has the intention in the next few months to bring manual workers into it. What the Secretary of State has said prevents that, which is unfair between those two categories of people. It will affect a number of people. For instance, it will not be possible during the next year, because we are dealing with the minimum requirements, to introduce death in service benefits, lump sums to widows. People will die during this period. I have already conveyed these thoughts to the Secretary of State for Employment today, and I hope he will look at this again, because it is not an injustice that is being done, but it is a nonsense that is being made of the Social Security Pensions Act which will be on the Statute Book very soon.
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I want to say a few more things about incomes policy. The present incomes policy is short-term. We have to consider how we can get people to recognise the basic facts of industrial life if we want to make a mixed economy work, and what happens if we ignore or abuse the principles upon which our mixed economy should in fact proceed. First of all, I must say that I think we should recognise that where an institution or an organisation gets into a monopoly position and uses its monopoly power for its own ends, someone is going to suffer.
It does not matter if it is a giant corporation or a large trade union. We on these Benches have fought over many decades the great corporations on monopoly. The monopoly power having moved to the trade union movement, this is why we want to see real industrial democracy and decisions on pay and other matters made far closer to the plant, where profits, losses and productivity can be better understood. I hope that we can rely on noble Lords and noble Baronesses opposite to help us to get this over, because it is essential that there should be a proper understanding of productivity, profits and losses at plant level if we are to defeat inflation.
Secondly, I follow the noble Lord, Lord Carrington, but not in detail. We must get a realistic balance between the demands of the public sector which, as the noble Lord said, are increasing tremendously—the Economist drew attention to this in dramatic terms only a week ago—and the balance between the demands of the public sector and the ability to pay of the private sector. This is absolutely vital. I want to say this to those opposite. They fail to understand why those of us who support private enterprise do not want to see an extension of nationalisation, particularly at the present time. It is not because this is something which is included in the Labour Party Manifesto. It is not a question of saying, "You must give up your Socialism". We are opposed to it because we think the pendulum has swung too far away from private enterprise towards Government ownership, and the burden on the private sector, which has to provide the cash, is already too great, and should not be increased by further Socialist policies. I believe over the coming months there will be greater

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recognition that where we have 60 per cent. of the Gross National Product being spent in the public sector, that this is too much and we dare not add to it another £100 million.
I should have liked to see in the White Paper a restatement of the principles which must apply to a mixed economy which has to rely so much on a viable private sector. For instance, I should like to hear from the other side the assertion that the private sector must be profitable. Profits are a source of investment which industry needs. Dividends must be encouraged. Psychologically we agreed years ago that if you have a pay freeze, you must have a dividend freeze. We must look at this again. Dividends are a major source of income for such things as pension funds and other units on which pensioners depend in their retirement.
My Lords, productivity is vital, and is a responsibility all the way along the line. Overmanning is a sin, and must be recognised as such by trade unions and management alike. I was shocked to see that the Ryder Report on Leyland showed that 25 per cent. of the workforce was unnecessary—40,000 people being paid every week. Think what the firm could have done with that money. No wonder the undertaking was, and is, in trouble. Yet we have this serious dilemma which is difficult to resolve. I do not know how it is possible to resolve it, because if overmanning is a sin, unemployment is equally or more so, not merely because of the waste of human resources; but because today, unemployment, generally speaking, is inflationary. It is something which we must tackle.
In 1974, a married man with two children who claimed all the allowances due to him would have been better off out of work for the first 12 months, unless his earnings from work exceeded £55 a week. He would have had a tax rebate and redundancy pay; his unemployment pay is not taxed, so the Government loses revenue and the unemployment pay has to come out of public taxation, public funds, and that pushes up Government expenditure. There is no National Insurance contribution, either, during that period. I have no solution to this, but we must look at it carefully. Unemployment solves nothing. It is not like 30 or
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40 years ago, when it was used as a threat to the worker. This does not happen, and I am glad it does not, but it makes things worse.
My Lords, this is why I believe that a massive retraining programme is much to be welcomed, and must be undertaken. For those who cannot or will not be retrained, we must consider carefully whether there is not some other way in which they can be usefully employed, because 1 million unemployed today is costing the State over £1,000 million. That money is going out for people many of whom do not want to be idle. We must have another good look at how we use our resources. The real solution for the time being is to shake out surplus manpower and get efficient industries; and then to employ it sensibly elsewhere after retraining, if necessary.
I think it is a real challenge to which this country must respond. As the noble Lord, Lord Carrington, said, the country will respond if things are explained to it in simple terms. I think the policy in this White Paper is only a start; we are going to need teeth in it, and toughness. We have got to use the next few months to try to tackle the problems which must inevitably arise when we face the reentry period.
4.20 p.m.
Baroness WOOTTON of ABINGER: My Lords, I should like, if I may, to begin by addressing a small request to the noble Lord, Lord Carrington. I understand that he has at his elbow a list of extracts from Labour speeches and Labour Manifestos, which I presume were much too long for him to include in his speech. Would he be good enough either to distribute those to Members of the House or to put copies in the Library, interleaved, so that noble Lords on this side of the House may have the opportunity to add comments and quotations from other sources. Having said that, I should like to strike a chord, which I hope will initiate a swelling chorus, of pleasure and rejoicing that at last we have before us a policy that is anti-inflation. This is a policy that has been born in something of a hurry, but I do not think noble Lords on either side of the House will dispute that it was not born prematurely—indeed the pregnancy went the full term. If I may now

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drop my obstetric metaphors, it is at the moment a policy which is of a temporary nature. Its temporary nature has been particularly emphasised by the TUC in their annex to the White Paper. I would point out that the Government are prepared to go further and intend to maintain policies over a number of years which will control domestic inflation.
My Lords, in the bottom of our hearts, whatever our contacts with industry, whether we are industrialists or trade unionists or academic economists or just ordinary sensible people, we are properly conscious that an epoch is coming to an end. It is an epoch which has lasted for a century and a half, during which time trade unions have fought to substitute collective bargaining for individual exploitation, fought long and bitter struggles often in the face of unreasonable opposition, until at last they have attained the distinguished and responsible position which they now hold in our community.
I hope that during such breathing space as this temporary policy may give us—and here I fully agree with the noble Lord, Lord Byers—we may devote ourselves to thinking out some of the new features of the new epoch that is now beginning. The trade unions have said in their annex to the White Paper that they are concerned that this temporary policy should not continually erode the differentials, either within negotiating groups or between them. I have great sympathy with that, because this would be a casual and ill-thought out erosion. I hope very much, as I think Lord Byers suggested, that we shall spend the time between now and our longer-term policy in working out some more sensible method of determining relativities and differentials. I hope that we shall recognise what is the truth; that there is absolutely no sanctity in our present pay structure. Our pay structure is a compound, a historical deposit; it is a compound of prejudice and quite fortuitous strategic advantage.
In the meantime, my Lords, we are faced with the temporary problem. I am not entirely happy about the temporary policy that is being proposed and I hope my noble friend Lord Beswick will be able to enlighten me a little further, although I may have to make an apology, because I am today at the mercy both of a nationalised and a non-nationalised
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industry; namely, British Rail and British Caledonian Airways. What I should like to ask my noble friend is this. My noble friend Lord Shepherd said that the £6 limit would not be carried into shift work and overtime. I think those were his exact words. Does that mean that however many hours a man works overtime, or however unsocial the hours, or however long his shifts, he will not be able to earn more than £6 more a week, or does it mean that he will be able to take his overtime earnings on top of this £6 basic?
Then there is a second feature—going back to the new epoch—which I think is important and is at the bottom of all our hearts, and this includes my trade union friends. I think we have said goodbye forever to the theory that the bargains which working people make with their employers are entirely their private concern. There is always outside the bargaining room, or haunting like a ghost just inside the bargaining room, another party, not invited to sit at the table or to speak. The other party may be the taxpayer, it may be the consumer, or it may be something intangible, abstract, as they say on "Twenty Questions", like the balance of payments. But there are always other interests. I think the policy we are now adopting is in itself a recognition that we have said goodbye forever to the idea that there is no third party involved in the collective bargains which are made between workers and employers.
I should like to mention one aspect which I hope will apply only to this policy and which I hope will be corrected when we get to the longer-term policy. This is not an incomes policy. The noble Lord, Lord Shepherd, said that directly or indirectly it will affect everyone in the country. In some cases the effect will be so indirect that it will be totally negligible. This is a pay policy; it is not an incomes policy. I think that is a very great deficiency. An incomes policy would affect every kind of income from wherever it came, but this policy affects only people who happen to work for an employer. If you do not work for an employer you may, with luck, escape it almost altogether.
Let me consider some of the people who are left out. There are the small business people, those we are often told

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are the salt of private enterprise, and so some of them are. I know a good many of them, because, living in a rural area, I use the services of a great many self-employed persons with small businesses, with perhaps one or two employees. Theoretically they are bound by the Price Code. In practice I do not think the Price Commission has heard of any of them because they come in the lowest category on which the Price Commission is not able to enforce its Code. Some of them are the salt of the earth. Some of them look at me fondly and say, "After all, we have known each other a long time", and then they come up with a very nice proposition. Others put up their prices by 50 per cent. within less than a year and contend that they are giving better service than other people in the same profession. These people are left out of the anti-inflation policy.
Right at the other end of the scale there are the speculators. If you earn £8,500 gross from an employer you may not have anything by way of additional income. But if you have an income of £8,500, or £10,000, derived anywhere other than from an employer, and you are clever and also lucky, you may speculate; you may add to your income anything that your cleverness and your luck may bring you, and there is nobody to say to you, Nay. You will pay your ordinary income tax, but you will not come under any kind of special anti-inflation measures.
A Noble Lord: There are capital gains.
Baroness WOOTTON of ABINGER: My Lords, there are capital gains, but some people speculate to a point at which it becomes their income. Then there are the shareholders. We have dividend limitation. Dividends are not to be increased by more than 10 per cent. This is the kind of provision which is sometimes called cosmetic, and supposed to make things look prettier than they are, which is flattering to cosmetics. Not many firms in my present experience are in a position to increase their dividends by more than 10 per cent. or even as much as 10 per cent., and those that are ought not to give them to their idle and spendthrift shareholders. They ought to spend
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the surplus on investing in increased productivity by British industry.
Lord BYERS: My Lords, the noble Baroness does not include in that epithet the pension funds, which are dependent on dividends? They have been investing in British industry.
Baroness WOOTTON of ABINGER: My Lords, that may well be, but that means that those personal shareholders who enjoy dividends—and there are a considerable number of them—will be left out of this policy altogether. It will not be equitable in that sense. A rich shareholder who has large holdings in a very profitable company will get a good deal more than £6 a week if his company has a good year. A pensioner with a small holding, a few shares that he or she has perhaps been able to collect in the same company, will get very much less. I think that when we move on from a pay policy—I am giving two cheers to the pay policy, and when it becomes an incomes policy I will give it three cheers—we shall be able to see that every single personal income in this country is restricted in accordance with what the country can afford. I see no possible way of doing that, except fiscally.
I have said elsewhere in print, as some of your Lordships know, that the only way to do this is to have a tax on the increase of every personal income, and that tax should come after payment of income tax so that it takes account of what people really have to spend. If we could do that, we should really have an incomes policy and the sacrifice would be spread over all classes of the community, instead of those who merely happen to be employed. It would not exclude the classes I have named, some of whom are admirable and some perhaps less admirable. I shall not go into the detail of that, because I have worked it out elsewhere, and I hope when we come to our longer term policy that that will form part of it.
Before I cease, I should like to mention one or two other general topics. First, there is the obsession that the noble Lord, Lord Carrington, and many of his companions on the other side have about public expenditure. There is nothing particularly wicked about public expenditure. Public expenditure is expenditure. It is just like any other expenditure. The only

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difference that may make it wrong is if the Government borrow the money, or print the money, which you and I cannot do. If the Government take the money out of our pockets, as they very largely do, in order to spend it on good public services when we would possibly spend it on our own frivolities, then public expenditure is a great deal better than private expenditure. This has been said many times, notably by Professor Galbraith in his book, The Affluent Society. There is nothing wicked about public expenditure as such. It depends where the money comes from and what the expenditure is on, and we should get away from this obsession.
Secondly, I should like to say something about the way in which we speak and think, particularly about inflation. We are now getting into the habit of speaking about inflation—my noble friend Lord Shepherd spoke about it as thought it were a cancer—as if it were some natural catastrophe. Do not let us forget that inflation is man-made, and if it is manmade it can be man-cured. When I am told that prices must go up because of inflation, this is making inflation the excuse for inflation and we are back in a circle which never ought to be. We have to change our whole attitude about this and our way of speech. We have also to say what is part of this, that prices do not go up. Prices never go up. Once upon a time there were leading economists, not so very long ago in the nineteeth century, who said it did not matter what trade unions did; the rates of wages were inexorably fixed by the laws of supply and demand, and trade unions could try to push but no difference at all would be made. Nobody believes that now. Everybody believes that wages are put up, and put up very often by trade unions, but we still believe it is about prices. Prices never go up; prices are put up.
Leaving that thought in your Lordships' minds, may I apologise if I am not able to hear the explanation which my noble friend Lord Beswick will give me about the complications of this policy when it comes to other than large national agreements. I am particularly concerned about shop floor agreements in which there is a great deal of shop floor bargaining. I wish, indeed, that we had a nice simple system; that we could live under
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the simple Chinese system where there are eight rates of pay and no others, and then we could add £6 per week to each of the eight as long as the top one was not too high, and all these difficult interim problems would be solved.
4.36 p.m.
Lord BOYLE of HANDSWORTH: My Lords, it is a great privilege to follow the noble Baroness, whose quite exceptional intellect and courage I have admired over many years, even when we have been on opposite sides. I felt at one point in her speech this afternoon that she was perhaps rather underrating the cumulative effect of the capital gains tax which has been in operation since 1965: the tax measures against land speculation which were very properly taken as part of the Conservative Government's package, perhaps a bit belatedly, at the end of 1973; the very severe capital transfer tax of the present Government, and the double increase of taxation on investment income. While I would not wish to debate with the noble Baroness about her interesting book this afternoon, I felt she was rather underrating the combined effect of those four measures.
Baroness WOOTTON of ABINGER:My Lords, there is one form of speculation which is not successfully covered by the measures which he mentions. It is one of the most deplorable; that is, that you can speculate in your own country's currency.
Lord BOYLE of HANDSWORTH: My Lords, I believe that where currency is concerned, long experience shows that this is one of the most unpopular forms of speculation, but where one must recognise that experts can perform a nationally significant service. I do not believe that one can dismiss this subject quite so easily as some wish to do. Returning to the main theme of this debate, like Mr. Heath in another place I would give an unequivocal, Yes, in answer to the question whether it is necessary to embark on the policy set out in the White Paper. I must say that I regret the fact that the Bill, which is the legal sanction behind the policy, has not been brought before Parliament. The White Paper in paragraph 3 talks about the Government "supporting the TUC's proposal for a universal pay limit of £6 per week". But under our constitutional

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conventions Governments do not just support and endorse the proposals of other bodies.
Governments make choices. They take decisions. They surely have the responsibility for assuring Parliament that they possess the requisite legal powers to back up the policy that they announce. Therefore, I do not think that there can be a valid defence for introducing this policy but not presenting to Parliament the legal powers which are necessary in order to sustain it. None the less, I believe that the policy itself is right; that is to say, the policy of bringing down the rate of inflation to no more than 10 per cent. by the late summer of 1976 and to single figures by the end of next year. I am also convinced that the limit on incomes proposed in the White Paper is an essential component of this policy.
I know there are still those who believe that all incomes policies are futile, even injurious, and that we should seek to defeat inflation by monetary and budgetary measures alone. This view was expressed by a number of speakers in another place last week: that was no surprise to me and it would be no surprise to anyone who was a Member of the Shadow Cabinet between 1966 and 1970. The noble Lord, Lord Carrington, said that the Conservative Party would certainly aim to learn from mistakes made between 1970 and 1974. What bothers me is not so much what the noble Lord and his colleagues might do if they were now in Office, but the feeling that there may be some rather slow learners on the Benches behind the noble Lord's colleagues in another place, and that fear has not been completely removed by some of the speeches that have recently been made.
The view that we can defeat inflation by monetary and budgetary measures alone has, of course, been supported by a number of academics, one of whom reviewed the noble Baroness's book to which she referred. "Monetarism" has become a sort of fighting word, so let me make it clear that, in my view, there are a number of things wrong with monetarism as a rigid doctrine as a counter to inflation, and I will cite three examples. First, it surely overlooks the urgency of the present situation, when British prices
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have been rising at an annual rate of 25 per cent, compared with our competitors' figure of nearer 10 per cent. Even the most celebrated of monetarist economists, Professor Friedman, has spoken of the control of money supply as a "long run" condition of price stability, and I think I am right in saying that Professor Walters has said in The Times that it would be necessary to pursue a rigid policy for four years. We simply do not have four years, and as Lord Keynes rightly said, in the long run we are all dead.
Lord BOOTHBY: My Lords, might I ask the noble Lord. Lord Boyle of Hands-worth, whether he agreed with Professor Galbraith who wrote to The Times the other day, saying that for the time being and for many years to come statutory control over wages, incomes and prices was absolutely essential and should be built into our economy?
Lord BOYLE of HANDSWORTH: My Lords, my short answer to that is, Yes. In fact, I was about to give a quotation from Professor Galbraith, and I will do that shortly. Secondly, surely monetarists seriously underrate the significance of the shift that has taken place in relative economic power within our society. I thought the noble Lord, Lord Byers, was right—I agreed with much of what he said—when he talked about an incomes policy being necessary in view of the growth of monopoly wage bargaining. This is the principal reason why over the years, indeed for the past 15 years, I have reluctantly become convinced that statutory powers are going to be needed as a permanent sanction; I do not see any way out of this. For my part I have believed this ever since I read the 1961 OEEC Report on Rising Prices which I think was in part the work of the noble Lord, Lord Kahn.
At this point I will quote Professor Galbraith, who said in an interview with the Observer last weekend:
"We have had stop and go fiscal policies. We have had stop and go income policies. They are not going to work until we can make up our minds that this is something we are going to have to live with permanently from now on."
The noble Lord, Lord Boothby, and I have discussed questions of this kind in the past. I have always regretted that Conservatives have tended to confuse the issue of

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nationalisation, and the issue of how egalitarian a society we want to see, with the quite separate issue of whether or not one believes in total laissez-faire. I can see no inconsistency in wanting to conserve our institutions, in having some disagreement with the Left about how egalitarian a society one wishes to achieve, and yet at the same time believing that there are certain forms of intervention which must be a permanent feature.
Thirdly, I believe that monetarists are too cavalier about what constitutes a tolerable level of unemployment. It is a matter not just of the absolute figure, but of the extra social cost of an additional 250,000 unemployed once the total has passed a certain point. If we are concerned with social harmony, then surely we should not ignore the evidence of the PEP survey, to which the noble Lord, Lord Byers, referred, that more than three-fifths of the British population strongly disagree with the suggestion that higher unemployment would be preferable to inflation at present levels. It is interesting, furthermore, to note that 74 per cent. of those in the Northern region hold that view. A number of noble Lords have already spoken about balance, but let us not forget the regional balance which Mr. Heath rightly mentioned in another place in his notable speech last week; the regional balance in Britain should, in my view, always be in our minds. For all these reasons, while monetary policy is certainly a component, and an essential component, of anti-inflationary policy, it cannot be the whole.
The size of the borrowing requirement is worrying, not least because of its effect on the reactions of our creditors. But I suggest that it is a mistake to suppose that at a time of rather sharply rising unemployment, a cut of £1 billion in Government expenditure will automatically result in a cut of £1 billion in the borrowing requirement. It is not so simple as that. I come closest to the monetarists' position over the nationalised industries. I think it was a pity that the then Conservative Government did not, as they so nearly did, follow the advice of the CBI in 1972 about putting these industries on a more commercial basis—an episode well described by the noble Lord, Lord Windlesham, in his extremely interesting recent book.
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Can one really justify a subsidy to British Rail of £430 million a year at the present time? I agree with an article which appeared at the weekend, in that I do not believe that this can be justified on social or even on environmental grounds. We must remember that the railways are today failing to attract either freight or passengers, and there is a real choice here between the level of subsidy we give to the nationalised industries and the needs of certain essential social services; and I leave your Lordships in no doubt, for example, as to the importance of the hospital building programme in the North of England.
I shall for the remainder of my speech consider the future. First, the £6 a week, when it is negotiated, will be a heavy burden on a number of small businesses. It will in many cases amount to a 25 per cent. rise, and I hope we shall hear the answer to the question which the noble Lord, Lord George-Brown, I know intends to ask again: just what would be the cost of this and what would it mean, for example, to the retail and distributive trades? Of course many price rises, including the consequences of the £6, still have to work their way through, and there is a likelihood that for a considerable number of workers there may be a fall in real wages by something like 10 per cent. in the New Year.
Lord BESWICK: My Lords, perhaps I might interrupt the noble Lord to find out just what is the question I am going to answer. When the noble Lord, Lord Boyle of Handsworth, asks what would be the cost to the retail trade, what exactly does he mean—the total cost in money terms, an estimate of the percentage increase on their wage bill; to what is he referring?
Lord BOYLE of HANDSWORTH: My Lords, I meant two things. First, I was referring to the percentage increase which I agree will be varying, but which in a number of cases will be as high as 25 per cent. Secondly, is it possible to form any estimate, arising from the £6 flat rate increase, of what will be the total extra cost to the economy as a whole in those cases when the negotiated figure might otherwise have been smaller? I felt that the noble Lord was on a fair point. But it is, of course, also true that real wages for a number

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of workers will be falling by something like 10 per cent. in the New Year. We have to face this. It will therefore call for very skilled political leadership. But at this point we must face the point that the noble Baroness was making; namely, that we have to choose between a cut in personal consumption and even harsher cuts in health and education, and I, like her, would not like to see those.
Secondly, we must continue with the task of trying to help the economy to become more competitive. I sometimes feel that, in our concern with inflation, we forget the balance of payments, which is really just as fundamental a problem. We cannot secure our position in the world without competitive industry and without a sufficient level of investment. Manufacturing investment is clearly vital for the future. Here, I could not help feeling that paragraph 39 of the White Paper was far too defensive.
"The passing of the Industry Act"
we are told
"will give the Government powerful new weapons in support of investment;…but investment, whether public or private, has to be paid for and, in a mixed economy, the investment of the private sector has to be paid for out of profits…. Last year, profits were so low that they were insufficient to finance stocks, work in progress and the replacement of existing fixed capital, let alone to extend it."
May I suggest that it is no good being too defensive about profits? I would say on this subject that if Ministers believe in a mixed economy—as most of them do—let them say so. Let them be frank about it. Let them say that unless British industry as a whole is making substantial profits there is no hope for job prospects, living standards or social improvements either. Mr. Heath, for his part, spoke up courageously when he was Prime Minister about what he called the "unacceptable face of capitalism". In return, let those members of the Government who really believe in a mixed economy say so openly, and say that they want to see us make a success of the private sector no less than the public sector.
Lastly, what is to be the next stage? As we have already heard this afternoon, there is, in the language of the cosmonauts, the problem of re-entry. This is
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recognised in the TUC's document. I am glad that attention has been paid this afternoon to increments. It is going to be very costly if we do not get back to increments and have simply a system of fixed points. Furthermore, pay comprises wages and salaries. I would plead with noble Lords and with the Government that we should not become too egalitarian in our approach to salaries. Let me give two examples. The first, as noble Lords will not be surprised to hear, is that of university salaries. Stage 1 of the post-Houghton award simply puts university teachers back to where they should have been in October 1974. Even this would not have been possible, as it is under paragraph 8 of the White Paper, but for the fact that the university teachers—rightly as I believe—went to arbitration over the top point on the lecturers' scale. Assuming, as I believe we must, that Stage 2 will be caught by the White Paper, there will be a continuing sense of grievance which will eventually have to be resolved.
I should like also to quote one sentence from the Report of the Top Salaries Review Body of last October, in which it was said:
"It is important to remember that levels of pay…at or near the top may well affect recruitment and retention lower down, and therefore the standard of ability which this country may expect to have at its disposal in ten or twenty years' time."
I believe that that point is most important. We should not only think of those who are earning the highest salaries now. It is a question of the incentives which are offered for the future. There is, I know, concern over post-experience retraining on the part of all those concerned with management—industry, business schools, universities and polytechnics—but it is no good retraining people simply for them to take up jobs abroad.
My last comment about the future is that I agree with the noble Lord, Lord Byers, in hoping we shall have a Prices and Incomes Board again. I was sorry when it was done away with; and I say this partly because my vision of a Prices and Incomes Board is not one of a body which takes away all the work from the existing organisations, including existing review bodies, but is of a flexible body which will remind us all the time of the

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connection between incomes and prices, and which can take a rather more leisurely and in-depth look at a field and explain to us with as much clarity as possible its problems for the future. I believe that there is a very strong case for a Prices and Incomes Board to be set up again and, indeed, I believe that we may well need a Relativities Board as well.
Clearly, we must feel acutely anxious about the economic situation today, with inflation at the present level, our balance of payments still critical and productive investment low, and, compared with the rest of the world, a continuing process of the weakening of our competitive power. Yet I believe that there is also much goodwill within our community and a desire on the part of large numbers of people to put things right. I hope your Lordships will not feel that I am being merely conventional or sentimental in saying that in this situation I believe a special importance attaches to both Houses of Parliament as the grand inquest of the nation. There are many proposals for reform of our political system today. But let us not allow any reformer, be he a Minister, an academic or a judge, to seek to by-pass Parliament. I very strongly agree with a point made recently by the noble and learned Lord, Lord Hailsham. There is a good case for looking again at the relationship between law, Government and Parliament. I agree with the noble and learned Lord there, but I also endorse his view that it must be Parliament which takes the decisions.
My links with Parliament are, of necessity, very part-time nowadays, but such links as I retain, not least as chairman of a Review Body, have left me—and, may I add, my colleagues—with a heightened respect for an institution which men and women of widely differing opinions serve well and recognise as something more important than they are. At a time of exceptional difficulty for Britain, let us not write ourselves down unduly, and let us remember our strengths.
4.57 p.m.
Lord GEORGE-BROWN: My Lords, one of the great cases to be made for this House is that, however late in the day and after however many academics and merchants, place will always be found for a worker. I want to proceed from
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that. I listened with interest to the noble Lord, Lord Shepherd, opening the debate and I found myself rather bothered by an awkward memory. The noble Lord, Lord Shepherd, said among other things that one of the great cases for the White Paper was that it represented an agreement with organised labour. Let me just speak as a member of organised labour. It represents nothing of the sort. This is Orwellian newspeak or doublespeak. It represents a behind-the-chair agreement with one or two trade union barons. Let us just admit that and not do the Orwellian newspeak or doublespeak. I can speak for my people in the unions just as well as Mr. Jones can, except that I do not have Mr. Jones's capacity to commit the card. The Secretary of State for Employment goes along because he and Mr. Jones are arranging it, which also, in a way, answers the noble Baroness, Lady Wootton. I am glad she has not yet left, though she said she would have to go. In a way, it answers her about her view of a pay policy. It has to be done in a much wider context, but I shall come back to that rather later.
I have little joy in knocking any efforts any Government may make in this field. But we must at some point establish what is the field. I made my opening remark about the difference between a worker and an academic, or a worker and a merchant because the field is much larger than a pay policy or incomes policy. With respect, I have not heard anybody say much about that yet.
I have many personal memories—and this is the only justification for imposing myself upon the House—of the struggle between October 1964 and July 1966, when we struggled hard. It got like almost everything, a little over-personalised. But unless one does that one does not raise it to the point where people take notice of it. It was a struggle to find a way in which productivity, production and the rewards of that could be related to what the nation should do with it: and it was a dreadful struggle. I see behind me the noble Lord, Lord Feather, who was not then quite so distinguished. There was a George Woodcock, who then ran the show his side, but the noble Lord, Lord Feather, was there all the time.

