Sitting of 23 February 1977

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

    Fife Health Board
    Mr. Gourlayasked the Secretary of State for Scotland what action he proposes to take to assist the Fife Health Board to acquire central headquarters.
    The Under-Secretary of State for Scotland (Mr. Harry Ewing): Premises in Kirkcaldy, for adaptation as the central headquarters for Fife Health Board, were acquired in June 1975. When the board's proposal was approved in principle in 1974, an undertaking was given that part of the cost of adaptation, as then estimated, would be met by an additional financial allocation. I understand that the board is at present considering the alternatives of adaptations and new purpose-built premises.
    Mr. Gourlay: Is my hon. Friend aware that there is a long waiting list for orthopaedic beds in Fife and a great urgency for more geriatric beds? Until the new central headquarters is provided, a fair amount of hospital accommodation will be used for administrative purposes. Will my hon. Friend do everything possible to assist the board in reaching a decision and getting the necessary finance to start the new building?
    Mr. Ewing: To a certain extent my hon. Friend has got to the kernel of the problem. The problem is not so much the need for a new headquarters building as for geriatric beds and other urgent medical facilities. We shall give the highest possible priority to that, bearing in mind the need for a central headquarters building. We accept that the fragmentation in three different towns is not an economic proposition.

    Teacher Training
    Lord James Douglas-Hamiltonasked the Secretary of State for Scotland how many representations he has received to date in connection with his recent proposals for reductions in teacher training facilities and colleges of education.
    Mr. Youngerasked the Secretary of State for Scotland how many representations he has received to date regarding the future of Craigie College of Education, Ayr; and if he will make a statement.
    The Secretary of State for Scotland (Mr. Bruce Millan): I have received over 700 letters and petitions about my proposals, of which over 400 include references to Craigie College.
    Lord James Douglas-Hamilton: In view of the fact that the majority of Scots Members on the Scottish Grand Committee have expressed no confidence in the consultative document, will the Secretary of State say whether any impartial authority in Scotland has suggested that the highly efficient, popular, fully subscribed and purpose-built college of physical education at Cramond should be transferred to the hopelessly inadequate facilities at Dundee at a cost of somewhere in the region of £1 million?
    Mr. Milan: I wonder whether there is any impartial authority in Scotland on anything. As I said in Committee upstairs, I shall take account of all the representations made to me.
    Mr. Younger: Is the Secretary of State aware that, following his rejection by the Scottish Grand Committee last week, the people in these colleges expect him to adopt a completely new approach to his plan as expressed in the consultative document? Would he be prepared to look at the representations already made and to receive representations from local authorities which may wish to see him on the subject?
    Mr. Milan: My hon. Friend has had a number of meetings and I, too, shall have a number in the next couple of weeks. Obviously, we shall listen to all the representations made to us. All I would say is what I have said already on a number of occasions—that there must

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    be a substantial contraction in the teacher training service in Scotland.
    Mr. Canavan: Does not the Secretary of State realise that there is widespread opposition to the proposals in the consultative document among the staffs, students, boards of governors, trade unions and church leaders because of a lack of any educational case or even a financial case in that document? In view of the lack of confidence in the Scottish Education Department, would it not be better to set up an independent body to investigate the whole structure of tertiary education in Scotland instead of closing down colleges or merging them?
    Mr. Milan: I cannot accept that criticism. Obviously, at the colleges affected by the closures there will be strong feelings against the proposals. There is nothing extraordinary about that. As I have said, however, there must be a substantial reduction in the teacher training system in Scotland—that is very much in the interests of the students—otherwise we will be simply taking on people to become qualified teachers when there are no jobs available for them at the end of the day.
    Mrs. Bain: Does the Secretary of State accept that, while the people of Scotland are coming to expect more and more betrayals from this House, they will feel—and it is high time the Government recognised this—that the biggest betrayal of all is of educational services in Scotland? When can we expect the Secretary of State to give replies to the detailed points raised in Committee so that we can relay them back to the people concerned?
    Mr. Millan: I reject the first criticism absolutely. We now have in Scotland the best pupil-teacher ratios that we have ever had. We have also eliminated part-time education for the first time for many years. Those factors should be taken into account.
    Mr. Lambie: What representations has my right hon. Friend received on the consultative document from the General Teaching Council?
    Mr. Millan: I am meeting representatives of the General Teaching Council on Monday 7th March, when no doubt they will let me know their views in detail. I gather that they have had a meeting and
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    taken certain decisions, but I am not aware so far that I have actually read the representations which they have made to me.
    Mr. Alexander Fletcher: Does not the right hon. Gentleman understand that his totally inadequate consultative document fails to grasp the educational opportunities which the temporary fall in pupil numbers presents? When will he produce a proper consultative document with the financial facts and with details of opportunities for new educational advancement and a scheme to spread the fall in numbers over 10 colleges, particularly three big ones—Jordanhill, Moray House and Dundee?
    Mr. Millan: First, I congratulate the hon. Gentleman on his debut on the Front Bench at Scottish Question Time. That was a very well-prepared question. I wish that it was worth answering.

    Mackerel Industry
    Mr. Penhaligonasked the Secretary of State for Scotland if he is satisfied with the development of the Scottish mackerel industry.
    The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): Last year there were substantial increases both in landings and in first-hand sales for human consumption. It is too early to make a firm statement about 1977.
    Mr. Penhaligon: Is the Minister aware of the gross over-fishing by Scottish boats now taking place off the Cornish coast? Does he agree that the industrial techniques which are being used can lead only to the bankruptcy of the Cornish mackerel industry in exactly the same way as they have already led to the bankruptcy of the Scottish herring industry? Has he any powers to deal with this problem? If so, is he prepared to use them?
    Mr. Brown: I am always being told that Scottish fishermen are paragons of virtue and do not engage in any illicit or illegal practices. Apart from the recent prosecutions, which, as I am sure the hon. Gentleman knows, included other than Scottish boats, there is no reason why boats should not fish legally for mackerel in the permitted limits.
    Mr. Penhaligon
    Mr. Brown: That is a matter of opinion. It is one of the things under consideration in relation to future quotas under the common fisheries policy. Obviously, we want to conserve even stocks of mackerel, which are now becoming increasingly popular.
    Mr. Henderson: I agree about conservation, but has the Minister studied the case last week when some of my constituents appeared in court in Cornwall? Does he intend to make any representations against the appalling fines levied on them there, about the fact that one of the magistrates indicated a preference before the case, and about the fact that the local fisheries officer had told the court that he was out to "get the Scots"?
    Mr. Brown: I am not surprised at that further expression of inflammatory anti-English sentiments by the hon. Member. I regret any fisherman being found illegally fishing, whether he is a Scottish fisherman or not. It does no service to the fishing industry of this country if hon. Members will not oppose the idea of anyone fishing illegally.
    Mr. Robert Hughes: Does not this episode prove conclusively that the well-being of the fishing industry in the United Kingdom is a matter for the United Kingdom and that the Scots, the English, the Irish and the Welsh have a common interest in getting a sensible fisheries policy?
    Mr. Brown: Yes, there is no doubt that there will be increasing pressure on certain species, including stocks of mackerel, simply because of the reduction in the availability of stocks of other species. The Scottish fishermen are to be congratulated not only on the fact that last year they caught more mackerel in Scottish waters but, more important, on the fact that more of the fish are going for human consumption.
    Mr. Teddy Taylor: Would not the Minister agree that incidents like this could become more frequent unless we can solve the problem of exclusive limits? Has he anything new to report on that? Has he any hope to offer that we might reach a conclusion in the near future in the discussions in the EEC?
    Mr. Brown: It is asking the impossible, I suppose, to expect the hon. Member to
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    give any credit to this Government for anything, but we have made considerable progress with various conservation measures in the EEC. I should have thought that he would welcome that, because it is the basis of our policy. In discussions within the EEC we have even reserved our national interest.
    Mr. Sillars: Will the Minister confirm that it is the Government's view on moral grounds that one cannot argue from a Scottish fisherman's point of view for protection for the Scottish inshore fleet and at the same time deny the same protection to the Cornish fisherman?
    Mr. Brown: That sounds so philosophical that I am not sure what my hon. Friend means.
    Mr. Sillars: Just say "Yes."
    Mr. Brown: If I knew what the question meant, I might be able to do so. There are peculiar, local, even unique circumstances about the method of fishing by people in Cornwall. I should like to see them preserved. I do not think that that is inconsistent with sound conservation measures outside the limits.

    Glencoe
    Mr. MacCormickasked the Secretary of State for Scotland if he will pay an official visit to Glencoe.
    Mr. Harry Ewing: My right hon. Friend has, at present, no plans to do so.
    Mr. MacCormick: Does the Minister agree that, in view of the disreputable massacre inflicted last night on the Government's excellent Scotland and Wales Bill by Scottish Conservative and Scottish Liberal Members—I agree that he might find this difficult to answer—it would be equally disreputable to get rid of the local hospital in Glencoe? Will he accept that one of the worst aspects of the reorganisation of local health organisations in Scotland is the increase in centralisation, against which we must fight?
    Mr. Ewing: After that supplementary question, I can imagine that there might be a desire in Glencoe to get rid of several local features, possibly at the next election. The hon. Gentleman received a copy of the consultative document published by the area health board, which is due to meet next on 18th March.

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    If there is any proposal to close the local hospital at Glencoe, that will come to my right hon. Friend and will have to be approved by him. The hon. Gentleman should not get excited prematurely.
    Mr. Russell Johnston: Is the Minister aware that the Glencoe hospital covers a big chunk of my constituency? Can he at least assure us that when the matter comes before his right hon. Friend, the representations against the closure will be fully and carefully considered?
    Mr. Ewing: Yes, I can certainly give that assurance.
    Mr. Buchan: Will the Minister bear in mind that the massacre at Glencoe was a massacre of Scots by Scots? Is it true that it is called the "Glen of Weeping", after the hon. Member for Argyll (Mr. MacCormick)?
    Mr. Ewing: One lesson that I have learned in politics is never to become involved in domestic disputes.
    Mr. Younger: If the Minister will not go to Glencoe, will he go further and visit the Western Isles, where people are facing fares increases on the ferries which are greater than the increases allowed under the Government's policy? Are they covered by the Price Code, and, if so, what will the Minister do about the matter?
    Mr. Ewing: That is a totally different question. If the hon. Member is so interested in the subject, I should have thought that he would take the trouble to put down a Question.
    Mr. Skinner: Will my hon. Friend confirm that the massacre last night came about as a result of the actions of a few of my hon. Friends taking a principled stand on the matter, allied with a successful attempt by the Tory Party, acting in unison, whiplashed into the Lobby by the Leader of the Opposition, not on the basis of devolution but almost entirely in a desire to inflict an electoral embarrassment on the Labour Government?
    Mr. Ewing: I can think of no better way to put that than the way in which my hon. Friend has just put it.

    Housing Tenants (Neighbours' Complaints)
    Mr. Adam Hunterasked the Secretary of State for Scotland what statutory duty is imposed on local authorities to investigate complaints from local authority house tenants regarding the conduct of neighbouring tenants; and if he will make a statement.
    Mr. Hugh D. Brown: The investigation of complaints is one aspect of the management functions vested in local housing authorities by Section 149 of the Housing (Scotland) Act 1966.
    Mr. Hunter: Is my hon. Friend aware that the problem of neighbour trouble among council house tenants is growing at an alarming rate and that many tenants are living in a state of tension and misery? Does he agree that the housing authorities have little power in the matter and have no statutory right to intervene in cases where individuals are involved in noise disturbance and verbal abuse? Since parents are allowed to attend children's hearings and to attend committees dealing with school attendance defaulters, does my hon. Friend agree that local authorities should have the power to form committees or panels for people with individual complaints against others?
    Mr. Brown: I can sympathise with my hon. Friend. This is one of the most difficult human problems facing housing authorities. Housing authorities do, however, have powers—I am not suggesting that eviction cures the problem—which are in my opinion adequate at present to deal with a human problem which should obviously also involve social workers.
    Mr. Fairgrieve: Does the Minister agree that the problems outlined by the hon. Member for Dunfermline (Mr. Hunter) could be improved if he gave more encouragement to more Scottish local authorities to sell council houses to sitting tenants and thus give them more interest in themselves, their houses and their neighbours?
    Mr. Brown: No. That is a doctrinal approach. With respect, I doubt whether

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    the hon. Gentleman knows anything about the problems in some housing estates—
    Hon. Members: Disgraceful. Withdraw.
    Mr. Fairgrieve: On a point of order, Mr. Speaker. Having served on a Scottish—
    Hon. Members: At the end of Question Time.
    Mr. Speaker: I understand the hon. Gentleman's feeling, but perhaps he would be kind enough to wait until the end of Questions.
    Mr. Brown: I shall repeat what I said. [HON. MEMBERS: "Withdraw."] I said that I doubt whether the hon. Gentleman has knowledge of many of the housing estates where the greatest problems are—[Interruption.] It is a more diplomatic way of saying that he does not know anything about the problem. I have already said that I have a lot of sympathy with authorities which are battling with this problem, but it certainly will not be solved simply by selling council houses.
    Mr. Speaker: Order. As a fellow Celt, I appreciate the difficulty of being brief, but I would appreciate questions and answers being a little briefer.
    Mr. Robin F. Cook: Since investigating complaints requires housing managers, have the Government yet considered the report on housing management of the Scottish Housing Advisory Committee, which stated that it was appalled by the low level of professional training in Scottish local authorities? In view of that report, can the hon. Gentleman promise the House an early response to the recommendation that the central Government should become more involved in the training of housing staff?
    Mr. Brown: As my hon. Friend knows, it was through the initiative and encouragement of this Government that the Scottish Advisory Committee was asked to treat housing management and, indeed, its improvement, including professional training, as a priority. Since the report was published only a week ago, I cannot yet give a response to it. But I treat this as a matter of urgency and I shall respond to it sympathetically.
    Mr. Welsh: In reference to the difficulties of housing management, is the Minister aware—if he is aware of anything—of the desperate shortage of trained housing managers in Scotland? Will he give a definite assurance that he will take action on the SHAC report?
    Mr. Brown: I have already said that I shall respond to it as sympathetically as possible, but whatever problems we have in housing management they are Scottish problems created by an indifference of too many people to attempting to solve them. There is no political mileage in it for the Scottish National Party. Yes, we shall respond sympathetically and urgently, because housing management and its improvement is one of our housing priorities.

    Rates
    Mr. Teddy Taylorasked the Secretary of State for Scotland if he will make a statement on the estimated level of rates in the current year.
    Mr. Millan: For the present financial year I have nothing to add to the information given to the hon. Gentleman on 21st October 1976. For the next financial year I am confident that local authorities will react responsibly to the Government's advice that expenditure should be stringently controlled and rate increases kept to the minimum compatible with maintenance of reasonable standards.
    Mr. Taylor: Is the Minister aware that the present level of rates is causing immense hardship to individuals, to industry and to commerce? As the Government only yesterday announced new proposals to restrict increases in prices, and as we already have controls on dividends, wages and rents, can he tell the ratepayers of Scotland why he has not put a ceiling on rate increases for next year?
    Mr. Millan: It has been interesting, as information has come forward in recent weeks about proposed rate increases for next year, that the increases on the whole—although, of course, the situation varies from one authority to another—have been rather less than was originally forecast. For example, Glasgow yesterday stated that the proposed rate increase there might be only 3p in the pound and Monkland district said that there would be a reduction of 1p in the pound. I

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    believe, therefore, that authorities are paying attention to the exhortations that they have had from the Goverment to exercise due economy in the coming year and that that is the best way to proceed.
    Mr. MacCormick: First, does the Secretary of State agree that he has a duty to explain to the people of Scotland that it was the Scottish Conservative Party which created the regional tier of local government in Scotland which has caused many of these problems? Secondly, does he agree that one of the worst features of Strathclyde at present is that it is run by the Labour Party? Thirdly, does he agree that the most successful local authority in Scotland to keep down the rates is the Cumbernauld district, which is run by the Scottish National Party?
    Mr. Milan: I do not agree with the last two of those questions. On the first, I do not think that it is necessary for me to explain to the House such iniquities as are in the Local Government Act 1973 since the hon. Gentleman does it so coherently.

    Nuclear Waste (Storage)
    Mr. Galbraithasked the Secretary of State for Scotland what is his policy regarding the granting of planning permission for the storage of nuclear waste.
    Mr. Milan: In any such case the planning authority would no doubt wish to be assured—as I would, if I were to call the case in—that the nature and scale of the proposals were acceptable and in particular that the waste would be stored safely and without harming the environment.
    Mr. Galbraith: Is the Secretary of State aware of the considerable public concern which exists about the possible health hazards resulting from such storage? In order to set at rest public anxiety on this matter, could he give some indication of the criteria that would guide him in allowing planning permission for storage and in allowing planning permission for prospecting for possible storage sites?
    Mr. Milan: That latter question is a a matter for the local authority, not for me. Unless a planning application is called in all planning matters are in the first instance for the local authority con-
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    cerned. It is not for me to intervene unless it is absolutely necessary. Concerning safety and other aspects, I refer the hon. Gentleman to the answer which I gave to one of his hon. Friends on 10th February indicating the statutory provisions under which I, as Secretary of State, operate at the moment and would operate in the future. In all these matters, I know that there is public concern and feeling.
    On the current issue, all that is involved is exploration. There has been no request so far for permission to store nuclear waste. That would be a long way ahead, and there would be all sorts of hurdles and safeguards to be gone through before that happened. If we are to continue with the nuclear programme, and even on the basis of the existing nuclear programme, it is absolutely essential that we bear in mind that we must find long-term solutions to problems of nuclear waste. It would be in everyone's interests to find those solutions.
    Mr. Dalyell: Is my right hon. Friend in a position to say anything about the discussions that the Government have had with the European Community on this difficult issue?
    Mr. Millan: The particular exploration programme that affects the South of Scotland, for example, and other parts of the United Kingdom at present is something that is being done with EEC co-operation. It is not even a United Kingdom effort. It is an international effort, because there is a joint responsibility not only at EEC level but, I think, even wider than that, of all nuclear nations to find satisfactory solutions to the problem of the disposal of nuclear waste. We approach this matter with the intention of having—as we have at present—the most rigorous standards of safety.
    Mr. Grimond: Is the Secretary of State aware that in this matter and in the related question of uranium mining his assurance that he will have the greatest concern for the environment is very welcome? Will he also assure us that, as well as the safety angle, he will take into fullest consideration the views of local inhabitants affected, and particularly the structure plans which have been drawn up with such tremendous efforts in these areas?
    Mr. Millan: Yes. Again, I have to have regard to all these matters. In the particular case of the controversy over Orkney, I do not think that I should say anything more at present, because, as I think the right hon. Gentleman recognises, in certain circumstances I might have a quasi-judicial planning function to carry out. However, I shall take fully into account all the matters that have been mentioned by hon. Members.
    Mr. Monro: Will the right hon. Gentleman accept that I am very glad that he has made this reassuring statement to the people of Scotland in relation to test borings and nuclear waste? Will he also bring home to the Harwell laboratory the fact that it must not prospect and carry out boring operations without planning permission in the near future?
    Mr. Millan: I think that in this case the local authority has taken the view—about which I understand that at an earlier point there was some dispute—that planning permission is in fact required. Certainly that is now what is happening. However, I think the hon. Gentleman will realise that on some of these matters involving individual applications it is difficult for me to say anything without appearing to prejudge an issue that will ultimately come before me.
    Mr. Sillars: Will the right hon. Gentleman confirm with regard to the expansion of the nuclear programme that we are now looking for disposal sites because of the CEGB's programme? Will he also confirm that Scotland is well endowed with generating capacity for many years to come?
    Mr. Milan: No, I do not think that I could say that, because, proportionately, Scotland has rather more nuclear power at present than have England and Wales, and that would certainly be true if the SGHWR or another generating station went ahead at Torness. This is not an English problem. Scottish waste is going to England for disposal now.
    Mr. Thompson: Considering that the vast majority of the people of Galloway, and probably of South Ayrshire as well, are utterly opposed to having a nuclear dump in our hills, is it not the case that this scheme of test borings is a complete waste of time and energy because the
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    results will never be applicable in our hills?
    Mr. Millan: I do not know whether I accept what the hon. Gentleman has said. Again, I do not want to prejudge the issue. However, as far as I am aware, the people of Galloway and South Scotland are at present happy to have the benefits of cheap nuclear power from Hunterston.

    Russian Fishing Vessels
    Sir John Gilmourasked the Secretary of State for Scotland how many Russian fishing vessels are at present fishing within 200 miles of the Scottish coast.
    Mr. Hugh D. Brown: The latest information indicates that there are some 16 Russian fishing vessels currently within 200 miles of the Scottish coast.
    Sir J. Gilmour: Does the hon. Gentleman agree that, while we can be grateful for the steps taken to reduce the Russian fishing fleet, there is a real worry that as fast as the Russian boats are put out EEC boats will come in to take their place?
    Mr. Brown: No, I do not accept that. I am glad that the hon. Gentleman has acknowledged the work done in the introduction of a licensing system for non-EEC countries. That is something for which we are entitled to some credit. It is obviously in the interests of conservation to ensure that no country, whichever it may be, is able to exploit stocks to the extent that exploitation has taken place in the past.
    Mr. Sproat: In this regard, when does the hon. Gentleman propose to introduce the order to ban the landing of ungutted haddock in Scotland's ports? What representations has he had on this matter from the Scottish Fishermen's Federation and the producers' organisations?
    Mr. Skinner: An Anglo-Russian chairman.
    Mr. Brown: I should say, for the benefit—
    Mr. Skinner: That is about as low as you can get.
    Mr. Speaker: Order.
    Mr. Brown: I should say, for the benefit of my hon. Friend the Member for

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    Bolsover (Mr. Skinner), that haddock has nothing to do with Russian fishing vessels. Seriously, however, agreement was reached at a meeting on 4th February. I understand that the industry, which is fairly divided on this issue, is having second thoughts. A meeting is to take place tomorrow, so we are still giving consideration to whether or when to introduce an order.
    Mr. Henderson: I take the Minister's point that he is in favour of conservation on a non-discriminatory basis. What is his reaction to the Irish Government's proposal that vessels in excess of 110 ft. in length, from whatever country, should be prevented from fishing within 50 miles of the Irish coast? Is there not here the germ of an idea which could be developed for our own fishing industry?
    Mr. Brown: I cannot win on this one, because of the blatant exploitation for vote purposes by the SNP. I should prefer it if hon. Members recognised that conservation measures have to be varied, perhaps, depending on the circumstances of each country. Therefore, that is the basis for the Irish proposals, and I would not dissent from what they have done.
    Mr. Corrie: While accepting the conservation measures that the Government have already taken, may I ask the hon. Gentleman to say what talks have taken place with regard to policing, the type of gear used and the sizes of the nets actually being used?
    Mr. Brown: As the hon. Gentleman will know, this is one of the conservation measures that we have introduced. It is certainly a priority, along with the other conservation measures, because the size of nets is an important factor in our policy.