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But we were not starting with an incomes policy; we were starting with a productivity policy—trying to decide what we could achieve, and then what we could do with what we achieved. Ten years after that exciting experience—I shall not say traumatic—we are, naturally enough, all 10 years older; although, if I may say so, when I look around your Lordships' House it seems that most of my colleagues show it more than I think I do. We are all 10 years older, but much more important is that we have had a decade of economic and industrial decline, and the country's national affairs are in a much more critical position even than we thought they were then.
The White Paper I must say that such a White Paper would never have been produced if I had been there—says that inflation has accelerated. That is true enough. What it does not say is that the Government have encouraged it to accelerate—
Several Noble Lords: Hear, hear!
Lord GEORGE-BROWN: My Lords, I should wish for a little less help from the Conservative side of the House. I simply do not want to make politics out of this; and I wish that the noble Lord, Lord Carrington, had not gone as close as he did, because the matter is much more serious than that. The Government have encouraged inflation, and have encouraged it to reach a level which, in 1964 when we thought we were dealing with a disaster, we had never dreamed of.
I have to say something which is not going to be agreeable to my colleagues, but what does it matter now. Nobody can do much to me, except call me the "second Labour Back-Bencher", which was written on the note I received from the Government Chief Whip. In due course I will be the third Labour BackBencher and, oddly enough, at the end I will end up somewhere else. It is disagreeable to say what I intend to say, but my colleagues will just have to accept it. In my honest view the Government, in this White Paper, come up with proposals that are not only half-baked—and I do not get briefed nowadays any more than is proper for me to be briefed; but I know just how half-baked they are—but are almost totally unbaked. I do not think that they even got into the oven.
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They are ill-thought-out, and the odd thing is that 10 years later, with a situaton far worse, they are less relevant to our problems, with respect, than were the answers we tried to produce in 1964 and in 1965 to 1966.
This is described as an attack on inflation—the one thing it is not! Therefore I asked the opening Government speaker how much does this add to the inflation we already have? It does not take anything away from it. I asked: how much does it add? He said that he would leave this to the noble Lord, Lord Beswick, to answer. When I passed along the corridor just now I happened to meet the noble Lord, Lord Beswick, and I gave him the figure. If one multiplies the working population by £6 per week, and if one allows a little for those who will squeeze through the loophole—and the noble Lord, Lord Feather, knows that there are always some who do, or who will—and if one allows for the part-timers, and then adds in the extra subsidies for food and for rent, and then the £10 a week job subsidy (so that we keep the unemployed off the register and make it look as if they are not unemployed) if one adds all that together, as I told the noble Lord. Lord Beswick, privately—and I now tell him publicly—the figure must be nearer £8 billion than £7 billion. I take the figure of £7·8 billion.
When I was at school a billion was a million million; now we have taken the American way of life and so it is a thousand million. The figure is £7·8 billion—it cannot possibly be less. We add that to the inflation we already have—with which we cannot live, says the White Paper—and we call it an attack on inflation. But honestly, my Lords, to anybody on this side of the House (and I am still a Socialist and a trade unionist)—Orwell knew what he was talking about with newspeak and double-speak—that is not an attack on inflation.
What the Government are trying to do is to make sure that we do not add more to inflation, but that we do not stop it. The reason I emphasise this is that it is difficult to get understanding outside if Ministers insist on being so obscurantist. Yesterday I saw a headline in The Times. I am sure that the noble Lord, Lord Thomson of Fleet, does not pay out whatever it is he pays out—£1 million a year?

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—unless he believes it to be right. The headline stated:
"TUC may provide 3-1 backing for the anti-inflation policies."
Where are they? Already we are spending what we have not got. We are printing money to pretend that we can afford things we know we cannot. I went through the agonies of the 1966 Bill. I wonder how many Ministers have done themselves a service by re-reading the reports of the Committee stage and the Second Reading of the 1966 Bill?
Ten years ago, when the situation was far less grave, we said—with the same Prime Minister; and we must give credit to the Secretary of State for Employment for he opposed us but every other Minister supported us—that it has to stop. We did not say, "Add £8 billion to it!" We imposed a freeze. If one is making an attack on inflation, then, for Heaven's sake, attack it! One damned thing you do not do is add to it. As my noble friend Lord Feather will remember, the TUC and the CBI—it was not then the CBI; but there were all its component parts—came together and said, "Okay! We will have a go!" But we were having a go at stopping it; we were not having a go at increasing it. We did not do too badly for a year. We took on all the leading trade union barons. Mark you, we also had Carron's law in those days—but this is a private joke between my noble friend and myself.
My Lords, we are now spending what we have not got. If, as The Times says, we have a three-to-one backing in the TUC for our anti-inflation policies, may I go through them? First, where are the cuts? The noble Lord, Lord Boyle of Handsworth, said, "Please do not touch my universities". Naturally, that is the last thing on earth that I should want to do. My children, who are involved in the Health Service say, "Please do not cut our hospitals". That, too, is the last thing on earth that I want to do. But somewhere the cut has to be made. We have done the silly thing of spending what we have not got for several years. We keep on telling each other that the price for restoring our situation is painful. Okay! Let us face it! It means that the universities will have to face it; it means that my daughter's hospital, in which she is a
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governor, will have to face it; it means that the housing schemes of the local authority I love best will have to face it. There is no other way until we drive ourselves so far down that the whole damned thing stops. And we are lucky, are we not, that there is not a Tom Mosley—remember, he never called himself Oswald when I was young; just like the ci-devant Wedgwood Benn, Lord Stansgate, who insists on calling himself Tony Benn and has wiped out the Wellington or wherever it was and all the rest. If we will not do it as democrats, some fellow will.
So where are the cuts? They are not here. We do not know. We know that industries and services are vastly overmanned—by which I mean that we have too many people for the limited jobs that modern technology requires. Where are the plans to reduce that acceptably. Where are the plans to retrain them, to bring flexibility and mobility into our labour force, both manual, clerical, white collar, blue collar, the lot; where are the plans? We know, do we not, all of us, that industrial investment has virtually stopped. What do we mean by the words "industrial investment"? We mean that people are not buying machines, are not raising the technological level. We know that it has stopped.
My Lords, with respect to my colleagues and friends—my ex-colleagues and, I hope, my present friends—the only proposal in the White Paper is greater pressure on pricing policies and on retained funds, which ensures that investment cannot restart. I see the noble Lord, Lord Bernstein, in his place. In his service industry, he knows this as well as I. If you put greater pressure on pricing policies and on the retaining of funds, then the investment is not going to restart. It is going to go back in. I know it best in the textile industry; for I spent a long time there.
May I put a question to the noble Lord who is to wind up? It is one I ask myself. Do this Government, this Labour Government, this Government of the Party of which I am proud to be a member, ever consult their Social Democrat colleagues, in, let us say, Sweden, who know how to deal with this and have done it? They are the best social welfare country in the world, the country

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with the least gap between the poorest and the richest. Do they ever discuss it with them or, for that matter, with Germany or Holland? We reckon that we are social democrats; we reckon that we are nearer to them than to anybody else. We reckon there is a great gap between us and those on the other side of the House. Why do we not discuss this with our colleagues and our friends?
My Lords, we in this country wasted 1974 because we had two Elections. We had to win the second one; the Labour Party had to win the second one. I can understand that. So we got the Government in. May I just remind the Ministers on the Front Bench, and any of my colleagues who have forgotten it, just what an inglorious win it was. So we produced a Government; so all the people we see on the Front Benches have their offices and their limousines—but we got less than one third of the vote. We got less national support than we have had since 1931, which was my first Election. I would ask my colleagues on this side of the House to be, perhaps, a little more humble. We did not win the Election in any terms beyond getting a few more seats than the largest other Party. We went backwards; and the reason I emphasise that is because our people, the people we should like to call "our people", are as bothered with us as any other part of the population. We are not matching what they think we ought to be matching and they would be more willing to face us if we talked to them honestly and straightly than we think they would.
That is how we wasted 1974, and now we have wasted 1975—first, because of the totally unnecessary and ridiculous referendum. We could not have two things going at once, so we stopped all work at home while we got on with the thing we did not need to do.
Several Noble Lords: Hear, hear!
Lord GEORGE-BROWN: Could the noble and learned Lord stop helping me!
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, the noble Lord asks me to stop. He must stop saying things with which I agree!
Lord GEORGE-BROWN: I am happy to say things with which the noble and
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learned Lord agrees, but could he tell me that privately?
Lord HAILSHAM of SAINT MARYLEBONE: No!
Lord GEORGE-BROWN: My Lords, they are no less true because the noble and learned Lord happens to agree with them—he cannot be wrong all the time. So we wasted the first part of 1975 because of the referendum; now we are wasting time because we must not move before the TUC meets in September in case we upset Baron A, Baron Y or Baron Z; but then we must not do anything until the Labour Party meets in October because the same barons control the same votes. I have said in Government, it is on the record—but I do not want to get into a row about the Crossman Diaries; let us wait until we get volume II of Brown's which will come out later when John Hunt or the noble and learned Lord, Lord Widgery, says that it is all right—and I am not saying anything my colleagues have not heard before: always someone or somebody has to be placated, some Minister or some trade union figure has to be kept in the "family", and so we do not make the decision. The results are policy paralysis; and this is a policy paralysis which produces abortions like the White Paper and the Bill.
Meanwhile, our people—the ones who call me "George" outside this House, who talk to me, who know me—are looking for leadership. They know that harsh payments are required for our past profligacy. An incomes policy cannot stand alone; it must, as the noble Baroness, Lady Wootton of Abinger, said, be fair; and to be fair, as Frank Chappell said the other day, it must be enforced. How the devil can a responsible trade union leader go to his conference and say, "We stay with it" when other unions with other leaders break through? This is why we introduced the 1966 Bill. Above all that, it must be set in a global plan. You cannot deal with a wages policy alone; you need a plan for growth which is what we tried to do in 1965. You need to make an allocation of national resources. You decide what you can afford for this, and for that, and what is left for this and what is left for that. That is the way they do it in Sweden; that is the way we tried to do it in 1965.

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If I may say so to some of my Johnny-Come-Lately Socialist colleagues—looking at no one in particular—this is the real Socialist philosophy, as against the phoney Socialist philosophy that some of them are currently preaching. As a Socialist, I believe in planning and allocating resources. That will not endear me to the noble and learned Lord opposite, but that does not worry me. I repeat that I have re-read all the papers I was authorised to re-read, re-reading the White Papers, Bills and the plans. We were on the right road until, with the assistance of the present Prime Minister after his return from Washington in 1966, the Treasury killed the idea.
So, having up to now made not a particularly constructive speech, but I hope one which needed to be made—at least I felt it did; and that is the case for this House providing a platform for a worker as against everybody else—may I in the last two minutes of my speech say something constructive. We need to return to learn the lessons of 10 years ago. Do it differently, if you will; but we need to return to a plan for national indicative planning with all taking part; the Government, the trade unions, the CBI, as it now is but was not then, the academics, and the regional councils—the only thing I left behind that the Conservatives did not destroy. Then we need to relate prices and incomes to what that plan forecasts as productivity. It is the only way, speaking dogmatically—although not wishing to do so, but because one is speaking shortly one must be dogmatic—hope and incentive can be given to those with ambitions.
It is ironic that current Ministers—I exempt the Prime Minister from this; he is just about as old a sinner as I am, and he knows the score just like I know it—no doubt regard themselves as more Socialist than I am, more avant garde than I am; but in fact, as a life-time Socialist, I venture the thought that whatever words they cloak it with, what the Secretary for Employment and his friends are doing is imposing wage restraint—the one thing we said we would never do—unrelated to anything that would make it have a meaning.
It has no relation to planning for prosperity, which was our case. The lack of courage, the lack of thought and the lack
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of policy is covered by the lavish use of ancient shibboleths and slogans. The self-declared and self-appointed Left, not for the first time in my lifetime in this Labour Party, which now spans 40 years, is the veritable Right. That Right does not frighten; it is our Right that covers itself with declarations of the Left which does.
I am bound to tell my colleagues on the Front Bench—it will not surprise them by now—that I believe that this approach will fail. The funds that are here, whether from the oil-producing countries or else where, may well be locked in. I tried not to ask questions of friends of mine that it would embarrass them to answer. But I think I am not too far away from knowing the situation. I think I know which ones could go out without disturbing the pound, and I think I know which ones are locked in because they did not get sterling guarantees. They may be locked in, but new ones will not come in as a result of this White Paper.
May I ask my noble friend who is standing-in for the noble Peer who is to wind up, whether the reserve powers Bill is, in fact, my old Part IV of the 1966 Bill? If he does not want to disclose this, could he at least tell me where he thinks it differs?
Baroness WOOTTON of ABINGER: My Lords, I wonder whether the noble Lord would allow me to remind him that he has now had four minutes since lie said he was going to have only two more.
Lord GEORGE-BROWN: My Lords, if the noble Baroness thinks that that is a great contribution to the debate, I am willing to let her have it. But I repeat the question: Is not the reserve powers Bill in fact my own Part IV? If I am nearly right—not wholly right, but nearly right may I ask the noble Lord to draw the attention of the Secretary of State for Employment to the fact that at least I introduced it while the Bill was going through the House. The Secretary of State for Employment and Mr. Cousins opposed it violently—but I gave them the chance to do it.
The oil bonanza may be later and may be less than the forecast. I welcome the appointment of the noble Lord, Lord Kearton—unlike the less than gracious Conservative Party reception yesterday. In so far as any man can dc it, he

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will. But I would remind the Government that in 1965, on the forecast of those who knew that nuclear energy would be here by now and would be so damned cheap, we shut 100 or more mines. It is not, neither now nor in the future. I warn the Government that we could find ourselves in the same situation with the oil bonanza. Meanwhile, we fall behind our Continental colleagues. This seems to be where I came in. But the urgency is greater, the margins are thinner, and, if I may say so, the willingness to lead from in front seems markedly less. I am scared and I am very pessimistic; otherwise, I would not have made this speech which gives me no pleasure. Yet Britain has the capacity and the potential.
We have always needed a Dunkirk. The question is: have we yet reached it? If we have, we can do it; if we have not, we will drift on a little while longer while this set of Ministers or another set of Ministers are waiting until Dunkirk has come. I believe it has come, and I happen to believe that our people outside—I will not be arrogant and say "my people"—are waiting for us to say that the "party is over" in the famous words of Mr. Crosland. The gate has gone down and now we do what we did in the 1966 Bill. We have a freeze for six months, and in the course of that period we will see how we get back into ordinary relations. I apologise for taking up so much of your Lordships' time.
5.34 p.m.
Lord HEWLETT: My Lords, it is not my intention to inflict myself upon this House for very long. I took a very full part in the deliberations on the Industry Bill and it is precisely for that reason that I feel compelled to speak this afternoon. Forgive me, my Lords, if I observe how few Peers who are directly connected with industry took part in the deliberations on the Industry Bill. This I found disappointing. But I might say that I reject the rather one-sided concept of the noble Lord, Lord George-Brown, on the idea of workers taking part in this debate, for, like him, I would claim to be a worker. I do not believe that all workers are necessarily those who operate on the shop floor. So many contributions are made in this House on the basis of wide experience, not always in industrial and
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economic affairs directly connected with industry.
In the North-West of England, in the chemical industry, I have adopted the adage of trying to be there first. By that I literally mean at the plant. The idea that the "gaffer" should be present at the enterprise before anyone else lends some support to the fact that he might be seriously interested in the profitability of the enterprise. I have found in this enterprise, and in others with which I am directly connected, that those on the shop floor are looking for a lead. I think they really appreciate the seriousness of the present situation. I agree with the noble Lord, Lord George-Brown, that they are prepared to put up with more severe sacrifices than the White Paper places upon them. I would say that industry could not be in much more difficulty than it is in now.
I do not wish to cause alarm or despondency in this House, but your Lordships can imagine our feelings when just across the road we have one of the largest dyestuff companies in the world. It is shut for the months of July and August, and rumour has it that perhaps it will be shut later in the year, too. This is no fault of free enterprise. This is part of the effect of the world-wide recession. But the impingement upon heavily capitalised industry in terms of cash flow, with an increased wage bill falling upon the less profitable enterprises at a time when exports are all the harder to achieve because of world trading conditions, is an extremely serious matter. The noble Baroness, Lady Wootton of Abinger, was quite right in what she said about dividend control. I think it is self-controlling at the present time, because there is not the margin of profitability or the degree of profitability in the short run, so far as British industry is concerned.
I will tell your Lordships what I think industry requires above all, and that is stability in an improved economic situation. But again the noble Lord, Lord George-Brown, is so right. We have to get the situation right first. Stability at this level or, worse still, deterioration from it, would be utterly disastrous. Therefore we need a return to an essential level of good housekeeping—and I certainly firmly believe in the old adage of the late Lord Randolph Churchill, "Trust the people". I am sure the

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people of the whole country would respond to dynamic, clear leadership. Alas, in the light of all our deliberations, even the £6 may now be too generous and perhaps a reduction should be placed upon it.
As for a complete pay freeze, I do not know that I can go along with the noble Lord, Lord George-Brown. The disastrous fact about pay freezes is that one day the sluice gate has to be opened, and almost always has the catastrophic effect of a flood of wage claims, many no doubt justifiable in the light of increased costs. In my view, some form of prices, wages and salaries control is essential. I go a long way with what was said by the noble Lord, Lord Byers. I believe that we are now faced with the inevitable consequence of having to bring in longer term control of wages and prices—the two are quite inescapable.
What is the duty of Government? So often, even in this House, we get our, selves completely hidebound with the amount of legislation pouring in. I should have thought that the main duty of Government is now what it always has been—to protect the citizen from attack from both without and within, to defend the law and uphold it, to preserve the value of money, to create conditions in which industry and agriculture can prosper, and finally, and by no means least important, to protect all those in society who are far less fortunate and need substantial help. I think that those conditions presume that those who are to make major decisions and contributions—whether they be on the shop floor, in management or elsewhere in the City—will, unless they live in the land of Utopia, require increased incentive and encouragement. This is not given in this White Paper and while I have to support the White Paper, because it represents something rather than just nothing, what worries me about it are the following points.
It takes no account of necessarily increased responsibility within an enterprise, or of increased risk-bearing. The only way to get better rewards, except for the £6, is to change jobs. So we are bound to have an increase in the mobility of people moving between jobs, provided that the state of the nation does not deteriorate or that trade does not get
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even worse than it is now. This is highly wasteful and gives no advantage either on the shop floor or in terms of management, except perhaps marginally in remuneration. It breaks up experienced work-crews and plant operatives. Training goes to the winds and often you lose middle management and, in some cases, upper management quite unnecessarily. I believe this is an inevitable effect of the White Paper's provision for a flat rate increase.
What I find very much worse is the fact that it completely collapses, and I really do not understand how workers in the trade union movement can for long go along with a totally flat rate increase principle, for this denies the very thing which I believe we should stand for; that is, that whether they be on the shop floor or in any other section of productive or service industry, people should be trying to improve themselves as well as trying to make a contribution, taking increased responsibility and being rewarded therefor.
I agree very much with the noble Lord, Lord Boyle, in terms of attending to the salary structure. It is all right to talk in terms of £8,500 and nothing above that, and of £6 below that, but we are not going to get an adequate return from employment in industry. In management in superior capacities, where heavy responsibility has to be taken, people will be tempted abroad where the returns are very much higher for commensurate responsibilities, and where the threat of prolonged restriction of remuneration, whether it be on the policy proposed by the noble Lord, Lord George-Brown, or in terms of the White Paper, is one of years and not just for a short time, or of "hold back" on senior management appointments, whether professional, commercial or industrial.
Certainly, the White Paper does not really deserve the title of a policy. It is not a policy. It is neither a pay policy nor an incomes policy. It is purely a stop-gap. It is purely a chance which I hope will be given to the Government to sort out their affairs and put forward a comprehensive policy, which must be fair. This element of fairness is far more important than has been realised. I swear that in the country you will get this degree of support which has been referred to, so long as the policy is seen

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to be fair. But there has been a suggestion that certain elements in the Civil Service are protected automatically, because they have an inbuilt system of increase and benefit, which will not be adversely affected. I would direct attention to the article written in the Economist in this connection. This sort of escape clause or escape hatch is a disaster, so far as getting the good will of the country is concerned.
I would say that it does not represent a policy at the moment; it does not even represent a stop-gap with justice. It is certainly rough justice. It is damned near rough injustice, I am afraid, as it impinges upon so many people in society today. Here is an opportunity, but, by jove!, judging by the first actions taken by Her Majesty's Government on the recommendations of the noble Lord, Lord Boyle, regarding Parliamentary salaries, we really cannot look for any great success. I am sorry that their policy did not demonstrate that the Government were behaving with fairness, efficiency or courage.
I think, with respect, they made a horrible mess of it. An impression has been given to the electorate at large that at least one House of Parliament is prepared to have one set of rules for itself, and different rules for the people in the country they purport to govern. I am not saying that MPs should have accepted £6 and nothing more, but I am saying that whenever that Report was received it should have been implemented, in whatever form that was to take, with the utmost possible speed, rather than be left sufficiently long for it to fall into the trap created by Her Majesty's Government only a month ago. It has created a bad impression in the country, and it there is a repetition of this type of behaviour it will not be believed that the Government are being serious in the matter. It looks as though this was some sort of a "front job", a bit of "kidology".
Any Government worth their salt must start with a policy and then go forward with a more rigorous and restrictive one until the situation is put to rights. I am afraid that in February 1974—and the noble Lord, Lord George-Brown, underlined this clearly—the country did not vote positively in any direction. No
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Party can be too proud of the electoral results that were obtained. But I suspect very strongly that the Government have found themselves where they are largely because the electorate felt they could not face all the upset of "confrontation", as they called it, with the miners' strike, no railways, restrictions on imports and many other things that would happen as a result of the industrial discord that was expected to result if the Government adhered to a strict policy.
Alas!, appeasement then paid no better than it pays at any other time. I am not entirely blaming the Government for the present state of affairs, but they have finished up with a very complicated situation which is far more painful and discouraging than we should have had if they had been prepared to face the issue to which my noble friend referred, without using the actual words, in his speech today. I think it is truly a question of: who governs Britain? I am not an anti trade unionist—and I wish your Lordships to believe me—hut I am most certainly an anti-extremist trade unionist, and I am against the kind of people who wish to wreck the very society which benefits them and which has been created over a thousand years of our history. I think we could do something to inihibt these people.
The time has come when the challenge of unofficial strikes, and so on, will have to be met with a united front which says that there cannot be payment for those who take part in unofficial and unapproved strikes, who go on snap walk-outs throughout industry, and so on. Immediately there will be a cry of "Hardship!" I accept that there will be some hardship and therefore money could he made available on loan, to be repaid by the unofficial striker when he goes back to work. Certainly, at the moment, we give encouragement to people to break away from such discipline as their own union is prepared to try to enforce democratically, and at their meetings.
I think we have to grasp this nettle, for I can see looming up in the immediate future just such upsets, when there are sections in industry who simply are not prepared to accept the £6 limit.
What should our attitude be? I think that the White Paper is not fair. We are not sure it will work: we are not even

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vouchsafed information about what will make it work if enforcement by the Government is necessary. I must say that I take a very poor view indeed of the fact that there has been no declaration of the contents—whether it be Part IV or anything else—of such legislation as may be necessary to enforce what is so far a voluntary pay code.
I will conclude by making two or three points in reply to noble Lords who have already spoken. The threat from the extreme Left is even more severe now than it has been in the past. The challenge which has been seen in constituency Parties so recently may multiply increasingly as it is felt that the present Government have not adhered to what they said was their policy in 1974. Again, I would say only this to the Government: You have the opportunity of completely uniting the country behind severe and just measures, but in exchange for that you will have to take out some of the extreme policies which are largely supported only by the Left Wing and are not given wholehearted support by the electorate as a whole. For, to pile Pelion upon Ossa, as the noble Lord, Lord George-Brown, has said, to add to the £6 a week all the other increased Government expenditure on the Community Land Bill, the Industry Bill and so on, simply shows that we are not serious in our attitude towards attempting to reduce the rate of inflation, or at least getting it down to manageable proportions.
The noble Lord the Lord Privy Seal said that we were twice as badly off, in terms of inflation, as some of our competitors. It is very much worse than that. The OECD figures show the United Kingdom now, in the 12 months to April 1975, at 22 per cent.; Italy at 20 per cent., Portugal at 17 per cent. together with Australia and Spain. Then we get down to the very low figures of Germany at only 6 per cent. and the United States at only 10 per cent. So the warning is far more severe than even most of our speeches today demonstrate.
The Social Contract was a failure, my Lords. I beg this House, do not let us burke the issue and say that it was pretty successful. It was not at all successful. That is why we are where we are. I am not one who rejoices in its lack of success, but I believe we should speak
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with candour and admit that it was a hopeful try but it did not come off. As for the wholehearted support of the trade union movement for the new policy, to which the noble Lord the Lord Privy Seal referred, it is not much of a wholehearted support when the TUC Economic Committee passed by only 19 to 13 votes the provisions outlined. Three votes the other way and it would have been a dead heat. I do not call that wholehearted support of the trade union movement.
As for the £6 a week not being taken as a minimum, I have to tell your Lordships that for industry it most certainly is. I have already been told that £6 is the very least—it is agreed they will probably not get more—that workers are going to demand. They reckon it is a kind of cost-of-living increase, something that comes up with the rations. It has, they feel, nothing to do with whether or not industry is profitable. It is what is expected it is the run of the mill. And in regard to credibility, I come back to the point about the electorate's trust. I will swear that if Her Majesty's Government said that, notwithstanding all the trouble from some of their extremist supporters, they would abandon the extremely costly Government programme—or not abandon it necessarily, but postpone it—set out in some of the Bills that are being crammed through your Lordships' House at the present time, they would carry a phenomenal degree of support, not only from the electorate but in both Houses of Parliament.
My Lords, the extremists in our society should be isolated by the good will of by far the majority of the people who would be prepared to support tough policies so long as they are fair—yes, my Lords, tougher and more immediate policies. Even if it meant tremendous sacrifice, I swear we should get the support of most people in this country. They would face the music now and go through with it. Whereas if the Government string it out with dribs and drabs, and it does not quite work out and it is necessary to have another shot at it, and then another, not just the people in this country but people abroad will doubt whether we have the ability to see our way through our problems.
So, my Lords, my feelings are that this is not a policy. It is not worthy of the name. It is a short-term stop-gap which,

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in the circumstances, it is the duty of all of us to support. I do it with very little relish for, like the noble Lord, Lord George-Brown, I do not think it has a chance of working, because ex-hypothesi it is too expensive to start with. But it represents a start and, in this case, something is better than nothing. But to be really successful, the Government must make very heavy sacrifices, and I shall look forward to hearing what they are later on in this debate.
5.53 p.m.
Lord FEATHER: My Lords, this White Paper is entitled The Attack on Inflation. It is not, "The cure of inflation". It is a move towards the achievement of that. But if the White Paper has friends of the nature of the noble Lord, Lord Hewlett, who has just spoken, then God save it from critics and enemies! It is dealing with the current situation. I should like to go along the lines of my noble friend Lord George-Brown, a great friend of mine. I, too, wish it were 1964 or 1966. I think a great number of people would like to return to 1964 and 1966 with the hindsight we now have, because then we should not get into the situation we are in. But we did not have that hindsight, and the starting point is here.
As the noble Lord the Lord Privy Seal said, the main enemy is inflation. It is inflation caused by the phenomenal increases in world prices, which developed quickly and inevitably into demands for improvements in incomes to meet the increases in the cost of living. We have now the result of the classical chicken and egg situation. No section of the community accepts a reduction in living standards except with the greatest reluctance. The result of startling price increases was quickly reflected in wage and salary demands to offset the effects of rising prices. This in turn has added fuel to inflation.
My noble friend Lord Shepherd said that most countries have been able to bring down their rate of inflation during the period in which prices in this country have continued to accelerate. Our prices are up 25 per cent. on a year ago, while those of our competitors are up nearer to 10 per cent., or less But when we say that our prices are 25 per cent. up on those of a year ago, that is the statistician's figure, the figure of the economist.
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It is not an even 25 per cent. increase. In some cases the goods we buy in the shops or the services we use and pay for are up by 50 per cent. or more, and many of these are services and goods which every household must have.
These essential costs have a greater impact on and cause greater hardship for those with low incomes: those with low wages or those whose pensions or superannuation is static or whose incomes are limited by reason of disability or other causes. If State pensioners had their incomes raised by 25 per cent., it would still leave them well behind in the struggle to maintain even a low living standard. So although it is true to say that inflation has reached a point of crisis affecting every family in the land, some families are more badly affected than others. As I have said, they are pensioners, people on disablement benefits or long-term sickness benefits. They are hit to a greater degree than anyone else.
There has been a heavy fall in the living standard of those on low incomes or fixed incomes. They have no margin, no fat, no cushion to take the shock of rising prices. They are living on the bare bones of subsistence level.
And unemployment is increasing and will continue to increase for many months; we all know that. Unemployment feeds on itself. It stokes its own appetite. Reduction in a family's capacity to buy the things they need results in decreased output, which discourages investment in new plant. This in turn leads to increased unit costs and lessens the opportunity to export—we all know the arguments. This in turn leads to cuts in imports of raw materials, and so the vicious spiral of unemployment, accompanied by lower living standards, continues to develop at an even faster rate. We think that, on the contrary, a reduction in the rate of inflation should lead to more investment and the creation of new jobs. Investment and improved productivity can result only from stable prices and an assurance of continued and sustained growth. The best salesman in the world cannot sell abroad if he cannot quote a price. Foreign firms are unlikely to expand their operations here or start new enterprises in the economic climate of this country with a minimum lending rate of 11 per cent. here, compared with a German bank rate of 4½ per cent.

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The target that has been set by the Government is to cut the year-on-year rise in prices to 10 per cent. by September 1976, and to single figures by the end of 1976. That is a hard target to set. Notwithstanding what has been said about the measures proposed in the White Paper stoking the fires of inflation, they will if they are analysed—in the sense that they are putting a brake on and introducing a measure of wages restraint compared with the terms of the social contract (that is to say, keeping wages in line with increases in the cost of living)—be seen to be capable of making a strong contribution; and there could be a reasonable expectation of the rate of inflation being cut to 10 per cent. by the autumn of 1976.
Although, as I have said this is a hard target to set, it should not be treated as an aim. It must be treated as the minimum target which must be achieved if we are to get to a situation which will enable this country and its main institutions to survive in their present form, for prices are as crucial in the present situation as wages. A price freeze is a simple thing to declare but both the Government and the TUC recognise that a complete price freeze is not a practical proposition at this stage. A price freeze now can throw a lot of people out of work and a price freeze which caused unemployment would be even worse than the pay restraint which is necessary to safeguard jobs and which is inherent in this White Paper. Unemployment has already topped the million mark and there are few who believe that it will not be higher than that this winter. The real figure for unemployment today—taking the registered total and those married women who do not register because they are covered by their husband's insurance and, therefore, are not entitled to unemployment benefit but are available for work, including those who are not on the register—is nearer to 1.5 million than the official figure of 1 million.
Nobody today under the age of 40—that is rather a shock to people like myself, when one realises it—has personal experience of the effects of mass unemployment. There was the low living standards and the insecurity of the years between the wars; the board of guardians, the unemployment assistance boards, the public assistance committee, the family
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means test, the poverty that lay like a heavy pall of grim misery over every industrial area, and particularly areas involved with heavy industries—those days can hardly be portrayed in realistic sand believeable terms to a post-War generation. The improvements in social security since then (so long as they can be maintained) will prevent a recurrence of the worst features of those grim days, but no maintenance of existing social security standards or those envisaged for April and November 1976, can match present day earnings despite what the noble Lord, Lord Byers, said. They cannot match present day earnings except in very low level wage cases. Even worse, with unemployment of that kind, nothing—no social security benefit, no amount of money—can offset the shock to the man or woman who finds that the security of a job has vanished; who finds that changing jobs is no longer an alternative to losing a job, and that the alternative to losing a job is a succession of rejected applications. The prospect of long-term unemployment to the individual man or woman brings a state of hopelessness that leads to frustration and bitterness and, what can be even worse, an ultimately apathetic acceptance of a desperately low morale.
I ask your Lordships to consider, in the light of technological development and the reduction of what might have been called the manual labour force at one time, how the new unemployment figure of mass unemployment would be constituted. The new unemployed would include, to an extent never known before, white collar non-manual workers, many of them (especially among the younger ones) with heavy mortgages, hire-purchase commitments and credit obligations which they can face only with difficulty even when the jobs are there. Their frustration and anger in the pursuit of an answer will lead to the rejection of what we know as the normal democratic procedures, and there are special problems about school-leavers. Unemployment on the early '30's scale could lead to threats to our democratic system which would imperil all the freedoms of which we in this country are so justly proud.
There are small groups of people today who chisel away at any hair-line cracks in the structure of democratic society and, consciously or unconsciously, their efforts

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could then lead to assaults by the "heavies" with their crowbars. The policy set up in the Government's White Paper, The Attack on Inflation, is well-known to all your Lorsdhips. No settlement can be reached which will give a pay rise of more than £6 a week during the year to 1st August 1976, and there will be no exceptions, no special cases, except for increases which are required in order to comply with legislation on equal pay. I comply with legslation to equal pay. The advantages of a maximum limit of £6 a week pay rise will mean that the relative value of such an increase will be the greatest for the low paid.
I am glad that the principle of a fiat-rate cash increase has been accepted. I well recall four or five years ago when the dustmen were asking for what seemed at that time a big increase—an increase of 20 per cent.—it meant an increase of £3 a week on their £15 a week basic rate. Members of the medical profession also had a wages application in at the same time for an even higher percentage increase, but as a kind of "doff of the hat" to the country's economic situation they, too, agreed to accept a 20 per cent. increase like the dustmen. The difference was that theirs was 20 per cent. on £4,000, an increase of £800 a year, or £16 a week. It was an increase which was greater than the total basic wage which the dustmen were seeking to improve, but it was the same; it was 20 per cent. With percentage settlements the lowest paid always lose, and if the £6 pay rise is achieved in full by the lower paid workers it is likely that this should provide some improvement in their real incomes, even after allowing for price increases which have yet to come.
The outline, and indeed much of the detail of these measures in the White Paper, was proposed to the Government by the General Councl of the TUC, a policy which was supported by a clear majority of the General Council—not the Economic Committee. As the noble Lord repeatedly said, it was, according to the Press (and that was my source, too), 19 votes to 13. That was not the Economic Committee; that Committee is an important body, but it is not as big as that. If you analyse the 19 to the 13 and, then consider the people who were away and who might have voted one way or the other, it is still a clear majority, and if
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the noble Lord, Lord Hewlett, had had a single majority, for example, I think he would have been delighted, too, and would have regarded it as a clear majority. So do not detract from the efforts of the General Council of the TUC in that respect.
I am confident that, at the forthcoming Congress in the first week of September, the General Council's policy will be supported decisively by the delegates of the 10 million trade unionists who will be there, and that will be overwhelming, too. The Mineworkers' Executive are balloting the whole of their membership with the recommendation that the membership should support the policy and, again, I have no doubt that there will be a decisive majority among the mineworkers in support of the Government and the TUC. But, obviously, a successful attack on inflation will hinge on the support which the unions, collectively and individually, give to this policy. However, it is not only a matter for the trade unions and the TUC. Public support is essential to ensure that the policy is complied with over the coming 12 months. I agree that the great majority of people want the policy to work. I think people are now more fully conscious than ever before of the dangers of inflation, not only to living standards but to the general quality of life in this country, including our democratic practices.
To put it mildly, I was disappointed that the Social Contract was not given a fair run by people who are generally in a position to influence public opinion. Many editorial writers did not look at the Social Contract in an objective way. If they had, and had used their considerable influence and their positions to en-courage adherence to the Social Contract, we might not be facing the difficulties that this nation faces now. Outside the trade union movement there was more cheering at the Social Contract than there was cheering for it. I am glad naturally to see that, in that respect and in respect of the White Paper which embodies much of the TUC's broader recommendations, there has been a much more objective examination and a broader acceptance of it or an acquiescence in its proposals, if not the enthusiastic support that one might have expected in this dire situation.
The task of the TUC is not going to be easy; if the General Council had

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chosen an easy path, it would have had no national merit. It would be too much to expect 100 per cent. support from every union affiliated to the TUC, because for many of the unions it would prove to be too tough a policy. The leadership in the different unions will need to fight hard to maintain the TUC policy embodied in the White Paper. The TUC statement has gone word for word into the annexe of the White Paper. The General Council are aware of the toughness of their policy, and will be campaigning among the membership of the different unions to get its acceptance and application, because they know the alternative of still higher prices and rising unemployment would be even more tough.
My Lords, the strategy of the TUC has been to try to make sure that those who have the most will sacrifice the most for the benefit of those who have the least. They recognise that a new policy is likely to produce some inequity. The White Paper also recognises that there could be inequity. That is why allowance is made in respect of wages council proposals and formal arbitration awards made before the White Paper was published, and due to be implemented after 1st September. There will be claims for special cases, but the danger is that once an argument is accepted for a special case, every other claim becomes a special case. The TUC has said it is determined not to open the door to let in a rush of special pleading of special cases.
The document issued by the TUC declares:
"The General Council therefore concludes that there should be a universal application of the figure of £6 per week. The TUC will oppose any settlement in excess of this figure."
I see from reports that in the other place this statement was jeered by some Members on the Opposition Benches. It would make one think, if it were not unthinkable, that some Members on the Opposition Benches in the other place would prefer out of sheer blind prejudice, to put it no higher, that this policy should fail. But if this policy fails, there will be small comfort for even the most rabid members of other political Parties for I believe, and I am not alone in believing, that if this policy fails, dire consequences, not only for the economy but for our democratic system of society, will prevail.
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I do not want to travel too far along that line. I believe the policy will succeed. People who are concerned for the future of our society will reject the cynical approach. There is too much cynicism at the present moment. There is too much encouragement of disbelief; there is too much concentration on destructive criticism, and not enough acceptance of good intent. Cynicism and apathy are the enemy of all parties in our democracy. It is not only the future of this country that is at stake, but the whole present-day fabric of our democratic society. The livelihoods of hundreds of thousands of people are at stake. There is a threat to the millions who make up our society, and to a way of life which we all believe and know is preferable to alternative systems, whether social, economic or political, in other parts of the world. I am no Jingoist; I do not believe that patriotism is the last refuge of a scoundrel and is something to be despised. At present, the stakes are so high that we must make our judgments calmly and dispassionately. If that is done in relation to the White Paper, the policy outlined in the White Paper will be supported by well-intentioned men and women in all walks of life.
6.14 p.m.
Lord ROBBINS: My Lords, since we last debated the economic situation we have had a glimpse into the abyss. There was a Monday a few weeks ago when the official slogan still was "no panic". A day or two after that, a statement was issued showing the utmost apprehension. Now we have this document which is the subject of discussion today and of a Bill which we shall be discussing tomorrow. I accept the exhortation of the noble Lord, Lord Feather, in that I would wish to avoid cynicism in this respect. I would concede that what we have to discuss at least shows an awareness of danger and some willingness to cope. Moreover, it cannot be said too frequently that the period of intense danger has ceased, but if anything goes seriously wrong with the present policy, the alarm which gave rise to the statement and what has succeeded it might easily be reawakened. Therefore, even if one has very considerable reservations about this policy and its future—as, indeed, I have—it is desirable this evening to choose one's words

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very carefully and to say nothing to make things more difficult for the fine men at the Bank of England who are fighting against possible catastrophe for us and our children. Also, I would urge that nothing should be said to impair any possible solidarity among men of good will in grappling with the problems of the future, and discussing them with candour and some detachment.
My Lords, the chief feature of the White Paper is quite clearly the restraints on incomes. Whether you think this is a voluntary or statutory incomes or pay policy is a matter for argument, and so too, let us admit, are some of the proposed instruments for bringing about this policy. But beyond that the general principle involved has provoked some general discussion, alluded to in the distinguished speech of the noble Lord, Lord Boyle of Handsworth. I submit that that degree of generality deserves some attention. I will confess to your Lordships that I do not share the belief expressed in many speeches this evening from both sides of the House that a permanent statutory control of incomes and policy over the wide field of the economy has necessarily come to stay. I would exhort the noble Lord, Lord Boyle of Hands-worth, in the words of Mark Anthony to the Roman crowd, "Be patient till the last", for while I shall begin with a certain detachment, from his point of view he may feel at the beginning that there are still discussable questions between us to attract substantial grounds for a long period of scepticism.
Statutory control of incomes and prices in peacetime has never so far lasted for very long, and has seldom been successful it is apt to breed a sense of injustice and resentment. This process, at any rate in the past, has tended to be cumulative, and eventually there has come some sort of breakdown. Whether or not Mr. Jones's £6 maximum per week is enough, whether it is going to succeed or not, we can be quite sure that before the year is out it will have bred a whole crop of problems, and that the policy of re-entry, as the noble Lord who introduced the debate described it, will not be unattended by trouble. Thus, in general, I differ from my friends who argue that a permanent overall pay and prices policy is desirable. I would certainly urge—and here I hope I should gain support from some who
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disagree with what I have just said—that if a prices and incomes policy is used as an excuse for refraining from other measures it will simply be an ignis fatuus.
Having said that, I would urge that there are circumstances in which an overall incomes policy or pay policy is of use. If you are in a situation when attempts are in some way or other being made to curb inflation by reducing excess expenditure, and if at that moment there arise demands for increases of pay which are not justified by increased productivity, then the result certainly will be business failure, redundancies and unemployment. But if at such a time there is, for the time being at any rate, a measure of restraint in the increase of incomes, the resulting unemployment will not be so great. More people will be employed at the same level of expenditure. In my submission, this is just our position at the present day.
We are undergoing a process of inflation unprecedented in our peace-time history, and if it goes on at the present rate undoubtedly it will eventually tear our society apart, in the sense which has been indicated in the speech that preceded mine by the noble Lord, Lord Feather. And what is a much more immediate danger, it will destroy our international position and all that depends on that in the next five years or so. According to the Chancellor of the Exchequer, who, I confess, is not my favourite statistician, 5 per cent. of the national income is sustained by foreign creditors. So we really must do something about the inflation. We cannot allow it to continue on the present scale. We must curb the rate of increase of expenditure.
My Lords, let us face it, it is highly improbable that this can be done without some increase of unemployment. I do not believe that an inflation of this order of magnitude has ever been curbed in history without a considerable increase of unemployment. Unemployment is already a matter of concern. It is not yet 5 per cent., but 5 per cent. is a matter of concern. If at such a time there are demands for more pay of the order of magnitude of the demands we have seen granted during recent history, I see no escape whatever from a further increase in unemployment of formidable proportions. In some way or other, therefore, I conclude that restraint of pay

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claims is the only way of mitigating this very grave social evil. I do not see any avoiding this conclusion.
Those whose preoccupation is with the volume of unemployment rather than with the rate of inflation, which is perhaps a legitimate preoccupation although not one that I share, may say that we should not curb the rate of expenditure, we should spend more in order to mop up the unemployment that already exists. But if we spend more in the aggregate, if at this moment we reflate—which is the fashionable word—then the inflation will go on, and, apart from the deplorable internal consequences, we cannot prevent some withdrawal of foreign funds, we cannot prevent the cessation of the foreign lending on which a comparatively easy passage through our present difficulties depends. So I would say that the broad justification of the present policy of pay restraint is just this, that it prevents the rise in unemployment being as great as it otherwise would be, if adequate steps are taken to arrest inflation.
What steps are adequate? Here we enter a field where I think sensible discussion has been much befogged by quite unnecessary intrusion of technicality, and some blame, no doubt, attaches to academics for the diffusion of these misunderstandings. The noble Lord, Lord Boyle, delivered a forceful and interesting criticism of the ambiguous attitude which he described as "monetarism". I will come to his remarks on that matter in a moment. But to start with, let me state what surely will be agreed to be an unimpeachable platitude; namely, that inflation takes place when the volume of spending exceeds the volume of goods available or potentially available at constant prices. That is so simple there could be no dispute about it.
But I think it is equally true, although doubtless this is a controversial subject, that the excess of aggregate expenditure cannot long continue if the ultimate supply of purchasing power—notes and bank credit and so on—does not increase, or does not increase much, beyond the rate at which the volume of goods and services available at constant prices is increasing. All historical experience sustains that simple view. You can have periods, shortish periods, in which people will not spend at the usual rate, when they think
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that prices are going to fall. You can have periods when they spend at more than the usual rate because they think inflation is going to go on. But if the money supply does not increase more than commensurately with the volume of goods and services available at constant prices you will not get continuing inflation.
I think the confusion to which the noble Lord, Lord Boyle, was alluding has been aggravated by the discussion of causes and culprits. Some people have said that demands for extra pay cannot cause inflation if the money supply is looked after in a proper way. That is certainly said during the debates in the other place. And perhaps in a sense that is true. But in a world in which Governments have an eye on the volume of employment as well as on the price level, it is very easy indeed to see that if there are calls for excessive pay increases in some parts of the system then there will be a temptation to a compensatory increase in money supply to prevent the causation of unemployment.
I therefore think that it is highly paradoxical for my dear friend Milton Friedman to say that all inflation is caused by monetary influences, just like that. If that is what is meant by a repudiation of monetarism, I certainly would not call myself a monetarist, and certainly would not go nearly all the way with Professor Friedman in repudiating supplementing monetary policy with fiscal policy, or even—what would be much less popular in certain quarters—antimonopoly policy. But if monetarism means simply that inflation, however initiated, whoever the culprit, cannot go on if the rate of increase of money supply is held properly in check, then certainly I modestly admit to that degree of monetarism.
Descending from these abstract considerations, which I apologise for inflicting on your Lordships' House, to our present situation, it is true that the rate of increase of money, either M1 or M3, has been considerably reduced during the lifetime of the present Government compared with the excesses of an earlier period. But since this sort of thing operates only with a pretty long time lag, and the change in the rate of increase itself takes time to seep through, I opine that there is still a considerable amount of incipient inflation in the system. This is