    Dental Health
    Mr. Dempseyasked the Secretary of State for Scotland if he will make a statement on the recent report commissioned by the Scottish Home and Health Department showing that Scotland has the worst record of dental disease in Western Europe.
    Mr. Harry Ewing: The most recent relevant report is that published in 1974 on "Adult Dental Health in Scotland
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    1972". It records that in Scotland 44 per cent. of adults were without natural teeth as compared with 37 per cent. in England and Wales. No comparison is made with the rest of Europe, for which comparable statistics are not available. A number of measures have been introduced since the report which, it is hoped, will lead to an improvement in dental health.
    Mr. Dempsey: Does my hon. Friend agree that according to medical opinion dental decay adversely affects the lives of our people? Is he aware that according to recent statistics Scotland has the worst rate of dental decay among Western European countries? Will he encourage local authorities to act, and will he assure them that additional funds will be provided from the Exchequer to enable them to do so?
    Mr. Ewing: I certainly cannot assure any local authorities that additional funds will be available from the Exchequer for any aspect of policy. However, the specific point raised by my hon. Friend is really one of research. We have made arrangements for an advisory dental research unit to be set up in one of the three dental teaching hospitals in Scotland to assess the effective use of dental procedures and related health services in order to try to bring about a very much needed improvement in dental health in Scotland.
    Mr. Rifkind: Is it not tragic that, almost 30 years after the foundation of the National Health Service, almost half of Scottish adults have no natural teeth? Given the failure of all advisory commissions followed by all Governments up to now, what reason does the Minister have for supposing that this new advisory unit will make any significant difference to the problem?
    Mr. Ewing: Whatever steps we take in this matter, we must depend on the co-operation of the people themselves. If people do not take an interest in their own dental health, there is not much that any Government can do about it. As in so many other aspects of life, the responsibility is with the individual.
    Mr. Robert Hughes: Does my hon. Friend recollect that in Kilmarnock a pilot study was carried out of the advantage of adding fluoride to the water supply, which showed that dental caries could be cut by

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    half? Will my hon. Friend further encourage local authorities to add fluoride to the water supply, and will he make some money available to see that this can be done as quickly as possible?
    Mr. Ewing: The one thing that I know about Kilmarnock—my right hon. Friend the Member for Kilmarnock (Mr. Ross) is not present—is that everyone there has his wisdom teeth. However, on the question of the fluoridation of water, we have asked the health boards—whose responsibility basically it is to encourage the local authorities—to draw this matter to the attention of local authorities again, in the hope that local authorities will give it the most serious consideration.

    Escorted Prisoners (Escapes)
    Mr. Russell Johnstonasked the Secretary of State for Scotland on how many occasions in the last five years prisoners in Scotland have escaped from custody while being transported between prison and the courts.
    Mr. Harry Ewing: On five occasions.
    Mr. Johnston: Does the Minister agree that there has been widespread concern throughout the United Kingdom following the escape of William Hughes in Leicester and the horrible events that followed, and that if the Home Secretary had been asked about prisoner transportation security immediately before that happened he would probably have said that he was satisfied? Will the hon. Gentleman tell the House that in Scotland, as in England, the matter is being looked at again very carefully?
    Mr. Ewing: Yes, Sir. I can tell the House with some assurance that since the Hughes escape we have had a look at the procedures for the transport of prisoners between establishments and courts and are satisfied that they are adequate. But we are interested to see the outcome of the Hughes inquiry, and if there are any aspects of that inquiry that we feel could be implemented in Scotland to increase security we shall take steps to implement them. We regard it as a very serious matter, and we have a close watch on it.
    Mr. Robin F. Cook: As most prisoners on their way to and from the courts in Scotland are normally held in reception
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    boxes in Scottish prisons, will my hon. Friend take this opportunity of answering Question No. 23, in my name?
    Mr. Ewing: In a sense that would be unfair, but I can say that there have been major improvements to those reception boxes.
    Mr. Fairbairn: When the Minister is considering this very important problem, in view of the excellent record that Scotland has in comparison with England, will he—not to make any nationalist point—advise the English that we have a rather good way of getting our prisoners to court and back again in custody, and that to transport them in individual taxis as is done in England asks for the problems which have tragically arisen?
    Mr. Ewing: There is close liaison between the Home Office and the Scottish Office on all aspects of security. I am sure that the Home Office will be interested to see how we conduct our procedures in Scotland.

    Ayrshire and Arran Health Board
    Mr. Lambieasked the Secretary of State for Scotland if he will increase the allocation of money for the next financial year to Ayrshire and Arran Health Board; and if he will make a statement.
    Mr. Harry Ewing: Under the terms of the interim report of the Working Party on Revenue Resource Allocation, the Ayrshire and Arran Health Board will receive an increased allocation for the next financial year. All health boards will be notified of their allocations as soon as possible.
    Mr. Lambie: Is my hon. Friend aware that his statement showing a substantial increase in the money to be allocated to the board next year will be much welcomed by my constituents? Does he realise that this is the first victory in the Lambie campaign against the Glasgow Mafia to get a fair deal for the people of Ayrshire and that I, too, welcome his statement today?
    Mr. Ewing: I am not sure about that compliment. We have had a working party looking at the allocation of resources to the various health boards in Scotland, and it is as a result of that first look at the allocation of resources that the Ayrshire and Arran Health Board will receive

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    this increased allocation. I am very grateful for the complimentary remarks my hon. Friend made in the latter part of his supplementary question.
    Mr. Corrie: Will the Minister assure me that some of the increase will go to the Island of Arran to look after the hospital services there, and that it will not all go to Central Ayrshire?
    Mr. Ewing: I think that the hon. Gentleman knows about the massive expansion programme that is going on in my hon. Friend's constituency. Some of the increased resources will go to community medicine projects as well, but the use of the resources is primarily a matter for the health board.

    Coupar Angus
    Mr. Crawfordasked the Secretary of State for Scotland when he next intends to visit Coupar Angus.
    The Under-Secretary of State for Scotland (Mr. Frank McElhone): My right hon. Friend has at present no plans to do so.
    Mr. Crawford: The Minister will be aware that Coupar Angus straddles one of the main oil routes from Aberdeen to the South. Is he also aware of the shocking state of the road and of the potholes in it and in the related roads? Will he instruct the Scottish Development Department immediately to give the Tayside Regional Council £500,000 which it requires to repair the road? We on the SNP Bench will not take public expenditure cuts from this Government or the rag tag and bobtail of the Conservative Party.
    Mr. McElhone: I shall confine my remarks to roads. Expenditure on road maintenance is normally revenue expenditure, which is under the control of the regional authority. For capital expenditure on road works, including improvements, the region was given £3·4 million in 1976–77. The allocation for 1977–78 is £3·25 million. It is for the region to decide how it wishes to spend that money, either on improvements or on creating new roads.
    Mr. Robert Hughes: Will my hon. Friend persuade the Secretary of State to go to the village of Blairgowrie, very close
    1402
    to Coupar Angus, and visit Mr. John McEwan, who is carrying out a massive study of land ownership in Scotland? As the information is available in the Scottish Office, will my hon. Friend now publish it so that we may see the exact power of the landlords and landowners in Scotland?
    Mr. McElhone: I have a great deal of sympathy with the point of view expressed by my hon. Friend. I shall take his comments into consideration.
    Mr. Buchanan-Smith: Will the hon. Gentleman acknowledge that, because of the particularly difficult weather conditions this winter, roads in areas such as that under discussion have taken a tremendously heavy hammering, as anyone who uses them must know? Will he give an assurance that in connection with oil-related development special consideration will be given to roads which are subjected to heavy traffic going to the oil areas—particularly the A94—in order to help local authorities in those areas?
    Mr. McElhone: We have the extraordinary expenses allocation within the rate support grant for oil-related areas, but we are under expenditure constraints. The hon. Gentleman will acknowledge that we have increased the expenditure by a little for 1977–78, to the sum of £3·25 million for Tayside at least.

    Devolution
    Mr. Alexander Fletcherasked the Secretary of State for Scotland which ministerial posts in the Scottish Office will no longer be required if the Scotland and Wales Bill is enacted and a Scottish Assembly established; and what functions are attached to them.
    Mr. Millan: The number of ministerial posts in the Scottish Office, as elsewhere, is a matter for my right hon. Friend the Prime Minister.
    Mr. Fletcher: I am surprised that the Question was not transferred. Does the right hon. Gentleman agree that, with eight Ministers in the Scottish Office, Scotland has a greater direct involvement in government than any other part of the United Kingdom? After last night's vote, does he not think that he should reconsider the fact that if there is an

    1403
    Assembly in Edinburgh Scotland's influence and involvement in the United Kingdom are bound to be seriously diminished? [Interruption.]
    Mr. Milan: As my hon. Friend says, it is the supplementary question that should have been transferred. I do not accept what the hon. Gentleman says. There are only six ministerial posts in the Scottish Office, not eight.
    Mr. Fletcher: What about the Law Officers?
    Mr. Millan: They are not part of the Scottish Office. There is not likely to be any increase in the number of Ministers. There may be a reduction.
    Mr. David Steel: Does the right hon. Gentleman recognise that many people who are in favour of devolution in Scotland are none the less concerned about the great increase in the number of politicians and civil servants foreshadowed in the Bill, and that unless there is a clear reduction in the powers and scope of the Scottish Office and in his own position devolution will not be genuine but a sham?
    Mr. Millan: There will be a considerable reduction in the responsibilities of the Secretary of State when the Bill is enacted. That will be reflected in the number of civil servants in the Scottish Office, and no doubt also in the number of Ministers who will remain as Scottish Office Ministers. But the latter point is not really a matter for me. One of the most interesting features of last night's vote was the way in which the Liberal Party ratted on its pledges.
    Mr. Buchan: Does my right hon. Friend agree that it seems very curious for the Liberal Party to try to justify its shabby and unprincipled behaviour last night on the basis of the number of Ministers who might be talked about in a Question today? Is not this even stranger than the argument advanced yesterday by Liberal Members that they wanted a concession on proportional representation, which was advanced in the House and defeated? Are they not slightly mixed up?
    Mr. Milan: I think that they are rather more than slightly mixed up. My impression yesterday was that the right hon. Member for Roxburgh, Selkirk and
    1404
    Peebles (Mr. Steel) and his right hon. and hon. Friends—for whatever reasons seemed sensible to them, but they were rather obscure to the rest of us—were anxious to betray their election pledges. I do not understand why the right hon. Gentleman wanted to do that.
    Mr. Gordon Wilson: Is the Secretary of State aware that the House is anxiously awaiting a further statement of definition of the Government's intentions in relation to the devolution Bill? In view of his support for the measure and the fact that it was in his manifesto for the last General Election, will the right hon. Gentleman give a pledge that he will vacate his own office of Secretary of State as a question of principle if the Government abandon the Bill?
    Mr. Millan: I do not think that we are inviting applications for Secretary of State yet. As for a general statement, my right hon. Friend the Leader of the House made clear last night that we shall continue with the Bill tomorrow. There is a day's debate ahead of us, and I am sure that the hon. Gentleman, like the rest of us, is looking forward to that.
    Mr. Sillars: Is my right hon. Friend aware that, notwithstanding the nonsense from the Liberals last night, given the support of other parties the Government theoretically had a majority of over 30 and that the Labour Party cannot evade its responsibility for the loss of the guillotine last night?
    Mr. Milan: What I take into account in all this—and what will no doubt be reflected in any statement about the Bill subsequently made by the Government—is that the Bill now before the House had a substantial majority on Second Reading.

  ACCUSED PERSONS (DOMICILE)
  Lord James Douglas-Hamiltonasked the Lord Advocate if he will make a statement on why, when and how accused persons may state their address as being care-of the sheriff court.
  The Lord Advocate (Mr. Ronald King Murray): This practice applies when an accused person is released on bail. Section 36 of the Criminal Procedure (Scotland) Act 1975 provides that all bail

  1405
  bonds must specify the domicile at which accused persons released on bail may be cited for trial. The practice of specifying that domicile as the sheriff clerk's office has grown up over a long period of time and is used in many sheriff courts. The main reason for it is that it is administratively convenient for those concerned with the service of indictments. Recommendations were made in the Thomson Report to change the practice, and this is presently under consideration.
  Lord James Douglas-Hamilton: Is the Minister aware that on 28th January five separate accused persons in the sheriff court in Edinburgh gave their addresses as care-of the sheriff court? If this becomes general practice in Scotland, will not many people fear that too much emphasis is being placed on protecting accused persons rather than on protecting those who are the victims of criminal activity?
  The Lord Advocate: I am aware of the matter to which the hon. Gentleman has referred. Perhaps it would be useful if I referred him to the answer that I gave to the hon. Member for Glasgow, Cathcart (Mr. Taylor) on 21st July 1976, in which I canvassed the general principles applicable, including the point that the hon. Member has just made.
  Mrs. Winifred Ewing: While taking the point made by the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton), may I ask whether this practice does not also hurt the interests of the defence, because the indictment is served at the sheriff court and the defence lawyer does not necessarily know that this has happened? Is the Minister aware that sometimes a very short time, perhaps only 10 days, is available to prepare the case and that the indictment could be lying at the sheriff court without the defence lawyer knowing? Is not this wrong from the point of view of both the defence and the Crown?
  The Lord Advocate: The hon. Lady has expressed a point of view that is without doubt held by some practitioners. I would have thought, however, that the majority of practitioners would find this a more convenient way of dealing with the matter, because a solicitor knows with certainty where he can get the indictment. When the indictment is served
  1406
  on his client, it is often some time before he has access to it.
  Mr. Fairbairn: The Lord Advocate has been good enough to tell the House the history of how the practice has grown up, but he also told us that the Thomson Committee recommended that it should not continue. Since this is one of the many recommendations of the report that would involve no finance and little legislation, will the Lord Advocate say when we can hope to see brought forward some of the sensible reforms proposed in that report?
  The Lord Advocate: I have already indicated in previous answers that the Government have the matter under active consideration. Obviously, in such a large field as this, it is a matter of priorities, and priorities must be set in their proper context.

  CHILD ASSAULT COMPLAINTS
  Mr. Canavanasked the Lord Advocate whether he has issued any recent instructions to procurators fiscal about complaints of child assault.
  The Lord Advocate: No, Sir.
  Mr. Canavan: Why were not proceedings taken against the headmaster who subjected one of my constituents, a primary school pupil with an injured hand, to corporal punishment? What kind of biased legal establishment do we have in Stirlingshire when the boy's father is fined £150 for shoving the headmaster and another of my constituents, an unemployed youth, is fined £40 for stealing a handful of potatoes, and yet Sir Hugh Fraser, a millionaire, gets off scot-free after cooking the company's books?
  The Lord Advocate: I reject those comments in general, and I particularly reject the suggestion that there is any bias in the prosecution in that area. I have written at length to my hon. Friend about the case to which he has referred, and I hope that that explains the circumstances. As to what a father was said to have done, perhaps my hon. Friend can take up that matter with me at another time.
  Mrs. Bain: Are not the procedures for dealing with child assault in Scotland greatly respected in other nations of the

  1407
  United Kingdom? Can the Lord Advocate give an assurance that, when the report from the Select Committee on Violence in the Family finally becomes available, he will do everything possible to ensure that the recommendations are brought forward and that there will not be a repetition of what happened to the recommendations of the Select Committee on Violence in Marriage?
  The Lord Advocate: If any of the recommendations are applicable and appropriate to Scotland, I shall do my best to see that they are applied.

  SUMMARY APPEAL PROCEDURE
  Mr. Rifkindasked the Lord Advocate whether he is satisfied with the appellate procedure available to persons convicted of summary offences.
  The Lord Advocate: I am aware of criticisms that have been made about the limited scope of the summary appeal procedure and I consider that some of these may have some justification. This, however, is presently being considered by the Thomson Committee and I do not consider it appropriate to anticipate any recommendations that it may make in regard to summary appeal procedure.
  Mr. Rifkind: Does the Lord Advocate accept that persons convicted in magistrates' courts in England and Wales can appeal for a new trial and that this has often led to convictions being quashed? Is he aware that in Scotland one can appeal from summary convictions only on matters of law, that this position is unsatisfactory and that in many cases it has led to grave feelings of injustice?
  The Lord Advocate: The hon. Gentleman has pinpointed an area in which there is a great deal of dissatisfaction that I share. In England there is a right of appeal in summary cases, under certain conditions, for a retrial. In Scotland there are two options. One is a limited right of retrial and the other is a radical change in the stated case procedure. I do not want to commit myself to saying which procedure is better, but there is much to be said for the former.
  Mr. Corrie: Is the Lord Advocate happy with a situation in which one cannot appeal against a judgment in the High
  1408
  Court on bail procedure, and whereby someone can be let out on a small sum of bail and commit offences, of the kind for which he has been indicted, before his trial comes up? Is the situation the same in England?
  The Lord Advocate: I do not know about the situation in England, but in Scotland there is only a limited right of appeal by the Crown in any criminal case. In the case of indictments there is virtually no room for Crown appeal, and in the matter of bail that sometimes leads to rather extraordinary results.
  Mr. Fairbairn: The Lord Advocate has wisely and generously admitted the shortcomings in the limitation on summary appeal procedure, but pending the report of the Thomson Committee and its recommendations cannot he suggest that there are sections in the Act that could be used to advantage by the Appeal Court in the meantime to go back to the original court?
  The Lord Advocate: I take note of that suggestion.

  FATAL ACCIDENT INQUIRIES
  Mr. Buchananasked the Lord Advocate when he hopes to publish the rules for fatal accident inquiries.
  The Lord Advocate: The Fatal Accidents and Sudden Deaths Inquiry Procedure (Scotland) Rules 1977 (SI 1977/191) were published on 16th February 1977. They will come into operation on 1st March 1977.
  Mr. Buchanan: Will my right hon. and learned Friend explain the benefits that will flow from the new procedure?
  The Lord Advocate: The rules should provide a new, detailed code of procedure that ought to be helpful to all those involved in fatal accident inquiries. They will come into force on the same day as the Act. The Act and the rules have the merit of removing doubts about the lawfulness of fatal accident inquiries being held into accidental deaths during oil operations on the part of the Continental Shelf that conies under Scots law. They will apply to deaths that have taken place before the operation of the Act and to deaths in legal custody. These are great advantages.

  TRAWLER "JURID" (ILLEGAL FISHING)
  Mr. Grimondasked the Lord Advocate if his attention has been drawn to the case of Skipper Justesen and the vessel "Jurid" in which, while the skipper was being fined £20,000 in Lerwick Sheriff Court, the vessel was free to leave port and dispose of an illegal catch for £46,000; and if he will review the law and penalties appropriate to such cases.
  The Lord Advocate: I have received a full report of this case from the procurator fiscal at Lerwick. Justesen was convicted of a contravention of Section 2(3) of the Fishery Limits Act 1976 and he was fined £20,000. The maximum fine that could have been imposed was £50,000. In addition to this penalty, the court has power to order confiscation of the catch and also of the gear. The problem in this case was not one of inadequate penalties. It arose because the court was denied the power to order confiscation of the catch and the gear by virtue of the boat's having left port before such an order could be made. The Act makes provision for the detention of a boat which is caught fishing illegally within British fishery limits until the proceedings for that contravention are completed. Unfortunately, in this case the power was not used.
  Mr. Grimond: I am grateful for that full explanation. This is a very unsatisfactory situation. Can the right hon. and learned Gentleman give some idea of when he thinks that power may be taken to hold vessels to prevent them leaving, as happened on this occasion, and selling their catch for far more than the fine?
  The Lord Advocate: Power already exists, but unfortunately the British sea fishery officers were perhaps not fully aware of its importance. Section 8 of the Sea Fisheries Act 1968 provides full powers to deal with such a situation. I have instructed procurators fiscal to give guidance on the importance of this matter to the British fishery officers.
  Mr. Robert Hughes: Is my right hon. and learned Friend saying that in this case it was an error of judgment by people in the locality rather than a deficiency in the law which led to the mistake?
  The Lord Advocate: That would be a more accurate indication of the trouble in this case. It was not so much that the legislation was not there as that the people concerned were unaware of the power that they had.

  TRAWLER "JURID" (ILLEGAL FISHING)

    BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 11TH MARCH
    Members successful in the Ballot were:

    Mr. Joseph Dean

    Mr. Bruce George

    Mr. Peter Viggers

  BILLS PRESENTED
    PRESUMPTION OF DEATH (SCOTLAND)
    Mr. Neil Carmichael, supported by Mr. Robin F. Cook, Mr Robert Hughes, Mr. Nicholas Fairbairn, Mr. Malcolm Rifkind, Mr. Russell Johnston, and Mr. Gordon Wilson, presented a Bill to make fresh provision in the law of Scotland in relation to the presumed death of missing persons; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon 25th February and to be printed. [Bill 68.]
    DISEASES OF ANIMALS (AMENDMENT)
    Mr. John Farr, supported by Mr. F. A. Burden, presented a Bill to amend the Diseases of Animals Act 1950: And the same was read the First time; and ordered to be read a Second time upon Friday 25th March and to be printed. [Bill 72.]
QUESTION OF PRIVILEGE (MR. SPEAKER'S RULING)
Mr. Speaker: Yesterday, the hon. Member for Sunderland, South (Mr. Bagier) made a complaint on the ground of privilege about an article contained in The Journal published in Newcastle upon Tyne on 22nd February. I have given careful consideration to this complaint, but I have come to the conclusion that it does not raise such issues as would justify my allowing precedence over Orders of the Day to a motion concerning it.

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft Housing Finance (Northern Ireland) Order 1977 be referred to a Standing Committee on Statutory Instruments, &c.— [Mr. Ashton. ]

SCOTLAND AND WALES BILL
Mr. Tim Renton: On a point of order, Mr. Speaker. Before the Lord President leaves the Chamber, may I take this opportunity of asking whether you have received any information of a change in the business for tomorrow?
Mr. Speaker: The hon. Gentleman knows that he is on the border line.

SERVICE WIDOWS (EQUALITY OF PENSIONS)
3.33 p.m.
Mr. Peter Viggers (Gosport): I beg to move,
That leave be given to bring in a Bill to provide pensions for widows of Service men below the rank of Warrant Officer, Class 1 who retired prior to 1st September 1950; to provide for equality of pensions for widows of Service men below the rank of Warrant Officer, Class 1 who retired between 1st September 1950 and 31st March 1973; to provide for the payment of such pensions from the National Insurance Fund; and for connected purposes.
I am obliged to the House for an opportunity to introduce a Bill under Standing Order No. 13. This subject has been debated from time to time in Parliament and on every occasion it has aroused sympathy but no action. I now put before the House a proposal that will convert the sympathy and compassion shown on all sides of the House into a parliamentary Bill. The anomaly that I am seeking to rectify relates to the payment of pensions to the widows of those who have served in the Armed Forces.
The widow of an officer who retired before 1950 receives a pension. The widow of a man who served in the ranks who retired before 1950 does not. This is indefensible and has been described as an "upstairs, downstairs" situation. I am seeking to rectify it in the Bill.
Traditionally, officers and men came from different classes of society and the way in which they were recruited and their terms of service recognised this. Widows of officers have received pensions for many years, but it was not until 1952 that the Forces Family Pension Scheme gave pensions to the widows of men below the rank of Warrant Officer Class I. The amount was one-third of the husband's pension, and it was increased in 1973 to one-half of the pension.
When the legislation was introduced in 1952 a cut-off date of 1st September 1950 was adopted. The widows of all Service men retiring after that date benefited from the new pension arrangements, but the widows of men retiring earlier were left out.
Service men and their wives can now look forward to a secure retirement on completion of their period of service.