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a case where the evil that men do lives after them. Whether or not it is possible to bring the rate down to 10 per cent. by this time next year is, to me, an open question. I do not believe that economic science provides any sure ground for confident prediction either way. There is a further cause for disquiet. One of the influences on money creation is the borrowing requirements of Government. Let me make myself clear on this, because in one distinguished speech the other day in your Lordships' House I thought there was a certain confusion—
Lord PEDDIE: My Lords, I intervene because the noble Lord is entitled to make himself clear. I am anxious to disentangle my thoughts from the web of confusion that his dissertation on monetarist and Keynesian theories has raised. I should like to ask him one simple question, which I thought he was going to answer. He began by placing some emphasis on unemployment, and I formed the impression that he meant that unemployement was a legitimate factor in dealing with the question of inflation. Does he support the concept that unemployment is a necessary feature in any general policy dealing with inflation?
Lord ROBBINS: My Lords, the noble Lord has completely misunderstood the drift of my remarks. I said that I thought that any attempt to curb aggregate expenditure would be accompanied by unemployment. But I regarded that as an unfortunate circumstance and I went on to recommend pay restraint in order that it might not take place, which is very different from brandishing unemployment as the main instrument for dealing with the problem of inflation.
May I return to my apprehensions? One of the influences on the rate of increase of money supply—because we are not talking about diminution; no one in his senses has talked about diminution in the absolute money stock; it is the second differential that one is talking about all the time—may be the borrowing requirement of Government. Government borrowing need not lead to inflation if the disposition to save is sufficiently strong. But frequently it is not strong enough, and the borrowing which is thought to be necessary is financed by the creation of
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money, and that creation is necessarily inflationary—at any rate, in circumstances like the present.
At the present time, our borrowing requirement, partly because of the effects of inflation itself, has increased out of all knowledge. Figures given by the Chancellor of the Exchequer in his Budget Statement were such as to make one's hair stand on end, and since that event I should guess that the borrowing requirement has risen even further. Therefore, the fear must arise in the minds of all reasonable people that unless we continue to get considerable help from abroad borrowing requirements of the present orders of magnitude must lead to the new creation of money, must lead to a renewal of the inflationary influences on that side. It is here that the White Paper, by itself, gives less reassurance than might have been hoped for. We are not told the targets as regards the rate of increase of M1 or M3. We are not told in the White Paper what the borrowing programme is likely to be. It is just here that those on whose good will we depend in the next few months, or even years, will be paying the most attention to the details of policy.
Let me hasten to say at once that I do not think that reduction of borrowing to meet expenditure is an easy policy at the present time. It is easy enough to talk of slashing cuts all round, and certainly some cuts will need to be slashing. I personally see no need, as I said the other day in another debate, for the prolongation of certain subsidies. But much expenditure has complex implications, and I can well understand the unwillingness at this juncture to give definite figures, quite apart from the politics of the matter.
There is one sphere, however, where attention is needed; namely, the sphere of nationalised industry. I can understand the need to support investment in some places in this area. Steel, for instance, is probably a case in point. But as regards overmanning, as regards excessive wage claims, action needs to be very definite and clear cut. Of course, the easy phrase "cash ceiling" conceals a multitude of administrative and, indeed, definitional duties. But on one point I am clear. Whatever our views about

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statutory control of pay through the economy as a whole, I can see no argument whatever for the absence of continuing control in the public sector. In the private sector it can be argued that it is up to the employer. If he concedes too much, he may go bankrupt, and that possibility may induce moderation at the bargaining table, but there is no such remedy in the public sector. The State is the employer and the State cannot go bankrupt in that sense, and the impression therefore is widespread that there is an endless stream of money available to meet any demands whatever.
I have no doubt that in this sphere, whatever Government are in power, there will be a need for a permanent incomes policy, and it is in just this sphere in the last few years under recent Governments, including the present one, that a clear policy has been lacking. I therefore very much hope that whatever our differences in the extremely difficult matters of control which we have to discuss tomorrow, we shall have no differences on this point. The Government must have a continuing pay policy over that sector of the economy which is under their direct control; otherwise whatever we do elsewhere we continue to be in a position of extreme danger
6.41 p.m.
Lord GORDON-WALKER: My Lords, one of the root causes of the economic problem facing us is that we have simultaneously both high unemployment and high inflation. According to the economics I was taught at university, this combination was impossible; one could not have simultaneously high unemployment and high inflation because unemployment cut purchasing power so much that it, in effect, brought about a depression and reduced inflation. The more doctrinaire monetarists—from whom of course I exclude the noble Lord, Lord Robbins, by his own definition and mine—still hanker after the simplicities of the past; they effectively and very often indirectly suggest that unemployment would still be the best cure for inflation. This seems to me wholly unacceptable.
Although, as my noble friend Lord Feather said, unemployment for each person involved is a great shock and evil,
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nevertheless if one looks at the problem as a whole today, redundancy payments, more generous benefits and the rest do prevent unemployment from decimating purchasing power as it used to. The degree of unemployment that would therefore be necessary to bring about a cure of or check on inflation would be intolerable in human and moral terms, but in modern conditions it seems that the policy would also be self-defeating, for instead of unemployment curing inflation as in the past, today inflation—and this is a truism—causes unemployment by pricing workers out of jobs.
That is why we have no choice but to attack inflation by other means and the only policy anyone can think of, myself included, for curing inflation accompanied by unemployment is some sort of prices and incomes policy. In the past, such policies, under all Governments of all Parties, have come to grief because, among other things, they provoked confrontation with the trade unions. I agree with the noble Lord, Lord Robbins; I do not think there has ever been a case of a prices and incomes policy in the full sense being successful for any length of time. It now seems that the Government in the White Paper have found a more hopeful policy that can avoid confrontation with the trade unions; namely, the measures, now well-known, to prevent employers, public, private and local authorities, from paying a wage increase above £6 a week.
My noble friend Lord George-Brown made a great deal of the fact that the £6 increase increases inflation. Of course it does; any increase in wages increases inflation, but the net effect must be compared with what inflation would otherwise have been if the £6 limit had not been effected. He was frank enough to draw the logical conclusion of his own remarks by saying that he favoured a wage freeze. The trouble with a wage freeze is that the "re-entry problem", as we now call it, becomes very difficult indeed; there is a great damming up of wage demands which will blow across the dam sooner or later. I noticed that my noble friend did not mention the aim of the White Paper, which is to reduce inflation to 10 per cent. within the year. If this can be achieved, then surely he, too, would agree that it would be a very great and worth while achievement.

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For once the Government have had some luck in the timing of their policy, mainly owing to a fall in many commodity prices, to cash-flow problems in industry and, perhaps, to the Government check on money supply—although I agree that that takes some time to work its way through—and the rise in both incomes and prices shows some signs of being curbed. As the Price Commission has pointed out, considerable price increases and other charges are still working their way through the pipeline, but by the time they have worked their way through, the new policy will be in operation and, if it is effectively applied, it should go some way to counter these prospective price increases. Thereafter we must hope that the rate of inflation begins to be brought down to tolerable levels.
Everything will of course turn on the execution of the policy. I do not think it has been sufficiently emphasised so far in this debate that the White Paper shows that the Government have very considerable powers indeed for enforcing their policy. It may not be 100 per cent. right and all the rest, but they certainly have with their statutory and normal powers very great weapons with which to enforce any policy. The noble Lord, Lord Carrington, said that the policy should be tougher still. He may be right, for it is difficult to judge how tough a tough policy should be. Nevertheless, I think he will agree that the Government will in any case have to be very tough even with the policy here, because there are bound to be challenges, difficulties and anomalies as the policy begins to bite.
Like my noble friend Lord Feather, I would always prefer a flat increase. I like that because it helps the lower paid. However, we must admit that the narrowing of differentials is one of the most difficult, delicate and awkward of tasks to carry out, and this will be, as time goes by, one of the great difficulties facing the Government. Jealousies and all the difficulties that arise out of the narrowing of differentials will mount. The Government may have to face strikes. There is no way one can carry this policy through by simply giving oneself powers. People may still strike. One prays they will not, but one does not know, and I feel that an even greater test—this was
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mentioned by the noble Lord, Lord Robbins—will be the mounting pressure that will inevitably occur to reinflate to reduce unemployment. There will come a time, I hope not too long ahead, when that will be the right policy, but at the moment inflation must first be mastered. This is the first thing that must be done in order to create room in the economy for an expansion that does not simply increase the rate of inflation all over again. I agree with the noble Lord, Lord Robbins, that pressure for premature reflation must be withstood, and this will be another test of the readiness of the Government to show sufficient toughness.
But whatever Governments do, inflation is, in the last resort, a matter of people, of the attitudes of people, and the only real cure for inflation depends on a general recognition that the evils of inflation are the greatest economic evils facing us. One can cure inflation only if the people are more frightened of inflation than they are of anything else in the economic field. Broadly, this has been the case in Germany and it has been one of the major causes of that country's economic success. It seems to me that there are clearer signs that in Britain, too, the catastrophic and daunting rate of inflation has begun to dominate and alarm public sentiment, and this is what is really necessary.
One sign of this is the courageous stand of Mr. Jack Jones and other trade union leaders—and it takes great courage for leaders of this kind to adopt such a stand—and the considerable majority vote in the General Council of the TUC in favour of the Government's policy. There are many signs that the people at large have welcomed the Government's strong line. Therefore, I believe that the Government can brace themselves—as they will need to—to stand firm in executing their policy in the assurance that at last the people of Britain are with them in concentrating on the prior task of mastering inflation.
6.51 p.m.
Lord WIGG: My Lords, I was very much interested in the statement by the noble Lord, Lord Gordon-Walker, that when he studied economics he was taught that inflation and unemployment were incompatible. The theory was that if one had high unemployment that, in itself, would be a cure for inflation. Could

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the noble Lord follow that thinking through and ask whether it was true when he was a young man learning economics and why, if it was true then, it is not true today? I suggest that there is a very good reason.
When the noble Lord was a young man in the Thirties, the income of the worker and his wife was to be measured in the wage packet he received at the end of the week. Today, that is no longer true. Our capitalist society has found a technique of printing money which is paralleled by what happens on television and in the media. I shall come to that in a moment. I carry in my pocket a little book which is full of tickets, none of which I asked for. They include a Barclay Card and a Harrods Card and all sorts of other cards. Every one is a passport to almost unlimited credit. As a result, the worker and his wife live in a society in which their wants are constantly stimulated. They are stimulated as against their next-door neighbour and as against the other sex. They can satisfy those wants without money. The only question—and I am astonished that economists have not turned their minds to this—is at what point in our society this very thin ice will begin to break. Clearly it must break at some time.
Let us examine this young man and young woman. They start off. He has a job and she has a job. They buy a home on the never-never. They furnish it on the never-never. He must have a car to get to work and, because of the breakdown of the transport system, she must have a car. They must have a colour television. They must have a radio in every room. Their clothes are bought on tick. They go on holiday on tick. If they have a garden, they must have a power mower and of course when they have a family all those wants which exist with them and with their neighbours are perpetuated in their children. This is one of the weaknesses of the monetarist theory.
Lord ROBBINS: My Lords, although I feel that the noble Lord's reproaches may apply to economists still practising in this country, a good deal of attention has been given to this problem in the United States.
Lord WIGG: My Lords, I was coming to the United States. I am not an original thinker. I got on to this only
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by seeing what has happened in other countries. Of course inflation is inherent in capitalism. In the United States, they have followed this policy through with extreme aggressiveness. When one turns on any American television or radio programme, one finds they are creating a need for something, stimulating a desire for something or seeking to satisfy that need and desire. If one examines the advertising side of our television, what does it advertise? Does it stimulate or educate public opinion into the need for mechanisation of the mines? Does it encourage people to withhold expenditure in order to provide the capital for the development of oilfield resources, or encourage the restriction of spending in order to build new power stations or new roads? Not at all; it follows a well-defined pattern. Something to eat, something to drink, something to make one smell nice, something for the cat, something for the dog, somewhere to go for the holidays—these are the things it promotes. In other words, one has built into the pattern of an advanced capitalist system aggressive selling which is wholly linked with consumption, and never with conservation.
That is the measure of our problem. In some way or other, we must curb this. I agree with the noble Baroness, Lady Wootton, that what we need is an incomes policy. Let people earn what they can where they can, but take the mickey out of them financially when they come to express their needs. In other words, there needs to be a greatly increased financial brake on the spending of money rather than on the earning of money. It is perfectly true that the Government's White Paper is, as was said by the noble Lord, Lord Hewlett, a stopgap. I find that an unkind remark because it is something more than that; but the situation is rather like a fire or, indeed, several fires. When one sends for the fire brigade one does not say that one has sent for it as a stop-gap. Our economy caught fire and brought the Chancellor to the House of Commons on 1st July. The question I should like to ask any noble Lord who cares to interrupt me is why that Statement was not made on 1st June? What happened between 1st June and 1st July? Of course there were two things. Being a kindly person, I will mention first the run on the pound. But why did that run on the

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pound occur? Noble Lords need go no further than the Library. They should turn up The Times for Thursday, 22nd May. M. Giscard d'Estaing had a press conference to celebrate the first anniversary of his accession to power. He forecast what would happen. He said that France would follow through a policy of monetary and economic union. He said that Britain and Italy were weak but that they would not worry about them. He said they would go back into the "snake" and that the franc had increased in value so that they would have to curb that increase.
One did not need to be an economist to know what would happen if M. Giscard d'Estaing, for reasons of French policy, intended to go back into the snake. The pound would sink in value and the franc would rise. The pound sank to its true economic value, given the rate of inflation in this country and in America, of 2·15 dollars. That caused Mr. Wilson to have an affliction of conscience. Mr. Wilson and the Press became very worried because of this Government's pro-Zionist policy. They jumped to the conclusion that because there was a run on the pound the Arabs would take fright and remove their balances out of London. So far as I can discover, not a single pound was moved by the Arabs. There was no movement at that time. If there had been a movement, our position would have been parlous, but I do not believe that there was any possibility of a move at that time. However, the Government became worried and from their point of view, in view of the policies they had adopted, there was every reason for them to be worried. Therefore, on the 1st July we had the Chancellor coming down and making his announcement, and we have had the White Paper. It has my 100 per cent. support because of its timing; there is no alternative at this moment to the White Paper. Something must be done to restore confidence in the minds of the creditors. Evidence must be given that one proposes to tackle the problem.
Here I pay my tribute to Mr. Jack Jones. I thought that the noble Lord, Lord George-Brown, was a little unfair when he compared himself to Jack Jones in terms which were slightly derogatory. Perhaps I might be forgiven for making
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the point that the fundamental difference between the two is that Mr. Jack Jones has the confidence and respect of the trade union movement, and deservedly so. He served his country well; he served the Labour Party well; he served democracy well by the courageous action he took.
I should now like to turn to what the noble Lord, Lord Feather, said. I entirely agree with him. One of the dangers of the situation is the cracks and strains that may appear in our democracy. When those come they will come for this reason. Consider what will happen if ever the British public form the view that Parliament—and I mean both the House of Commons and this House, the institution of Parliament, the instrument of discussion—is incapable, through lack of will, or understanding, or courage, or whatever cause, of taking hold of the problems which threaten the daily lives of ordinary people. If that happens, then the institution of which we are members, and of which we are glad to be members—the highest honour ever done me was when I was elected to another place—will be pulled up by the roots and looked at with very great care. Therein lies the threat. The threat lies in our lack of capacity, on the part of the Government and Opposition in both Houses, to understand and tackle the problems that face us.
I want to be as constructive as I can. I listened with great interest to the speech of the noble Lord, Lord Boyle of Handsworth. He again was very revealing in something that he said. He said that he thought the time had come, on the issue of the mixed economy, when Members of the Government, members of the Labour Party, should stand up and speak up and explain their position in respect of the private sector. I agree. If we are to have a mixed economy it is a matter of debate as to where the line should be drawn, and the private sector cannot flourish, cannot find the investment—indeed, in the long run it cannot function—unless it has the goal of a sufficiently large, worth while objective of profit. There is no argument against profit, because it is a test of efficiency, and I accept that without question. I am astonished that the noble Lord, Lord Boyle of Handsworth, did not quite

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appear to understand what he was saying; but if it is the duty of those who call themselves Socialists to examine their position vis-à-vis private enterprise, equally it is the duty of those who sit on the opposite side of the House to ask themselves what is their position in relation to the nationalised industries, because one of the things which has bedevilled this country since the end of the last war is the constant sniping—often malicious, almost always ill-informed—that has come to the nationalised industries from the other side of the House—
The Earl of GOWRIE: My Lords, if the noble Lord would be so kind as to allow me to intervene for a moment, I should like to ask him in this context about the money which the last Conservative Government put into the mining industry?
Lord WIGG: Really, my Lords. I have a higher opinion of the noble Earl who has just spoken than is warranted by his question. Like a child he asked: "What about the tuppence which was given?" Well, my Lords, what about it? I am going right back to 1945. I remember what was then handed out to my noble friend Lord Shinwell when he tackled the problems of the mines, of electricity, of gas and of steel—industries which have been milked to the last drop—not to mention the railways and its bag of physical assets. These were industries which were taken into control because private enterprise could provide neither the skills nor the capital. Yet now they turn around and ask: "What about the money that the Conservatives gave last time?" What the heck has that to do with it?
The fact is that the Conservative Government did not accept—and the backwoodsmen on those Benches still do not accept—the principle of public ownership. The truth of it is—if anyone wants to interrupt please do not mutter but get up on your hind legs.
Baroness WARD of NORTH TYNESIDE: I said, how ridiculous!
Lord WIGG: That is all right; it is perfectly in common with the noble Baroness's usual utterances. The fact is that the Conservative Party has not accepted public ownership, and there are
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those on this side of the House who have not accepted private ownership. But the fact remains—and here I shall be dogmatic—that the overwhelming majority of our fellow citizens have accepted the need for a mixed economy. The point to be decided is: where should the line be drawn and what should be done? There are plenty of examples of mixed economies in all kinds of society, but in my submission it is essential that the public sector should be dominant, because that is what makes me a Socialist, and I believe that the public interest should prevail over private profit.
Having put that forward I shall now put forward one more point and then sit down. In America, there is the same situation as there is here. There is a great move for aggressive salesmanship and they, too, have a built-in inflation. But they have found a correction. For the same reason that the Conservative Party is antagonistic to the idea of public ownership, equally it rejects the idea of collective bargaining. To my mind, there are three stages. First, there are the negotiations which go on as between groups of workers on the factory floor; then, at some stage or other, there must be an instrument for conciliation; and, finally, there is arbitration.
Is it not very odd that in capitalist America they have succeeded in having a built-in very high rate of inflation while at the same time being able to curb it because they have a specialised approach to the principle of collective bargaining? Therefore, right across the board, negotiation, conciliation and, ultimately, compulsory arbitration are built into their system and that is what makes it work. But here, primarily because of the attitude of the Conservative Party and their acolytes, there is this built-in objection, first to public ownership and, secondly, to collective bargaining. If we want to get a partnership between employers and employees, between employers' organisations and the trade unions, and ultimately involving the Government in so far as public money is concerned, we must find an instrument with which to do that. Here, again, I pay my tribute to Jack Jones.
I believe that Part II of the Protection of Employment Bill, which will come to this House next week is, in the setting up of ACAS, a step in the right direction.

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But we are a long way from reaping the fruits; that is because we have been slow in planting the seed. But what we must not do is to keep pulling up the small plant by the roots to see whether it is growing. We are paying for the mistakes of past follies. What I cannot stand is to listen to the noble Lords, Lord George-Brown and Lord Hewlett, prattling on about what happened over the past 10 or 11 years, without remembering all the facts.
I ask the noble Lord, Lord Hewlett—he can interrupt me in a moment if he wishes—what did the Labour Government inherit in 1964, with a majority of five? They inherited a deficit of £800 million. But even more staggering than that was the deficit for 1964, which was running at the rate of £1,000 million. What was the legacy that that lot left behind in 1974? They left a deficit of £4,400 million. The noble Lord, Lord Hewlett, talks as if when Mr. Wilson arrived at Downing Street in 1964 and 1974 he had a clean doorstep. Of course he had not. He was left a legacy that would daunt any man. To his credit, and to the credit of the Labour Party and the trade union movement, they did not run away. They tried to tackle it.
Lord HEWLETT: My Lords, if I may intervene in respect of the 1964 and the legacy of £800 million, more than 50 per cent. of it was investment abroad on which earnings for this country were, and have been since, yielded. In respect of quite a considerable proportion of the balance, it was buying ahead for fear of a Labour victory because it was known that there would be restrictions on imports.
Several noble Lords: Oh!
Lord HEWLETT: Your Lordships may laugh, but this is the fact. In regard to the Conservative Party—since there has been this bitter, virulent attack and from this side there has been no Party political attack in this debate—I must say, as a former chairman of the Executive of the Conservative Party who served for six years, that at no time at any Party conference was there a Motion moved or requested that there should be denationalisation of the main service industries. The only two that were ever discussed were road transport and steel. With the
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utmost respect to the noble Lord, Lord Wigg, I would ask him to be correct in his facts. There is a great deal of hitting out in all directions. A little accuracy as well as a lot of verbiage would be appreciated.
Lord WIGG: My Lords, I have been generous in letting the noble Lord interrupt me, and I am glad that he has done so for he has given his case away. He and his fellow industrialists in 1964, when the economy was coming under great strain, much preferred to invest abroad rather than in industry in this country. This is what Mr. Heath meant when he talked about the unacceptable face of capitalism, because it is people like Lord Hewlett who prefer private profit to the country's interest. That is the case against the Conservative Party.
Lord HEWLETT: My Lords—
Lord WIGG: Once is enough, my Lords. I have given way once. I am not hitting out in all directions, I am saying that I think the White Paper at this time is right. I think there are a number of things that need to be done. I think that all Parties must accept in toto the need and the consequences of a mixed economy. All Parties—and this applies particularly to the Conservative Party—must do more than pay lip service. They must accept, and see to it from their own personal interest that they accept, the principle of collective bargaining, because unless collective bargaining is accepted you cannot expect to get anything from the trade unions other than the response which becomes inevitable. May I offer to the noble Lord, Lord Beswick, my apologies that for a special reason I shall not be able to stay for the winding-up of this debate.
7.13 p.m.
Lord AUCKLAND: My Lords, one of the thing which a magistrate—and I am married to one—says to an habitual offender are words like: "This is your last chance. The next time, something very drastic will happen to you." I believe that in many ways the White Paper we are debating today is really the last chance for this country as a whole to get its economy in order. I am tempted to reply to some of the points made by the noble Lord, Lord Wigg, but I would say only that it is the easiest

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thing in the world to sling arrows at both public enterprise and private enterprise. I think that in his intervention my noble friend answered the points very well. I would say only that these chemical firms and other firms run by so-called capitalists—against which some of the Party opposite seem to have a peculiar kind of bias—are the lifeblood of the country. Firms such as the one which my noble friend runs, probably have better industrial relations than many. From all sides of the firm, from the board room to the shop floor, they contribute towards eradicating what the noble Lord, Lord Shepherd, in his opening speech rightly called the cancer of inflation.
My Lords, for all too long we have been soothing the aching tooth with oil of cloves and other emollients. But there comes a time—and those of your Lordships who suffer from toothache as I do from time to time will know this—when something more drastic has to be done. The pliers have to be applied and the tooth extracted. We are at this danger point now, or very near it. It is therefore essential that this White Paper works.
I have no wish, and I do not think any noble Lords have any wish, to be prophets of doom. Although one hears a great deal from all sides of the Press, not only from the so-called Tory Press, whatever that is these days, but from the Press which does not support this Party, words to this effect. These are not my words; they are not the words of any of your Lordships; they are the words of those who know something about industry, commerce and what inflation is all about. It is important to look at the future. We do not know for certain for how long these powers will have to be used; whether the £6 will always be the figure or whether it may have to be increased or decreased, but I believe that in many ways that is beside the point. What is necessary is for such people—whether or not we agree with all they say—as the noble Lord, Lord Feather, and others similar to him on the Trades Union Congress and leaders of industry or the CBI, to get together to discuss the next move.
We had a Question yesterday from my noble friend Lord Cottesloe about Hammersmith
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Hospital in which I happen to have a particular interest. I believe the reply from the Government was the right one, even though it brought cold comfort to one of our very best hospitals, particularly in regard to such vital operations as kidney grafting. If these proposals mean that this kind of operation has to be adversely affected for any length of time, it may well mean that able-bodied people who are able to work, will not be able to help their country out for a far longer time than is good for them or the country. I instance that as one relatively small but not unimportant point. Therefore we have to get our priorities right.
I believe that in the social services, and particularly our hospitals and the Health Service, it is essential that we keep the standards of building and improvements as high as we reasonably can. Similarly, mention has been made of the unemployment which faces school-leavers. This, I maintain, is one of the most distressing social problems at the present time, because one reads about hooliganism, truancy and other matters, and I think much of this is caused by the frustration which school-leavers have, and this is particularly true in the North of the country, through not being able to obtain jobs. This is something which the Government and all relevant parties ought to be discussing and will I hope discuss during this critical period.
I noted yesterday in one of the evening papers a recommendation to the Trades Union Congress about import controls. I have some sympathy with this particularly on commodities which one might almost call carrying coals to Newcastle—things like matches which we can manufacture perfectly well for ourselves, and of a good quality. Is it feasible during a time like this that we should have to import them from Poland and other countries? I am not against trading with Poland, because there is a lot we can learn from countries of this kind, whether or not we agree with their political outlook and other matters. But we have to have priorities here. I know there is the problem of retaliation, and that we cannot always get our exports into these countries; but this is something which I believe the chambers of commerce and the Departments of Trade and Industry should look at very carefully.

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One of the problems is that we are importing a great many raw materials which, in these times, even if it means encroaching on the environment, we could extract for ourselves from places like Cornwall and North Wales, and thus save our import bill. These will not be popular measures, but the measures inherent in this White Paper, or any White Paper which any Government may produce at this time, will not be popular. These are important facts of life. This is contained in paragraph 37 of the White Paper which says:
"A big increase in import prices would impose on us a further reduction of our standard of living and it would then take longer for this policy to achieve our inflation target."
There is sense in this, and this is surely something which, particularly following the Statement made in both Houses of Parliament yesterday regarding the textile and footwear industry, should be considered seriously.
I should like to refer briefly, on a rather more controversial note, to some of the legislation which is going through Parliament at this time. We have three or four major Bills to discuss which are highly controversial and, I believe, completely irrelevant to the problems which we face at the present time. I do not think it would be reasonable to expect the Government to drop these Bills completely; but there could be a lot more "give and take" than is going on at the present time regarding some of the Amendments which come from not only this side but other sides of the House. This would give a much better image to the general public of this country, and I leave the Government and those whose duty it is to consider these things, to bite on these facts.
The people who are to be hit particularly hard by these proposals are the white-collar workers, the junior clerks and others in the City of London, and elsewhere, who have to keep up appearances. I do not want to enter at this time in the Session, or even at this time of the evening, into the wage awards which have been made to certain parts of industry which have gone well beyond the Social Contract. At this time, as it has been mentioned before, that would be divisive and unhelpful. But the general public as a whole will draw their conclusions,
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perhaps not very favourably, unless something is done in a fair ratio when we come to the end of the problems which are brought out in this White Paper; and everybody hopes that these problems will be solved soon.
What is absolutely certain is that a rather childish row between the merits or otherwise of public or private ownership will not in itself help; but while we on these Benches have made our mistakes, there is no doubt whatever that the figures revealed from the newspapers, television and elsewhere have shown certain defects in private ownership. In conclusion, if the Government really want this White Paper to work—and I hope it will work—they must look carefully into the extreme measures which are contained in some of the Bills which are to come before this Parliament.
7.29 p.m.
Lord PEDDIE: My Lords, I regret that I did not have the opportunity of hearing several of the speeches made at the beginning of the debate. I apologise to my noble friend, and others who took part, for my absence. This was in a way due to circumstances that have sprung from the problems of inflation, because, having put down my name to speak during this debate, I have found myself since then, and today, spending many more hours than I originally anticipated on the question of increased Post Office charges.
When I arrived here and saw the list of speakers, 25, 26 or 27, I was again tempted to withdraw, particularly when I noticed one very strange thing. I am prompted to make this comment because of the point made by the noble Lord, Lord Auckland, who called for some expression of national unity, some demonstration from this side of the House, and the Government in particular, to indicate how we are all working together to deal with this problem of inflation. Out of a total of 25, 26 or 27 speakers there happen to be only four members of the Opposition taking part in this debate. I should have thought that the Opposition would be extremely concerned with the problems that confront the country today, that they would have spent some time expressing either criticism or, in the light of the comments made by the noble Lord, Lord Auckland, some support for the honest attempt on

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the part of the Government to deal with this problem. I am not the sort of man to indulge in recriminations or cast any doubts, but is my idea not correct that it is due to the fact that the Party opposite feels that it, too, must of necessity be somewhat restrained in expressing criticism of the action of this Government because of their contribution to the circumstances that have led up to the difficulties of today?
I spoke of not entering into the debate, but I was prompted so to do because of my very long experience—five or six years with a direct personal involvement—in operating the mechanism of the prices and incomes policy. Those were five or six extremely difficult years, a period when a considerable number of mistakes were made. As the noble Lord, Lord Feather, said, with hindsight we could, of course, have avoided those mistakes. But I say—and this is something which must be firmly borne in mind—that if we had retained the mechanism of the Prices and Incomes Board I am quite sure that both the Conservative Government that followed and the present Government would have had a steadily perfected instrument that would have enabled them to deal with this situation far more effectively than either Government have been able to do. But that was destroyed, not because of any careful assessment of the economic implications but largely because of personal decisions. I know the background to it, and it is indeed tragic. Political circumstances, even personal vendettas, intervened, and resulted in the series of circumstances for which this country has paid dearly.
Also in the light of my own personal experience and as one who on many occasions has criticised the actions of my own Party in government, I want to express firm support for the Government's proposals indicated in this White Paper. The proposals themselves are simple, and I believe that their stark simplicity is their greatest virtue. Over the years I have seen all kinds of complicated formulae presented by economists, more likely to bamboozle the public than to give any support, so I like the stark simplicity which enables people to understand clearly what it is all about.
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I have already indicated that no Government can earn full marks for their attack on inflation and the steady erosion of our industrial efficiency that has gone on since the end of the last war. But say without any shadow of doubt that this Government have highlighted the problem. Even the sternest critic of this Government must agree that. The Government have in clear terms indicated to the general public the seriousness of the situation. It is not easy for a Government to do that. I believe, too, that they have demonstrated their faith in something which I think is absolutely essential for the successful operation of an incomes policy; that is, a high measure of voluntary participation. Without it an incomes policy cannot succeed. Over the short term and under conditions of extreme emergency it may be necessary, and indeed unavoidable, to introduce statutory compulsory policies. But if we are to have an incomes policy as part of the general strategy to deal with the economic situation, it must be based upon voluntary acceptance. I congratulate the TUC on their foresight, honesty and courage in giving support to proposals that run absolutely counter to the philosophy of the trade union movement and that is expressed in their acceptance of a flat rate of pay increase.
A number of contributory factors to inflation have been discussed during the course of the debate. First, there is the relationship between the production capacity of the nation and the demands that are made upon it in the form of consumption, private and public. That we all know. This country for a long period of time has been consuming more than it earned. That is the simple basis of inflation. Even more important than that is the psychological aspect which I want to mention. Inflation is self generating. Inflation can and indeed will if it continues, destroy the country, and yet there are many people who appear to be better off and really believe that they are better off. Indeed, certain classes of the community have built around themselves a protective wall where incomes are indexed (as pensions are), and members of powerful trade union organisations, quite regardless of the circumstances, feel that they can claim a certain measure of protection. How long that

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would last with roaring inflation, I do not know.
There are a great many people in the community who do not feel the strong personal urge to deal in a fundamental manner with this problem of inflation. Therefore, if the appearance of prosperity is maintained—and indeed it was maintained and encouraged when the Party opposite was in power—there is increased difficulty in introducing the necessary restraints. Let us face it, there is the suggestion that the flat rate carries a measure of inequity, and so it does. Several noble Lords have indicated the difficulties that arise with different classes of workers, particularly administrative workers, who receive the £6. It is inequitable because in terms of total income it is not so much. But while that is inequitable, what about the inequity of inflation? Without any shadow of doubt inequity is built into inflation and certain classes of the community suffer very badly indeed. I need not describe them because they have already been described.
There is no shortage of suggestions for dealing with the situation, and all I would say now is that there is no single solution and no magic wand. An incomes policy of the kind we are describing now must be but one facet of an overall policy to deal with the fundamental question of economic efficiency. Today, the demarcation between statutory and voluntary action is increasingly blurred. It is difficult to see where one ends and the other begins, and I believe that the present proposals steer a course between the statutory and the voluntary, with considerable emphasis being laid upon the voluntary. In that I believe our solution lies.
The noble Lord, Lord Hewlett, referred to differentials. This is an important point and one worthy of emphasis. One of the most difficult problems confronting us today, not only in this immediate crisis but in the future, is how to accelerate production. To do that is essential, but at the same time we must devise an equitable system of wage differentials. The present fragmented character of trade unions makes that much more difficult. What pleases me is the close and intimate participation of the trade union movement in these proposals which are being put forward by
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the Government, because that helps along the very necessary development of trade union organisation that will be able to achieve the sort of basis we need and without which we shall never get the kind of viable economy that we all seek to create.
I should like to conclude by emphasising the point I have already made, which is that the present proposals—which I applaud—must be recognised as being but one facet of a comprehensive policy for securing the development of the economy. Inflation is but a symptom of economic disorder or deficiency, and the more we recognise that the clearer we shall have in our minds the necessity for dealing with this fundamental problem of increasing the overall efficiency and productivity of this nation. It is only along that road that we shall find the ultimate solution to the problems, we are discussing today.
7.43 p.m.
Lord ALLEN of FALLOWFIELD: My Lords, it is not easy at this stage of the debate to avoid covering some ground which has already been covered by preceding speakers. I find it rather more difficult because I am suffering from a relaxed throat, but I hope that what I have to say may make some contribution to the value of this debate, not only in your Lordships' House but in the minds of the public generally. I should like to start by drawing your Lordships' attention to the concluding paragraphs of the White Paper, Nos. 47 and 48. If I may, I should like to quote paragraph No. 48, because I think it is so important.
"This is a plan to save our country. If we do not over the next 12 months achieve a drastic reduction in the present disastrous rate of inflation by the measures outlined in this document, the British people will be engulfed in a general economic catastrophe of incalculable proportions. If we do succeed, as we are resolved to do, we can turn with fresh energy and hope to tackle the fundamental problems which will still face us in constructing an economy in which high pay is earned by high output."
All paragraphs in this White Paper are very important, so far as I am concerned, at this stage in our history; but I believe that paragraph is the real "guts" of the intention, the spirit and the word of the White Paper so far as the British public are concerned. I am sure they will understand this; and, may I say, as one who travels widely, that I have never

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encountered such a climate of opinion as exists today, which is collectively saying to those who are responsible, "For God's sake do something! This situation is uncontrollable."
No one in your Lordships' House or any responsible citizen of this nation can fail to grasp the importance of these words, or indeed to measure their significance against the backcloth of the enormity of the problems confronting the Government, the employers and, last but by no means least, the British trade union movement, now and in the immediate future. This Paper is concerned with 12 months, and rightly so. My concern and also, I am sure, that of many other people, is over the ongoing policies to be adopted after those 12 months and the cherished hopes that the objectives set out in this White Paper will become reality. But, if those responsible in industry, commerce and services generally fail to respond or to act quickly and in conformity, in my view there will be an explosion in the British economy. In that explosion, industrial peace will go. Jobs and job prospects will be a thing of the past, as we have understood them in the context of full or near-full employment in this country. The whole of the British economy and, indeed, the freedom of the labour market will be damaged, and perhaps damaged beyond repair. I think that is a solemn responsibility on the constituents who are responsible for this Paper, and it is certainly a responsibility on the British public.
To some of your Lordships it will be difficult to believe that the Government's plan will work, yet few honest people can offer a meaningful alternative which they believe to be absolutely reliable and acceptable. Here may I refer to what was said by my noble friend Lord Brown, although I know that he has now left the Chamber. He referred to the agonies which he went through in 1966—though I think he had some pleasures as well. I had the doubtful pleasure at times, as one of six other representatives of the TUC, to share those agonies; and sometimes I shared those pleasures. Listening to my noble friend, as I did today with more than a tinge of sadness, I was reminded of the saying that:
"It is easy to be right about yesterday and today, but never tomorrow."
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It makes no contribution towards the solving of the problems facing this country to malign representatives, whether of Government, of employers or of trade union movement. That makes litle contribution towards helping to solve our problems—Yes, even with hindsight. I was very sorry to hear malignment of that kind coming from that source. It was very noticeable that after the malignment and after the very, very, damaging analysis—if that is what it was—of the White Paper, little alternative, if any, was put forward as to what we should do if we do not follow the plan or the Government's White Paper.
It would be foolish to pretend that the problems facing Britain are not among the most serious confronted for many years. As so many other noble Lords have said before me, the twin evils of inflation and unemployment menace us, and most certainly our future, in a way that we cannot ignore. Because they exist in the manner in which they do maximum unity is called for in this House, in the House of Commons, in the Confederation of British Industry, in the Trades Union Congress, and among the public generally to help solve what is a crucial issue which concerns us not only for today but for tomorrow. How we deal with it today will determine how we are to live tomorrow.
I see this plan as both a challenge and an opportunity: a challenge to the whole nation to an acceptance of the need to bring down the unacceptably high rate of inflation, and an opportunity, possibly the last in a free society, to lay the foundation within the next 12 months for renewed economic growth and a move forward in living standards for the future. The question we should be asking ourselves today is, not will the Government's plan work, but how can we make it work? That is the challenge facing us at the present time. That applies to all of us. It would be wrong and a disservice to the society we aim to protect by our acceptance of the formula, whether it be a wage or a price target, if we merely pay lip-service to these policies in this House and outside, individually and collectively, and then leave them to the other fellow to carry out.
Let us have no illusion—I am sure there is none in this House—as to what is at

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stake. It is whether this nation can make the transition from a laggard, low growth, low productivity, high-unit cost and low-wage society to a purposeful and dynamic society principally geared to the needs of economic expansion and social justice. That is something we have not had in this country for a long time. I am absolutely convinced, given our present economic and social difficulties, that the framework of action enshrined in this White Paper and in particular the Annex to the White Paper is the only way in which we can pursue at this time—and I emphasise, at this time—an agreed counter-inflation programme with the consent of workpeople. This leads me to say to my colleagues in the wider trade union movement that we cannot be in favour of planning the use of the nation's resources and against planning in the sector which concerns us most. It would be misleading to expect that the problems of the economy can be solved without at the same time facing the total and lasting obligation upon the community as a whole to help play its part in creating a socially just and defensible society.
Here let me declare an interest. My experience as a trade union leader leads me to accept that our movement—too often the whipping boy of the commentator and the pundits, and on some occasions not without justification—is at its best when we are asked to react to something. That is why the wage target of £6 flat increase together with the price target are all themselves fundamentally part of that challenge. In other words, consent and persuasion is the essence of the plan we are considering at the present time.
We have had some experience of the other doctrines and we know what happened to those. I know from long and at times difficult experience, as one who has been round this course with about four different Governments, that there cannot be superimposed upon workpeople or employers uniform and rigid policies. Any attempt, even when driven to do so, inevitably creates injustices and the collapse of those policies. This, I hope, the Government will keep in mind when they are giving consideration, as one understands they are, to their reserve powers. Indeed, the paths of political and economic history are littered with the casualties
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of policies of this kind. I deduce from that that imposition, if this is what we are thinking about, is out. No Government in Britain can proceed in this society by imposition without running the risk of grave mass disobedience. No institutions by their acceptance or otherwise of this plan can operate in isolation of each other without their actions having repercussive effect on all.
I hope that we shall not be lulled into the false security of believing that the answer to the problems confronting this country is statutory imposition of wages. It cannot be left, if the thinking is in those terms, in the wages setting alone. First, the trade union movement will not allow it. Secondly, judged by previous experience, it would be a catastrophe. So the inability of Government alone to control the situation is, in my view, implicit in the nature of our society, in the nature of our industrial system, and in the nature of our wages system. The trade union side input in this plan is a practical programme of our seeking; and it was encouraging to some of us to hear noble Lords earlier say that this is a courageous attempt, as I believe it is, to deal with our current situation, an attempt that I confidently believe will have overwhelming majority support in this country.
Given this, two things must run together. The first is that the plan must be seen to be, and accepted—and I am sure it will be—by our movement as being, a natural and sensible thing to do between the Government and the movement; not something artificially drawn out solely by loyalty to a political Party. Moreover, it must be viable and sensible in its own right. I believe that the plan projected in the White Paper is that, and, however difficult it might be to explain to working people, it must be explained and accepted. I believe that the stakes are too high to allow opting out on a score of that kind. If there is any weakness in the fulfilment of this plan it is in how we shall present it to the people of this country.
I do not believe that any of the Administrations we have seen in recent years have been very adept in the presentation to the public of the problems confronting the public and—and here I return to the theme which I think has to be plugged both here and elsewhere in the

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country—unless there is unity between those people who pay lip-service to wanting to do the best thing for the country we cannot hope for this plan to succeed so far as the public generally are concerned.
Lord BROWN: My Lords, before the noble Lord sits down, I think he inadvertently attributed a range of remarks to me, Lord Brown, when he should have said, Lord George-Brown.
Lord ALLEN of FALLOWFIELD: My Lords, I intended no such thing. I should have said Lord George-Brown.
Lord BROWN: My Lords, I merely pointed that out for the record.
8.1 p.m.
Lord MILFORD: My Lords, we are in a very deep crisis indeed and it must definitely be solved. I emphasise the word "must" because I read today in the Press of the slanderous accusations of the Shadow Home Secretary, Ian Gilmour, that we on the Left in the Labour movement, the Communist Party among others, wish this crisis to intensify in order to create a state of chaos. We British people want to, and must, solve this crisis, among other things, to help the old age pensioners, the lower-paid workers, the wage earners and their families, and the British people generally who suffer most. When we do not agree that the present proposals will solve these things, and we put forward an alternative way out, the Shadow Home Secretary and others arrogantly denounce us as subversive.
Surely the right way to find a solution to a problem is to find out why it has arisen. The major reason acclaimed by the Press, the mass media, the Government and the Opposition is wages. Wages price us out of markets. We are deeper in this crisis than any other European capitalist country, yet in those countries wages are higher than they are in Britain. From this I cannot see how wages are the fundamental cause. We Socialists and Communists believe this is a crisis of capitalism, of world capitalism. It hits Britain hardest because ours is the weakest of the major capitalist economies.
Why are we so weak? That is one of the fundamental things that I think we must examine. Since we surrendered our Empire we have drained our capital into overseas investment, into countries we
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formerly ruled, to the neglect of British home industry. To protect our investments and interests abroad, we have spent thousands of millions of pounds on overseas military expenditure, and the noble Lord, Lord Carrington, was a chief among the people making this military expenditure. In the era of multinational companies there has been an acceleration of the drain of British capital from home. This drain on British capital, which should have been used in equipping and expanding British home industry, is a far more fundamental reason for our crisis than oil, wages, the working class, the trade unions, who are always blamed by every Government and Opposition, the Press and mass media, while employers, bankers, trusts, speculators, get off comparatively free. There is no mention of their nearly thirty years' strike of investment in this country: a strike more prolonged, hitting us harder than any strike of a section of the workers.
The Government White Paper (Cmnd. 5710) of 1971 admits that investment for each worker in Britain was less than one-half of France, Japan and America and well below Germany and Italy, and these figures have got worse for each year since 1971. So the question should be asked: Do the monopolies, the multinationals, put Britain first, or do they prefer to chase higher profits abroad? If we accept the present Government's solution of cutting purchasing power and public investment, are we not bound to have more industrial stagnation and higher unemployment? Apparently that is accepted. Why? Is it not on the question of capital investment that we have to do something quickly and drastically? The present situation is not new. Ten times in the last 25 years we have attempted an incomes policy, but every time it has failed. Surely after such failures we must try to find a new policy. This crisis is second in seriousness only to the two World Wars. Drastic steps leading to serious inroads to our present system have got to be taken.
I am not alone, the Communist Party is not alone, in putting forward the following points which have been raised, discussed and agreed to by many people in the Labour Party and the trade unions. First, I think prices have got to be frozen and food subsidies increased, not abolished. Secondly, the

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large monopolies, the banks and the financial institutions, must be nationalised to bring them under democratic State control. Free collective bargaining must be restored, the lower paid helped and pensions increased to stop stagnation and to extend the home market and expand industry. We should expand the economy to 6 per cent. of growth, block capital exports and direct them to home industries; tackle the balance of payments by cutting investments abroad, and we should sell £7,000 million British shareholdings abroad as we did in the two big crises of the first and second World Wars. Lastly, and I think very important, we should restore the cuts in education, the Health Service and housing. These national investments produce real wealth for the country and we are falling far behind the rest of Europe in our education, housing and health. How can we afford all this? First, we must expand our economy, bring back the capital from abroad and cut the arms bill.
Lord HAILSHAM of SAINT MARYLEBONE: Like Russia!
Lord MILFORD: My Lords, vast wealth is in British hands, abroad and here, but it is not being used in the interests of this country. I cannot agree with the White Paper because it puts forward wages as the main reason for inflation, and does not tackle what I regard as the main reasons. The one-sidedness of the White Paper is bound to lead to further frustration, to confrontation with the people who are most important in our economy.
8.10 p.m.
The Earl of LONGFORD: My Lords, it is a pleasure to follow my old friend the noble Lord, Lord Milford, although I cannot agree with a number of the propositions he put forward. Many years ago when I was Labour candidate for Oxford City, I remember I was helpful in securing the position of Labour candidate for South Oxfordshire for the noble Lord. When the General Election came along I faced the electorate as arranged, and met defeat at the hands of the noble and learned Lord. Lord Hailsham of Saint Marylebone. By that time, the noble Lord, Lord Milford, had joined the Communist Party—and I am not sure which of us had
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the more painful experience. But that takes us back a number of years. I shall speak briefly in favour of the White Paper. At this time of night, a Back-Bencher should try to confine himself to a general theme, but there is a topic which I shall touch on because I have mentioned it in the last two speeches I have made on the economy, and it is one to which I attach importance.
In my last two speeches on economic matters, I spoke about the need for personal sacrifice, beginning with those who are wealthiest and most comfortable. There I am sure the noble Lord, Lord Milford, will agree with me. I expressed the hope that those in the strongest position to make sacrifices would offer them. I said that one could hardly expect the trades unions as a whole to exhibit a shining unselfishness unless the rich people in this country—and there are still plenty of those, even in these difficult times—are prepared to give a lead in self-abnegation. I repeat that now. Mr. Len Murray, the General Secretary of the TUC, has struck the right note here. I understand him to have said that in certain circumsances he would accept a cut in salary; that is a good start. There was a rumour that the Cabinet would cut their salaries. There was quite a strong rumour that the right honourable gentlemen the Prime Minister and the Chancellor of the Exchequer were keen on the idea, but when it came to the point, they jibbed and did no more than hold their salaries where they were. In academic terms we could call it a "beta query plus result", but it was something. I cannot say as much for the other place. If I said what I thought about their performance with regard to their salaries, I should imperil the relationship between the two Houses; therefore I shall keep that to myself for the moment.
My Lords, when we heard the noble Lord, Lord Boyle of Handsworth, in his notable speech waxing lyrical about Parliaments, the thought of what they did to themselves at 2 o'clock in the morning passed through my mind, but that is not my main topic this evening. I want to deal with the attitude of the Government and try to extract still more firm indications from the Government about their attitude to the reserve powers. We have not heard much about them, considering