1413
This is entirely right and proper. Moreover, pensions of Service men and widows are increased from time to time to take account of inflation. Only one group—the pre-1950 widows—remains left out. As other pensions and benefits increase with the cost of living, the pre-1950 widows receive as a Service pension exactly what they have always received—nothing.
Service pay now allows Service men to make some savings and there is no doubt that living conditions for men and their families are better than they have ever been. Conditions for Service men who retired before 1950 were very different. Pay was comparatively low and there was no realistic chance of making substantial savings. Indeed, the expectation of life during two world wars was such that it would have been difficult for any serving man to make insurance arrangements or to provide for his old age by savings. All the savings of these men who retired before 1950 were tied up in their pensions that died with them. I have had many letters and representations from all over the country from widows who were shocked and horrified to discover that they were entitled to no pension.
In areas with a large Service population and many Service pensioners, there are widows living next door to each other whose husbands served in a similar rank, but while one gets a pension, the other does not. This is unfair and is seen as such by organisations involved with Service pensions.
A Minister once went on record as saying that if any pre-1950 widow suffered hardship it should be mitigated by supplementary benefits, by rent rebates and other provisions. But why should this be necessary? I am talking of proud people, who wish to benefit from their husbands' service, and they would prefer to receive a pension earned by that service rather than money that they regard as charity.
The widows in question are the last people to cause civil disorder and difficulty. They are women whose husbands have served through one or even two world wars—the very people who have helped to safeguard the freedom we enjoy today.
1414
When the scheme was first introduced in 1952, there had to be a cut-off date, and I accept that 1st September 1950 was a proper date, but is it fair that widows who do not receive pensions should see other people who do receive benefits moving upwards, as on an escalator, with inflation while they still receive what they have always received—nothing?
Occasionally an abuse develops over the years that is acknowledged by Back-Benchers on both sides and even by Ministers who recognised it before they became Ministers. Everyone is sympathetic, but nothing happens. This has been the case for the last 20 years with the pre-1950 widows. Let us now put it right. In 1972 there were an estimated 30,000 pre-1950 widows, and the cost of giving them pensions was thought to be about £4 million a year.
May I make two points in regard to the cost? First, the people in question are among the least privileged in our community and are likely to be receiving supplementary benefits, rate rebates or other help from the State. Any amount given to them in pension will diminish the amount of help that needs to be given in other ways.
Secondly, my Bill has, as one of its clauses, a provision that it shall not come into force until an order has been made by the Secretary of State by Statutory Instrument. This means that there will be no immediate effect on Government expenditure if my Bill is passed. All I am seeking to establish at this point is the principle that pensions should be paid to the pre-1950 widows.
This is a completely non-party matter, and I am proud to have backing from a representative or spokesman of every party in the House as sponsors to the Bill. I hope that it will commend itself to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Peter Viggers, Mr. Alan Lee Williams, Mr. Philip Goodhart, Mr. Stanley Newens, Rear-Admiral Morgan-Giles, Mr. Richard Crawshaw, Mr. Julian Critchley, Mr. Emlyn Hooson, Mr. fain MacCormick, Rev. Ian Paisley, Mr. Dafydd Wigley and Mr. John Ovenden.

SERVICE WIDOWS (EQUALITY OF PENSIONS)
Mr. Peter Viggers accordingly presented a Bill to provide pensions for widows of Service men below the rank of Warrant Officer, Class 1 who retired prior to 1st September 1950; to provide for equality of pensions for widows of Service men below the rank of Warrant Officer, Class I who retired between 1st September 1950 and 31st March 1973; to provide for the payment of such pensions from the National Insurance Fund; and for connected purposes; And the same was read the First time; and ordered to be read a Second time upon Friday 25th March and to be printed. [Bill 73.]
ORDERS OF THE DAY

  SUPPLY
  [8TH ALLOTTED DAY]—considered
  Mr. Speaker: Before we begin, may I make a very brief statement? The first half of our debate today, until about 7 o'clock, is the Liberals' Supply Day and the second half is the Ulster Unionists' Supply Day. Many right hon. and hon. Members have indicated to me that they wish to speak, but they will all get in only if we realise that these are abbreviated debates, and I am appealing to the House in general and not of necessity to the hon. Member who states the case for the respective parties in opening the debates.

  REFORM OF GOVERNMENT
  3.43 p.m.
  Mr. John Pardoe: I beg to move,
  That this House believes that Great Britain's economic performance is gravely hindered by a system of government which grants majority power to alternating minority parties; and calls for the reform of the voting system so that Parliament can represent and give effect to the wishes of the people.
  It is entirely appropriate that this subject should have been chosen for the first debate in the aftermath of yesterday's great victory for representative parliamentary democracy by one of the parties that has no part in the two-party system in this country. I call it a victory for representative parliamentary democracy and not a defeat for the Government because that is the way I believe that parliamentarians should view last night's proceedings. Indeed, it is the case that, if the reform that I am proposing today were to be implemented, last night's vote, last night's victory for representative parliamentary democracy, would become again the natural order of things.
  Governments ought not to consider that being beaten by combined votes in the House of Commons is a disastrous defeat. They should accept it as being part and parcel of the job of a legislative chamber. But if this is a legislatve chamber, and we are legislators, we need to go further. We have a right to participate. There is an acceptable devolution Bill somewhere

  1417
  in this House; there is a majority for an acceptable devolution Bill somewhere in this House. But, because of the conventions of government, the House was dished up with a mess of pottage, without being given a choice of menu without even being asked whether it wanted its steak overdone, medium rare or rare. We simply had to take it or leave it. I hope that the Government will learn the lessons of last night and that we shall operate in future more as a proper legislative chamber.
  There may be many reasons for wanting a change of method of government, but most important, and a pre-condition of all the others, is the general awareness that there is something wrong with the present method. If there is not that awareness, both in this House and, more particularly, in the country, there is no point in carrying on an argument for reform, but I believe that we fool ourselves if we think that the awareness does not exist. Whatever may be thought in this House about the adequacy of the present system of government, there is great scepticism outside.
  The Kilbrandon Commission had a detailed attitude survey carried out. It was very well summarised in the minority report. It revealed a very high level of discontent with our political process. If one asks when the British people last felt themselves to be citizens of a well-governed nation, or when they last believed that their democracy worked well, one sees, from even more recent attitude surveys and opinion polls, that almost universally outside this House the trade of politics is held in general contempt. The reputation of Parliament and of parliamentarians is low.
  It will be said, and I am sure the Leader of the House would say it if he were here, that it was always so. But that is an easy but dangerous answer and too complacent by half. Is it really an inevitable part of representative parliamentary democracy that its practitioners and its institutions should be held in such low esteem by the electorate at large? I do not think that it is and it is to that end that I wish to make some fundamental reforms.
  Part of the problem we are facing is not unique to Britain. Professor Dahren-
  1418
  dorf, in his Reith lectures published as "The New Liberty", said:
  "The progress of citizenship, of the right of association, of the autonomy of many social organisations and institutions, has led to a fragmentation of the political public so that representative democracy has been transformed into a gigantic and confused bargaining process between organised groups."
  That is part of the problem that this House ought to face. How far are our institutions and our political system capable of dealing with it?
  Faced with this massive change, our representative parliamentary democracy is impotent. That is not just a Liberal view but one that is widely shared by a whole range of political commentators, whether they look down on us from the Press Gallery in our daily deliberations or write in the more esoteric and academic journals.
  I do not want to oversimplify the problems we face or their solutions. Both problems and solutions are highly complex. But I do not think that it is going too far to assert that a great deal of what is wrong with Britain today lies with her method of government, and that Britain is in a very similar situation to that which she experienced before the great Reform Act of 1832.
  We have a system of government which does not measure up to the realities of a modern State or to the aspirations of our people, and we have to usher in a period of political and constitutional reform similar to that which occupied the half century following the 1832 Act. The reforms necessary are widespread, but this afternoon I intend to deal with only one—electoral reform. It is not necessarily the most important, but it is the key to all the others. Just as, in a chemistry experiment, a catalyst is need to bring about a change and to get a reaction between various chemicals, so electoral reform is the factor needed to break the constitutional log jam which is causing a great deal of our poor performance as a nation.
  There may be many reasons for supporting electoral reform. The first, of course, is that it would do the Liberal Party a favour, and I do not deny that. It is an undoubted fact. Had proportional representation been in operation at the last General Election, there would

  1419
  now be 117 Liberal Members of Parliament. That is
  "a consummation
  Devoutly to be wish'd",
  as Shakespeare said. He did not actually say it about proportional representation but he would have if he had known about it.
  The second reason for advocating PR is, of course, that it will be fairer. That is something which the British people understand. When they are asked whether they want a fairer electoral system, the vast majority of them say "Yes".
  In a debate in this House on 25th January the hon. Member for Renfrew-shire, West (Mr. Buchan) said:
  "fairness can be said to be the last refuge of the wet."—[Official Report, 25th January 1977; Vol. 924, c. 1277.]
  That is a notable remark in the annals of representative parliamentary democracy. But I wonder what the hon. Gentleman would think of, say, a Communist country which announced that it had just held an election and boasted that its Government had secured a mandate because three out of 10 of the citizens had voted for it. I ask the hon. Gentleman and other hon. Members to consider that. We talk a great deal about East European Communist dictatorships. We know exactly what we mean by that. We know what we mean by the words "dictatorship" and "tyranny". But I wonder whether there is a Communist dictatorship, apart perhaps from Czechoslovakia and Poland, where, if a free election were held under the auspices of the United Nations, the present Government would get a lower percentage of the votes than this Government got in the last election. Does not that say something for our standards of democracy and their standards of dictatorship?
  Hon. Members: No.
  Mr. Norman Buchan: The hon. Gentleman may not be aware that I was making an analogy with Dr. Johnson when he said:
  "Patriotism is the last refuge of the scoundrel".
  I did not do so for the reason that Dr. Johnson rejected patriotism. On the contrary, he was a very sturdy English patriot. But he said that it was used and abused by the scoundrel. In the same way, I said the new level of com-
  1420
  plexity was the last refuge of the wet because they in no way thought beyond that into all the other complex arguments which I adduced in the debate.
  Mr. Pardoe: It strikes me that a better anology is the remark by Joseph Stalin when he asked:
  "How many battalions has the Pope?"
  because both convey that extreme totalitarian arrogance towards the wishes of the electorate at large.
  Fairness is one reason why people might support electoral reform. There is certainly more support for it on that score outside the House. I ask hon. Members to consider whether a system can be said to be fair when it took 35,915 votes to elect a Labour MP at the last election; 37,771 votes to elect a Conservative MP; 40.777 to elect a United Ulster Unionist MP; 55,440 to elect a Plaid Cymru MP; 76,328 to elect a Scottish National Party MP; and 411,288 to elect a Liberal MP. I am aware that hon. Members who sit on the Liberal Bench are worth two or three other hon. Members in this House. But the proportions given in those figures are way beyond even my estimation of the qualities of my right hon. and hon. Friends.
  The third reason which might be advanced for electoral reform is that it is more democratic. What is representative democracy but an idea which is intended to ensure representation of the national will? That must mean that all views in the country are represented in this House in proportion to the votes cast in the country. The arguments advanced by many Labour MPs, particularly in the debate in January, amounted to saying "I know I cannot persuade the majority of my countrymen to vote for what I believe in. Therefore, I shall maintain an electoral system which allows me to do what I want." That is a negation of democracy.
  The Leader of the House is fond of quoting John Stuart Mill. It was he who uttered that triumphant cry:
  "If you can inform the passion of the multitude against the self-interest of the few, you have the right to await the outcome with confidence."
  I would suggest that many Labour MPs have changed that to "If you can rig Parliament so as to use the passion of

  1421
  the few against the interest of the multitude, you have the right to do any darn fool thing you like whether the multitude likes it or not."
  Mr. George Cunningham: In present circumstances, the likelihood is that an election would result in there being a large Labour Party, a large Conservative Party and a large, but perhaps smaller, Liberal Party in this House. Therefore, the Liberal Party would always be in power in association either with the Labour Party or with the Conservative Party, even though they had minority support. Although there are elements of unfairness, as the hon. Gentleman has said, in the present arrangement, is the hon. Gentleman saying that it would be fair or democratic for the Liberal Party, as a result of that system, to be permanently in power?
  Mr. Pardoe: It is not true that electoral reform, PR, or whatever system one chooses, always produces coalition. I advise the hon. Gentleman to read "Adversary Government and Electoral Reform" edited by Professor Finer. The hon. Gentleman will find that there are many countries which have PR where coalition has not been produced. I agree that in the majority of cases it does indeed lead to coalition, and it is because it often leads to coalition that I support it. I support it because I believe that it is better that this House should perhaps suffer an undue influence by a moderate minority than an undue influence by an extremist minority.
  Indeed, what the present system does is to hand to the extremist group, particularly in the Labour Party, a totally undue influence although, if they had to stand under their own semi-Marxist colours, they would never achieve a vote which would get them into this House at all.
  Mr. Douglas Jay: Perhaps the hon. Gentleman can answer one question that has always puzzled me. If all these arguments are valid, why is it that the Liberal Party did not introduce this reform in the years between 1906 and 1914 when it had an effective majority and could have done so?
  Mr. Pardoe: I would again ask the right hon. Gentleman and other hon.
  1422
  Members to read the record of history carefully. I would ask them to read the book "Adversary Government and Electoral Reform", particularly the second chapter, to which I have already referred. That looks at the history of this matter carefully, and it is quite clear that a whole series of initiatives was taken by Liberal Governments in the early years of this century to get PR on to the statute book.
  Mr. Jeremy Thorpe: Will my hon. Friend also remind the right hon. Gentleman that perhaps in one of the most important parts of the United Kingdom—Northern Ireland—this system was introduced by a Liberal Government, abolished for extreme sectional reasons by a Tory Government, and reintroduced by the Tories in 1973 with the full support of the Labour Opposition of the day? In one of the most crucial places where minorities should be fairly represented, the Liberal Party was in the vanguard in insisting on PR.
  Mr. Pardoe: We cannot allow the debate to be conducted between two right hon. Gentlemen. But I would say to the right hon. Member for Battersea, North (Mr. Jay) that Asquith was perhaps very sensitive about making constitutional changes without all-party agreement. His leaning over backwards to try to get all-party agreement on this was the reason why it did not get through the House of Commons at the time.
  I also ask any hon. Member who believes that the present system is democratic whether it is democratic that there should be 380 hon. Members out of 635 in this House who are in A. P. Herbert's phrase "Non-MPs", and who, whenever they look at a group of their constituents, are unhappily aware that more than half of them voted against them.
  Another reason in favour of electoral reform is that perhaps it is what the people want. I do not suppose that would be the view of many hon. Members in this House. But the fact is that since 1974 the opinion polls have shown a massive support in this country which has always been over 60 per cent. In the latest poll in The Sun, published only two or three weeks ago, 70 per cent. of the British people supported a fairer system, and indeed did so even when

  1423
  asked the supplementary question "Would you continue to support electoral reform and a proportional representation system even if it meant that the party you support were not able to get an overall majority?"
  I know that the Leader of the House is not particularly taken with opinion polls. All right. Let us have a referendum on this matter. It is a great constitutional issue. Incidentally, there is a danger in referendums being held if the only body in the country to decide when and what question is the Executive. It is a great instrument of power in the hands of the Executive, as de Gaulle showed.
  One point which must be faced is that the two-party system is breaking up. The first-past-the-post system may have been appropriate as long as the two-party system dominated this House. But in 1951 the two parties polled a combined vote of 27½ million—79·9 per cent. of the electorate. That was their high point. In 1955 they polled a combined vote of 25½ million—73·7 per cent. of the electorate In 1964 they polled 24·2 million—67·4 per cent. of the electorate. The average for the two elections in 1974 was 22·7 million—56.9 per cent. of the electorate.
  The two parties hope that the trend will not continue. They hope that the collapse of the two-party vote and the rise of a third force in politics is a temporary phenomenon. But I see no evidence that that is the case. I believe that it is a question of the two-party system being dead, but not lying down.
  All these are reasons for electoral reform, but I wish to argue in other terms today. The essential link between poor economic performance and our electoral system is the one which I particularly wish to stress. The link may not appear direct or close to some—certainly not to those who wish to ignore it—but it is accepted by many people in this country who are not imbued with the political process.
  I should like to quote from an article by Samuel Brittan "A Manifesto for 1975" in a publication by the Institute of Economic Affairs called "Crisis 1975". He said:
  "I make no apology for starting with proposals to reform the political market place which is now the main weakness in our national
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  life. On the one hand, a dominant minority of the electorate has too much influence. On the other hand, voters as a whole have too little choice."
  The first two of his major recommendations for facing up to the economic crisis he went on to list as a change in the electoral system and fixed-term parliaments.
  In an article in the Financial Times on 11th November, Samuel Brittan interpolated into a mock article—on what the Chancellor should tell the House as part of his budget—a firm recommendation on this point.
  For those in the Conservative Party who may still have doubts, I propose to quote from a source nearer to home for them. Aims for Freedom and Enterprise issued a pamphlet entitled" Industry and Electoral Reform" by Sir John Foster, QC. In that article, he said:
  "Britain, the country with the most primitive electoral system, is also the country suffering the gravest economic problem in the industrialised West. The link is clear for all to see."
  I do not claim that proportional representation is a cure, but the reform of our electoral system leading to the end of adversary politics is a pre-condition for economic regeneration. The problem with the adversary system is that winner takes all and that loser plays no part other than to criticise. There is, indeed, therefore an inbuilt temptation to manufacture disagreement and dissension even where it does not exist. We have seen that happen all too often, particularly in industrial and economic policies. Moreover, it does allow extremists in both parties to have undue influence.
  Social Democrats in the Labour Party, who are not themselves red in tooth and claw, find it hard to understand how their Government can be considered extremist. This matter has recently been debated in the columns of The Times between the hon. Member for Berwick and East Lothian (Mr. Mackintosh) and the right hon. Member for Leeds, North-East (Sir K. Joseph). Basically, it goes like this. The Social Democrats in the Labour Party —say, the Prime Minister, the Foreign Secretary and the Secretary of State for Education and Science—are precisely the kind of people one could take to any multinational company's boardroom table and nobody would be scared by them. That is quite true. But they are being

  1425
  continually manoeuvred by their own Left Wing towards the Left. That is especially true in opposition.
  The cycle of political extremism in Britain goes like this. Labour goes into opposition. Most of the sensible people get on with doing sensible things. Only the very boring people are prepared to be bored by sitting on Labour policy committees toying with Marxist theories. The conference therefore receives nothing but the lunacies from the Left, and it passes them.
  The Labour Party then comes back to power. The Social Democrats have committed themselves to the manifesto, because that was the only way in which they could preserve party unity. It usually takes a couple of years to get the lunacies out of the system and to get on with the job of sensible government. That is why we got into the nonsense of 25 per cent. VAT and then got out of it. It took the Labour Government about 18 months to learn that trick. Even so, the balance is continually being moved to the Left.
  The right hon. Member for Leeds, North-East was right to point that out, but his answer is no answer at all. The right hon. Gentleman's answer is to create an extreme Right-wing or laissez-faire Conservative Party so that, by a series of lurches from left to right and right to left like a drunken sailor, somehow the Aristotelian golden mean will be kept. But that leads to total chaos. We change one policy for another. We have seen that with investment incentives, taxation, regional policies, pensions and, of course, local government reform. Not all that is in the past, because we are moving into another phase of incomes policy.
  In the "New Inflation" Aubrey Jones wrote:
  "Clearly no policy will be effective and no organisation as the vehicle for carrying out a policy can survive unless there is broad acceptance by both the main parties in a two-party system."
  But can that be under the existing rules? I doubt it.
  I remind Conservative Members of a quotation from the Economist of June 1968 which referred to
  "those who cynically oppose incomes policy in order to embarrass the Government—we mean the Conservative Party".
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  We have seen incomes policy over the years as a ghastly tribute to the adversarial two-party system. I hope that we can stop the process dead in its tracks here and now.
  Late last year the CBI published a document called "The Road to Recovery". Under the heading "The Role of Government" it stated:
  "There is a ground rule which is important above all others. In few industrial countries in the free world has trade and industry been subjected to such violent reversals of industrial and economic policy as in the United Kingdom. The prime ground rule must be the continuity and consistency of Government policy towards trade and industry whatever party may be in power—a bipartisan policy."
  The Government's strategy depends on this, because, unless we can fill industrialists and potential investors with the confidence that these policies and this taxation are here to stay, we shall not get any of the investment that the Government so urgently require.
  Mr. Kenneth Clarke: Is the hon. Gentleman saying that if the Liberal Party had been in a more influential position it would have substituted consistency over the last five years? If so, why did the Liberal Party vote for Second Reading of the Industrial Relations Bill but against Third Reading, and, if it was in favour of a statutory prices and incomes policy, why did it support the miners in 1974 in trying to defeat that policy?
  Mr. Pardoe: The reasons that we voted against industrial relations legislation on Third Reading were explicitly spelt out in speeches from the Liberal Benches on Second Reading. We made clear that we were prepared to vote on the principle of the reorganisation of industrial relations law, but we felt that certain important changes were necessary in the Bill. We said that unless those changes were made, we would not vote for the Third Reading. We were utterly consistent in our views. It is not inconsistent for a party to state its reservations on Second Reading and then, if those reservations are not met in debate, to vote against the measure on Third Reading.
  Our nation's poor economic performance and our electoral system appear to be intrinsically bound up. Even if the Leader of the Opposition hopes to obtain

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  an overall majority for the Tories at the next election, I must tell her that that will not solve the problem. Even if I believed that Conservative policies were right, which I do not, that would not solve the problem. To a certain extent, the Tories are condemned by their own document "The Right Approach". In that document, the Tories said,
  "To make the structural changes that are necessary to restore the dynamic of a mixed economy will need a settled approach over a long, hard haul."
  Later the document suggests that it will require a 10-year period for the strategy to be successful and that is right.
  It is said in the CBI document "The Road to Recovery" that industrialists need more long-term consistency but even if the Conservatives come to power they may not obtain the required investment. They did not do so when they were in power in earlier years.
  The reason for that situation is clear. Unless the Conservative Party poses the possibility that the nation will become a one-party State, industrialists, investors and landlords must think in terms of an alternative. As long as this system lasts, the alternative may be a swing to old-style Socialism—perhaps far more to the Left than is the present Government. Therefore, the Conservative Party will have to accept our approach in the long run. Although the Conservatives were in power from 1951 to 1964, investment, particularly in the steel industry, did not appear because it was always considered to be a political risk. Even if under a Conservative Government there is a review of housing policy to assist private landlords and to bring capital into the private housing market, landlords will not invest because they will fear a return to another type of government.
  How are we to change the system? It will not be done in this House—for the obvious reasons that individual Members will suffer from the introduction of proportional representation. It stands to reason that if there are to be 117 Liberal Members there will be 50 or 60 fewer Labour Members and 50 or so fewer Conservative Members. Each Member will have over him an unhappy question mark. Members will not support electoral reform. It will be done eventually because enough people will follow Joe
  1428
  Rogaly's advice and become militant democrats.
  There is a breakthrough point for the Liberal Party. It involves 23 to 28 per cent. of the electorate and about 7 million votes—in other words, 7 million militant democrats voting in the next election as though they were casting votes in a referendum for proportional representation. They will recognise that the only way in which they can vote for proportional representation is by voting Liberal. Then 7 million militant democrats will lead to the end of the adversarial two-party system. That will lead to a different kind of government for Britain.
  4.16 p.m.
  Mr. Tim Rathbone: I am pleased to speak following the hon. Member for Cornwall, North (Mr. Pardoe), although I wish to clarify one or two points that arise from his speech before I advance certain thoughts of my own.
  I suggest that we are facing, not a situation of merely looking forward to a coalition of different parties if the projected electoral reforms envisaged by the hon. Gentleman come into effect, but a coalition now. We know—and certainly the hon. Gentleman should know—that each party in this House is a coalition of many disparate parts.
  Secondly, I wish to question the direct link that the hon. Gentleman seeks to make between economic performance and the effects of our electoral system. He said that he did not claim electoral reform as a cure-all, but I suggest that that could be read into the motion and what he said about it. It would be misleading the country to suggest that, by a wave of the constitutional reforming wand, our desperate economic problems will go away.
  The third point involves the Liberal proprietorship that was sought to he established for the idea of electoral reform as a whole.
  Mr. Pardoe: No, I was not suggesting that was the case.
  Mr. Rathbone: The hon. Gentleman says that he does not make that claim for the Liberals, and I am grateful for that. Constitutional reform and political evolution has emanated from all parties over the years. In 1950 we saw the

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  disappearance of the last piece of proportional representation represented by the university seats, and it was only in 1969, that votes at 18 were introduced. There has been concern in all parts of the House, with many wishing to bring about some reform of our constitutional system.
  I wish to express my admiration to the Liberal Party for espousing this cause. I do not accept that a great influx of Liberal Members of Parliament will be brought about by such change. As many other parties espouse a commitment at least to investigate a reform of our electoral system, the support attracted to the Liberal Party, because only it advocates such reform, will ebb away. Obviously hon. Members are prepared to take a risk and I am delighted that they should do so in electoral terms.
  In Westminster we can now find more than sufficient horrifying reminders of the state of rot and decay that now affects what we could, until quite recently, claim as the great British parliamentary democracy which has been revered and often copied through the world. For years Britain could tell the world the meaning of democracy. Now we are in a constitutional mess.
  That our present Government is acting in a way that represents only a minority of the people in the country hardly needs repeating. The fact that fewer than 30 per cent. of the electorate voted for the Labour Government speaks for itself. The fact of the present Government's doctrinaire Socialist legislation only too dramatically negates any claim that government now reflects majority opinion. Choice at the hustings is no choice at all if it is not reflected in a Government which represents reasonably accurately the choice that has been made.
  Equally, it can no longer be argued that our present electoral method is particularly well-designed to sustain a Cabinet Executive through a reasonably long government, although the happenings of yesterday evening went in a different direction from this line of argument. I would rather deal with the issue on the basis of recent experience.
  The Executive now is maintained in power only in so far as it can count on support for its policies from various disparate groups inside and outside Parlia-
  1430
  ment and within its own and other parties here and elsewhere. This is true now, and surely it will become more true in the future, because the first-past-the-post method encourages those small parties which can concentrate their support in a small number of constituencies. We see that in the growth of nationalist parties. The first-past-the-post system, as it encourages those parties, discourages other parties that seek support throughout the country.
  Whether we like it or not and whether we change the electoral system or not, the days of the basic two-party system have probably gone for ever. This is marked by a loss in votes for the two major parties which leads to a Government who lack the legitimacy and moral support that they should have and that they desperately need today.
  What is to be done? Several possible solutions have been offered. Most of them are complementary, and some have emanated from the other place. A written constitution is one possibility, but, with all its merits, it brings some problems in its train and could lead to a vast increase in governmental bureaucracy and interference by legal intervention, as we see in America and France. A new Bill of Rights is another possibility. But the preparation of such a Bill and adherence to it must require more political consensus than exists between the party battle lines today.
  Another suggestion is reform of the second Chamber. Reform may be needed if only to protect our two-Chamber system from the threat of abolition, which appears to be supported by some senior members of the Government party. Necessary though that reform may be, it is peripheral to the real problem.
  The real need—and it is the reason that I support the motion—is a reform of the House of Commons, not just by the introduction of a fixed term of government—although that has its attractions and merits investigation—nor by greater use of referendums, which are an unattractive prop to our present wobbly parliamentary system; nor by increased reliance on Committee work, which the Secretary of State for Education recently advocated —although that might be an improvement to procedures. I advocate reform at the core of Parliament, reform of our electoral system by substituting for our

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  present first-past-the-post system—which leads to inequitable and undesirable representation—a more proportional system, through which the innate good sense of the majority of the people can be reflected in the composition and therefore on the actions of this country's Governments.
  We debated proportional representation all night the other Tuesday. That debate was not about our national Parliament; it was about Scotland and Wales. That was a particularly appropriate subject for debate, because the most astonishing aberration of the last General Election happened in Dunbartonshire, East, where the Scottish National Party candidate was elected by only 31 per cent. of those who voted—the lowest proportion of support in any United Kingdom constituency. In that constituency three-quarters of the electorate did not support the SNP candidate as their Member of Parliament, yet here the hon. Member for Dunbartonshire, East (Mrs. Bain) usually is. It is noteworthy that there is no hon. Member from the Scottish National Party in the Chamber today. That is an indication of their lack of concern with democratic processes. The hon. Lady is now at Westminster demanding the most extreme action—a separate State for Scotland. What more dramatic illustration can there be than that of the inequity of our present system?
  Mr. Richard Wainwright: Does the hon. Member agree that although it was a remarkable election result to which he refers, it was symbolic, in that the 31 per cent. which brought the hon. Member for Dunbartonshire, East (Mrs. Bain) here is virtually the same as the total percentage of the electorate which installed the whole Government?
  Mr. Rathbone: The hon. Member makes my point well.
  It is against that background that I urge the House to consider how to reform the system. That could be done perhaps by establishing a Speaker's Conference or perhaps by a special independent commission set up to study speedily the whole question of constitutional and electoral reform, and quickly to recommend action to improve our electoral system.
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  I urge this in the belief that such reform is needed by our country and would be good for it. There is a growing wave of opinion that appreciates the need for change, that would support it, and that would support any candidate or party which advocates consideration of such reform.
  I urge such reform because true conservation—I take literally my own party's name—can often be achieved only by carefully conceived and planned evolution. Such constitutional evolution is long overdue in Britain.
  I urge this because I belong to a party which prides itself, with justification, on being the party of the constitution. Only a Government supported by the majority of the country, elected through a more proportionately representative system than the present one, can protect us from the one-party State which might so easily be the outcome of a successful confrontation with Parliament by far Left-wing or Right-wing forces outside our parliamentary system.
  I urge this because, under our present system of parliamentary democracy, Parliament cannot protect the legal rights of individuals from arbitrary Executive decisions. Therefore, the system must be reformed. Let the party of freedom lead that reform; I hope that the Conservative Party will do that.
  I urge this because a more proportionate electoral system should ensure that we never again have a leftwards-leaning Socialist Government for ever kow-towing to its most radical elements.
  The argument that the first-past-the-post system ensures strong government, representative government, or moderate government sadly should be stood on its head. The sooner we realise that and take action the better it will be for Parliament and for people.
  4.28 p.m.
  Mr. Reg Prentice: I did not intend to speak in the debate, but I was partly inspired to do so by the feeling that the Benches on both sides today, particularly on this side, should contain more hon. Members who are ready to participate in this fundamental discussion. I congratulate the Liberal Party on initiating the debate.

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  If tomorrow morning the Government make the sensible decision and drop the Scotland and Wales Bill entirely, the 20 days that will be saved could be well spent on a long discussion in depth on this subject, which can be discussed only briefly this afternoon. The background to the debate contains a number of important and hopeful tendencies. One is the unusual rigidity of the party system in the past 30 years.
  I say "in the past 30 years" because in earlier periods of our history Parliament was more flexible and there was more inclination for people to cross the Floor and for groups to form and line up on various issues. In the last 30 years the main parties have taken on the form of well-drilled armies. They got through the Lobbies at the crack of a whip, with virtually every vote a foregone conclusion. We ought to reflect once in a while on the fact that Mr. Gladstone started life as a Tory and became a Liberal, Mr. Joe Chamberlain started life as a Liberal and became a distinguished Tory, and Sir Winston Churchill crossed the Floor twice in his lifetime. Many others whose names are not so well remembered were much more flexible.
  The rigidity of the system has meant that the three main parties have become more and more detached from the body of the electorate. A further background to this debate is the growing disenchantment and disillusionment with party politics that we have seen growing rapidly, especially in the last decade or so. Anyone who went canvassing in an election 15 or 20 years ago, certainly for the Labour Party, could go down a street and mark fairly accurately whether people were for or against. If some said that they were doubtful, it was usually only a polite way of saying that they were against.
  These days there are many more genuinely doubtful people among the electorate. When I speak about people being doubtful I mean not apathetic people but people who care about the issues and the future of their country and who do not see that the existing system of government provides any answer to the problem worrying them.
  To some extent this is happening throughout the world. This feeling of disenchantment was present in the recent American election and in the German
  1434
  and Japanese General Elections. It is probably a factor throughout the free world and, I daresay, in the totalitarian world also, although we shall never know because people there cannot express themselves.
  This feeling is partly due to the increasing pace of events and the complexity of the issues, coupled with the almost inevitable failure of politicians in government to fulfil expectations in a rapidly changing world. There is also a peculiarly British dimension to this. There are many ways in which our complacency about our institutions has made our problems worse than those of other countries. I wish to underline three points which have already been touched on.
  My first concerns the selection of candidates and within that I include the "de-selection" of sitting Members. Of course I should declare an interest here. If I illustrate this in terms of the unhappy history of Newham, North-East in the past 18 months I do so only to make a particular point relevent to the debate. I do not come to weep on anyone's shoulder.
  It so happens that in the last General Election I was opposed by an extreme Left-wing Socialist, Miss Vanessa Red-grave, who ran under the banner of the Workers' Revolutionary Party. I give her all credit for running under her banner for her own principles. She polled 500 votes and I got nearly 23,000 votes. That was the verdict of the electorate.
  But because of the way in whch we do things in Britain, the proposition of people who at the moment have a majority in my local general management committee is that the politics of Vanessa Redgrave should be imposed on the people of Newham by the back door. I believe this to be an extreme although not unique illustration of the way in which our present system not only enables minorities to govern the country but any minorities within a minority to exercise a disproportionate influence.
  President Carter is now the President of the United Sates and I hope and believe that he will be a great President. I feel optimistic about the prospects.
  Mr. Sydney Bidwell: It would be quite amusing to suggest that Vanessa Redgrave's party had been a major force leading to my right hon.

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  Friend losing the support of his management committee. It would be misleading to suggest that. It was not Miss Red-grave's party which predominated in that action.
  Mr. Prentice: My hon. Friend has not followed my point. I paid tribute to Miss Redgrave for standing under her own party banner and for facing the electorate with a policy, which was decisively rejected. I respect people who hold such a minority view and stand under their own colours. What has happened in my constituency party, and within the constituency of my hon. Friend the Member for Hayes and Harlington (Mr. Sandelson), and in some others, is that there has been an influx of people who, rather than run under their own colours, join the Labour Party because they believe that they can get more power that way than by facing the electorate under their own banner. That is a different proposition.
  President Carter was selected as a presidential candidate as a result of a process in which millions of American citizens took part. If he had had to rely upon the inner workings of the Democratic Party, he would never have been a candidate. We have a lot to learn from the American system. I am not suggesting that the British people are ready to accept the primary system as it stands, but I believe that it has merits that ought to be examined by us with care. Either the primary system or some version of it might well be adopted in our case.
  My next point is that the system of adversary politics dominated by two main parties leads to actions at election times that are profoundly unhealthy for democracy. If we look at the election manifestos of all parties for the two 1974 elections we find that they were quite good on the first two or three pages. They all recognised that Britain faced a difficult economic situation and said that the first priority was to work our way out of it. When we move to pages 5, 6 and 7 and read the chapters on housing, education, pensions, or the health services we find that all political parties were offering to do things, making promises and proposing to spend resources that the country had not earned. In the process of doing so they were devaluing not only themselves but democracy. It is
  1436
  this constant repetition of election promises that are not fulfilled that is leading to a growing disenchantment with the whole democratic process.
  My third point was well made by the hon. Member for Cornwall, North (Mr. Pardoe). Our present system prevents the degree of continuity in policy that we must have in view of our desperate economic situation. Most of us would say that when we speak of continuity we are not asking for genuine differences to be disguised or fudged. We are not suggesting that the House of Commons should always pretend to agree about everything. What is unfortunate about our present system is that we seem to feel a compulsion to exaggerate our differences, to have a parliamentary row about three times a week, to pretend to differences that do not exist.
  That attitude is translated into the manifestos and into a situation in which an incoming Government feel bound to tear up much of the structure they inherit and to try to start again. Then, a couple of years later, they have to do a U-turn. The whole history of prices and incomes policy in the past 12 or 14 years is an illustration of this. If there had been a commonly accepted policy, a continuing approach to prices and incomes during that period, while we should still have had inflation, I am convinced that we should not have had as much. The extent of inflation is due to the stops and starts and the U-turns that have been part of our system.
  I close my remarks on an optimistic note derived from my experiences this week. The first was an experience I had on Monday night, which hon. Members did not share, and the second was the experience of last night, which we all shared.
  The night before last I was the guest speaker at the annual general meeting of the Lincoln Democratic Labour Association. It was an exciting, invigorating meeting, the most invigorating local political gathering that I have visited for many years. The LDLA has won two elections out of the last three in Lincoln and is confident that it can win the next. It controls the city of Lincoln, is represented on the county council and is a leading political force in the city.

  1437
  Its active membership includes people who have been members of the Conservative, Liberal and Labour Parties and, perhaps most important, it also includes people who had found no political outlet until the LDLA was formed. In other words, it includes people who wanted to do something on local and national issues but who could not find a natural home in the existing political parties. Now they are finding their natural home and are giving service to their city and, by example, to the nation.
  We temporarily saw something of that spirit in the referendum campaign. Like many other hon. Members, I was speaking in towns throughout the country and meeting local leaders of the Campaign for Britain in Europe who were saying to each other "We Conservative, Labour and Liberal people are finding that we have more in common with each than we have with many extremists in our own parties. We are happy working together in this cause, but we are afraid that we shall lose touch when the referendum is over." What has happened in Lincoln could potentially be happening throughout the country and is long overdue.
  What happened in the House last night should also give us some reason for satisfaction. It was a victory for Parliament. Hon. Members from all parties except the nationalist parties were in the "No" Lobby last night. We were emphasising what is too often forgotten under our present system—that no Government can govern without the consent of Parliament. In doing so we were striking a blow for Parliament and for democracy.
  Whether or not we have a fundamental reform of our constitution—and I believe we should have—there should be more occasions like last night when hon. Members judge issues on their merits and do not simply do what their party Whips have told them to do.
  Mr. Eric Heffer: My right hon. Friend must be aware that over the years many of us have judged issues on their merits. I have certainly done so for the past 10 or 11 years, and for that I have been regarded as a Left-wing extremist, a rebel wanting to rock the boat, and so on. My right hon. Friend cannot have it both ways. Many of the people in the "No" Lobby last night do
  1438
  not share his views one iota, except perhaps on devolution. That is not an argument that political debate and discussion and argument should cease, because that is the essence of democracy.
  Mr. Prentice: My hon. Friend and I have had strong disagreements, sometimes deep disagreements, on various issues in the past, but I hope that he will accept that I have always respected the way in which he has stood up for his principles. My hon. Friend has said that he has, as he put it, rocked the boat. I think that he is entitled to rock the boat. I think that people throughout the political spectrum should do so, although, as a footnote, I would add that some people on the left wing of the Labour Party—and I do not include my hon. Friend the Member for Liverpool, Walton (Mr. Heffer)— seem to apply double standards. They believe that it is right for members of the Left to say exactly what they like and to make vigorous attacks on the moderates in the Labour Party, but if the moderate part of the Labour Party does the same thing in return, that is rocking the boat.
  Now that I am free from the shackles of being in office, I find that I have the same kind of freedom as my hon. Friend the Member for Walton has exercised. I believe that other hon. Members throughout the House should exercise that freedom.
  I do not believe that we should abandon the party system or go as far as the American Congress in this respect. There is much to be said for party cohesion a good deal of the time, but we should have a healthier democracy if there were more free votes and more occasions when hon. Members could abstain or vote against their party because of the merits of a particular issue. If the Government of the day had to win the vote through argument and had to convince hon. Members instead of taking their support for granted, they would more often carry the country with them, and the quality of government would be better.
  I thank the Liberals for choosing this subject. I have been able to make only a few brief, unrehearsed remarks, but I believe that we should return to this subject at greater length in the months ahead.
  4.45 p.m.
  Mr. Emlyn Hooson: So far today in this debate we have

  1439
  listened to three profoundly interesting speeches, not least that of the right hon. Member for Newham, North-East (Mr. Prentice), who referred to last night's vote. The significance of the vote was that, quite exceptionally, it was not a matter of ritual, as votes have become in the House. It is a strange reflection on our democracy that serious political writers can say—and hon. Members can repeat it in the House—that the only weapon in the hands of an Opposition is time.
  It is significant that last night's vote was concerned with time. The hon. Member for Liverpool, Walton (Mr. Heffer) was so moved that he carried his convictions to the extent of abstaining. I understood that he always stood up for his convictions in these matters.
  I wish to touch on a point raised by my hon. Friend the Member for Cornwall, North (Mr. Pardoe) when he said that electoral reform was not an overall answer to the country's problems but a catalyst, something necessary to bring about a profound change in our political attitudes. In this country we are suffering from the adversary system of politics. We all know that there is an enormous amount of synthetic indignation engendered in the House on various issues which does not reflect the true feelings of hon. Members or the electorate outside. The right hon. Member for Newham, North-East said that one of the great faults of our system was the "bargain basement" attitude towards elections. When the history of the present period is written it will be seen that the worst part of the last Conservative Administration was the first 18 months, and when we look at the history of the present Government we shall see that it was also the first 18 months that were worst. The Government have been struggling in a variety of ways to put right the wrongs which they committed in the first 18 months. The respective Governments were both trying to fulfil promises that they had made to secure victory, not to serve the best interests of the country.
  I turn now to the kind of reform that we can achieve in our present system of government in this House. A matter of great anxiety to those who run the country is the mass of ill-digested legislation that is passed. The interests of those who
  1440
  are affected in today's highly sophisticated modern world are insufficiently consulted. Bills are often badly drafted and do not do what Ministers say they are designed to do. I was a member of the ill-fated Select Committee on agriculture which had the temerity years ago, under the chairmanship of the then hon. Member for Brecon and Radnor, now Lord Watkins, to send for various civil servants and to interrogate them about price reviews in agriculture and so on. The Committee was scrapped when it was found that our inquiries were going too far, but that Committee illustrated for a short time the sort of thing that could be done if the Committee system in the House were changed.
  In the book by Griffith and Perry covering scrutiny of Government Bills, in the period considered the authors found that 3,510 amendments had been moved by Back Benchers and that of these fewer than 5 per cent. were agreed to. Govenment Ministers moved 2,710 amendments in the same period, and of these all but one were passed. Back Benchers withdrew 1,797 amendments on the usual fraudulent undertaking given by Ministers that the matter would be considered and that appropriate amendments would be introduced at the Report Stage. This makes a farce of parliamentary democracy, because of the undertakings given in 1,797 cases, only 365 amendments were made or introduced by the Government.
  The authors came to the conclusion that on only 25 occasions were Governments forced to make any significant changes because of Back-Bench pressure, and that general situation applies in this House whatever the complexion of the Government. Once they occupy the Front Bench, Ministers, with very few exceptions, seem to be completely controlled by the thinking of their civil servants and no longer reflect the views of the House of Commons or the electorate which put them in power.
  I should like to see, as a reform of our system of government in this House, a change in our system of Committees. For example, I think we should have subject Committees sitting in advance of legislation which should consider consultative documents presented by the Government. As an example, let me take two subjects in which I have been particularly

  1441
  interested over the years. They are agriculture and defence. Everyone knows that this country has an annual price review when various interests such as the NFU are consulted by Ministers or civil servants. Members of Parliament are never consulted on these matters. These days our Minister goes over to the Common Market and has to make representations to his EEC colleagues about what the EEC agricultural policy should be.
  There is, however, no means of consultation with the elected Members of Parliament here, who represent consumers, farmers and so on, and nor is there consultation with the various interests. I declare an interest as a farmer, but why should the farming unions be consulted yet the consumer associations are not? It is important that a Select Committee should have power to ask various bodies to come before it and to consider a consultative document put before it by the Government. The Committee should be able to call and interrogate civil servants and various interested groups, and it should be able to prepare an advisory report for the House of Commons. All this should also happen before legislation is introduced.
  The same thing could happen with a defence Committee. There should be a permanent defence Committee which should be able to call various experts before it as well as calling in the civil servants before any legislation is considered by the House.
  Mr. Cranley Onslow: I am not sure that the hon. and learned Member is on such a good point as he thinks, apart from the fact that there is not often legislation about defence. If he looks at the minutes of the Defence Sub-Committee of the Expenditure Committee he will find that anything of real significance is denoted by asterisks only.
  Mr. Hooson: The hon. Member will appreciate that this is because of the very nature of what is being considered. I gave defence as an example simply because I have been interested in the subject, and it is a very good example of the kind of sphere in which there should be a permanent Committee with wider powers than are possessed by the Corm-
  1442
  mittee on which the hon. Member sits at present.
  Thereafter we should have the Committee again sitting to consider legislation after Bills have been given a Second Reading. This Committee should have the power to examine Ministers, civil servants and outside bodies. Each such Committee should have its own research staff, independent of other research staffs in the House. I do not suggest that there should be an excessive number of such Committees, but I am sure there is room for half a dozen of them, with Members sitting around a table, not on the old basis of adversaries across the floor making repetitive speeches but inquiring of experts. We live in a highly sophisticated country. Modern life is becoming more and more complex. There are various interested groups which know far more about a subject than any one hon. Member can hope to know.
  It is necessary to marry our deeply-established political system, which has evolved over a long time, with modern industrial society. In order to do that we can adapt our Committee system to a system better suited to modern times. That system would also provide Back Benchers with a much clearer and more useful rôle. It is ridiculous that the only weapon of an Opposition is time. That results in all-night sittings, wasted time and repetitive speeches, and we should clear up our procedure to make sure that we can have much better means of being a more effective opposition.
  This system would also produce much more effectively the desirable check on Government activity and would lead to a much closer examination of legislation than is made at present. We know from experience on many Committees that a few Members do a good deal of work and that many Members are just passengers. It would be very much better, and hon. Members would themselves learn much more about their specialist spheres, if they sat on a different kind of Committee in considering legislation. This would also streamline the passage of legislation through the House and cut out a great deal of duplication. The Report stage would probably be much more important. There could be an advisory report from the appropriate Committee to the House before Report stage. It would involve outside interests