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that we have been at it for five or six hours, but I understand the noble and learned Lord, Lord Hailsham of Saint Marylebone, apparently will deal with them exhaustively.
Lord HAILSHAM of SAINT MARYLEBONE: Exhaustingly.
The Earl of LONGFORD: My Lords, I should not like to suggest that, but the noble and learned Lord will deal with the reserve powers as night falls. However, I must say this much in advance; in my view these reserve powers are absolutely necessary. The White Paper contained this crucial message and I apologise for reading it out. In paragraph 25 the White Paper says:
"The Government believe that the measures described above will be adequate to secure compliance with the policy by all employers. If however they find that the policy needs to be enforced by applying a legal power of compulsion they will not hesitate to do this."
Paragraph 26 says:
"Legislation has therefore been prepared which, if applied in particular cases, would make it illegal for the employer to exceed the pay limit. The Government will ask Parliament to approve this legislation forthwith if the pay limit is endangered with resultant unfairness to the great majority of those who are prepared to observe it."
This is blunt speaking, and I can only hope that my esteemed Leader will tell us that those words were firmly intended when they were written, and are intended just as firmly now. Without that message, without the possibility of those steps being taken, the White Paper would amount to very little in practice. It could be brushed aside; it could disappear into limbo like other attempts of this sort have been.
My Lords, we must all speak for ourselves. The noble Lord, Lord Allen of Fallowfield, spoke not only for himself, but for quite a section of the trades unions. He gave his view and therefore I must give mine. I repeat that I hope the noble Lord the Minister will be able to tell us there is no retreat from the passage in question. I do not think this is a completely redundant question. The Guardian carries this statement on its front page, under the heading "Back-up Bill on £6 limit goes into limbo":
"A combination of the bitter objections of Mr. Michael Foot and the convoluted legal arguments of the Government legislative body appear to have produced a mood of despair."
A mood of despair has been produced by the prospects of devising a workable
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draft for the Bill. I hope that we shall be told by the Minister that this is quite untrue. If it is any kind of inspired leak then indeed the news is bad, but I hope that for once the Guardian has got it wrong.
My Lords, on Monday, in The Times, Mr. David Wood, their political editor, referred to what he called the second Bill and said:
"By the end of the week nobody had much faith that the Bill would ever see the light of day."
He could mean that it would not see the light of day because it would not be necessary, but in the context I do not think that was his actual meaning. What he appeared to mean was that under various kinds of pressure the Government were losing their nerve in regard to this Bill. I daresay the view expressed by the noble Lord, Lord Allen, today has been among the pressures. Once again I appeal to the noble Lord, Lord Beswick, to tell us whether Mr. Wood, like the Guardian, is totally mistaken. That is essential. If we go away with this issue fudged we are not really backing a policy of any kind of significance.
I was relieved when we had this statement; it was a new statement of policy. Statements have been made before and then usually have been sabotaged by the other side. When the Labour Party were coming forward with a statement in the days of the last Wilson Government, it was the noble Lords who sabotaged it, and the same could have been said of the Conservatives in their turn. Here, at last, we have a firm statement about what is generally understood to be called the statutory policy, backed by the Leaders of all the Parties. Therefore, I was much relieved when this statement was issued, just as the noble Baroness said that she was full of joy. She is a more joyful person than I am, and relief is the strongest emotion I can feel in these difficult days. But I was delighted this should happen.
I was in favour of a statutory policy. Unfortunately, the noble Lord, Lord Allen of Fallowfield, has had to leave the Chamber. If he can state his view, I can state mine, and so I say that for many years I have been in favour of a statutory policy for wages and salaries, and appropriate Socialist measures to go with it. I remember in a debate in

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March I said that statutory controls, which I have favoured before now, and in certain circumstances would favour again, were not a practical possibility at the moment. I and a few other Members are nervous of saying something particularly in this area of discussion, which is counter-productive. We know that what is said by young or older Peers, or Peers on any side of the House, may or may not have the effect that they want it to have in the union movement. However, a point is reached when one can come out in the open and say what one believes, and one need not be too careful as to whether one is possibly irritating some so-called baron.
As a matter of fact, at the time I left the Labour Cabinet the issue had not really become very acute. It became very acute later when the Prime Minister and the right honourable lady Mrs. Castle produced their policy, which was one kind of statutory proposal. But, certainly, when I was still a member of the Cabinet, going back almost as long as the noble Lord, Lord George-Brown, went back this afternoon, I recall that at one point the majority of the Cabinet would appear to have been in favour of the policy. We must wait for the next instalment of Mr. Crossman's memoirs, if they are allowed to be published, to find out what everybody is supposed to have said at that time, and perhaps not quite accurately. There certainly was at one time a general opinion in favour of this policy. So do not let us suppose that this idea of a statutory wages policy is in some way opposed to Socialism, that there is some fundamental objection to it from the doctrinal point of view.
I was very much interested—and here I must be careful that I do not offend any rules of convention—by a speech made by Mr. Ian Mikardo, who has taken the lead, or took the lead last week, not for the first time, in criticising the Government's policy from the point of view of the extreme Left. I realise I shall be hauled up by the noble and learned Lord, Lord Hailsham, or some other purist, if I quote his actual words, but what he said, if I can put it into indirect speech, was that he did not believe in unregulated free wage bargaining; he never had done. He said it was nonsense to say that we could have a planned
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economy with an unplanned wages sector. He went on to argue that we cannot have a planned wages sector in an otherwise unplanned economy. But his conclusion was this, that his objection to what he called the "proposition" was not a moral one, but a tactical one. So it is certainly helpful to have removed any sort of moral aura from this question of free collective bargaining. It has been reduced, shall we say, to a tactical issue on which Socialists are as free as anybody else to make up their own minds.
But that is not to say, of course, that the total question of the right policy can be stripped of all moral aspects. There is always a moral duty on the Government, and in their own way on the leaders of the Opposition Parties, to suggest a policy in the best interests of the nation. From now whatever the future may hold, taking a broad view of the debates in this place and in another place. I think we can say that the leaders of the British people are agreed as to what ought to be done. Certainly, we in this House appear to be in that situation. We know what we ought to do. The White Paper with all its imperfections, which are inevitable in any human document, leaves no doubt about the course which ought to be taken. The question arises; have we the will, the courage and the moral stamina to do our manifest duty?
I said that I would confine myself to one issue, and I have largely done that. As I sit down today, I wish to urge that the prospects of a genuine attack on our British inflation could be better at this moment, now that reality has been faced, than for many years; but if we falter now I would say that the situation would be worse than at any tme since the war. If we fail this time, if having come up to the fence we just shy away, then I do not think anyone would have very much hope for us for a very long time to come. It is for the Government to point the way; that is their responsibility. It is for the rest of us to back them up manfully. I hope and believe that the Government will do their part, and I hope and believe that we in our various capacities, important or insignificant as they may be, will not be found wanting in ours.
8.24 p.m.
Lord GORE-BOOTH: My Lords, this has been a debate covered by a considerable degree of brilliance, brillance which

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at the beginning of today was almost too brilliant to be able to decipher. There was the brilliance academically of the noble Baroness, Lady Wootton of Abinger, there was the brilliance of the noble Lord, Lord Boyle, and so on. It has been a great experience to be exposed to this if one is a somewhat more humdrum character oneself. I somewhat deplore, I must say, the brilliance of the noble Lord, Lord Carrington. I felt that this debate was not perhaps one in which one quoted what one's opponents had said wrongly, because we have all said so much that was wrong. We are really trying to concentrate on what we do from now on, and this is really the point of the debate. We have also had an orthodox statement of the Communist gospel by my noble friend—I suppose I must call him my noble friend in view of where he sits—but he has not heard of the mixed economy; he thinks still that all multinational companies are in favour of everybody else and we get nothing out of them at all.
I have been somewhat less ambitious, and what I did in preparation for this debate was to read through reports of the debates in the other place, and also to read very carefully the White Paper. I must say that having done that I came to the view, absolutely clearly, that if there were any question of voting in this House I should vote wholeheartedly for the White Paper, without any question and without reserve. There are limitations; it is not a perfect Paper; I shall come in a moment to a few blemishes.
But I think it is a very remarkable achievement, if one looks at it not so much as a photograph, as a thing in itself, but as a document in the context of what has been going on in the country, what has been going on in the trade union movement, what has been going on in the Labour Party. That it should have been possible for this Government to put this Paper together in consultation with the trade unions and the CBI is a very remarkable step forward indeed. Obviously, it was greatly helped in the other place by the out of normal dimension contributions made on the one hand by Mr. Healey and on the other by Mr. Heath. I have felt that that was really the context in which we should be dealing with this Paper, not in a too absolute one, but in direct connection with the political situation as it now exists.
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If your Lordships will bear with me, I will try to reinforce that conclusion by two very short extracts which I think bring this out very strikingly. One is paragraph 29, where the White Paper says:
"The Government…would like to be able to freeze prices but an immediate price freeze is simply not possible after nearly three years of strict price control without depressing investment and causing additional unemployment."
Then in paragraph 39 there is a sentence:
"…increased investment whether public or private has to be paid for, and in a mixed economy the investment of the private sector has mainly to be paid for out of profits."
Then it goes on to say that the present levels of profits are lower than before.
Those unexceptionable sentences might have been drafted by, for instance, my noble friend Lord Robbins, and none the worse for that. I think it is most remarkable and most laudable that sentiments of that kind should be contained in this White Paper in this context, and I think those are the things that should have been broadcast to the nation by the leader, instead of the great concentration—which, of course, is very important for the individual—on the £6. I believe that to be the perspective in which we are talking, and which, incidentally, has provoked some of the brilliant speeches to which I have referred.
If I may go on with the White Paper, I should also like, as I have done before in the case of another White Paper, to commend the language, which seems to me very good, in particular the insistence on talking about pay and not about wages. This is, I regret to say, an obsession which I have inflicted on your Lordships earlier. The whole purpose of this exercise is to produce some unity, and one of the things which is necessary is to get away from the cliché words which immediately conjure up the image of a class society, of which we are trying to get rid. There are other small blemishes. I think paragraph 2, which refers to the "under-utilisation" of productive capacity, contains the danger that it could mean the use of capacity we have, because it is there, and produces things which people no longer want. I put that in only as a warning, because this is sometimes a fallacy behind an employment policy. I should like to echo what

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the noble Lord, Lord Boyle of Hands-worth, said about the "Government supporting the trade unions in a particular initiative". Governments do not support: they endorse. The draftsmanship on that point should not have been so sloppy.
Looking back at the proceedings in another place, may I deal briefly with a few of the points on which there was the most dissension? The first was this problem of the statutory powers, about which the noble Earl, Lord Longford, spoke. In this in one respect I have considerable sympathy with the Government. The partial statement of possible statutory powers, which was one-sided in the White Paper, is a pity. In a situation like this the Government must clearly have thought this matter through, and realised that they could not make a statement about statutory powers unless they said something about control or discipline on pay. At this moment, in relation to the White Paper, this would have been a very unwise thing to do for the sake of the White Paper itself. This is what the late President Roosevelt used to call an "ify" situation. In the "ify" situation, the Government were wise not to take that one on, though the reassurance that there would be some kind of powers if the White Paper broke down was perhaps a salutory thing to have said.
On the matter of public expenditure there was again a great deal of uproar in another place. I think I can understand what the Government were doing, though no doubt the noble Lord, Lord Beswick, can illuminate this question a little further. At this stage we are seeing an increasingly tight control, and indeed a reduction, on public expenditure, in little episodes which have happened in your Lordships' House. Two days ago we lost an Embassy in Tananarive on the grounds of economy. Yesterday, improvements to the hospital at Hammersmith were announced as being dropped, again on the grounds of economy. I fear that this unhappy catalogue will have to go on, and that will show that there is a cutting of public expenditure. The crunch will come when the Government, if the position continues, have to cut down on things which come even nearer to the day-to-day lives of ordinary people. We see in these
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episodes evidence at least that the idea of reduction of expenditure is alive in the Government and is proceeding. Of course, we do not know how far the Government will go.
The weakest part of the White Paper lies in the direction of what is called so politely the "borrowing requirement". There has been a heresy circulated about this, particularly in the time of the previous Minister of Industry, to the effect that this really does not matter because it is merely a transfer of resources from one body to another. This arose in another place, and again, observing the point which the noble Earl carefully pointed out, I shall not quote the Prime Minister verbatim.
The Earl of LONGFORD: My Lords, one can quote a Minister verbatim.
Lord GORE-BOOTH: I thank the noble Lord very much. I am being very careful about the noble and learned Lord. Anyway, the point came out rather as a sideline, and the Prime Minister explained that in terms of resources the question of whether a company or the Government borrow money for oil development was immaterial. But he then added:
"I grant that the effect is not the same in respect of the public sector borrowing requirement."
Surely this is a desperately important matter which the Government cannot go on shirking. If I ask one of your Lordships to lend me £1 (if one of your Lordships has £1) and you then need it back again and ask me to give it back, I do not say, "I have regrettably been unable to arrange a borrowing requirement in order to fulfil my obligations." I either say, "I can't afford it", or "I haven't got it". The disguise of the appalling debt situation under this narcotic expression "borrowing requirement" does the most immense harm, and is greatly susceptible of misunderstanding by the public of the danger which it causes.
We have had the figures quoted that we now have this borrowing requirement of something like £9 billion to £12½ billion, all of which will have to be serviced, in so far as it is borrowed by the Government from the public or abroad. I have been through this labour myself in the Civil Service of trying to collect the resources to pay interest on this sort of

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thing, and indeed to repay the capital. Quite apart from one's views about nationalisation or non-nationalisation, there must be a conscious check on this rake's progress, which we will have to pay for in a most agonising way in the years to come. I personally have a somewhat split view on nationalisation, but the Government will have to take seriously the pressure on them to hold up some of the intentions of nationalisation which have been put forward, simply on the grounds of the burden which unnecessary nationalisation will add to the tremendous burdens which this problem puts on us already.
Those are some of the things directly out of the White Paper. Might I just enumerate a few other points that will have to be discussed immediately following this debate? There is the matter of the presentation to the public, making it all intelligible, which Mr. Heath stressed in another place. We have not been successful in this so far, and on that I agree with the noble Earl who also drew our attention to this problem. There is the foreign impact of what we are doing, which has not been mentioned. One is glad to say—and I can say this on authentic information—that the White Paper had a most importantly good effect in the United States, which is perhaps the most important country in this con, text. I was also much impressed by various noble Lords speaking about, "Well, after this, what?" I do not think that any moment would be too early to start a "think tank" going on the subject of what this society will be like in a decade or further on, in the light of everything that has happened.
Finally, I would associate myself with the noble Earl, perhaps putting the point somewhat differently. It is all very well to say that inflation is the root of our troubles; and maybe up to a point, by technical operations, we can diminish it. But we shall not get it right unless we get the character of our people right. There has been a period in which we have had it too good, in which "couldn't care less" has been the fashion, whether in personal conduct or in putting together an automobile. We shall have to take a pull on ourselves, which this emergency may give us the right incentive to do. If we do that, I am sure that we have all the other competences to escape
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from the deeps with which this situation threatens us, and to assume our proper place in the world.
Baroness GAITSKELL: My Lords, before the noble Lord sits down, may I ask him a very short question? Am I right in thinking that he was comparing Government and State borrowing with a kind of domestic housekeeping borrowing? This over-simplification, which comes up time after time, seems to me absolutely misleading. It is not the same thing.
Lord GORE-BOOTH: My Lords, there is a similarity and a difference. I certainly think that the floating of a domestic loan creates an obligation on the Government, but it does not involve the transfer of large sums across foreign exchanges, so to that extent it is different. In any case, I feel that the absolute volume of Government borrowing remains important and the figure which it has now reached can only fill one with apprehension.
8.40 p.m.
Lord DAVIES of LEEK: My Lords, we have had a hard day's night, and lately it seems that it falls to me in debates to appease the House by saying that I will not speak for many minutes. Because your Lordships have heard so much philosophy and so many brilliant speeches, I will try to make a few constructive suggestions in perhaps ten minutes or so. I begin by apologising to the noble Lord, Lord Carrington, and the noble Lord, Lord Byers, for not being in my place when they were speaking. They will know that it is not my custom to leave debates in which I am taking part. I hope they will not think that it was a piece of Welsh grobian arrogance on my part; it was simply that, being the chairman of a committee, I had to attend an important meeting and consequently missed what I am sure were two very constructive speeches.
I have great pleasure in speaking following the noble Lord, Lord Gore-Booth, because I agree entirely with him that the use of language these days is of the utmost importance and, as he will be aware from reading the Good Book, first was the word—so semantics are important. The trouble with inflation is that it hides things, as my noble friend

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Lady Gaitskell pointed out. For example, a nation living at a time of inflation is a nation with a smoked salmon appetite trying to live on a soused herring income. This seems an inevitable occurrence and, as people try to meet their appetite, what is the result? This has been happening all along, perhaps since the discovery of hire-purchase. My old mother, way back in the hills of Wales, where some noble Lords may think we were savage, would never get anything till she could pay for it, and in those days it often took us a very long time to pay for something, even for some new apple trees. That philosophy of my old mother has disappeared and "Take it now and pay for it later" is the slogan. Consequently, throughout Western democracies—and this is happening now even in the Communist countries—there is a hidden factor: our economies are held together on pillows of cloud, like hire-purchase, and when they collapse the effect is felt on employment and on the economies of every country in the world. I could illustrate this in great detail, but as I have such a wise audience illustrations are on this occasion not needed.
Let us be frank in considering what is happening today. Let us admit that man is going adrift and technology is taking over. The motor car has certainly dominated man, who is a complete slave to his automobile, and he is getting like his ugly, crude, rude, ill-mannered piece of mechanism attached to a lump of steel that is driven by fumes and petrol. If you watch him in the streets you see him acting worse than the gorillas and baboons in the jungle, and I know what I am talking about because I have seen both in the jungle. To be honest, the baboons and gorillas act much more gently and kindly in the jungle than a group of British motorists in a traffic jam in London. Man is being battered into mediocrity by a society that is overwhelming him, a society which none of us seems completely to understand.
For example, we say, "We must cut down our imports." But what is the corollary? If a nation depends on exports, how can it cut down its imports? What is the matter with those who utter these slogans? How can one pay for what one imports if one does not export? The question is not one of handing over
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pound notes because they want something real; and that must be the first consideration of any economist. That is why the White Paper is important, and of course I support it. I agree with the noble Lord, Lord Peddie, when he said that the White Paper is full of simple things; but so are many of the world's answers. I am not a very good Christian, but most of the basic religions have simple rules and ethics of life. Everything would be made much easier if we applied those simple rules and ethics to our way of living. I am simply saying that sometimes it is not the grandiose plans and schemes but the simple things in life that provide the answers.
Let us not have too many promises. I do not want to turn this into a Party debate but, bless her heart! I recall the marvellous speech made by the Leader of the Opposition on television the other evening. I listened and watched and suddenly I heard her say, in effect, "No longer shall we have to pay rates, and mortgages will be pegged at 9½ per cent." It all sounded superb, and I sat back and asked myself, Who is going to pay for the teachers, the police, the parks, the firemen, the drains, the sewers and the roads?" Somewhere along the line somebody must pay for all these things, and I thought that the right honourable lady was doing what Shakespeare did—telling us how to throw perfume on the violet, how to smooth the ice or add another hue to the rainbow. That sort of thing in politics is finished. Somehow, we must get together and find constructive answers to the problems that now face us. I will try to illustrate briefly what I mean before I sit down, which will be much to the pleasure of the noble and learned Lord, Lord Hailsham of Saint Marylebone, who I see sitting in his place not exactly entranced by what I am saying and no doubt anxiously waiting for me to finish.
Lord HAILSHAM of SAINT MARYLEBONE: I am doing my best, my Lords.
Lord DAVIES of LEEK: My Lords, in the other place a suggestion was made about land. While I appreciate that landowners are worried, it is clear that on the question of land we have to do something. As an old follower and supporter of land values, if I may call

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myself such, as populations increase so the amount of land available to individuals grows less. Mankind must find an answer to this problem of urban land values. Incidentally in considering the question of land values, banks are involved; and ill respect of one of them one of the leaders on the Opposition Benches got his fingers burnt. He did not exactly burn them. I am not subgesting that he did anything wrong, but this goes to show how things can happen. I have a friend in this business, and he has had so many loans given out willy-nilly to speculators in land values that that too has helped in the inflationary situation which we have to meet. I will not develop this theme because 99 per cent. of your Lordships know what I am talking about probably better than I do.
Consider the issue of investment overseas. I wish I had time to develop this part of my speech. I can only hope that noble Lords will take what I say for granted without my giving chapter and verse, which I would give if time permitted. I have with me details of Leylands' investments overseas, in Australia, Spain and everywhere. Most of this information is not to be found in the Ryder Report, but it was fundamental to the Government when they had to take over and suffer great losses as a consequence. About a million jobs are at stake, and on 2nd April 1975 the Prime Minister told the Commons that something would have to be done about it. We have reached a pitch in the history of capitalism—I use the word "capitalism" not in a pejorative sense—when we must consider exactly where we are. I am anxious not to be dogmatic, but the Americans are in a bigger jam than we arc. They are not even able to pay their way in New York. I was in Chicago some years ago and found that the school teachers there had not been paid for six months. So let us not denigrate Britain too much. We keep knocking our country, but let us not overdo it.
The United States authorities had to rescue Penn Central Railways a few years ago. The railways there were collapsing like they are here. What can one expect if one allows juggernauts—there is one at Brent Cross now stopping the traffic, 50 tons of juggernaut holding
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everything up—to run through the beautiful villages of Britain? If we say the nation cannot do anything about it we must have gone crazy. There is no wealth but life, and we should balance all this against the horror that is now running wild on the roads of Britain. To revamp their railways the United States had to put large sums of money into them. The same happened in France. The French Government, faced with a railway company on the verge of collapse, had to put money into it. Renault, which was already nationalised, had to have money injected into it in 1971. We had to do it—and a Conservative Government concurred, and rightly so—when we put money into Rolls-Royce. It was a question of the nation honouring an important aero-engine contract and a liability in relation to Lockheed.
As big firms have grown, a new stage has been reached. It is no good talking about the old-fashioned enterprise—the old fish and chip shop and the cobbler's shop. We are out of that simple acquisitive society and into something which is dynamically mightier than anything that has existed before in history. It is mightier than Governments. What has happened? As big firms have grown bigger, a new stage has been reached in their relationship with the State. No Western Government can or will allow firms that are the main elements of their economy to be finished off by bankruptcy.
No matter whether the Conservatives, Labour or the Liberals are in power, we dare not do it. This stage of the relationship has been building up since the two world wars and its general consequence is an economic and political position which will be here for years, despite the talk of Socialism. We have entered into a system of State capitalism and we no longer have the pure acquisitive society that Tawney wrote about in his magnificent books. We have a system of society in which State capitalism is accepted and in which we try to prevent it being a rogue elephant.
I am sorry; I have gone a minute over my time, so I will take only one more point. I cannot understand the madness of our financial and industrial system neglecting British agriculture. We put millions of pounds into industry. Two

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million pounds is a fleabite. We are putting £2 million a day into British industry. I am not grumbling about that, but I am grumbling about the astounding fact that since the war we have expanded agriculture by 70 per cent., despite the loss of 50,000 acres for motorways and so on, despite the loss of thousands of men who have left the land. There has been a reduction of 60 per cent. in the labour force. We have achieved that expansion through the wisdom of the British farmer and of the British agricultural worker.
Lord SANDYS: My Lords, would the noble Lord accept that it is over 70,000 acres per annum and not 50,000 acres since the war that has been lost? It is an enormous figure.
Lord DAVIES of LEEK: My Lords, I am very grateful to the noble Lord for making that correction and for putting it upon the record. I am really grateful to him. It is an essential difference and it is one that shows even more the great efficiency of British agriculture. If we do this, this will be a way of saving money on the balance of payments.
Lord STRABOLGI: My noble friend should read the White Paper.
Lord DAVIES of LEEK: My Lords, my noble friend on the Front Bench thinks I am criticising the Labour Government. Why not? My noble friend keeps mentioning the White Paper, but all I am asking is why, in this crisis, we did not give the same priority to the production of more food at home. If we had, we could have saved £300 million or £400 million a year on the balance of payments. I hope that, when we are getting into this, we shall do something about British agriculture. I shall leave it at that point with one caveat. Noble Lords on both sides of the House are now pretending to themselves that they can do what they like about our economy. We are moving into equality of taxation, harmonisation of taxation, free movement of labour through Europe and currency agreements in the Common Market. In other words, never again can we tackle our crises ourselves. These points will have to be discussed in Brussels.
8.55 p.m.
The Earl of LYTTON: My Lords, the trouble with following the noble Lord, Lord Davies of Leek, is that he is like a
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bottle of champagne beside which I am like, as best, a half bottle of Guinness. I always enjoy his speeches. I have been impressed by the brilliance of this debate which was referred to by the noble Lord, Lord Gore-Booth. I was fascinated by the tour de force of the noble Lord, Lord George-Brown, though, realising how he dislikes anybody who agrees with him, I am happy to say that I only partly agreed. I was also among those who read—or skimmed through—the million and a quarter words uttered on this subject in another place the other day.
However, I want to quote from a speech which was not delivered in the other place but elsewhere, and which I thought was superior to any we have heard. It ran, in part, as follows:
"It is not a question today, in the crisis that Britain faces, of choosing between inflation and unemployment. Inflation is causing unemployment. We cannot have a little of one and less of the other. The more inflation we have, the more unemployment we have and, if we were to tolerate the rate of inflation reached in recent months, then no industry would be secure, no job safe."
I comment that that is relatively new. Until recently we were being told that we could have a little more inflation and less unemployment. That statement is new. The speech went on to attribute the inflation principally to wage increases.
"To continue wage awards on the scale of recent months would be to cat the seed corn. Such an act would be crazy, even suicidal, with all that means for the future employment in industry."
That speech was delivered by the Prime Minister at the annual meeting of the National Union of Mineworkers. It seems to me that, in delivering the speech on that occasion, the Prime Minister entered the lion's den, addressed a pride of miners assembled on an occasion when Oliver always turns up to ask for more, and exhorted them by every device he had to hold their hand and restrain themselves. The miners are surely the spearhead of what has been an inflationary cycle somewhat resembling the gamble of Wall Street which ended in 1929. Should that cycle continue, it will certainly produce our ruin.
It is that that the White Paper is principally about. Never mind whether it is called income or wages. It is a mass demand for increase of wages that is being picked on as the decisive inflationary factor in the past 12 months or so. That is