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  very much more in the formative stages of legislation. It would also bring about much more consensus politics, not in the political sense but in the industrial sense, in this country.
  The vote last night, as I have said, has attracted such a great interest because it was not a repetition of the usual ritual through which we go in this House. It illustrates, by the very interest that it has engendered, one of the tremendous weaknesses of our modern parliamentary democracy.
  4.58 p.m.
  Mr. Kenneth Clarke: I am about to inject a discordant note into the debate in being the first Member to speak against the motion. Before 1 am suddenly identified as an unexpected political ally of the hon. Member for Liverpool, Walton (Mr. Heffer) as a wrecking extremist, perhaps I had better describe briefly the position from which I speak.
  When I hear people talk about the Centre in politics, I always believe that to be something to which I personally belong. If I am ever pressed to define my position in politics, it perhaps begins to date me when I call myself a Butskellite, and I continue to use that phrase even though it has gone out of fashion for the time being. I remain a believer in consensus politics. It is the duty of a Government to achieve consensus so far as possible. Perhaps to relate myself to this debate, and for the satisfaction of the hon. and learned Member for Montgomery (Mr. Hooson), I agree that the worst period of office of the last two Governments—Conservative and Labour—was the first 18 months of each of their terms of office. That was because of the pressures to which they had succumbed before they came to power and before reality set in.
  Speaking from that position, I find myself a little isolated from my political friends in the House who seem to have taken up electoral reform as a passionate cause and are pressing it strongly for what they believe to be desirable constitutional purposes. I exempt from them, although its members are often my political friends, the Liberal Party because alongside its genuine constitutional motives is the underlying feeling that there would be a substantial increase in
  1444
  the number of Liberal Members in the House if only electoral reform could be achieved.
  The reason why I am against reform from my essentially centralist position, however, is that I believe that the system of election in this country still exercises desirable pressures—from my point of view—upon the practice of politics in this country, and I believe that it should continue to do so.
  First, I should make it clear that I am trying to identify the pressures imposed on politics and politicians by our electoral system. I do not intend to go into a great discourse on the present state of politics and the reliability or otherwise of politicians, because politicians are basically what they make themselves. This Parliament is basically what hon. Members make it. The system exercises certain pressures that are on the whole beneficial, and if there are failings they are the failings of the people who are practising politics—their failure to respond to the pressures.
  The main pressure that our first-past-the-post system exerts is that it tends to pull politicians and politics towards the centre. The victor in electoral terms in British politics is the man or woman who strives to get as near as possible to 50 per cent. of the popular vote and who strives to occupy the middle ground. Victory has always gone to the political party that succeeded in getting closest to the middle ground. This has been a beneficial influence for a considerable length of time.
  Mr. David Penhaligon: Would the hon. Member describe for me—and I am an hon. Member with a majority of only 464—what pressure he can possibly experience with a majority of over 15,000?
  Mr. Clarke: At least, at the General Election I sailed in with more than 50 per cent. of the popular vote. Therefore, I have no personal vested interest in advocating electoral reform. I think that some of the advocates of electoral reform find themselves elected on narrow majorities by our present system and then realise that a change in the system would make it virtually impossible for them to be removed.
  Nationally speaking, victory goes to the party which occupies the middle ground, and I do not believe that circumstances

  1445
  have changed. But at the moment, uniquely, we have a Government in power who have been seen to vacate the middle ground, and I believe that the next General Election will give victory to the party which most successfully occupies it.
  The second influence of the present system is that it tends to give us a coalition system of government. We do not have the post-election coalitions formed by agreement between different parties which stood separately at elections. Instead, we have big parties which are themselves coalitions. They have formed themselves into these coalitions to present themselves to the electorate in order to have a prospect of success under our electoral system. There are wide ranges of opinion within the big parties at the moment. To present either big party as a monolithic bloc representing certain interests is total mythology.
  Those coalitions are formed and held together by the present electoral system, and if the parties did not respond to this pressure they would have no chance of success. We achieve unity because we agree on a programme to present to the electorate, and we maintain our unity in order to convince the electorate that we can offer some cohesion in Government. We present ourselves as a broad-based bloc in order to win power, and we realise that there is no hope of victory in pursuing sectional interests.
  Proportional representation would fragment those coalitions and divide the existing parties. I hope that my hon. and learned Friend the Member for Beaconsfield (Mr. Bell) will not be offended if I say this, but I think it is inconceivable that he and I would be in the same political party under a multi-party system. I do not think for one moment that he would disagree with that. But he and I are held together in a friendly coalition in exactly the same way as members of the Labour Party are held together by the electoral system.
  Mr. Cyril Smith: Both hon. Members fought on the same manifesto.
  Mr. Clarke: In a coalition Government formed by separate parties all the members pursue the same policy in power irrespective of their manifestos. In this
  1446
  country, there is an amalgamation of respective beliefs before an election. It is quite different in a multi-party system because the coalition is formed after the election by secret deals in smoke filled rooms between parties which can form a majority but which did not coalesce before the election.
  That leads me to the third consequence of our present electoral system which I believe is beneficial. It gives the electorate an actual choice of the Government who will govern them for the next four or five years. Members of the public can protest and say "A plague on both your houses", but they know that they can vote both for the Prime Minister and for the Government of their choice. Under a multi-party system they could not do so with any certainty.
  Mr. Nicholas Scott: Does my hon. Friend release that at no time since the Second World War has the majority of the electorate ended up with the Government for which it voted? Experience generally is that coalition Governments are formed not as a result of deals in smoke-filled rooms after an election but as a result of compromises by the parties concerned before the election, when they commit themselves to saying during the election compaign with whom they will coalesce. The electorate are well aware of the sort of Government for which they will be voting.
  Mr. Clarke: With respect to my hon. Friend, there are endless examples of Governments in Europe being formed by a coalition of parties which do not command the support of 50 per cent. of the electorate. No American President has been elected by 50 per cent. of the total population. Under the European system, many Governments are not supported by 50 per cent. of the voters. Nor is it true that coalition deals are done in all cases before an election. It is true that the coalition in Germany was reached before the election, but one could contrast that with the situation in Holland where, after every election recently, it has been unclear who could and would form a Government for some months. During that time secret deals are formulated, even to the point where everyone is haggling over who will hold what portfolio and which regions will be favoured in the subsequent programme.

  1447
  In our present system, the electorate vote for the Government and the Prime Minister. In one sense that weakens our position as Members of Parliament because we know that in our constituencies, while there are those who actually vote for ourselves as individuals, there are those who are exercising their right to have either Mr. Callaghan or Mrs. Thatcher as Prime Minister or one or other platform, knowing that their Member will support that platform when he is elected. As a balance to that, once the Government are elected the Member has the satisfaction of knowing that as the constituency Member he is a representative of the Government to whom the constituents have practical access for their own personal problems. That concept would be thrown out completely by the introduction of electoral reform.
  The opportunity to vote for a Government also has a certain disciplining effect on the electorate—and I do not mean to sound patronising in saying this. It has this effect because there are those who at an election will turn away from the possibility of pursuing limited sectional interests—
  Mr. Cyril Smith: Now we know what is behind it.
  Mr. Clarke: I do not know why the hon. Member for Rochdale (Mr. Smith) Keeps interrupting everything I say. He has been here only a few minutes. The position is that under a multi-party system there are sectionalists, regionalists, Poujardists and, in other countries, confessionalists and religious elements. In this country, under our system the electorate face a choice between two realistic alternatives for Government for the next five years. Normally they must decide between the lesser of two evils. That is the reality of politics which, I trust, the hon. Member for Rochdale is following in his judgments in this House. No man ever reads a party manifesto and believes every word of it—or, if he does, he is some sort of automaton employed in Central Office or Transport House.
  Politicians and the electorate face a choice between the lesser of two evils—between two realistic and working coalitions which have formed themselves to hold office. Therefore, they plump for a party to form a Government. It
  1448
  has a disciplining effect on the electorate in that it makes them use their votes for a serious purpose. It has an effect on the Government in that it discourages them from using their power for purely sectional, fringe, regional or confessional interests. In any multi-party system an anti-abortion party would be a strong runner in some parts of this country, and the effect on the electorate would be to deflect them into a small issue and away from making a realistic choice of the Government of the day.
  Having defended the present system in a House apparently composed mainly of those prepared to change it, I turn now to its defects. The argument is that it is unfair because it disfranchises 3 million electors who, in the Liberal case, as it were, throw their votes away and are not represented in this House—
  Mr. Pardoe: It is 5½ million.
  Mr. Clarke: Yes, 5½ million including the other parties.
  Mr. Pardoe: No, 5½ million for us.
  Mr. Clarke: You get 5½ million?
  Mr. Pardoe: Yes.
  Mr. Clarke: When the hon. Member hears what I am about to say about his party's vote, he will understand my amazement that the Liberal Party gets 5½ million votes.
  The Liberals' case on the wasted vote is that they represent this vote as being somehow the silent centre ground of politics which is not represented here and is excluded from the adversary politics of the great parties. With respect, that is a complete myth carefully calculated by the Liberal Party and does not represent that nature of the Liberal vote in the country at all. Otherwise, I as a centrist politician would be happy to welcome 5½ million recruits to the causes that I hold dear.
  The vision of the two major parties as the parties of, in one case, big business and, in the other, the trade unions, with the little man in between never represented, is a myth. They are both broadly-based, overlapping coalitions. The Liberal vote is not this centrist ground arguing for continuity and the other things that it is represented as being. It comprises largely protest voters

  1449
  voting against the party for which otherwise they would tend to vote.
  In my constituency—surveys have shown that my situation is not unique—my Liberal opponent, who is slightly to my right on economic policy but otherwise holds views completely indistinguishable from mine on every major issue, gets a large number of votes from Right-wing electors who are voting because they agree with the right hon. Member for Down, South (Mr. Powell) on immigration or because they are against our membership of the EEC. They vote Liberal in order to teach people like me a lesson. It is mainly a protest Right-wing vote.
  The other element in the Liberal vote is the totally non-political Poujadist vote which votes Liberal because it does not regard Liberals as politicians and protests against the general failure of politics and our present economic malaise, saying, in effect, "To the devil with the lot of you." That vote has nothing to do with positive support of a programme. However appealing—I do not believe that it is appealing—the Liberal programme might be to some, its programme is almost a complete irrelevancy. The people who vote for this reason do not know what the programme is and they do not want to know what it is. This is a large nonpolitical vote.
  I fear that a change in the electoral system would unleash that Poujadist, nonpolitical vote, that protest vote, and would give it extremely dangerous sectional channels to support. It would turn this Parliament into one which, although under our present system it is becoming multi-party, might then become multiparty with the National Front and other undesirable fringe groups represented. I do not think that the Liberal Party would necessarily succeed as a result.
  One must accept that the Liberal Party gets the votes of those who vote for small parties because of a protest against the performance of Governments over the last few years and an expression of some disillusionment with the working of our politics. One must search for the causes of that disillusion but not attribute them all to the electoral system. The pressures of the electoral system are wholly beneficial upon our politicians and our
  1450
  political parties. If we have not satisfied the electorate, the failures lie with the politicians and the parties in failing to respond to those pressures.
  When one considers what is going on with the supposed inflexibility of the present parties—the right hon. Member for Newham, North-East (Mr. Prentice) gets on to such matters as the selection of candidates—one sees that the situation within the Labour Party currently relates to matters entirely within the constitution of one of the major political parties and has nothing to do with our electoral system.
  Indeed, I would say that the electoral system is on the side of the right hon. Gentleman's views, even if it is too late to rescue the right hon. Gentleman from his own party executive, in that those who move to extremes within his party will at least pay the electoral penalty. The extreme Left-wing candidate who succeeds him will lose electoral appeal in consequence of taking an extremist position, and the system will tend to pull matters back towards the middle.
  The parties must respond to the system by satisfying the public and seeking to appeal to the moderate centre of public opinion which is dominant in this country. As one part of that appeal, we must therefore seek to avoid the ping-pong of politics and adversary politics. A party will win support if it can commit itself to the minimum of repeal of what its predecessors did and the minimum of institutional change and reform, if it can show that it has been made responsible by the experience of government. A party must resist pressures from its own doctrinaire elements to pledge itself immediately in opposition against all those things which it found itself obliged to do when it was itself the Government.
  But that is something for the parties to respond to, and the present system of election helps to influence the major parties, in Government and in Opposition to do that, and it does not work in the reverse way. Changes of the kind advocated would weaken our democracy by turning the formation of Governments into deals between politicians. They would weaken Parliament by making it a multi-party institution enabling Governments to manage it on the principle of divide and rule. Even worse, it would encourage what I think is perhaps the

  1451
  most dangerous tendency in the country at the moment; it would help to divide the country further into warring sectional interest groups, competing regional rivalries, fragmented political interests and extremes which are already being given more of a separate platform. It is a mistake to pursue this fashion for electoral reform in the belief that it has anything significant to do with our present political malaise.
  5.17 p.m.
  Mr. George Cunningham: Judging from the speeches rather than the motion, there are three subjects covered in this debate. One is proportional representation, the second is parliamentary procedures and the third, which is the main one in the motion, is the state of the economy. Much has been said about parliamentary procedure. It is interesting to reflect that what we are supposed to be doing today is considering the Estimates for expenditure upon the public service. There could be no better reflection of the inefficient way in which the House does its job than to know that that is what we are supposed to be up to.
  At least the Liberal Members are to be congratulated. They have hardly put down a substantive motion for discussion, but at least we are not having this debate upon a motion for the Adjournment, which is the motion that the official Opposition more often than not chooses for the use of its Supply Days.
  The hon. Member for Cornwall, North (Mr. Pardoe) suggested—I can hardly believe that even he believes it—that all the ills of our governmental, or rather our parliamentary, system derive from the absence of proportional representation. He acknowledged that the Liberal Party has great self-interest in the introduction of that system. I take the view that there is practically everything wrong with the way in which we do our work in Parliament except the necessity for proportional representation.
  If we had that system, the inevitable result—as I tried to point out in an intervention—for the foreseeable future at any rate, is that there would be three principle parties. Two would be largish parties—not on the extremes: we have no extremes of any political significance in this country—Labour and Conservative, roughly equal in size, and in the
  1452
  middle the Liberal Party, with a much greater representation in the House than it has now.
  The only consequence of that is that either before or after elections there would be a deal between the Liberal Party and the Labour Party or between the Liberal Party and the Conservative Party. It would be up to the Liberal Party to choose one of those parties. The Liberal Party would be permanently in power, and we would not have an opposition which by appealing to the electorate could realistically expect to secure power. I can think of nothing which would be more weakening to the proper function of parliamentary democracy than that kind of coalition in power all the time with an opposition which could never expect to be in power. [HON. MEMBERS: "No."] Let other hon. Members say how it would work if not in the way which I have described.
  Our parliamentary habits are wrong. I stress the word "habits" because there is nothing wrong with the system. I include such secondary aspects of it—important though they are—as the Committee system to which the hon. and learned Member for Montgomery (Mr. Hooson) referred. Of course we should have subject Committees like every other legislature in the world. Of course we should have a better method for the scrutiny of expenditure, such as we are supposed to be doing now, and for the scrutiny of legislation.
  Those of us who serve on the No. 1 Procedure Committee are hopeful —we hope; we do not believe—that perhaps the consequence of that Committee's proceedings will be to place before the House some procedural changes which could greatly improve it. But I do not believe that the procedures or the structures of the House are the main fault. The fault is the attitude of Members. As my right hon. Friend the Member for Newham, North-East (Mr. Prentice) said, the trouble is that Members are simply not prepared often enough to vote the way they think.[HON. MEMBERS: "Last night."] The day after last night is perhaps not the day to take the view that everything will change for the better, but we shall see.
  I do not think that it would make for a good Government or a useful Parliament if Members were on every vote to

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  scratch their heads to decide with which grouping they would vote each time and on which individual basis they would vote each time. Like every other group of decision makers, we must compromise with each other and trust each other's judgment on things. I might defer to another person's judgment on certain subjects, but on other subjects that other person might defer to my judgment. But in the end the responsibility whether I compromise is mine and I am not responsible to my Whip for the manner in which I discharge that obligation—as my hon. Friend the Member for Wakefield (Mr. Harrison), one of our Whips, who has just entered the Chamber, well knows. I am answerable only to the electorate which sent me here.
  Those who tend to speak in this manner tend also to say that what is wrong with Parliament is the Members, not the electoral system and not the public. I regret to say that the public escape a wee bit too lightly. In this the public has something to answer for. There are not many countries where an MP can receive a letter from a constituent saying that it is a disgrace that such-and-such a Minister is allowing his MP a free vote. That has happened to me.
  If there is to be a change inside the House, the change of habit must be in the hearts and minds of the Members and the change of procedures must be devised by Members. On this issue I have changed my mind since coming into the House. The force of the change upon Members must come from outside the House. The public must expect its Members to be answerable for what they do in the House. The electors must expect their Members not to say "Well, I voted such-and-such a way because my party voted that way". People will say they are not interested in that but in why their Member had voted that way.
  As far as I can judge the attitude of my constituents, they want me to support solidly the continuance of a Labour Government. That is the principal reason why they sent me here. But on individual issues they expect me to use a considerable measure of independence of judgment. Unless that is done, this whole place might as well pack up. The lack of that sufficient measure of individual judgment weakens and practically
  1454
  paralyses the House of Commons at present.
  The hon. Member for Cornwall, North suggests in the motion that the introduction of proportional representation would somehow transform the British economy and would remove the English disease—or what it is that is wrong with our economy. That argument is slightly valid. The notion in the minds of many people that the country faces a political divide perpetually, and may go along one path or another, carries over into economic affairs and industrial relations. But for the most part I think that the political situation is irrelevant to economic affairs.
  The British disease, which is diagnosed as things basically sophisticated, and worth writing a book or even an article about, is nothing more than good plain old-fashioned inefficiency. At present, the British are colossally inefficient. We could not organise a raffle. That situation exists in private and public industries. It exists in the Government and in the House of Commons and it exists certainly in all the political parties as machines. Perhaps it exists in political parties as machines more than it exists in most other places. I do not know the solution to that problem except perhaps exhortation. It seems an extremely weak remedy for such a killer disease. But I do not think that there is anything we can do except to recognise that the fault lies in the attitudes and efficiency of people, and by at least mentioning it all the time we stand a chance of its being cured in time.
  It would be wrong to lead people to suppose that the introduction of a new system of electing Members to this House would suddenly make boardrooms find viable projects which they cannot find at present, or that it would lead trade union representatives to see the advantage in certain innovations which they do not see at present. It is implicit in the motion that the activities or inactivities of Government are extremely important in determining economic success or failure. I do not accept that. If we have a system where the Government are interventionist—as it is in all Western countries at present—that interventionism continues to be a fractional element of the total decision-taking process whether in operations, investment incentives, taxation or whatever. It is all marginal compared with the efficiency and enterprise

  1455
  —the two EEs—of those conducting the business.
  Over the past decade we have failed because business men in Coventry have not seen the opportunities which business men on the other side of the world in Japan have seen and exploited. It is nothing to do with the notion that these days we cannot sack people. People are never sacked in Japan and Japan gets by without that device almost entirely. We suffer from a lack of efficiency, which means using three people to do the job of two, and a lack of enterprise, which is the failure to find work for the third man.
  If we manage simply to recognise that fact, in the end we might manage to climb back out of the rut into which we have fallen, and if the procedures in this Chamber become more related to the real effects in our economy and our politics, that, too, will help to diagnose the real difficulties from which we suffer.
  5.30 p.m.
  Mr. Jeremy Thorpe: I should like, first, to congratulate my hon. Friend the Member for Cornwall, North (Mr. Pardoe) on introducing this subject and on his speech, which has certainly stimulated an excellent debate. I am delighted that the Minister of State, Home Office, will be replying to the debate, because he and I have sat on the Select Committee on Direct Elections to the European Assembly and I know him to be a good democrat. Likewise, I am delighted that the right hon. and learned Member for Huntingdonshire (Sir D. Renton) will be winding up the debate for the Opposition, because as a member of the Crowther Commission on the Constitution he has a close interest and an informed view of constitutional matters in the House and, indeed, in the country generally.
  The hon. Member for Islington, South and Finsbury (Mr. Cunningham) made a very reasoned and well argued case—if he will allow me to sound patronising, which is not my intention. When he rightly says, even in the presence of the Whip sitting in the Patronage Secretary's place, that he is answerable to no one but his constituents and that he is not answerable to the Whips and acts according to his conscience, I am sure that that
  1456
  is so. However, history shows that the sanction for that is having the Whip withdrawn, which under our present system means certain defeat, as many people, such as Dick Taverne, Christopher Mayhew and a whole list of those who have shown such independence, have found out.
  The hon. Member for Rushcliffe (Mr. Clarke) says that at every election there is this great swarm to the middle ground. You could have fooled me, Mr. Deputy Speaker, when some 380 Members managed to get here with less than 50 per cent. of the vote. One does not swarm to the middle ground. One swarms to the selection committee that selects one. If one is in a safe Tory seat or a safe Labour seat, one gets in. The hon. Gentleman puts a higher value on his own moderation than is perhaps the case. He says that proportional representation will lead inevitably to a whole series of coalitions. I can see that it might do that. It would not necessarily do that, but it might. However, if it did that, it would be because that reflected the wishes of the electorate.
  I cannot accept that one should say "Because we never want to have coalitions, we must therefore have a system that distorts the wishes and the votes of the electorate so that we do not get one." One cannot say "We believe in democracy and the process of counting heads", and then cook the books. That is the fallacy.
  The hon. Member for Islington, South and Finsbury said that he had had a letter to say that it was a disgrace that we were allowed a free vote on something. He put that matter humorously, but it indicates the adversarial side of our politics. When we have a free vote, which simply means that the Whips allow hon. Members to exercise their consciences and think for themselves, that is regarded as a very remarkable parliamentary event.
  I shall not spend much time on the arguments advanced by the hon. Member for Rushcliffe, save for the idea that we must discipline the electorate and that they must make a serious choice. What the hon. Gentleman is really saying is that we must get them to vote not necessarily for what they want but for the lesser of two evils. That is the sort

  1457
  of discipline that the electoral system has on Labour voters in my constituency. There are probably 10,000 committed Labour supporters in my constituency. The Labour vote is never more than 5,000 or 6,000, because Labour voters feel compelled to vote for me not because they are liberals but in order to prevent the Tory candidate from getting in.
  That is an appalling discipline in an advanced democracy. I should like those Labour supporters to vote according to their convictions, and if then there was no clear majority betwen myself and the Tory candidate, they would have the opportunity to express a second preference. That would be democracy. The authoritarian ring with which the hon. Gentleman is advocating discipline is not the sort that I came here to advocate.
  Mr. Kenneth Clarke: Surely the single transferable vote system, which the right hon. Gentleman is advocating, seeks to strengthen just those pressures. If the second preference vote were permitted, it would mean that the Liberal Party would be greatly strengthened because the Liberals would hope to get the second preferences of all those in those constituencies in which no one appears with a clear 50 per cent. majority. They hope to get in on the second preferences of Socialists who would vote for anyone other than a Conservative, or of Conservatives who would vote for anyone other than a Socialist. The second preference system advocated by the Liberals aims to capitalise precisely the influences that the right hon. Gentleman claims to deplore in North Devon.
  Mr. Thorpe: The fact that the hon. Gentleman did not know to within the nearest 3 million the Liberal Party vote and his view that we are in favour of the second preference system, known as the alternative vote—which we are not and never have been—shows that he has his facts wrong. Secondly, he does not appear to understand how the single transferable vote works. It is simply that if one has a three-Member or a four-Member constituency, any candidate who gets one-quarter of the votes gets one of the seats. In other words, one is represented in proportion to the strength of one's party. If two out of every four votes go to the Conservatives they would
  1458
  have two out of the four Members. They would be the two most popular in the opinion of Tory voters.
  If I have assisted the hon. Gentleman by a preliminary dissertation on the subject, I hope that he will be grateful.
  The hon. Gentleman goes on to talk about what it would really lead to. This was one of his great fears. Those who say that there shall be only two parties are only one stage removed from those who say that there shall be only one party. The principle is the same. What the hon. Gentleman is really worried about is sectionalist parties and regionalist parties. Is that not exactly what we have in this country? Do we not have a system, as shown by the UUUC, Plaid Cymru and the nationalists, in which anyone who can concentrate support in a particular area finds it much easier to get elected? Is it not within the whole system that Plaid Cymru and the SNP, with 1 million votes get 11 seats when a widely based national party with 5 million or 6 million votes, because it is widely based, will get only 13 seats?
  Therefore, although it is said that the system that we advocate would produce these terrible effects, they are with us already. Changing the system is the one way of ensuring that we would not get them. I hope that the hon. Gentleman will do some more thinking on the matter. He says that it would be terrible because we might get National From Members and Communist Members. However, if there is a substantial minority of such people in this country, it is better that people like that are represented here. For example, I think that it is much better that people from Northern Ireland with whom I find myself in tremendous disagreement are in this Houes. It is much better than having them driven underground by the system.
  I want briefly to turn to three points. I want to illustrate why the electoral system that one uses is of tremendous constitutional importance in this country. When the Government of Ireland Act was introduced in 1920, the then Prime Minister, David Lloyd George, was determined on one thing—that the Catholic minority in the North and the Protestant minority in the South would be fairly represented. He was also determined that the religious affiliations of the citizens, North and South, would not

  1459
  polarise, so that if one was a Catholic one belonged inevitably to one party and if one was a Protestant one belonged to another. To achieve this he introduced proportional representation.
  That system has endured very well in Eire. I have no hesitation in saying that it is one reason why religion plays no part in determining the political affiliations of the electors in Eire. There has never been a Cabinet in Eire that has not contained Protestants. Some of the most distinguished Presidents of the Republic of Eire have been of the Protestant faith, the most recent being Erskine Childers. In the North, the system was introduced, and for very narrow reasons it was abolished by the Unionists in the late 1920s—frankly, because Lord Craigavon said that unless it was abolished, after the next election the Opposition would be returned with more seats than the Government. What he meant was that the Unionist Party was in danger of splitting—it would probably have been the best thing for Irish politics if it had—between a moderate Tory and extremist Tory party.
  Be that as it may, the system was abolished, and from that moment the Catholic minority, partly by the gerrymandering of boundaries, was permanently under-represented. That was one of the causes of frustration. Much more important, because it was frustrated in this way the electorate polarised on the basis of religion. If one was a Roman Catholic one became a nationalist or Republican and if one was a Protestant one automatically became a Unionist.
  In 1973 the then Secretary of State reintroduced PR long before the Sunningdale package, with the full support of the Labour Opposition of the day, in order that we might try to end that polarisation and have all shades of opinion represented. I emphasise that it was because there was a fair electoral system that we were able to have a convention representing all shades of opinion, as a result of which, following Sunningdale, we were able to get a power-sharing Executive going. The reason it fell to pieces some six weeks later was that, whilst there was a fair representation of all shades of opinion in Ulster, there was then a Westminster-type election under the first-past-the-post system, and although only 51 per cent. of the vote was
  1460
  against Sunningdale, 11 out of 12 Members were returned for that 51 per cent. and those 11 immediately claimed a mandate for saying that there was no support for power-sharing. The effect of that election was to frustrate the first hopeful signs that a meaningful degree of power-sharing could be brought about. Therefore, I believe that the electoral system has a profund effect. I want to put this in the context of Scotland and Wales in particular, where there is another great constitutional problem that the House will ignore at its peril.
  Mr. McCusker: The removal of proportional representation in the 1920s did not radically alter the composition of the House of Commons of Northern Ireland. Whilst there may be arguments for proportional representation, they de not include the argument that it should be used as a device to thwart the will of the majority.
  Mr. Thorpe: No one has ever suggested that proportional representation is a device to thwart the will of the majority. As far as I know, no member of any political party in Northern Ireland wishes now to revoke it. That is a great tribute to the efficacy of the system.
  However, I do not want to become too enmeshed in Irish history. Being half Irish— [Interruption.] The better half, from the South—I could go on for ever.
  The Tories abolished PR simply because the Unionist Party was splitting into two halves, between the moderate Tories, the Faulkner-O'Neillites of today, and the extremists of the Lord Brooke-borough type. Changing the electoral system meant a change in the whole system. Northern Ireland politics became far more monolithic than ever before when the first-past-the-post system was introduced.
  This leads me on to the one unanimous recommendation of Kilbrandon, that we should have the PR system for the election of the Assemblies in Scotland and Wales. Why? Let us look at the example of Quebec. The Quebec separatists, albeit saying that they were in favour of secession from Canada only after a referendum. but clearly a secessionist party, had four pro-Canada parties against them, and so the pro-Canada vote was split four ways. Under our glorious system, that meant that the separatists needed only

  1461
  two-fifths of the vote to secure two-thirds of the seats.
  Precisely the same thing could happen in Scotland. It will not necessarily be the nationalists who gain. It may be the Labour Party, or any other party. In the first Assembly election a party securing only 30 per cent. of the vote could have the majority of the seats and say that it had a mandate for secession or watered-down devolution or for saying that the system did not need amendment. That is the worst possible way to start off devolution. Therefore, we ignore the importance of the electoral system used for the Assembly elections in Scotland and Wales at our peril.
  The Government have come up against the problem elsewhere. They secured an extra seat for the European Parliament—81 seats instead of 80—so that the Catholic minority could be represented in the European Parliament. They said "It is terribly important", and our European partners replied" We'll give you another seat". Then some of our partners said "We have given you an extra seat. What makes you think that even if the Roman Catholics get a third of the votes under your system—".
  Mr. McCusker: Gerrymandering.
  Mr. Thorpe: "—under your system of gerrymandering"—I give that to the hon. Gentleman—" they will get one-third of the seats?" The Government said "We can't guarantee it under our system." Some of our European partners are rather fly, and they understand these matters now. Therefore, the Government considered PR simply for Northern Ireland, a three-Member constituency, on the basis that they wanted the minority to be fairly represented. That is the only minority that matters. Under-representation of minorities does not receive much notice unless they resort to violence, and then they are listened to very quickly. I hope that there is not a moral there.
  The Government thought the position slightly illogical. They could not say that that minority mattered, that under the system minorities were underrepresented, and they would have PR there but not in the rest of the United Kingdom. Now they are having to think
  1462
  of a national list system, which is very difficult even for the Leader of the House to sell. The basis of his argument is that the people of this country are incapable of understanding any system but the first-past-the-post system, that they are not nearly as intelligent as, for example, the people of Northern Ireland, Southern Ireland and other parts of the world. The right hon. Gentleman will have a rather difficult time.
  I would like to go along with the hon. Member for Lewes (Mr. Rathbone), who made an extremely important speech, in being opposed to referendums, but in this country there must be referendums on certain issues, because there are certain issues which cause divisions within parties as well as across parties and which cannot be put to a General Election. For example, if I were a Labour anti-Marketeer, how would I vote at a General Election if the Labour candidate in my constituency was in favour of the Market? Would I vote for a member of another party because of the cause or would I vote for my party and against the cause?
  The problem shows why one cannot have an election on the Common Market issue. How would a Labour pro-Marketeer vote if he had the distinction of living in the constituency of the hon. Member for Penistone (Mr. Mendelson), who spoke against the Market with great sincerity and clarity?
  The great thing about proportional representation is that a much greater choice is given to the electorate. Not only is there a guarantee that a percentage of the vote is fairly represented but one can choose between varying shades of opinion within one's party, whether one is on the Left or the Right, whether one is for or against the Market, whether one is for or against devolution.
  When the hon. Member for Islington, South and Finsbury asked whether we really thought that if we changed the electoral system different decisions might be taken in the boardrooms, he over-dramatised, but I do not over-dramatise in answering in the affirmative. The reason why people do not invest in this country is that there is a lack of continuity. Let us take prices and incomes policy, for example. The Labour Government introduced a statutory prices and

  1463
  incomes policy in 1966–70, so the Conservative Party opposed it. We voted for it. In 1970 the Conservatives said that they were not going to have a prices and incomes policy, but they introduced one in 1973, and so the Labour Opposition opposed it. We supported it. When they came to power, the Labour Government said that they would not have one, but they introduced one in 1975, for which we voted when the Tories abstained.
  One needs only a 1 per cent. swing in this country, under our crazy system, to have a totally different Government who will nationalise or denationalise, change from investment allowances to investment grants, and make the most dramatic changes. I believe that there is a majority in this country for certain guidelines. People in business in West Germany know that, although there may be a change of Government, accepted guidelines will be followed, that there are certain rates of tax upon which one can probably base one's investment decisions, that certain forms of industrial democracy may well be implemented and continued. That is the sort of continuity that the PR system would give, not because one creates coalitions but because there is probably a majority for moderation.
  Under PR, there might well be different emphases and different agreements. If a minority party found itself holding the balance of power and abused it, it would be cut to pieces in the next election. It is dangerous to phophesy, but I do not believe that either of the two major parties will have a majority after the next election. I think that the Liberal Bench and the Benches behind will hold the balance of power after the next election, under the present system. Therefore, the idea that we get strong government under the present system is wrong. The "discipline" of which the hon. Member for Rushcliffe spoke has already produced six parties. I would have thought that that was enough to go on with, but the hon. Gentleman thinks there may be more.
  We have a system which gives a minority of 38 per cent. the right to rule, a system in which a 1 per cent. swing can make the difference between this or that Government, a system in which 6 million people can vote for a political party yet
  1464
  be virtually disfranchised. As a Liberal Member, I, of course, protest against that system, but not on behalf of Liberal MPs. We are here—we got here in spite of the system. I remember in February 1974, my great anger when I went to see the right hon. Member for Sidcup (Mr. Heath) because although he had 11 million votes and 296 seats, and was trying to form a Government, I had 6 million votes and an additional 4 million voters but that gave us only three more Members of Parliament. I was not angry for myself. I was angry that in an advanced democracy millions and millions of people could be denied what they had voted for.
  It does not matter if the hon. Member for Rushcliffe disagrees and thinks that we are wishy-washy because we were in favour of Europe before the Tory Party had even heard of it or because we were in favour of devolution, on which the Tory Party is still somewhat tremulous. It is basically for the people to decide. I am not so arrogant as to say that people who vote Tory or Labour are wrong. They may be misguided, but they have as much right to be wrong as we have right to be right. A little more of the humility that I have just shown would come well from the hon. Member for Rushcliffe.
  All I am saying is that we have an electoral system that, quite clearly, does not reflect the wishes of the majority and therefore the Government of this country do not have that authority behind them to rule. The system frustrates not only minorities but the will of the majority as well. There are large artificial changes from one Government to another and the system increases the concept of adversarial politics. On those precious occasions when the House acts collectively, as it does on many Select Committees, including the PAC and the Select Committees on Estimates and Nationalised Industries the legislature is often highly critical of the Government of the day even though the majority of Members are Government supporters. We deny that sort of spirit from breaking out in the country and in the legislature by this crazy archaic electoral system which no other advanced democracy in Western Europe would dream of using and which will make us the laughing-stock of Europe if we use it for the European Parliament. It could lead to the break-up of the

  1465
  United Kingdom should we be assinine enough to use it for the Assemblies in Scotland and Wales if that Bill is passed.
  5.53 p.m.
  Mr. Cranky Onslow: I shall not be long and I shall not yield to the temptation to follow the right hon. Member for Devon, North (Mr. Thorpe) into some of the byways that he explored. The thing that bothers me about this debate—though I am glad that the subject was chosen—is the way in which speakers from the Liberal Bench have tried to establish a link between the poor performance of the country and the electoral system. I do not think that they have succeeded. I share the view put from both sides of the House that the Liberals have tabled a motion which contains a fundamental non sequitur. The Marxists would call it a dialectical leap. I am glad that they are not here today. but that is what it is. The assumption that because things are wrong with government, proportional representation would cure them, is a simplistic one. Even if the Liberals have correctly identified some of the symptoms, their treatment is wholly wrong. And in any case we are really only dreaming, because whatever happens, we shall fight the next General Election on the rules that we have got now, and any sort of proportional representation is strictly for afterwards.
  Nor has anyone who has spoken today in support of proportional representation been able to show how it would increase the power in the hands of Parliament in the realities of today's political situation. I do not see, for instance, how choosing Members of Parliament on the basis of proportional representation would do anything to tackle the problem of the power that is concentrated in the hands of non-representative trade union leaders. A proliferation of parties must weaken Parliament and hand yet more power over to the non-elected elements in our society.
  What has also been depressing is the way in which we have heard speakers fail to identify the way in which individual Members could use the power that is already in their hands. The advocacy of the Select Committee system, by the hon. and learned Member for Montgomery (Mr. Hooson), was uncon
  1466
  vincing and muddled. He might have made a beter point had he said that we have a Select Committee on Nationalised Industries, that these industries spend enormous sums of money, wield enormous influence and employ vast numbers of people, yet Parliament has virtually no control over them at all. We can of course read the Reports of the Committee, and the House has actually debated one of them in the last four years, but there have been about 20 Reports in all in that time. We know how busy the Committee has been. Its members have been to Sweden, to the West Indies, to Australia, to Japan and to the United States. The Committee's motto ought to be "Join the Nationalised Industries Committee and see the world". But for all the influence it has on the nationalised sector of our economy, we might as well spend the money on something else. And yet it is in our power to make this a great instrument of parliamentary authority, and we should, surely seek to do so.
  Then again, this week we have all rightly mourned the loss of the most distinguished advocate of democratic socialism on the Treasury Bench, Anthony Crosland. I was immensely depressed to hear his friend and colleague, the Secretary of State for Education, say that it was Tony Crosland's habit to stay in the House until 2 a.m. to vote and then to work on dispatch boxes for an hour. It ought to be possible for people who are in the business of government to organise their lives more effectively than that. Frankly, I was profoundly sad to hear that, because the one thing that a Minister must not do is overwork.
  We feel that because we arc here we must be busy, should we be here at all? Should we not be out in the country, trying to learn at first hand what goes on in the real world outside? And of course there is too much legislation, and too much bad legislation. Civil servants make more work for busy Ministers. I have had exchanges with Home Office Ministers on this subject before. It is tragic that in Parliament's attempt to perform the task of governing the country through the Government it exercises so little discipline over Ministers. There are lessons that we should learn from recent experiences.
  Perhaps, again, the people of this country do not care enough about the economy

  1467
  and they vote for daft things that are fundamentally unfavourable to the health of the economy. To some extent, the electors have the Government that they deserve now, but they certainly wish to be rid of this one at the earliest opportunity.
  The hon. Member for Cornwall, North (Mr. Pardoe) complained that Members of Parliament are unpopular. They always have been unpopular, and they always should be viewed with suspicion, but if it is the hon. Gentleman's objective to be always popular, does he really think that that is the right course?
  The Liberal Party wants to be popular, but where does that get it? It is in a populist position, where it is all things to all men. The hon. Member for Rochdale (Mr. Smith) says "Stop the world; I want to get off". I do not accept the proposition advocated from the Liberal Bench this afternoon that if we change the rules and get everybody's second choice into the House in vaster numbers than those now on the Liberal Bench, this will be a better place and we shall have a better-governed country. That is not true. The country does not want more weak or more bad government; it wants better government and less government, and that is what my party and the people of the country will be supporting in the next election. That is the purpose to which we must change and adapt ourselves.
  Ultimately, we all have to submit ourselves to the test of elections. That is a good thing, and we should do it more often. Governments should not be allowed to choose when elections take place, and they should not have so long a tenure of office.
  In his many quotations, the hon. Member for Cornwall, North missed one. Rousseau's judgment on the scene in Great Britain was that the British people think that they are free, but in reality they are in chains. The only time that they are free is when they are electing their representatives at General Elections. The sooner that day comes, the better for us all.
  6.0 p.m.
  Dr. Colin Phipps: On Monday, I shall have been a Member of
  1468
  Parliament for three years. That is not quite long enough to have become embittered by lack of preferment nor too short a time for me to have a view on the way this place works.
  My three years can be broken down into three phases. In the first six months I was so suffused with self-satisfaction at having got here that I viewed everything through rose-coloured spectacles and was prepared to take a panglossian view of its imperfections. I think that this attitude is shared by most new Members.
  In the second phase I took a closer look and slowly, by a process of osmosis throught the pores, I became astonished at the systems within the House. It struck me that most of my colleagues who had been here much longer than I seemed to be putting up with it, presumably out of utter conformity or resignation with the system or because they had learned to work it. I assumed the latter and this phase lasted for about 18 months.
  It then became quite clear that my colleagues had not learned how to work the system. This phase was helped when, for reasons that escape me, I was made a member of the Select Committee on Procedure, which was almost totally inhabited by Dr. Panglosses of various parties, all of whom seemed to believe that we were living in the best possible of worlds.
  Having decided that my colleagues were not satisfied with the system, I asked why they were not making an enormous row and bouncing up and down saying that this hotch-potch should be changed. The answer for a Government Back Bencher is simple. We have an Executive chosen from a legislature which is largely composed of people who want to be members of the Executive. If I may use the vernacular without causing offence, the Executive has hon. Members by the short and curlies and the people who are used for that purpose are the Whips.
  It was a long time before I appreciated that I had to shake off the Whips if I was to have any independence and freedom in the House. As long as we have a system in which the Executive rules hon. Members because they desire to be members of the Executive, all Governments will get their legislation through, no matter how ludicrous, ill-thought-out, or ill-prepared it may be.

  1469
  Having reached this view, I began to consider whether our electoral system was necessarily the best. I believed that it was a splendid system; it was the system that got me here and I had a vested interest in it. However, when one examines the power that it gives to the Executive, might not another system which does not give that power be exactly the sort of change that we need?
  With due respect to the hon. Member for Rushcliffe (Mr. Clarke), he enumerated all the virtues of our system and the vices of the Continental system. I am not convinced that we are better governed than other European countries, despite all the virtues of our system. In fact, it could be said that some European countries have done better than we have in the last 25 years—only marginally maybe, but nevertheless better. It does not follow that our system, whatever its virtues, produces the best results.
  If it is not the case that reforming ourselves will reform the rest of the country, why are we setting about such things as the Bullock Report and industrial democracy? If we are not prepared to look at democracy here and if we do not set about reforming ourselves, why should we expect others, whether in the boardroom or anywhere else, to reform themselves?
  I recognise that the main parties have a vested interest in the current electoral system. I have a vested interest in it because if it is changed I might find myself out of Parliament. However we must look clearly at the system that we must use in Europe and that must be used if we devolve powers to Scotland and Wales or to the whole of the United Kingdom.
  I accept the contention of the Liberal Party that it is impossible to think that we could have 81 Members in the European Parliament with none of them being a Liberal. That would clearly be ludicrous. The smaller the number of Members being elected, the more ludicrous that system becomes and the more likely it is that only major parties will be represented. We have to rethink our electoral system.
  We must look at our own procedures and do something to ease the pressure
  1470
  on hon. Members and particularly on Ministers. It is ludicrous that the payroll vote, which comprises the people who govern the country, should be the vote that spends the longest hours here into the early hours of the morning, because those hon. Members have to do so. In Belgium, all votes, except for committee stages, take place at 2.30 on Thursday afternoons. There is no reason why we should not adopt that system. It would allow Ministers to work proper hours and we should have time to do the things that really matter in our constituencies and in the House. The country would be no worse governed. It would not make a jot of difference.
  6.8 p.m.
  Sir David Renton: I hope that the hon. Member for Dudley, West (Dr. Phipps) will allow me to express some envy of him. On Monday, he will have been here for three years. I have to confess that I am in my thirty-second year in the House and it may be that my views will be slightly tinged by my experiences, which have been fairly varied.
  I did not agree with everything that the hon. Member said, but I do agree with him that we should examine our democratic processes from time to time to see whether they can be improved. The method by which we are elected cannot be exempted from that scrutiny. That is why we should all be grateful to the Liberal Party for having chosen this subject on their shared Supply Day. It has been an interesting and stimulating debate, though it seems to have been a debate largely about a choice of evils.
  The right hon. Member for Newham, North-East (Mr. Prentice) has pointed out what may be considered to be the danger of the present system—that it enables the extreme Left inside the Labour Party to dominate what is otherwise a coalition of that party. Also, the Labour Party received only 38 per cent. of the votes polled at the last General Election, and 28 per cent. of the support of the whole electorate, yet we have seen something approaching a revolution in social and economic policy in the past two years.
  I say that it is a choice of evils because, as was pointed out by the Hansard

  1471
  Society's commission on electoral reform, about 300 systems have been put into practice or considered. Some are better than others. Some have been mentioned today. None is perfect. I shall say something about several of them.
  The hon. Member for Cornwall, North (Mr. Pardoe) was candid in implying that there is a choice of evils. He was also candid in saying that proportional representation, whichever form it takes—he did not specify a particular form—is no cure-all for our economic ills. I was, however, surprised when he pleaded that we should get away from the adversarial system. If any Member would be miserable under any system that was not adversarial, it would be he! However, I take comfort in the fact that when he dealt with the Conservative Party he praised us with his faint damns.
  As my hon. Friend the Member for Lewes (Mr. Rathbone) said, our democratic processes, including our voting system, are evolving. For example, we had the Speaker's Conference, presided over by Mr. Speaker King, and of which I was a member, which considered electoral reform in the late 1960s. The change in the voting age resulted from its recommendations. The only method of election that we were asked specifically to consider was the single transferable vote. Having done so, we recommended, by 19 votes to one—that one being the Liberal member of the conference—that there should be no change.
  Speaking for myself, I am still opposed to that system for elections to this House, but it may be suitable for other Assemblies. The last Conservative Government introduced it for the Northern Ireland Convention, and the Kilbrandon Commission recommended it unanimously for the Assemblies for Scotland and Wales.
  Britain's economic performance under the present Government has been tragic. In spite of all the pretension and all the hopes thrust upon us by the Government, inflation is rapidly worsening again; unemployment continues at a high level, causing misery and waste of manpower; we owe to our friendly capitalist competitors vast debts which it will take years to repay; and last month we had the worst trade deficit in our history. Indeed,
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  I think that it is appropriate to say that we have never had it so bad in peacetime.
  The motion says that our
  "economic performance is gravely hindered by a system of government which grants majority power to alternating minority parties;".
  I think that for the words "system of government" the motion should have read "system of voting". They are not exactly the same thing, but we know that the Liberal Party is referring to the system of voting from the second part of the motion.
  When more than two parties are competing for votes, no party is likely to get a majority of votes under any voting system. The best way in which we could be sure that the party with the majority of seats in this House had the support of the majority of the people would be to have only two parties—a situation that could be achieved by the Liberals doing what I and some of my hon. and right hon. Friends have done. We joined the Conservative Party. We were not only welcomed but—if I may reveal my immodesty—we were, indeed, respected, and I hope that we still are.
  Mr. Thorpe: I shall not go into the period when the right hon. and learned Gentlemen was nationalised as a National Liberal, and subsequently denationalised, but I must point out to him that even in an election in which there are only two parties it is still possible for the minority party to become the Government. The most tragic example of that is South Africa. In the General Election there, in 1947, the Nationalists got a minority of the votes but a majority of the seats. From that has flowed many of the problems of Southern Africa today.
  Sir D. Renton: What the right hon. Gentleman says can happen, but only in the event of an exceedingly close result, such as the one we had in 1951. Then, the Conservative Party got six more seats than the Labour Party but 0· per cent. fewer votes. There was also the occasion, which the right hon. Gentleman will remember better than anyone—the February 1974 General Election—when the Labour Party got four seats more than the Conservative Party but 0·8 per cent. fewer votes. Thus, what the right hon. Gentleman says