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what the White Paper is surely about. In order to achieve restraint in this matter, supported, if necessary, by statutory measures—that is, by the majesty of the law—the Prime Minister has done his utmost to secure a consensus. It seems to me that he has had a substantial measure of success in the very areas where his rivals the Conservatives failed, because Mr. Heath was defeated by the miners. It is lacking in humility to denounce the Socialist programme without admitting that fact, which is most important. Both Parties have been defeated by the miners—and when I say "defeated" it is not entirely a battle; it is, however, the failure to persuade certain sections of the community that by making themselves secure with exaggerated incomes they are damaging the rest of the people, particularly those not so well organised.
Quite early in his speech the Prime Minister refers to the Social Contract and virtually implies—indeed, he says so—that the Government have delivered what they undertook to do, and he implies that the trade unions have not. There is sometimes a tendency to imagine that the TUC has perpetrated and act of fraud. I am sure that this is not the case. It has done what so often happens in political life: it has overestimated its capacity to control others. That is what is wrong, and the Prime Minister implies what is obviously true, that the Social Contract so far has failed, not because the Government have failed in their pledge, but because the trade unions have been unable to deliver; and he is hoping for more.
Surely this emphasis on wages is one of the most difficult things that a Socialist Prime Minister can possibly do; it is all the more difficult when he is addressing miners rather than any other body. This has been done with a measure of success, we certainly hope, and the effort at consensus is necessary to overcome what we have experienced; namely, the flouting of Parliamentary decisions by powerful outside groups. It is useless to legislate if legislation is flouted. The attempt is to get a consensus with the TUC which represents, very imperfectly, labour, and the CBI which represents, even more imperfectly, management. I think that that trend is in the right direction, and there may be other bodies which should ultimately be brought in.
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This development of consensus lacks one very important factor. There is no consensus in Parliament—and I agree with those who say that Parliament is the institution which must govern. These other bodies are adjuncts, necessary adjuncts, but ultimately it is Parliament which must rule, and the difficulty is that the Party which represents, as the noble Lord, Lord George-Brown, said, only 30 per cent. cannot, except by a convention, be said to represent the majority of the electorate.
During the course of the speech by the noble Lord, Lord Carrington, a very interesting question was asked by the noble Baroness, Lady Wootton of Abinger. When the noble Lord, Lord Carrington, was urging the Labour Party to stand on existing public sector industries without seeking to expand them, the noble Baroness asked him to say, in view of the sacrifice he was asking of the Labour Party, what sacrifice he would make in exchange. I was disappointed at the noble Lord's response. I thought he might have said that if the Labour Party made the sacrifice of standing on the public sector as it is—in other words the mixed economy without extending the mixture in either direction—the Conservatives would do their utmost to make the existing public sector thoroughly successful—which it is not at present—and that they would support the Labour Party in its policies. Is there no possibility that the noble and learned Lord, Lord Hailsham of Saint Marylebone, might say something more forthcoming in answer to the question from the noble Baroness, Lady Wootton of Abinger, which seems to me to be the missing link in this story?
We can get co-operation from the TUC and the CBI, but there is always this minority in Parliament pretending to be a majority. There is the weakness, and there it will break down. I should have thought that the time was ripe for a concensus in Parliament on a programme which everybody could support to get us out of the dreadful mess we are in.
9.5 p.m.
Lord DOUGLAS of BARLOCH: My Lords, there is no doubt that year after year of inflation has brought us to the brink of disaster, and what I welcome most of all in the White Paper, and in the Government's attitude, is the realisation of the urgency of the situation with which

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we are confronted. There is a great deal in the White Paper with which one must agree, but there are certain omissions which make one wonder what is the basis of the Government's policy. There is a great deal of emphasis—and indeed this is the kernel of it—upon wages and restraint of incomes for the purpose of reducing inflation.
But there is no mention of monetary policy, and I should remind your Lordships what are the facts of this matter. Between 1954 and 1970 there was an increase in the note and coin circulation of 100 per cent.; that is, an average of 5 per cent. per year. Between 1970 and March 1974 there was an increase of 40 per cent. in monetary circulation; an average of 10 per cent. a year. In the year from March 1974 to March 1975 there was an increase of 20 per cent.—the rate of 20 per cent. a year. This indicates an accelerating rate of inflation up to that time. Since then there has been, I think, some modification; but unless the monetary circulation can be brought to something near a stable level, inflation, as measured by increase in the price level, is bound to continue.
My Lords, I have mentioned the note circulation. I shall not trouble you with the figures for credit as measured by the indices M1 or M3. All I will say is that they showed a parallel increase, as anyone who is familiar with this matter would expect. It is essential that the currency be controlled and should not continue to increase at this terrific rate, because, if it does, at the end of the period of more or less standstill under the White Paper policy you will find that there is a pent-up amount of demand by money in circulation which will inevitably raise prices. Theoretically—and lots of people believe this—you can control prices only within very limited amounts and only for a very limited period; unless of course you are to abandon a free economy completely and are to regulate the whole of our economic affairs by the State. That is a proposition which is absolutely impossible and which would certainly precipitate disaster.
It is essential that the monetary circulation be controlled. Not only does it have an effect on the level of prices but it has a whole series of other ill-effects economically. It percolates
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through the economic structure at differing rates. It makes it impossible for businessmen to foresee the future and to control their undertakings accordingly. It makes it impossible for them to know what the rate of exchange will be and, consequently, it makes matters extremely difficult for exporters. It requires a larger and larger cash-flow in order to provide the raw materials and the wages which industry has to finance, and it raises the level at which money can be borrowed; because who is to lend money at 5 per cent. if the value of it at the end of a year has diminished by 10 per cent.? It is absolutely uneconomic. Therefore the effective rate of interest has to rise in order to compensate for the inflation. Unless these matters are dealt with, it is not possible for our economy to be brought to a stable and a productive level. Inflation does not necessarily increase production. It very often results in wasteful investments and wasteful expenditure which in the long run diminish production.
My Lords, it is assumed that wages can go up to the extent of £6 per week during the year which is ensuing. Do not let us forget that this country is not as rich as it was. So long as it has to pay £3,000 million, or something of that order, to get the oil which is necessary for its existence we are, to that extent, so much the poorer; and it is impossible for incomes generally to be increased in purchasing power as long as that continues. The hard fact of the matter is that somehow or other the real rate of wages measured in purchasing power will have to fall; and not only wages but many other incomes as well. Indeed, they are falling. This is the fact of the matter which is absolutely inescapable. I share to a certain extent the apprehension which was expressed by my noble friend Lord George-Brown as to whether the policy will bring about a reduction in the rate of inflation to the extent which is anticipated. If it is the fact, as is only too likely, that £6 is not a maximum reached only by a few people, but something which is reached generally throughout the economy, then the increase in money earnings will be of the order of 10 per cent. or 15 per cent. in a year. As I have already said, the effects of inflation are gradually working themselves out through the economy;

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costs of the other factors of production are increasing and will continue to increase. Therefore it will be very difficult indeed—I hope it can be done—to limit inflation to 10 per cent. by the end of the year. In any case, unless this policy is accompanied by a parallel control of the monetary circulation, we will still be faced with a formidable problem at the end of this year. We cannot afford to go on like this much longer because we are living upon borrowed money, and the people lending it will not go on doing so forever if they think that our economy is unsound.
9.16 p.m.
Lord KAHN: My Lords, in so far as my comments on the White Paper may be regarded as critical, they should not be regarded as detracting from my very warm welcome, which I share with many other noble Lords, of the Government's realisation of the perils which are facing this country. Here I should simply like to refer to paragraph 48, the concluding paragraph, of the White Paper:
"If we do not over the next 12 months achieve a drastic reduction in the present disastrous rate of inflation by the measures outlined in this document, the British people will be engulfed in a general economic catastrophe of incalculable proportions."
These words indicate a miraculous cure of the blind.
I cannot refrain from commenting on the tragic loss of time before the conversion of the Government to a sensible state of mind. But the great thing is it has happened; and the Prime Minister and the Chancellor of the Exchequer are to be congratulated for repudiating the views put forward by the Labour Party at the two General Elections of 1974, just as Mr. Heath, and his Chancellor of the Exchequer and other members of his Cabinet, including several members of your Lordships' Opposition Front Bench, are to be congratulated for their similar honesty in admitting grevious error several years ago. Having mentioned Mr. Heath, I should indicate agreement with the views expressed by other noble Lords about his admirable contribution to the debate on the White Paper in another place on 22nd July. Having listened with admiration to so many speeches by the noble Lord, Lord Carrington, his speech this afternoon constituted not only a brilliant performance but also a stirring and moving one. I
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imagine all other noble Lords who heard him also found most inspiring the speech of my noble friend Lord Robbins.
Apart from all else, the White Paper is remarkable for the clarity and conciseness of its drafting. It stands out among White Papers as a good piece of English prose. The case is stated clearly, forcefully, in a downright manner and in terms of common sense. There is none of the usual jargon, and the usual ambiguities are avoided. There is no place for sectional cases. I should like to draw special attention to paragraphs 2, 4, 38 and 39. I have not time to quote from them but I should like to read, at the top of page 4, from paragraph 4—
"To try to cure inflation by deliberately creating mass unemployment would cause widespread misery, industrial strife and a total degeneration of our productive capacity. The only sensible course is to exercise pay restraint and reduce our domestic inflation without sacrificing our long-term economic goals."
If I understood rightly, my noble friend Lord Robbins is in broad agreement with the view expressed in the passage which I have just quoted.
A ritual reference is made to monetary policy in paragraph 46. I could not reasonably ask for less than that. On monetary policy, my noble friend Lord Robbins and I do not see completely eye to eye, but with the passage of years we seem to come closer together; perhaps each of us moves towards the other. I felt that his observations on monetary policy this evening were conciliatory and broad-minded in tone—I mean to be not condescending but admiring—and those differences which remain between us are perhaps somewhat theological in character and better discussed in private than in your Lordships' House. As to jargon, my only criticism is on the reference to the public sector borrowing requirement in paragraph 43, and I will come back to that. Your Lordships are, of course, aware that the public sector borrowing requirement is the domestic borrowing requirement and not the overseas borrowing requirement of the country. I agree with my noble friend Lord Robbins that the public sector borrowing requirement has monetary implications. I would draw his attention to the fact that paragraph 43 appears earlier than paragraph 46 on monetary policy, and that the night is too far advanced for me

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to develop that aspect of the public sector borrowing requirement.
There are two passages in the White Paper which I find outstandingly welcome. Paragraph 3, on page 3, reads:
" The problem is not just one for the next year; the Government intend to maintain policies which, over a number of years, will control domestic inflation and prevent any resurgence of the present rates of price increase."
And then paragraphs 25 and 26 on page 7:
"If however they"—
the Government—
"find that the policy needs to be enforced by applying a legal power of compulsion they will not hesitate to do this.
"Legislation has therefore been prepared "—
the state of preparedness of the legislation is not perhaps entirely clear—
"which … would make it illegal for the employer to exceed the pay limit."
I have no doubt whatever that the socalled draft Bill will have to be introduced very soon, and I agree with the noble Lord, Lord Byers, and my noble friend Lord Boyle in regretting that it has not been published as a draft Bill.
Lord BROWN: My Lords, may I interrupt. I have not spoken yet, so I think the noble Lord must be referring to the noble Lord, Lord George-Brown.
A Noble Lord: The reference was to the noble Lord, Lord Boyle.
Lord KAHN: My Lords, I thought I had referred to my noble friend Lord Boyle, but if I made the wrong reference I must apologise.
Lord BROWN: It seems, my Lords, that my apologies are due to the noble Lord, Lord Kahn.
Lord KAHN: My Lords, I agree with my noble friend Lord Boyle that a permanent statutory incomes policy is probably necessary. In this context, I should like to draw the attention of my noble friend Lord Robbins, who expressed doubt about whether a permanent incomes policy had been successful in any country, to the outstanding success of the statutory policy in the Netherlands from the end of the Second World War until about 1967, if I remember correctly. It then collapsed as a result of the entry of the Liberal Party into the Coalition Government—a curious contrast with the Party line-up on this issue in our country.
Lord BYERS: My Lords—
Lord KAHN: But, my Lords, I entirely agree with my noble friend Lord Robbins that a statutory incomes policy must not be regarded as an excuse for avoiding other necessary measures of restraint. I should like to refer briefly to the danger to which many of your Lordships have referred, of relying on the statutory control of prices rather than of earnings. Here I agree with the noble Lord, Lord George-Brown. Perhaps the shortest and simplest method of dealing with the matter is to refer to paragraph 29 of the White Paper, which draws attention to the danger of depressing investment and causing additional unemployment. I would add, as a further factor, the undue compression of profit margins, thus causing unemployment not because of lack of demand but due to plants becoming so unprofitable that they are closed down. Very often, once closed down, a plant is never re-opened and the country has permanently lost part of its productive capacity. References have been made to the re-entry problem. The Chancellor of the Exchequer said in another place on 21st July that the discussions about this very serious problem would begin in good time. I would only mention the rather obvious point that it is going to prove a very difficult problem.
I turn now to one blemish which I feel the White Paper possesses. It seems to me to be unduly optimistic about the prospective degree of success in terms of a reduction in the rate of inflation. It is very dangerous to set up a target, unless there is a reasonable chance of its being either achieved or very nearly being achieved. Should the outcome fall far short of achievement, the whole policy rapidly becomes discredited, as we discovered so often in the years of the Labour Government from, I think, 1964 to 1966. The White Paper lays it down as a target that by September 1976 the cost of living will be only 10 per cent. above what it is expected to be in September 1975. It seems to me that by September 1975 we shall have done rather well if the current rate of increase—I am not talking about September 1975 compared with September 1974; I am talking about current rate expresed in annual terms, seasonaly adjusted; the rise in the cost of living over the three months July, August and September multiplied by four

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—in the cost of living has fallen to 16 per cent. per annum.
On the assumption of a linear fall in the rate of increase of the cost of living, the target requires that by September 1976 the current rate of increase in the cost of living will be down to 4 per cent. per annum. This of course is a ridiculous expectation, and clearly there is something wrong with my calculations. No doubt my error lies in assuming linearity. I cannot expect the noble Lord, Lord Beswick, to deal with this question in his reply, but I hope that the Government will take the earliest opportunity of indicating, in terms of a curve or the equivalent, how they expect the rate of inflation in terms of the current rate to behave during the period from September 1975 to December 1976, in order to justify their target.
With present rates of inflation, and with rates of inflation fluctuating as rapidly as they have been, the comparison of the cost of living in particular months with what it was 12 months previously is—I will not say meaningless—entirely useless. It may be a matter of historical interest but it is not of significance. I myself should have felt more happy if the White Paper had expressed as a target that by September 1976 the current running rate of increase in the cost of living was the equivalent of 10 per cent. per annum, not the cost of living in September 1976 compared with September 1975.
I come now to the attitude of the Chancellor of the Exchequer towards the problem of unemployment and public expenditure. On public expenditure, I can probably save time if I quote passages from his speech in another place on 21st July, at col. 67:
"I also warned in my Budget Statement that, looking beyond 1976–77, there would at best be only very restricted room for overall growth in public expenditure."
Then:
"…as the Expenditure Committee pointed out in its Ninth Report last year, there are strong arguments against using public expenditure as a tool of demand management in the short term."—[Col. 68.]
Then:
"We must ensure that in these critical years when keeping inflation under control will still be a high priority, we make sufficient resources available for exports and investment without denying the British people the prospect of
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some rise in their own real earnings."—[Col. 70.]
The brutal fact is that our public expenditure, apart from productive investment of nationalised industries, has been engrossing too much of our productive resources. There has been too little left for improvement in the balance of trade and for improvement in productive investment. Our low rate of productive investment is largely responsible for our low rate of economic growth and the consequent low rate of increase in our standard of living. It is this which has led to discontent and to pressure for rapidly rising money wages, based on the mistaken belief that if money wages rise more rapidly the real wage will be higher than it would have been with a more moderate behaviour of money wages.
Members of your Lordships' House may take the view that, say, rebuilding the Hammersmith Hospital—about which a Question was asked in your Lordships' House yesterday afternoon—and such like, is more important than the equivalent in terms of real take-home pay. They may talk about a social wage of £1,000 a year a man (I think the figure is) as something to be added to the personal wage, but neither the leaders nor the members of the trade unions look at it like that. That is the blunt truth which has to be faced. The fallacy of the borrowing requirement is this: if, instead of talking about the importance of preventing public expenditure from increasing in real terms, we talk about the importance of reducing the borrowing requirement, that would be consistent with a rise in public expenditure accompanied by a bigger rise in tax revenue.
In another place recently the Chancellor of the Exchequer has referred to our very high marginal rates of tax. I believe this emphasis on the importance of reducing the borrowing requirement, as opposed to the importance of keeping public expenditure in check, is, and has been, responsible for our present high level of public expenditure and high rates of taxation. I am sorry to say this, but I really think that the error occurred when Sir Stafford Cripps, who succeded Dr. Hugh Dalton as Chancellor of the Exchequer in March or April 1948, no longer talked about the current account. In those days we did not talk about the public sector; but he no longer talked about the current account Exchequer

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surplus, and Dr. Dalton, in his autumn Budget of 1947, rightly drew attention to the very high level of the current account Budget surplus. But Sir Stafford Cripps introduced this fatal concept of the overall deficit, and I think that has been responsible for a great deal of error.
I will conclude by saying a word about Western Germany. In February a pay settlement covering 1 million engineering workers in the state of North Rhine Westphalia resulted in an agreement to a wage increase of only 6 to 8 per cent., the claim being for 11 per cent. Three days later, in the public service sector, there was a settlement covering 1½ million employees. A year earlier, in February 1974, in that sector a rise of 12½ per cent. had been settled after a three days' strike, whereas on this occasion, in February 1974, the agreed increase was 61 per cent. The leaders of the trade union concerned described this result as a triumph for reason. It is in that spirit that I think we need to deal with the problems of this country.
I entirely agree with the noble Lord, Lord Carrington, about the way in which the citizens of this country will rise to an action at the time of danger. But it is not sufficient merely for the members of trade unions to have the right attitude. I am sorry to have to conclude my speech by saying that it is also necessary for the trade union leaders to have the right attitude. Instead of thinking in terms of how much the standard of living will rise in the next 12 months, or about what will happen, they should think more about the rate of increase of the standard of living over the next 10 to 20 years. Failure to do this has resulted in our very low rate of growth, and in the fact that our standard of living has already been overtaken rapidly by a number of leading industrial companies in Western Europe and Scandinavia. Before long, we shall be in danger of being overtaken by the whole lot.
9.41 p.m.
Lord BROWN: My Lords. I unequivocally support the contents of the White Paper. I do not intend to talk a great deal about it. I shall not talk about the past or even the present, but I shall say something about the future. I believe the White Paper has given us a year, perhaps even two years, of breathing space, but
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what follows on the termination of the £6 wage freeze I believe is a matter of the most vital importance to this country. Currently, of the alternatives that might face us, the first is monetarism. With all due respect to the noble Lord, Lord Robbins, I do not believe for one moment that that is a solution. I always feel that, fundamentally, the attempt to control wages and other forms of inflation by reducing credit and the money supply must be wrong, because to try to cure inflation by reducing the flow of goods and services seems to me wrong in principle.
Lord ROBBINS: My Lords, with great respect to the noble Lord, it is not a question of reducing the money supply, but of reducing the rate of increase of the money supply.
Lord BROWN: My Lords, I would go along with the noble Lord, Lord Robbins, in saying that every Government must exercise some monetary discipline. Economists like Milton Friedman have advocated a cut in all sorts of expenditure, and have implied that an enormous rise in unemployment is a means of curing wage inflation—if the noble Lord is not of that school, I am glad to hear it. A second alternative would be a form of statutory imposition of wage levels. I do not believe this is acceptable to the workforce in this country, nor do I believe it is right, because such forms of statutory freeze tend to freeze differentials, to create feelings of gross unfairness, and are felt to be a form of imposition if imposed by the Government. What do we face if these two possible "runners" go out?
My Lords, briefly I want to suggest the form of what we will have to work out during the breathing space given by the White Paper. There are three ideas I would almost elevate to the level of principle—but I will not—which I believe must form the basis of any long-term solution to the problem of wage inflation. The first is that the differential pattern of wages is the key to the problem of wage inflation. It is a competition to achieve what is considered by one union to be a fair place in the pecking order of earnings. It is the motivation which makes them seek the large increases we have seen over the last three or four years. I believe it to be a fact that if

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any sustained change in the pattern of differentials is to be brought about, they must receive the support of wage and salary earners. If they do not, then as soon as one set of people achieves an increase, the rest jump on the bandwagon and re-create the status quo in terms of differentials.
That is one point. The second point which I think must be taken into account is the fact that employers, in terms of national wage negotiations, really have no part to play at all. They are in a powerless position today, and their general course of action in the face of the threat of a strike in support of a large wage increase is to give it and to pass on the results of that in terms of increased prices to the whole community. They have my sympathy; I have been an employer. It is very difficult to run the risk of bankruptcy merely in order to maintain that stand.
Underlying this position is the current fantasy in the minds of many people in this country that wage increases are won at the expense of shareholders or at the expense of profits. This may have been true in a small number of cases. It was probably very largely true in the distant past. It is no longer true. Increased wages are won at the expense of every other member of every trade union in the country and every citizen. As Harold Wilson is quoted so often as saying:
"One man's wage increase is another man's price increase".
This is a competition between trade unions, and so long as employers are in the situation it can be made to appear as a competition between a single trade union and a single employer. So I think the employers must be got out of national wage bargaining.
The third point, perhaps the most important of all, is that if we have in our society, as we have today, a series of power groups, constituted by these very powerful trade unions, which have no place within the constitution of the country, then we have a very serious situation indeed. It was the genius of the nineteenth century politicians that they recognised this fact. After the Napoleonic Wars there were in this country new power groups of citizens who banded together and wielded power and yet had no place in the Constitution. At that time cities such as Manchester and Birmingham
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were entirely unrepresented in the House of Commons. The disruption in this country was wild and furious. It is on record that a third of the city of Bristol was razed to the ground in civil riots and commotion. The wisdom of politicians of that time, particularly the Liberal politicians, as they have been criticised, was to insist eventually on the passing of the Great Reform Act of 1832, which enfranchised those power groups.
The 19th century is studded with Reform Acts which extended the basis of government, by including an ever-increasing number of those emerging power groups within the Constitution. Indeed, this went on into the 20th century, when the women exhibited their power in ways that some of us recollect—my mother was a suffragette—and they, too, had the franchise extended to them. The point I am making is this. Whenever you have a power group in society which has not got some place in the Constitution whereby they can make their powerful presence felt through a vote in Parliament, then they will inevitably disrupt society.
Today our trade unions are power groups, and it is not a simple matter of extending the franchise to them, because as citizens they already have the vote. But in their occupational role they have not. I do not think anybody can, in principle, blame the trade unions for disrupting society, for they are powerful, and that is the only way in which they can support their effort and press their claims. This, I believe, will go on. We are in a situation today where the underlying imperative for everybody who earns a wage or salary in our society is to join some powerful group which can defend their place in the pecking order of differentials. We face an increasing number of these power groups at ever higher levels, if one can put it that way, fighting for their standards of living against all the other power groups, constituted by the other trade unions.
To give effect to these three points—these three quasi-principles, if you like—requires a radical leap, and I do not believe that there is a permanent solution in view unless we are prepared to take the big jump forward. This is very difficult for our society. We are prone to try to solve our problems by a series