  1473
  can happen, but only with these fantastically close results, and it will not always happen even then. There was a very close result in 1950, for example, but it did not happen.
  One is bound to say that if a different system of voting had nevertheless produced a Socialist Government, our economic performance would have been just as bad as it has been because it was a Socialist Government. They would have introduced nationalisation, State control, high taxation and vast public expenditure, like all Socialist Governments do. Therefore, I feel that there is a fallacy in the motion, and that it does not necessarily follow that economic performance is hindered by the system of voting, even if it does grant power to alternating minority parties, as another system might also produce minority Governments, including, alas, possibly, on the swing of the pendulum, another Socialist Government.
  The second part of the motion calls for
  "the reform of the voting system"
  The Conservative Party has an open mind on this and is not unsympathetic to further consideration of the matter, but on an all-party basis. At both the General Elections in 1974 we committed ourselves to having a Speaker's Conference on electoral reform, and that remains our position as a party. We are not prepared to commit ourselves at this moment to any particular system of voting, and it is significant that the motion does not do so. I was glad to learn that the right hon. Member for Devon, North (Mr. Thorpe) was clear that the alternative vote is not the most favoured system among Liberals. It used to be at one time.
  Mr. Pardoe: Never.
  Sir D. Renton: I am glad to hear that. The Liberals have a most convenient way of covering every situation. I have heard Liberals argue in favour of that system, and in my constituency, and I am glad to hear that it has not officially ever been party policy. For the sake of the record, it is worth repeating what that great former Liberal who became the greatest Conservative once said—that the system
  1474
  of alternative voting was "the worst of all possible plans", adding:
  "The decision of 100 or more constituencies, perhaps 200, is to be determined by the most worthless votes given for the most worthless candidates."—[Official Report, 2nd June 1931; Vol. 253, c. 106.]
  I hope that thereby he damned forever what must, I agree, be an exceedingly bad system.
  Mr. Hooson: Will the right hon. and learned Gentleman inform us who that was?
  Sir D. Renton: I thought that I had done so. It was Sir Winston Churchill.
  A few weeks ago, we had a most interesting discussion, late at night, in Committee on the Scotland and Wales Bill, on a proposal to apply the additional member system to the Assemblies. That is certainly worthy of further discussion by a Speaker's Conference. There is also the present French system of the second ballot. I concede that that is not PR, but it has brought remarkable stability and decisiveness to French politics after years of frequent changes of Government and political instability and turmoil. I would have thought that that was also a system which should be considered.
  Out of the 300 systems that I have mentioned there would no doubt be others—which are perhaps well tried and are in force abroad—that are also worthy of study.
  This is an important issue, on which strong opinions are held, as has been shown by this debate. It will not vanish merely by being ignored or somehow wished away, and the Conservative Party certainly does not pretend that that can happen.
  We expect to win the next General Election decisively under the present system of first-past-the-post. In doing so we shall again undertake to convene a Speaker's Conference, so that the matter can be fully and fairly considered in the light of modern experience. Therefore, although we do not agree with the exact wording of the motion because of the fallacy in it that I have mentioned, and because of some of the implications which have been dawn from it in the course of the debate, we do welcome the discussion on this matter which the motion has provided. We shall take note of the views

  1475
  expressed in this debate and we stand by our commitment to another Speaker's Conference.
  6.22 p.m.
  The Minister of State, Home Office (Mr. Brymnor John): Perhaps I can redress the balance, because the hon. and learned Member for Montgomery (Mr. Hooson) alleged that all Ministers were programmed by the box. Perhaps I shall make less of an ex cathedra speech than that of the right hon. and learned Member for Huntingdonshire (Sir D. Renton).
  The debate has ranged widely over a number of issues that arc not within the terms of the motion. Many of them reflect the responsibilities of my right hon. Friend the Lord President. I was asked to answer the debate in the mistaken belief that the motion meant what it said rather than its being a vehicle for a wider debate.
  In common with the hon. Member for Woking (Mr. Onslow), none of us who witnessed the tragic death of Anthony Crosland, and many other facets of our Government, would be so arrogant or presumptuous as to suggest that our present system is ideal or that it did not need to be looked at.
  Although people outside may espouse this cause we must have due regard to the complexity of the subject, because reform of Government is not solely a matter of remedying the voting system and, thereby, remedying other matters of government. I do not believe that it would be anything other than a serious disillusioning if people were led to believe that a reform of the voting system would lead to a reform of every other facet of our life.
  I stand beside the hon. Member for Rushcliffe (Mr. Clarke) who warned about the danger of denigrating the present system too much. I accept, and I have acknowledged, its imperfections But it has proved to be a resilient and adaptive system, which does not deserve the denigration and over-statement that has been characteristic of some statements from the Liberal Bench this evening.
  I want to mention the moving tributes paid to the power of the House of Commons, and its power over the Executive. I remind the Liberal Party that when the House of Commons considered PR in the most recent debate it rejected that
  1476
  system by a large majority. [HON. MEMBERS: "On a three-line Whip."] If 221 votes to 25 is the result of a three-line Whip I should be a little frightened of one-line Whips.
  I should like to deal with the end of the motion before I refer to the beginning. It states that the reform of the voting system gives effect to the wishes of the people. That presupposes that there is only one wish of the people when electing a representative. I concede that some people think that the electoral system is unfair. But I do not believe the public opinion polls which state that the majority of people take that view even at the moment.
  The second thing that people are looking for is the election of an individual to serve their constituency—a man to be their MP. The connection between an MP and a district is not only an invigorating part of our democracy but it also reduces disillusion in the democratic process and reduces the estrangement that people feel with the democratic process and enhances their involvement.
  Mr. David Penhaligon Mr. David Penhaligon (Truro) rose—
  Mr. John: I shall not give way. I started my speech at a late hour and I understand that another Member of the hon. Gentleman's party wishes to wind up. The next point I wish to make is that the single transferable vote system, so beloved of the Liberal Party at the moment, is one that would lead to large multi-Member constituencies.
  Mr. Thorpe: What about Northern Ireland?
  Mr. John: I shall come on to the right hon. Gentleman's interjection. I was saying that in any part of the mainland of the United Kingdom this would lead to a number of effects. It would weaken the geographical connection which most constituencies have with their Member of Parliament because it has been calculated on the Scottish basis that everything north and west of the Great Glen would be two constituencies if one is to have equality of representation and roughly the same number of people electing their Members of Parliament.
  Secondly, because a constituency had a number of Members, there is no longer an individual with whom an electorate

  1477
  has any connection. That may not affect the central party machine, but it must enhance the power of regional party executive rather than the individual because many of the selective processes for candidates would take place in areas which did not have the faintest idea about people from other areas and one small area in a large constituency could easily dominate the representation.
  The third thing that the electorate wants is some sort of certainty about its government.
  Mr. Charles Morrison: The Minister expressed the view that the STV system had disadvantages and that that system is not relevant. What about the additional member system which is in existence in Germany and which has been suggested by the Commission sitting under the chairmanship of Lord Blake? Would the Minister care to comment on that?
  Mr. John: I am commenting on the terms of the motion. I do not think that any system is free of difficulty. The additional Member system, in particular, divorces the additional Member from the electorate. Some people have suggested that he might be free to take into account wider considerations, but the fact is that the additional Member system does contain many of the difficulties that I have described.
  I was talking about certain government. I am saying that although the narrow majority tends to militate against my argument, I believe that the probable result—this is where the right hon. Member for Devon, North (Mr. Thorpe) and I disagree—rather than the possible result of PR would be a coalition government. I believe that would lead to a number of ills.
  The right hon. Gentleman made the point that if people vote in a certain way that must be what they wish. Although they may vote for the Liberal Party they are not necessarily expressing a wish for coalition government. I do not think that his logic on that point is right.
  Certain ills flow from having a coalition Government. There is the question of negotiation of portfolios and particularly the blurring of the responsibility that an electorate can put upon a Govern-
  1478
  ment. It hardly needs to be said, in view of what the right hon. and learned Member for Huntingdonshire said in his party political broadcast about the shortcomings of the Labour Government and the great future that he foresees for a Conservative Government, but I agree that in the present system it is easy for the electorate to fix responsibility upon the Government.
  Where a coalition Government exists, particularly if more than two parties form the Government—it might easily be so—the cross-blame and assumptions of virtue that occur at an election as to what went right or wrong in the last Parliament would mean a blurring of responsibility of which the electorate could not make use in forming a reasonable judgment of what happened.
  That process leads to the country not getting the measures that it needs. I think that we have all approached this matter in a moderate way. But there is an assumption that there must be a watering down of anybody's proposals if they are to be right. I do not think that that assumption in economic terms is necessarily right. In a coalition Government we are likely to see not measures which the country needs, but measures which everyone in the coalition can agree upon, which are likely to be the lowest common denominator. The coalition Government will proceed at the pace of their most junior partner. That is precisely the wrong kind of approach.
  Another point concerns the diminution in the quality of the vote which is cast. I acknowledge that the quality of the vote cast may be diminished by the fact that many people vote for a party and may get a disproportionate number of Members of Parliament. But the quality of the vote is also diminished if, having voted for a candidate—heaven knows why people vote for candidates; often they vote against other candidates—because of the policy or a combination of policies which he espouses, a coalition is to be entered into. In that event, the reason why an elector votes for a party may be abandoned not because of the test of the ballot box, but because of the negotiation for compromise in joining a coalition. In other words, it will not be amenable to the test of the ballot box, but will be susceptible to abandonment in the negotiations in some back room to form the Government.

  1479
  Having dealt, I hope sufficiently, with the point that the wishes of the people are not necessarily coincidental purely with reform of the voting system or "fair" electoral system, I turn to the first part of the motion which is an unsupported assertion. It states
  "that Great Britain's economic performance is gravely hindered by a system of government".
  No real connection has been adduced between those two matters. Certain examples have been produced, but no clear connection has been adduced between those two elements. I do not believe that they have a particular connection.
  The right hon. Member for Devon, North said that lack of continuity is the great evil, and that is the evil to be overcome. The right hon. Gentleman said that investment was frightened off by a lack of continuity of government. A more stable pattern of government would produce a better result.
  The hon. Member for Woking put forward a different view. The hon. Gentleman said that we should have more frequent elections and should not leave the power in the hands of the Executive. That seems dangerously close to inviting the same lack of continuity of which the right hon. Member for Devon, North complained.
  Mr. Onslow: I did not have time to expand my argument. One of my beliefs in more frequent elections is that governments would then have less time to do bad things.
  Mr. John: The hon. Gentleman seems to think that the ills of the Government are put right more by the sins of commission than of omission. I am not sure that is right. Governments of both major parties since the war have wrestled with an intractable series of economic problems. That does not mean that the Government who carry out policies are necessarily to be held in less esteem than the Government who do nothing and hope that the problems will go away. The lesson of the modern world is that problems of that kind do not go away.
  Dr. Phipps: That is the view which I should have taken in the past. If there is no correlation between our system of government and economic performance,
  1480
  what are the arguments against changing the governmental system?
  Mr. John: I remind my hon. Friend that I was dealing with a change in the voting system and laying in the hands of the electorate all the economic ills of this country. I accept that we can then consider the rights and wrongs of the system on their merits, but we cannot do so under the imperative of economic ills which probably have not flown from that particular system. We need to consider the system of government on its own merits rather than as the cause of our economic ills. I think that my hon. Friend and I would probably reach agreement on that matter.
  Economic troubles and the voting system are demonstrably unconnected. For example, the United States and Canada have first-past-the-post systems and they have not performed badly in economics. In some countries which have proportional representation economic performance is not good.
  Mr. Hooson: Name them.
  Mr. John: I think that it would be unkind in our new European rôle for me to name partners, despite what the hon. and learned Member for Montgomery may try to attract me into doing.
  Let us consider the convolutions undergone in forming coalition Governments. There are occasions when coalitions take a very long time to form in some countries. There may be months of negotiation. Two or three people may be asked to form governments, but they may have to confess their failure. What do the Liberals think would be the effect on the pound of such protracted uncertainty and evidence that nothing was happening in the country? I think that it would have the most devastating effect.
  Mr. Hooson: Will the hon. Gentleman give way?
  Mr. John: I should like to develop this point before the hon. and learned Gentleman exercises extra-sensory perception about what I am going to say. A coalition Government, which would be difficult to form and take months of negotiation, would have a bad effect on the economic performance of this country. So far from the present system hindering economic performance, the suggested alternative might have an equally ruinous effect.
  Mr. Hooson: Will the hon. Gentle. man give an example of a country where this system has had an adverse effect on its currency? For example, has the mark ever been adversely affected during the forming of a coalition in Germany?
  Mr. John: The hon. and learned Gentleman quotes the example of a coalition which is announced in advance of an election. That is the exception. I do not think that examples such as Italy or the Netherlands, where there have been protracted negotiations for coalitions, have been particularly attractive in that respect.
  Mr. Stephen Ross: Does the Minister accept that it would be better if we took longer in forming new Administrations? Perhaps we should take the example of America, where the incoming President has two or three months to build up his team. Often the mistakes in government are made in the first two or three days when the appointments are announced. I think that is a good argument for taking longer in discussions when forming a Government.
  Mr. John: In fact, I was not chosen within the first two or three days. It may be that the hon. Gentleman has me in mind when he gives that example. I do not agree with the hon. Gentleman, because the example of the United States is that of a lamed and enfeebled outgoing Administration and an incoming Administration that has much glamour but does not enjoy any power. At the time of the hand-over—despite the rather greater efforts that have been taken on this occasion—there is a sudden realisation that responsibility rests upon the new administration. Mistakes are just as likely to be made by an Administration formed over a fairly long period as by an incoming Government who are formed rather more quickly.
  I agree that the motion has sparked off a most interesting debate but I believe that it should not be accepted by the House. I submit that it is wrong in its premises, deficient in its logic and misleading in its conclusons. As a consequence the motion might be read as yet one more conjuror's illusion, giving the impression that if we change one thing
  1482
  everything else will follow. It would be harmful to follow such a course.
  I hope that the House will recognise that everyone desires to have the most efficient legislature with tolerable conditions for Members of Parliament and Ministers. We are not masochists. We believe that sometimes intolerable strains are put on all sections of the House. It is because we do not believe that what the hon. Member for Cornwall, North (Mr. Pardoe) has said is necessarily a solution to the problem that I hope the House will not accept the motion.
  6.42p.m.
  Mr. Russell Johnston: For a Liberal to find himself debating electoral reform twice within a month in the House is quite a remarkable experience. In a sense the debate, which has been in the main extremely constructive, has been a continuation of the debate of 25th January. For that reason I think it is a good beginning to what I have to say to refer to the speech of the hon. Member for Derby, North (Mr. Whitehead) on 25th January. The hon. Gentleman knows that I intend to refer to his remarks. I do so because it was generally agreed that he made the most effective case against proportional representation that was made that day on either side of the House or, for that matter, on either Front Bench.
  The hon. Gentleman advanced four principal arguments. First, he said:
  "it will not advance the cause of democracy in the United Kingdom"
  That, of course, is not an argument but an assertion. However—and it is something that has not been mentioned very much this afternoon—we would surely be foolish to ignore that only France and Britain of all the democracies in Europe do not have a proportional system of voting. France will introduce such a system very soon for its elections to the European Parliament. Secondly, it is worth noting that the countries now returning to democracy after the experience of dictatorship—for example, Greece, Portugal and Spain—all intend to employ the proportional system. Greece and Portugal have already done so and Spain will do likewise.
  What happens elsewhere is relevant. It was a sad moment when the hon.

  1483
  Member for Dudly, West (Dr.Phipps) referred to what is done about divisions in the Belgian Parliament. Everyone laughed heartily. Why was that? Perhaps it was because they did not know anything about what happens in the Belgian Parliament. Perhaps it was because they are not very much interested in what happens in any Parliament other than the British Parliament. It is about time that we stopped being so insular in our approach to constitutional matters.
  The second argument that the hon. Member for Derby, North advanced in his criticism of what he referred to as "fancy franchises" was put in this way:
  "But it is not the sole or prime function of the United Kingdom Parliament to represent a microcosm of the nation."
  If it is not, what is the point of this Parliament? What is its function? Is it to govern without concern for its own representative character? It is not enough to say, as the hon. Gentleman went on to do, that many Members stand out against their constituents in supporting policies that would be opposed by 60 per cent. or even 80 per cent. of the constituents. When such stands are taken they are almost always on social issues and not matters of party policy. On matters such as capital punishment and abortion the parties have traditionally avoided taking official views. That argument is not only incredible but quite untenable.
  The hon. Member for Derby, North raised a third argument that has been advanced today by many hon. Members including the Minister of State. It is said that a Member of Parliament forms a precious and vital link with his constituency. What form does this great link take that everyone talks about continuously? Obviously there is a geographical link in that each of us, in a sense, is involved in trying to get a fair share, or possibly more than a fair share, of the national cake for the bit of land that we represent and the people who happen to live in the area. Secondly, there are those who come to us with complaints about the wrong working of the system in any particular sense. But in my experience—I have spoken about these matters with other hon. Members—the public do not go to Members of Parliament on a great many occasions to argue about policy.
  1484
  I do not think it is very likely that Labour Members, or Liberal Members, bombard the Shadow Secretary of State for Education and Science to urge the virtues of comprehensive education. That is for the simple reason that everyone knows his attitude on the matter. It is known already and, therefore, it would be a waste of time to take such an approach. In the same way I am sure that the Secretary of State for Education and Science does not find her postbag full of argument about the link that Members form with the public to be dubious.
  In my experience people do not write a great deal to criticise federalism, for example, although it is known that this is the view that I take. I find the argument about the link that Members form with the public to be dubious.
  The second contention in respect of the relationship between the Member of Parliament is that of identity. On both sides of the House we know of examples of hard working Members who have had a good record of dealing with constituency cases who have been swept out on a tide one way or the other. This happens repeatedly. If it is so important for the elector to relate to his individual Member, why does that so often happen? I should argue as have others—indeed, it was argued by the hon. Member for Rushcliffe (Mr. Clarke)—that it is because most voters are more interested in the Prime Minister and in the Government of the country than anything else.
  If the relationship between Member and elector is so important, why is it that the turnout in the British General Election is lower than that in countries that apply the proportional system? In the previous General Election in this country there was a 72·8 per cent. turnout whereas there have been turnouts in the 90 per cent. in Austria and Italy. In the 1972 General Election in Germany there was a 91 per cent. turnout.
  Mr. Bidwell: How far is the hon. Gentleman discounting the aspect of personal following that a Member must inevitably build up if he is as diligent as the lion. Gentleman suggests most of us are? Surely the personal following that is built up over a longish period has a bearing on the result. Surely that applies particularly to some of his Liberal colleagues who have sat on the Liberal

  1485
  Bench from time to time. Is it not the case that they have been elected as individuals rather than on the basis of being attached to a Liberal Party that very few people understand these days?
  Mr. Johnston: I regret that the hon. Gentleman's understanding of these matters does not extend to the Liberal Party.
  I do not deny that individuals do succeed in holding seats that otherwise would not be held. I accept that that would not happen if they had not been of such effective calibre, but that does not deflect me from my argument.
  The fourth argument that the hon. Member for Derby, North advanced on 25th January has been used again and again throughout this debate:
  "The essential problem of democracy is how to face up to hard choices."
  That is what the hon. Member for Rushcliffe was also dealing with. The hon. Member for Derby, North said a little later:
  "If we have a belief, we have to take sides in the argument."— [Official Report, 25th January 1977; Vol. 924, c. 1316–21.]
  At that time the hon. Gentleman was attacking the hon. Member for Caernarvon (Mr. Wigley), and it is noteworthy that there are no nationalists present for this debate. The hon. Member for Derby, North mentioned the question of nationalisation of steel and said that he did not know whether the nationalists were for or against it. He excluded the idea of any compromise approach. That is not true because we remember the days when gas was nationalised by the first Labour Government after the war. There was then an opportunity to introduce co-ownership of a kind because there was a considerable degree of co-ownership within the gas industry. Apart from the exclusion of any compromise, what the hon. Gentleman and others appear to be saying is that it is more essential to democracy that a decision is made than any question of how many support such a decision. We reject that view. It is of the utmost importance to have in mind how many people support a decision.
  I turn to a number of points made in the debate. I refer first, almost reluctantly, to the archaic argument put forward by the right hon. Member for
  1486
  Battersea, North (Mr. Jay)—because it is typical of many points of this nature made in debates. The right hon. Gentleman asked why the Liberals did not do something about the situation when they were in power. I would remind the right hon. Gentleman that the Liberals were last in power almost half a century ago, and that at that time there were even members of the Labour Party who did not favour votes for women. We are now dealing with affairs half a century later.
  It is worthwhile recording the actual record of the situation. In 1909 Asquith appointed a Royal Commission to investigate the electoral system. The Commission reported in 1910, but its recommendations were not considered because of the major constitutional crisis which then arose over the House of Lords and also because of the Irish question. The war then intervened. The main reason that this matter was not pursued, apart from the fact that the Liberals lost office afterwards, was that electoral reform before the war was not so pressing and urgent because there were only two main parties. When there are two main parties in evidence, the first past-the-post system works to a degree. If there is evidence of a third or fourth party, the system ceases to work in the same way. Also, it was the practice at that time to have a free vote on constitutional issues.
  In 1916 a Speaker's Conference took place and a Bill was carried in the House by Lloyd George and Asquith in 1917 calling for legislation on the recommendations. The whole thing foundered because of the dispute between the Lords and the Commons over the respective merits of the alternative vote, which the hon. Member for Rushcliffe, from the profoundity of his knowledge, equates with the single transferable vote, and STV itself.
  The hon. Member for Lewes (Mr. Rathbone) suggested that my hon. Friend the Member for Cornwall, North was suggesting that economic problems would go away with the coming of proportional representation. That is part of the ridicule type of argument—I am not suggesting that the hon. Member for Lewes was ridiculous—which runs "How is your rheumatism? Have you tried PR?" Certainly economic problems will not go away with the coming of PR, but we con-

  1487
  tend that such problems would be easier to tackle. That the hon. Member for Lewes emphasised the geographical nature of politics produced by the first-past-the-post system was most relevant.
  The right hon. Member for Newham, North-East (Mr. Prentice) emphasised the necessity in this House of repetitive war dances. His references to the history of prices and incomes policies were most apposite.
  My hon. and learned Friend the Member for Montgomery (Mr. Hooson) exposed the illusion of Parliament as a place for genuine collective capacity for changing the views of the Executive, and he quoted interesting figures to back his argument. I believe that that is the case because the system artificially gives to one group complete power.
  The hon. Member for Rushcliffe was largely dealt with by my right hon. Friend the Member for Devon, North (Mr. Thorpe). Essentially what the hon. Gentleman did was to make a series of points and reached conclusions that were totally different from those arrived at by all the major commentators on the political scene. He said that the present system resulted in a pull to the centre. That is not a general agreed view. He said that coalitions were formed by large parties, whereas PR would result in pork-barrel politics and fragmentation and the atmosphere of old smoke-filled rooms. The fact is that it is the secret internal coalitions of the great parties in which the smoke-filled room atmosphere operates. Where one has open coalitions between two different parties, one has to justify what one does to one's supporters and the public. That is a far more open and satisfactory way in which to operate than the present system.
  Mr. Kenneth Clarke: Surely what cannot be refuted is that the Labour Party, in its internal attempts to come to a coalition solution and its attempts to reach agreement on policy, certainly does not conduct its affairs in secret or in smoke-filled rooms. Those affairs are only too public. On the other hand, when an attempt was made to form a coalition between the Liberals and the Conservatives in February 1974, there was something of a mystery. Indeed, that still remains a mystery and it is still disputed.
  Mr. Johnston: I do not dispute that for a moment. I am sorry that the former Prime Minister, the right hon. Member for Sidcup (Mr. Heath) is not present or on terms of conversation with the hon. Member for Rushcliffe, because otherwise he could explain the matter clearly.
  The hon. Member for Islington, North and Finsbury (Mr. Cunningham) seemed to suggest that the only reason we were interested in this system is that we would be in a state of permanent coalition. The plain fact is that where coalition operates it is enforced because of the pattern of voting in the country.
  The hon. Member for Woking (Mr. Onslow) accused us of a dialectical leap. The fact that the hon. Gentleman was unable to perceive my hon. Friend the Member for Rochdale (Mr. Smith) seemed to suggest that the hon. Gentleman's powers of observation are not particularly acute. My hon. Friend has argued the link between the economic and voting system in terms of continuity, decision-making, investment and the creation of an atmosphere of reconciliation. All this will not happen immediately.
  It is often said that in Northern Ireland where the PR system has been introduced the problems did not go away. Of Course they do not go away immediately, because these things take time to establish themselves, but this system has been established elsewhere with success.
  The hon. Member for Dudley said that our system had virtue although not necessarily, if I may paraphrase the hon. Gentleman, all that much virtuosity. I thank him for his reference to the European Parliament. In terms of elections to the European Parliament we shall he compelled by virtue of cur agreement with the Community to have a proportional system of election.
  The right hon. and learned Member for Huntingdonshire (Sir D. Renton), summing up for the Opposition, made a cautious contribution, that was perhaps indicative of the years to which he drew attention. If the Conservative Party is so anxious to discuss this matter, why has it not so far raised the subject in the existing discussions in the Speaker's Conference? I understand that the Conservative Party is not encouraging or pressing discussion of electoral reform in present circumstances.
  Mr. Thorpe: The Conservatives have refused to do so.
  Mr. Johnston: I do not wish to eat into the time of the next debate, and I conclude by saying what was repeated by my hon. Friend the Member for Cornwall, North. Our case is based on three points. First the Liberals believe in representative democracy. The present system produces a Government and Parliament which is unrepresentative and grossly so. More than 70 per cent. of the population voted against the Government or did not vote. That equates the number of people who said in the Sun opinion poll that they favour electoral reform.
  Secondly, Liberals believe that only a system that reflects the majority of public opinion can truly claim to have a mandate and be able to govern effectively. We have a situation now where small swings produces big policy changes and instability.
  Thirdly, Liberals believe in the need for compromise and they see the present system as making compromise more and and more difficult to achieve by artificially excluding those who seek change and encouraging those who do not. We have a Parliament in which debates are rituals and where the Whips rule. We have a polarised, class oriented two-party system which is increasingly out of touch with reality.
  1490
  The hon. Member for Rushcliffe said that the Conservative Party was a broad coalition representative throughout the country. Why then did the Conservative Party have only 11 working-class candidates in 1964 and only five in 1974? A total of 85 per cent. of the funds of the Labour Party come from the unions.
  The Lord President when answering the debate on 26th January, made a deeply disappointing contribution, but at least from the Minister we have not had jokes about Gladstone and Disraeli. That is something for which we should be grateful. But we have had a profoundly Conservative approach and a repetition of old arguments heard throughout the debate which is why I shall not deal with them separately. The Minister's contribution can be summed up in his own phrase that we must
  "have due regard to the complexity of the subject."
  What dynamism and drive that represents! If that is what we are to expect from the Government we have little hope. But, the need for electoral reform is increasingly seen throughout the country. One day soon we shall have it.
  Mr. Pardoe: I beg to ask leave to withdraw the motion.
  Motion, by leave, withdrawn.