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of very small adjustments. I do not believe that the problem we face is capable of being solved by that small series of adjustments.
I believe that a scheme such as I shall briefly describe will give effect to the three ideas that I have enumerated. It is essential that the Government, at the annual Budget time each year, should state the amount by which they can allow the total wage bill of this country to increase. It is increasingly absurd that Governments should present Budgets which are inevitably based on some prediction of the rate of increase of wages and salaries without stating them, and then have to face the fact that at the end of the year their calculations have all gone awry, because their prediction about the rate of increase of wages has been woefully inadequate.
Having established what I would refer to as the total wage cake of the country, then we need a new institution composed of representatives of any trade unions in the country, which would have the task of dividing up the wage cake between all the employment groups of the country; not between individual unions but between the employees, the Civil Service, the Health Service, the engineering industry, the chemical industry, and so on. It would not be a selfish tussle between trade unions; it would be the trade unions collectively deciding by sharing out this wage cake what was to be the new pattern of differentials. These unions would have to agree on their recommendation to Parliament as to what should be the split up of the cake. If Parliament accepted it, then it would become legal for employers to pay to all of their employees in the various employment groups that percentage of money increase which had been recommended by this new body, which I would call the National Council for the Regulation of Differential Wages.
That, in short, is a brief description of a new institution which I believe we shall eventually come to. If we do not come to some new institution, which places the trade unions in a situation where their responsibility equates with
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their current enormous power, then no solution of this problem lies in the future. We shall go on with the internecine feud between one trade union and another, and we shall have them using the power that they have to disrupt the country as being the only way by which they can affect society.
I listened to the noble Earl, Lord Longford, and his comment that he was able to speak frankly in the new situation, whereas in some situations in the past it was not possible to speak frankly because one might disturb the trade unions. I listened to the noble Lord, Lord Allen, talking about Government Acts being impositions on the trade unions. It is a new situation when any legal Act of Parliament and of Government can be described as an imposition, but I believe that is what the trade unions feel them to be, because of their power position. We have to recognise that the trade unions are—I am not quite sure which it is—the second, third or fourth estate of society.
Lord HAILSHAM of SAINT MARYLEBONE: The fifth.
Lord BROWN: The fifth. Unless we can put them in a situation where they form some sort of subsidiary Parliament, we will co on having these feuds. I am not the first to propose something of this order. Winston Churchill, no less, proposed an industrial House of Parliament in his Romayne Lectures in the 'thirties and L. S. Emery wrote about these matters at that time. They were farseeing and I believe that a constitutional change is an absolutely essential basis. We have perhaps one or two years in which to work out a solution. If we have not worked it out by the time the current £6 wage freeze is withdrawn, then we will be back where we started, only a little bit worse.
9.55 p.m.
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, in this interesting and protracted debate we have heard, if my calculations have not gone awry, four Conservatives—that is, the noble Lords, Lords Carrington, Hewlett, Auckland and myself—five Cross-Benchers, one

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Liberal, one Communist and 12 professed supporters of the Labour Party.
Lord GORDON-WALKER: My Lords, what does "professed" mean?
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, if these statistics be not wrong, the relative abstention by Members of my Party must be attributed to a desire not to obstruct or sabotage a policy in which I am bound to say we have relatively little feeling of confidence. For reasons I will give, we did not wish to be disagreeable. Unfortunately, as I am to wind up for the Opposition, I am bound to be a little disagreeable, so I hope the Leader of the House and the noble Lord, Lord Beswick, will hold on to their seats while I say the necessarily disagreeable things, just to show that things do not always appear from this side of the House quite the same as they do from the other side.
I have for some years had to point out that in the view of some of us, the crucial and humiliating factor about this country has been the relatively poor showing we have made to our comparable competitors—France, Germany, the Netherlands, Japan—all of which began in 1945 in a situation comparably less promising than our own, all of which have outstripped us in wealth during the succeeding 25 to 30 years. We have pointed out, not always with universal approval, that there are a number of reasons for this; our trade union structure is archaic and riddled with restrictive practices; our investment is inadequate; our industrial relations law is a jungle of obsolete nonsense; our approach to industrial training is restrictive, especially as regards adults; some of our major industries, particularly our nationalised ones, are riddled with bad labour relations to say the least; and there have been these persistent and excessive demands for increases in remuneration. And now we are facing inflation.
Not a very long time ago, when we were discussing the Social Contract, I got into a great deal of trouble from my noble friend Lord Alport, and from many people of undoubted good will and similar political outlook, for saying that it was
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a disreputable political device that it was essentially inflationary in its conception; that it was unfair and seen to be unfair because it was conceived between two partners to the exclusion of the great majority of the community and at their expense, and above all because it could not be policed and would not work. We were accused of a want of patriotism for not supporting the Social Contract, but we could not do so because we did not believe in it. We said it would not work and it has not worked, and it was not the first of these flops. There was the declaration of intent, there was the national plan, there was In Place of Strife and I do not deny that there were numerous attempts by Governments of which I was a member to cope with similar situations. It is my unpleasant duty to say that though, judging by the debate today, many persons of undoubted good will, ranging round all quarters of this Chamber, have given the White Paper their unqualified support, in my opinion it will not work any better than the others.
Having said that, I must go back to one or two factors which I would happily forget. In February 1974, we—by which I mean my noble friends, my honourable and right honourable friends and I—were saying, "The issue before the country is whether not this Government but any Government can survive if those who have industrial power obtain by the use of industrial muscle that which they cannot obtain by negotiation." I was travelling to Oxford in my car the other day. I turned on the wireless and there was the Prime Minister addressing the miners. He was saying:
"The question before the country is not whether this Government but any Government can survive if there are those with industrial power who use their muscle to obtain a settlement which they cannot get by negotiation."
In October, I was saying:
"Inflation is causing unemployment. One man's price increase is another man's ticket to the dole queue."
I turn on my wireless and I hear the Prime Minister saying:
"Unemployment is caused by inflation. One man's wage increase is another man's ticket to the dole queue."

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But what was the Prime Minister saying in February 1974 and what was the Party opposite doing? They were orchestrating the opposition to what we were saying. What were they saying only last October and what were they doing? They were saying that the Conservative Party was the Party of unemployment. They were saying that inflation was running at 8·4 per cent. How can we believe or trust the Party opposite, now in power, when, with the uttermost want of principle, without a blush, without an expression of regret, and with every appearance of pride in their achievement, they bag our arguments but do not pursue our remedies?
The noble Lord, Lord Shepherd, at the conclusion of his interesting speech, asked us what we had done. I am not sure that it is the business of an Opposition to say what they would do at this precise time. But the question was answered by the noble Lord, Lord George-Brown. If the noble Lord, Lord Shepherd, does not accept our remedies within the parameters of social democracy, he has only to look to Germany or to Sweden. He need only look to those two countries in the last 12 months, while the Government were messing up our affairs, to see how much better those two countries have done than we have under so-called social democratic governments. The Government do not need to ask us. Let them face the policies which other countries have faced.
However, one or two things have to be realised. The trouble with the White Paper is that it is altogether too cosy. It pretends to face realities but it does not face any of them. It does not say that never again must a small, organised minority hold the country to ransom when they are serving a public monopoly in order to get by industrial action what they cannot get by negotiation or arbitration. It does not say to the unions, "You must put your house in order by the abolition of overmanning and restrictive practices." Despite the Ryder Report and despite the reports on the printing services and the Press, the White Paper does not say that
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profits instead of being diverted to increased remuneration must be spent on profitable investment, nor that, until those things are done, everybody must absorb within their existing incomes the inevitable price rises which are coming in the pipeline whatever we do and whoever is in power.
Lastly, it does not say that the penalty for breaking these requirements is national bankruptcy and unemployment for the members of the very trade unions who are making the demands and for their fellow workers; and that no Government, whether Labour or Conservative, can save them from it. It is because this package does not ram these lessons home that it will not work. It is still a package devoted to the economics of Cloud Cuckoo-land; and there are other reasons still.
The first is that the Government are seeking to obtain the advantages of a statutory policy without statutory sanctions. A policy which designs to obtain the advantages of a statutory policy without statutory sanctions is neither fair nor seen to be fair. It is unfair and seen to be unfair because until the unknown reserve powers are brought into effect it puts a premium on breaking the policy. It is the breachers of the policy who will escape, and it is no good talking about rogue employers when the statutory sanctions are brought into effect, because the rogue employers will have already got away. But are they such rogues after all, if the unions are told that there will be no sanction brought to bear on them, and there is no answer in this so-called voluntary policy as to what is to happen to the employer when faced with bankruptcy or a strike as alternatives?
I agree with the noble Lord, Lord Byers, when he says that we have no idea what the ultimate sanctions will be. The noble Lord, Lord George-Brown, said that they may be his old Part IV; he knows more than I do. We do not know what they are or why they are being kept dark. Are they being kept secret because they are so objectionable or because they are so fatuous, or because they are a little of both? Or is it because the Government themselves do

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not know, even though the White Paper says that legislation has been prepared—whatever that means? What is the employer to do? What is to be done to the employer when he is faced with a strike which breaks the policy and is given no redress? He must choose between bankruptcy and a crime. The union which cannot control and is unwilling to expel, its militants escapes scot free, even after the sanctions are introduced.
This is the policy which we are asked to believe is fair and seen to be fair. A policy which is to beat inflation has at least to reduce our borrowing requirement. But this package will increase it. It will increase subsidies on food and housing and even on jobs, in the face of over-manning. It will increase the wages bill. It will involve about £400 million—perhaps more—annually, paying for legislation which a rational Government would drop; the Community Land Bill is only one of many examples. A few more hundred million pounds would be thrown away in acquiring North Sea oil when the resulting revenue could be obtained by fiscal measures without nationalisation. I do not know what is the cost in pounds of nationalising the efficient docks and making them as inefficient as the nationalised docks, but it will certainly be a cost in national efficiency as well as in pounds.
A policy which will work must—and this is conceded—be a policy which will last for more than a year. But this is a policy which cannot be made to work for more than a year. The £6 flat rate cannot work for more than a year, and the rush for restored differentials—of which the noble Lord, Lord Brown (that is, Brown the son of Telamon, not Brown the son of Oileus) spoke of a moment ago—will follow and will lead to restored inflation.
I understand the Government's desire to help the underpaid, but the underpaid will not be helped until a policy is designed which will work and which will be seen to work. Moreover, it is not a £6 limit at all. In paragraph 6 of the White Paper the Government say that it is a maximum, but they have
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appended to the White Paper the TUC document which says that it is to be of universal application; and I know which is the more likely to be true. The result will be, of course, that there will be many bankruptcies and there will be a total inability to stick to the 10 per cent. increase which, in my view at any rate, is likely to be excessive.
My Lords, I hope to spell out some of the objections tomorrow on the Question, Whether Clause I shall stand part of the Bill?-—not the Bill which we have not been allowed to see, but the Bill which we have seen and which we are now supposed to pass at Second Reading without discussion. I ventured to describe it as another nail in the coffin of the rule of law. So it is! I wish briefly to explain my reasons to which I will revert tomorrow.
This Bill which we are now to pass without discussion, proposed by a Labour Government, is a Bill the avowed purpose of which is to deprive workers of their contractual rights under a contract their legal contractual rights. That is what Clause 1 does. When and how are they to be deprived of their legal contractual rights?—when limits of the White Paper are not exceeded. But what force has the White Paper? That which is going to deprive people of their legal rights is something which is not law. It is something which will have—because we have not ventured, and I think the Government are right, to do more than take note of the policy tonight—only the Resolution of another place behind it. It is not an Act of Parliament, but it is to deprive workers of their legal rights, and to deprive them of those legal rights at the option of the employer; because the employer is not bound to do it and will not do it if he is threatened with a strike.
Even then we are asked to substitute something even more strange. What is the good of reading the White Paper when we are told in subsection (2) that the Secretary of State may substitute any other White Paper of his choosing, subject only to the Negative Resolution of Parliament. They are to be deprived of their legal rights at the option of the

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employer in accordance with the terms of a document, in the first place which has no legal sanction, and in the second place which we have not seen it because it does not exist. When they are to be deprived of their legal rights under the terms of a document which we have not seen, a document which has no legal sanction, one would at least think that the courts would be allowed to decide what those documents, when they come into existence, mean. But not so! Clause 5 says that if you want to know what the words mean, the Secretary of State will tell you, not the courts. This is Government by Humpty Dumpty. It is not Government by the rule of law.
The reason for all this is that they want to keep Mr. Foot in the Government. They want to be able to say that this is not a compulsory policy; that this is a Statute which is not a Statute; this is voluntary but is not voluntary, at least not for those whose legal rights are being taken away. It is a policy which is unfair and seen to be unfair; which is law and yet not law; which is voluntary and yet not voluntary; statutory and yet depriving people of their legal rights without the authority of a Statute. That is what the Government are doing and The Times, God bless it! says we should give it an unequivocal, Yes. And I am not going to do so.
10.14 p.m.
Lord BESWICK: My Lords, the noble Lord, Lord Boyle of Handsworth, said that Parliament had a role to play in the educative processes that are needed at the present time. I think we can say that this debate has fulfilled that role; even though I gathered that the lesson we are to learn from the last 15 minutes is that the cloak of infallibility has now fallen on the noble and learned Lord, Lord Hailsham of St. Marylebone.
After the straightforward and non-polemical way in which my noble friend the Leader of the House opened this debate, I must say that I preferred the opening comments of the noble Lord, Lord Byers, to those of the noble Lord, Lord Carrington, although my feeling of irritation passed from the noble Lord, Lord Carrington, during the course of the speech of his noble and learned friend. The comment which I had in
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mind regarding the speech of the noble Lord. Lord Carrington, was about when he referred to shortness of memory. I can assure him that we too have our memories, and we remember the question posed in February 1974.
The noble Lord could not have highlighted the problem more clearly, he could not have shown the difference more clearly between the approach which his Government showed to this problem and that of the present Government. We have to learn from experience, but it is the fact that the previous Administration imposed a punitive industrial relations policy upon organised workers in this country, and they did it at a time when the speculators were making such obscene profits that all of us have subsequently decried it. It was at that point of time when they challenged the miners, and it is not surprising that their Government toppled in the winter months of 1974.
But the situation is now more hopeful; it is different. We have a policy which although it does not find favour with the noble and learned Lord, Lord Hailsham of Saint Marylebone, is nevertheless, in general, agreed by the TUC, the CBI, by the overwhelming majority of those who have spoken in this debate, and by the broad mass of the country. That is a different and more hopeful situation. It is a situation on which we have to build. I hope we shall all accept the role of explaining to people what the problems are, what the difficulties will be and also what our duties must be. I agree with the noble Lord, Lord Byers, and with my noble friend Lady Wootton that this exercise in incomes policy-making on which we have now embarked cannot just be dropped after a year or 18 months.
Many have asked that there should be something much more permanent. The imagination has been caught rather by the phrase the "re-entry problem". But I hope there will be no re-entry into a world in which everyone is for himself in the wage bargaining field. I hope we will be able to get something different, and even though the noble and learned Lord dismisses the previous attempts which have been made, it will not be the first time in human affairs when we have failed at the first or second attempt, that we have picked

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ourselves up, tried again and succeeded. I hope we may win through to success on this occasion. When my noble friend Lord George-Brown said the planned incomes policy we want will be in the context of a more successful national economic plan, I hope that will be realised, and there is a possibility that we may get through to that as well.
We all welcome the contribution of the noble Lord, Lord Boyle of Hands-worth, and I welcome the firm support which he and others have given to the policy of this White Paper. I noted what he, the noble Lord, Lord Byers, my noble friend Lord Longford, the noble and learned Lord, Lord Hailsham of Saint Marylebone, and others said about publishing the reserve powers. I am not sure that they are right. I recognise that it can be argued either way; although the argument against referring without publishing would be even stronger against publishing without getting the consent of Parliament. I am not certain whether at this time it would be wise to publish a document about which there could be distracting and probably destructive arguments about a phrase, clause or subsection, when we have to get agreement on the general principles. I am not sure they are right, and I am not sure that those who criticise the present Government for their handling of economic affairs have a better record than we in these
matters.
The noble Lord, Lord Boyle, attracted some vocal support from the other side over his rhetorical question: "Why cannot Ministers say where they stand in regard to private enterprise?" He went on to ask: "If they want a profitable private sector, why cannot they say so?" I thought that on this point he was less than customarily fair. He might have referred to the White Paper, although I could refer him to several quotations. But there was this recently published White Paper, The Regeneration of British Industry, in which it is said quite clearly:
"We need both efficient publicly owned industries, and a vigorous, alert, responsible and profitable private sector, working together with the Government."
I do not believe that the criticisms made by the noble Lord are justified on that point. My noble friend Lord Longford is certainly a friend of some long standing,
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and I am sorry he had some difficulty in pronouncing my name—
The Earl of LONGFORD: My Lords, I had no difficulty at all. I was trying to put right something which had been said by my noble friend Lord George-Brown who, for some odd reason, pronounced my noble friend's name all wrong.
Lord BESWICK: The noble Lord, Lord George-Brown, goes back for even more years in friendship than my noble friend Lord Longford; this is a private joke between us. My noble friend Lord Longford asked whether the words of the White Paper about reserve powers were more authoritative than a newspaper report which he had seen. He asked which we should accept. I recommend to him the words of the White Paper. The Government have not changed their stance since that was published, and if the situation were reached where legislation were called for it would be introduced. I hope that satisfies my noble friend, but I reiterate that the Government are convinced that a voluntary policy is the best way to deal with this problem and I do not believe that the best way of getting success for a voluntary policy is to start by saying vie doubt whether it will succeed.
Lord GEORGE-BROWN: My Lords, will my noble friend forgive me for one second? We decided this differently in 1966. We thought it better to do it the other way round—but other times, other manners. Would the noble Lord confirm my guess that it is Part IV of the 1966 Bill which they have up their sleeves?
Lord BESWICK: My Lords, it has been decided not to publish this Bill and I am afraid I cannot give a preview to my noble friend even about Part IV. I was asked another question by my noble friend Lord George-Brown concerning the cost of the £6 per week pay rise. If each individual had that increase, then multiplying £6 by the number of employed workers in the country would give us the sort of figure quoted by my noble friend—that is, £7,000–£8,000 million—as an increase on the national wage bill. I could not give a breakdown to the noble Lord, Lord Boyle, of what the cost would be in the retail trade or in those industries where such a rate of increase, if

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granted, would be more than the 10 per cent. average increase; but the total effect of this increase is estimated to be another 10 per cent. in the RPI by the autumn.
The noble Lord, Lord George-Brown, appeared to be arguing that an increase of £6 per week now on top of current inflation would speed up the whole situation. Of course we have had the 25 per cent. increase. That is a fact, as my noble friend Lord Gordon-Walker said. What we are trying to do now is to reduce the rate of increase. If we do not have this 10 per cent. or £6 a week, is the noble Lord's alternative still the 20, 25, 30, or 34 per cent. that we have been having?
Lord GEORGE-BROWN: My Lords, I am sorry—
Lord BESWICK: May I continue and complete my sentence? If he is not going that way and leaving it to that sort of rate, then I assume that he is wanting something much more severe than the 10 per cent. increase.
Lord GEORGE-BROWN: My Lords, will my noble friend forgive me for intervening, but he had to leave at that moment and he left someone to take a note for him. I said exactly what I thought we should do. I said we should do what we did in 1966—have a freeze and put the gate down. If his notetaker did not pass on the note the noble Lord cannot blame me for it. I did, in fact, say it.
Lord BESWICK: My Lords, I know exactly what the noble Lord said. I was listening to him.
Lord GEORGE-BROWN: No, the noble Lord had gone.
Lord BESWICK: As a matter of fact, my Lords, I was taking advice from my advisers in one ear and listening to what my noble friend Lord George-Brown was saying with the other. As to what my noble friend did in those days, I have previously complimented him, spontaneously—not in answer to any kind of intervention. When he was not here, I paid tribute to the action he helped to take in one of those unsuccessful attempts, as it happened—through no fault of my noble friend—to get some sort of control
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in those earlier days. But the difference between those days and today is that we now have a 26 per cent. inflation rate. If we tried to get it down as suddenly as my noble friend is suggesting, back in one fell swoop within a month or two, is would just not be feasible. We should have precisely the same kind of conflict as noble Lords opposite had in February 1974.
Lord GEORGE-BROWN: Why not, my Lords?
Lord BESWICK: My Lords, I think ours is the better way. It may take a little more time, but it is better to build soundly than to risk the kind of defeat which noble Lords opposite suffered in that difficult period.
The testing time will be in the next few months. Higher increases of pay, much higher than the £6 a week, have already been made. They have still to work through to prices in the shops. There may well be a peak in prices above that we have now reached. But at the turn of the year we should be seeing the rewards of restraint. During 1976, if demand picks up and world economy improves, the terms of trade need not be in our favour and we should have further difficulties. But if we can hold on, if we can make it work, as my noble friend Lord Allen of Fallowfield said, towards the end of that year other favourable factors will begin to make themselves felt. I have in mind as well our own oil from the North Sea.
May I say something about the impact of inflation on recent industrial activity and relate it to what was said by the noble Lord, Lord Carrington, about cuts in public expenditure? Incidentally, it was interesting to note that those demands for cuts were put much less stridently than they have been in another place and previously here. It would seem that the challenge to noble Lords opposite as to where they propose to cut is undermining their aggressiveness on this point. But may I put this to the noble Lord? Last year the gross domestic product in this country showed virtually no change over 1973. By the first quarter of this year the GDP was nearly 1¾ per cent. down on the recovery peak of last autumn, and industrial production was showing a rapidly deteriorating trend. This has continued in recent months, and

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in the three months to May industrial production was 2 per cent. down on the preceding three months, and 6 per cent. below that quarter of last year. The only consolation is that it is not quite so much down as in certain other industrial countries.
I will not go through all the reasons for that reduction. There are a number of detailed reasons, but there is no doubt that inflation is the major cause. Manufacturing investment, for example, fell 6½ per cent. in the first quarter; the investment in the distributive and service industries 9¾ per cent. All this came out of the cash-flow problems directly linked to inflation, and the fear of future inflation has also been a prime ingredient.
But it is in this situation—when inflation has locked us into a recessionary trend—that we are asked to cut public expenditure, and if we had yielded to this demand to cut public expenditure in this way I tremble to think what our unemployment situation would have been. I absolutely agree that we cannot afford to stimulate employment. The normal reaction to this kind of situation in the old days would have been to reflate, and that is what we are asking Germany and the United States of America to do. We cannot afford to reflate, much as we would like to but, by the same token, it is reasonable to say that it would now be wrong to have any radical cuts in public expenditure.
The employment situation and the industrial decline is a somewhat gloomy picture, but we expect a strong and controlled pick-up in world trade through next year. If the West Germans take further action later on this summer, our confidence will grow further. Our competitiveness is still strong, perhaps 91 per cent. up on the mid-1972 level, and in that situation we should be able to claim our proper share of the recovery if it comes, as we believe it will.
But all this hinges upon the success of the White Paper policy and that, in turn, as so many have said, depends upon public opinion. I think that this public opinion is much more important than the threat of prison. Ultimately, it is public opinion which will decide whether this policy will succeed. It has been said that Parliament has a part to play in building up that opinion. We are hoping to use proper explanatory
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publicity. I should like to see in this country the kind of campaign that we had during the referendum debate. I should like to see in this country, as there has been developed in Sweden, discussion groups, financed possibly by the Government, discussing the implications of this policy. Let us have the criticisms and let us also have informed support.
My noble friend Lord Wigg suggested that we should cut out inter-Party snipings. I liked even more the appeal of my noble friend Lord Feather that we should cut out the cult of cynicism and unbelief. He said that faith in the future of our country is needed and, despite what the noble and learned Lord, Lord Hailsham, said, I should like to think that the majority of us in this House do have that faith in the future of our country.
On Question, Motion agreed to.

FINANCE (No. 2) BILL
Lord SHEPHERD: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Shepherd.)
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. 44 having been suspended (pursuant to Resolution), Bill read 3a, and passed.

REMUNERATION, CHARGES AND GRANTS BILL
10.35 p.m.
Standing Order No. 44 having been suspended (pursuant to Resolution):
Lord SHEPHERD: My Lords, I beg to move that this Bill be read a second time.
Moved, That the Bill be now read 2a.—(Lord Shepherd.)
Lord HAILSHAM of SAINT MARYLEBONE: My Lords, in the speech to which the House has just listened, I explained that I do not propose to detain the House at this late hour, but will be saying more tomorrow on whether Clause 1 shall stand part of the Bill, if the House will forgive me for not making a formal speech now.
The Earl of SELKIRK: My Lords, may I ask a question? Today is 30th

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July, and these provisions come into operation on 1st August. On what wage settlement does this bite? Wage settlements reach all kinds of different stages; they are recommended and agreed. Does it fall only on those which are finally agreed, and on which payment has in fact been made? Or does it arise from questions of recommendations which in the ordinary course of events would be followed? It is important this should be understood.
Lord SHEPHERD: My Lords, if the noble Earl, Lord Selkirk, will raise this point tomorrow on Clause 1 of the Bill, I will guarantee that he is given a specific answer. There is a varied answer to it; it varies according to various types of settlement. I suggest that now is not the time to give an answer, but I will see that a reply is given to the noble Earl tomorrow on Clause 1 of the Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

GREATER GLASGOW PASSENGER TRANSPORT ORDER CONFIRMATION BILL
Brought from the Commons; read 1a, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
BRITISH WATERWAYS BILL
Returned from the Commons with the Amendments agreed to.
  SOVIET OFFICIALS: EXPULSIONS AND REVISITS
  SOVIET OFFICIALS: EXPULSIONS AND REVISITS
  CHIEF PHARMACY POST—WALES
  CHIEF PHARMACY POST—WALES
  PRESERVATIVES IN HUMAN FOODS
  PRESERVATIVES IN HUMAN FOODS
  AGENCE EUROPEENE DE COOPERATION: APPOINTMENTS
  AGENCE EUROPEENE DE COOPERATION: APPOINTMENTS