NORTHERN IRELAND (SECURITY FORCES)
7.2 p.m.
Mr. J. Enoch Powell: I beg to move.
That this House takes note of the unabated continuance of terrorist violence in Northern Ireland and calls for a further increase in the strength and effectiveness of the Ulster security forces.
With this motion the House leaves the realm of light-hearted fantasy in which it has been enjoying itself for the last three hours or so, and, I am afraid, enters into the area of hard, unpalatable and cruel facts. It is to enable the House and the Government to confront some of these that we have used our opportunity to move this motion tonight.
As to the truth of the first statement in the motion, there is little need of argument. I shall simply mention the fact that civilian casualties in 1976 were much higher than in any previous year with the single exception of 1972, and that even if we feed into that total some adjustment for what are classified as sectarian killings, the picture is not improved. I shall only mention one other figure because it leads us straight into the subject matter of the debate. That is that the deaths of RUC members and RUC reservists were at the highest level of any year and were nearly 50 per cent. higher than in the worst previous year. The House can read more of these details in the quarterly return supplied on 27th January in a Written Answer by the Secretary of State.
There is a further background which is not merely statistical and to which I want firmly to attract the attention of the Secretary of State. That is the profound conviction, which is held throughout the Province, that the Government are doing less than they could, seriously to tackle terrorism and to destroy the IRA. It is most impressive that, to whom ever one talks in Northern Ireland, be they civilian or be they in the security forces, people of a balanced judgment, rational sane people, will seriously tell one that they are convinced that the security forces are being deliberately held back by the orders of the Government from doing what is in their power to do and would be their duty to do, to put an end to terrorism and to defeat the IRA.
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I have stated this fact brutally not because I share that conviction. To me it is inconceivable that the Government are doing other than their utmost to end terrorism. But the right hon. Gentleman must accept as a fact this unfavourable background of opinion against which the Government and the security forces are operating. My colleagues and I plead with the Secretary of State to do everything in his power both to analyse the reasons for this miasma—for such it is—and to do everything that he can to dispel and destroy it. The favourable impression—if I may say so—which in his early months he has created, has as yet done nothing to break this extraordinary diffracting medium, through which so many people in Northern Ireland, including the security forces, view their predicament.
I shall risk one suggestion. It is that the Government policy of making arrests, of picking up wanted persons, only when they are reasonably sure of being able to secure a conviction for a serious offence has not been understood either by the security forces who have to carry out that policy or by the public who are witnesses to it.
This, at any rate, must be one of the explanations for the persistent statement, which everyone finds made in Northern Ireland, that the police or the Army know perfectly well that such and such a person is guilty of such and such a terrorist act and yet he walks free as air in the open daylight. I do not for a moment believe that this happens by reason of a decision on the part of the Government that terrorists shall go at large, nor as a result of any slackness or any lack of willpower on their part. That I do not believe. But what is proved is that the policy—sound in itself, for the converse would be disastrous—has simply not been understood, and has simply not been put over either to the public or to the security forces. I do not pretend that that explanation is the sole one, but I am sure that it is one of them. The Secretary of State has the task of combating and reversing this climate of opinion in which he is at present operating.
I turn from a psychological factor on one side to a psychological factor on the other. It is not our purpose in this

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debate—at any rate on the United Ulster Unionist Bench—to concentrate otherwise than on the physical elements in the situation. This is not to say that the physical elements are efficacious or even decisive by themselves; but in one debate, it is useful to concentrate upon one aspect of the subject at a time. Nevertheless, one should analyse the state of mind of one's opponent, because it is by destroying the will of one's opponent that wars are won.
The striking characteristic of the state of mind of the IRA, which is the enemy not only of Her Majesty's Government but also of the Government of the Irish Republic as well as of all decent inhabitants of the whole island of Ireland and indeed of the British Isles, is that it lives in an unreal world, in which it is always just about to topple, by means of terrorist acts, the intentions, policies and pledges of the Government of the United Kingdom. This came out clearly in some of the things exposed in the Balcombe Street trial. It is immensely dangerous that this misconception should exist, that only one more push is needed and the whole "get the troops out" brigade will soon be in a majority in Great Britain, the nerve and will of Her Majesty's Government will be broken, and the British people, sick and tired of all this, will be glad enough to pull out of Northern Ireland.
We in this House know perfectly well how fantastiscaly remote such an appreciation is from the reality; and we know that, whatever our personal opinions or aspirations with regard to the future of Northern Ireland may be. But the terrifying fact is that, after so much effort on the part of Government and security forces, the message has not got across to the IRA that it will not win in that way and that there is no possibility of its winning in that way. This means that every stance of the Government—everything which they do, every word which they speak—must be measured in the light of that misconception; for unless and until that misconception is destroyed, the IRA and those who react criminally to the IRA will continue to destroy innocent lives for literally no purpose.
I turn to the physical factors, upon which I shall concentrate for the remainder of what I have to say. I wish
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to refer to three aspects of the security forces—first, manpower, secondly, armament and, thirdly, rôle and mutual co-operation.
The RUC concluded 1976 with an increase in strength which was gratifying. It brought the regular force up to 5,253 or 350 more than it had been 12 months ago at the beginning of the year. This was to some extent offset—I shall be grateful if the Secretary of State will comment upon this, because there may be some misunderstanding—by an appreciable diminution in the part-time RUC Reserve, so that the figures, when expressed as a crude total, appear to be less favourable than they ought to be. I am sure that the Secretary of State will give us the reassurance that we require, that satisfactory—as it went—though the record of 1976 was, he will not be satisfied unless he beats it in 1977.
We need as soon as possible to get up to the provisional target—it has been made clear that it is only provisional—of 6,000, which, incidentally, will be twice the level at which the regular RUC stood in 1969, in circumstances for which Her Majesty's Government in the United Kingdom were not responsible. The size of the RUC is of obvious relevance; but it may not be fully appreciated that the total force available has a direct relationship to the effectiveness with which any part of it operates in a particular situation. We are not merely chasing establishments when we say that, if we were to pick out perhaps one single factor to which we need to give the highest priority, it would be the earliest achievement of that 6,000 target for the regular RUC and to go on from there afterwards.
There is an additional reason, which I have already mentioned, why this achievement is particularly important. It is that in these months the RUC is being deliberately placed under maximum stress by the IRA. The RUC is the prime target of the attacks of the IRA in this phase. It is all the more important that it should not only be seen to enjoy the support and confidence of the Government and all concerned but that it should have the assurance of our intention to build up its strength at least to that provisional figure, from which I believe we shall have to move on further.
Before I come to the recruitment of the Ulster Defence Regiment, I want to refer

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to another psychological factor which again the right hon. Gentleman must recognise, difficult though it may be for him to cope with I refer to the widespread conviction that persons entirely suitable in every respect for recruitment into the security forces are being refused upon trivial grounds or upon the ground of prejudice, or upon some other ground evincing reluctance or unsureness on the part of the Government.
Once again, I say to the Secretary of State that I simply do not believe this. But, equally, I have to contend with the fact that I am confronted, as all of my hon. Friends are in their constituencies, not merely with the general assertion "Oh well, it is no use our volunteering for these Reserves and the UDR because we know perfectly well that the only result would be that our application would be mulled over for months and then thrown out" but also with alleged cases in which persons who are totally fit, willing, loyal, of blemishless character, have been refused enlistment.
The right hon. Gentleman cannot rest upon his assurance, which I believe he can truthfully give, that this is a misapprehension. This misapprehension is a fact which militates against recruitment. My hon. Friends know that this is so. As before, I will make a suggestion to the right hon. Gentleman. I believe that he has to go further than he has hitherto gone in taking the individual Members of Parliament concerned into his confidence as far as possible when individual cases are brought before him.
I fully realise the difficulties of my suggestion and I fully understand that many grounds on which would-be recruits are declined ought not to be known, not least for the sake of the persons concerned. But we in this House are, or should be, the public relations officers of the right hon. Gentleman in this respect. If we are to help him in destroying the adverse factors which militate against recruitment, he must put us in a position in which we, at any rate, are able, with conviction, to repudiate the allegations with which we meet. We can only repudiate them specifically, since our first line of defence is to ask for specific evidence. But when we are given the evidence and we are not in a position personally to say that we repudiate it, we cannot do much to help. So there is
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another unwelcomed load which I place upon the plate of the Secretary of State; but he knows that I do so because to discuss recruitment without mentioning this would be totally unrealistic.
Mr. Max Madden: I apologise to the right hon. Gentleman for missing his opening remarks but I was very interested in what he has just said. Before he leaves that point, could he tell the House whether he or any of his hon. Friends have submitted these allegations to the authorities and, if so, what has been the reaction? Would he also consider the advisability of creating some sort of appeal machinery to which allegations of this sort could be submitted for possible independent investigation?
Mr. Powell: I shall gladly answer the hon. Gentleman, and I hope that other hon. Members will forgive me if my answer adds a minute or two to my speech. In answer to his first question, the Secretary of State can confirm that my hon. Friends and I regularly put forward cases which appear to us to be inexplicable. So far the reply has been the assurance that the matter has been properly considered, that the discretion of the chief constable or whoever it may be has been properly exercised, and that the Secretary of State is satisfied that this is so. I am willing to accept the word of the Secretary of State. That is what we do in this House. But the result of that formula is that my hon. Friends and I are in no position—I do not say to disclose any particulars—we are in no position to rebut, or to attempt to break down the prevalent misconception.
On the other half of the hon. Gentleman's question, while I and my hon. Friends support the new code of appeal and discipline applying to the police, and would support any system which went as far as possible to guarantee fairness to members of the forces, I must say that I do not see how, in the recruitment of the Armed Forces, it would be possible or desirable for persons who thought themselves aggrieved by not being recruited to be able to appeal against the decision. That would involve, amongst other things, the inconceivable result that recruits could be forced upon Services which actually did not want to have them. So my first reaction to the hon. Gentleman's second suggestion,

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which I realise was made in good part, has to be a negative one.
I return to the UDR, where the situation in 1976 was more disappointing. Although it was only a matter of 2½ per cent., we have to face the fact that we had a relapse in the number of persons in service in the UDR. There is also disappointment, which I will not conceal, at the rate of implementation of the Government's decision to increase the full-time element of the UDR. We were glad to hear the reply of the Under-Secretary of State for the Army at Question time yesterday confirming that the figure of 200 was only a first instalment.
Neverthless we do not believe that this recruitment is at present being pressed ahead with the maximum energy. There may be reasons and there may be difficulties, and I shall mention one or two of them before I sit down, but we ought clearly to have the initial aim for the UDR of 8,000 men, of which no less than 2,000 or a quarter—that is the equivalent of one company in a battalion—would be on a full-time basis. With less than that, or with a different composition from that, I do not believe that the UDR can perform its rôle.
I turn now to armament. The inadequacies of the present armament of the RUC are, I believe, admitted. A certain number of new weapons and new vehicles have been issued to the RUC; but it is our experience that in areas where these weapons and vehicles are most essential—I speak here for several of my hon. Friends—they have either not yet been issued at all or are not issued on a scale which makes it possible for the RUC to be able to operate in the way that it ought to be able to operate without the immediate backing of the Army.
There is no question hereof expecting or asking the RUC to perform the Army's rôle—the two rôles are distinct—but equally it is impossible, with the improving arms of the IRA, to expect the RUC, however courageous it is, to be effective unless it is backed by weapons under its control which are at least the equal of what can be brought against them—and used against them with the advantage of surprise and position —by the enemy whom they have to confront.
The Secretary of State is separated from these questions technically by at
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least two administrative layers, namely the chief constable and the Police Authority; but I am sure he will not disavow his fundamental responsibility in this matter by a simple reference —which we have had too often in the past—to the fact that these matters fall within the responsibility of the Police Authority. After all, it would be quite wrong, even if it were possible, for us to quote police opinions at the Secretary of State. Our alternative therefore is to appeal to him to accept his responsibility, for it is his, for the type of armament and the scale of armament of the RUC.
Turning to the UDR, I must say that the reply given yesterday by the Under-Secretary of State for the Army caused very considerable surprise to my hon. Friends and myself. His reply, to the effect that the armament of the UDR was on the same scale as well as of the same quality as that of the Regular Army, is very difficult to reconcile with what we actually know from our own constituencies, where we know as a matter of fact that the scale of transport, wireless sets and other equipment is in no battalion adequate to maintain the whole of that battalion in operation at one time.
If we are being told that the British Army is in such a position that no infantry battalion has the scale of proper infantry weapons to allow it to operate effectively, we must be content to suppose that the UDR is on the same scale; but this is an absurd position in which to place the UDR.
We are magnifying our difficulties by attempting to recruit for forces in which these facts are known and notorious and cannot be concealed by those who serve in them. Again, we understand that a survey last year showed that only 25 per cent. of the wireless sets used by the UDR were in working order. So we ask the Secretary of State to address himself directly, hand in hand with the primarily responsible Secretary of State for Defence, whom we are grateful to see attending this debate, to the task of bringing the infantry battalion equipment of the UDR as soon as possible to the full Regular Army scale. I guarantee that that will have more effect than anything else upon the achievement of the task of recruitment which the Government have set themselves.

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I have dealt with armament; but what of rôle and co-operation? The best-armed and equipped security forces will still lack morale and conviction if they are unclear about their rôle or if they find constant ambiguity in the relationship between their rôle and that of the other forces with which they are operating on what should be the same front. I am not denying that there has been some progress in this respect over the last two or three years. A recent parliamentary reply showed that the boundaries between the Army and the RUC have been brought into co-ordination to a very respectable level; but mere coincidence of boundaries is not sufficient to secure the co-operation which is necessary. The evidence that reaches my hon. Friends and myself is that the Army and the RUC, and the RUC and the UDR, are more out of touch with one another than is tolerable in present circumstances.
Once again I will not make that criticism without adding a practical suggestion. I believe that the best way to establish the requisite co-operation is by training together. I am informed—perhaps I am informed wrongly—that there is no training together between the UDR and RUC. Certainly what common training studies there are, are inadequate. Again, what training in common is there, what common exercises are carried out, between the police and the Army? I do not want specific answers; but if this matter is being attended to, the Secretary of State will be able to give an answer which ought to remove doubt. However, the fact is—nobody who goes around in Northern Ireland can be ignorant of it, and we sometimes have very personal experiences which prove it to us—that even in the most dangerous areas in Northern Ireland one security force is often operating without knowing or understanding either the purposes or the intentions of the other security force in the area. That applies to all three—the RUC, the Army and the UDR.
We say, therefore, that the other requirement for recruitment and morale is that co-operation shall be raised to a much higher level, so that all the security forces have the same morale, because they see themselves as doing the same job together. As part of that we must succeed at last in defining the true rôle of the UDR in a way that has not been done
1500
yet. There has been too much uncertainty about this matter—too much to suggest that the UDR is a kind of stopgap for the Regular Army. I understand, for example, that in a number of cases the UDR has been used for taking over static duties from which regular troops have been withdrawn.
We believe that the rôle of the UDR, as part of the Army, is to be a fully-equipped, fully-trained frontier force and that that is what it exists for. It is a full-time and a part-time force, but it is also a regular force of the Army, with that specific task. That must be so clearly understood that it informs the attitude and morale of the whole UDR and is accepted by the other security forces which are operating in conjunction with it.
I am sorry that I have taken up half an hour of the three hours which is all that is available. However, I am sure that the Secretary of State and the House understand that it was necessary, if they are to benefit, and if, thereby, Northern Ireland is to benefit from this debate, for the whole field to be as far as possible comprehensively displayed, at any rate upon the physical side.
7.35 p.m.
The Secretary of State for Northern Ireland (Mr. Roy Mason): I am sure that the whole House is grateful to the right hon. Member for Down, South (Mr. Powell) and to his party that we should be debating this subject tonight. It is right that the House should spend a little more time on the question of security in Northern Ireland.
I do not agree with all that the right hon. Gentleman said, but I agree that terrorist violence still constitutes one of the worst problems that we have to face in Northern Ireland. I do not seek to conceal that state of affairs, nor do I want to give at any time the impression that Her Majesty's Government—and particularly myself—are complacent about the matter. In the Government book there is no such thing as an acceptable level of violence. There is no question, either, of purposely holding back the forces. Of course, in some areas of Northern Ireland where now, increasingly, the British Army is becoming the buttress of the RUC, it may be being missed. It may be that it is not so noticeable and does not have

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the same high profile as it had before Where the RUC is coming to the fore this impression may be gained.
As for arrests by the security forces, I can assure the House that there is no restraint whatever. I would have thought that the security forces must feel that they have to be sure. If they make a mistake—and this particularly applies to the British Army—they know that that mistake will be exploited to the full and that the propaganda backlash could do them a great deal of harm.
It may be argued tonight that we are not making as much headway as we would like in tackling terrorist violence. I think that would be wrong and misleading. We have to look at all the statistics and we have to be clear about the different types of violence, whether they take the form of attacks on the security forces sectarian killings, or attacks on commercial property. If we look at the full range of figures it is clear that the downward trend apparent since 1972, continued generally in 1976, and the sectarian assassinations, which were not greatly, if at all, affected by the so-called cease-fire in 1975, the overall level for 1976 was less than that of the previous year.
There are some other hopeful signs. The quantity of explosives estimated to have been used by the terrorists during 1976 was only a fraction of the pre-cease-fire level. We believe that the increasingly stringent control of explosive substances both here and in the Irish Republic is paying off, and I can assure the House that this is a field to which the Government continue to devote great attention.
I should also record the steadily increasing effectiveness of the police. During 1976 1,276 persons were charged with terrorist-type offences, and there were more in the last quarter than in any of the three preceding ones. These charges included 241 for murder or attempted murder. But even more important are convictions. In 1976, 934 persons were convicted, on indictment, of scheduled offences.
Despite some brutal and well-publicised attacks, many of the favourable trends that I have described have continued into the new year. Good arrests, for instance,
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continue to be made. The Chief Constable tells me that among those charged during January were 10 whom he considers to have been organisers of Provisional IRA violence. As hon. Members will probably be aware, two men have now been charged with the despicable murder of Geoff Agate, in Londonderry, and the opening weeks of the new year have seen the charging of loyalist paramilitary gangs who were operating in Ballymena, Bangor and County Armagh, respectively. That is the sort of positive progress that is being made.
The Government are convinced that the policy that they are pursuing is the right one and the one most likely in the long term to bring a final end to violence. But we must not delude ourselves that there is some other magic recipe, as yet untried. There is no guarantee that some other sweeping measures would achieve the desired end, either by their impact on the terrorist or their effect on the ordinary citizen.
A democracy functions by the will of the people and through the rule of law. It cannot behave like a totalitarian State, nor is it right that it should. Its security forces exist to defend the rights of its citizens and not to limit them. I am convinced that the message is getting through to the men of violence, and as I have emphasised time and time again that they have set their feet on a road that goes nowhere. There will be no negotiations with them, and there will be no amnesty; only steady, unrelenting pressure.
This pressure comes from the men and women on the ground doing the job, supported by the right organisation and equipment. In this respect it is the RUC who must shoulder the main responsibility for bringing the terrorists to trial.
During 1976 there were about 2,900 applications to join the RUC, and 581 recruits were accepted. This is the highest recruitment figure for any year in the history of the force, and it follows the 1975 total of 505, which was itself a record figure. But despite the real and apparent pressures on the RUC, the wastage for other than normal retirements or resignations for personal and very specific reasons is not a significant factor in Northern Ireland.

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In terms of a percentage of total strength the overall wastage rate has remained broadly constant at around 4 per cent. over the past few years. This record compares favourably with other forces in the United Kingdom. It is an encouraging indication of the morale of the force and its continuing will to serve the whole community. The strength of the force at the end of January was 5,320, and although there is still some way to go before we attain the establishment of 6,500 officers the prospects are good.
I did look at the figures to which the right hon. Member for Down, South referred—the 2,000 applications. He complained that despite this we took on only the number to which I have referred. There are divisions in Northern Ireland that are up to establishment, and in those areas people are turned away. In these cases there is a feeling of dissatisfaction. There is also a rigid screening process, and as we approach the level of establishment naturally we go for more experience or a better type of person.
It has been suggested that greater use should be made of reserve constables. I know that the Chief Constable is considering whether the existing strength of the force, including the part-time and full-time reserve, might be more effectively organised to meet demands on their resources. But we should remember that the reality of police work is that the prevention of crime is as important as detection. The very presence of a reserve constable is a deterrent to the criminal, and the officer is thus making a valuable and effective contribution to the maintenance of law and order. If at the same time a regular officer can be released for other duties—and there will always be tasks which can only be carried out by the regular force—the contribution made by the reserve constable is even more worthwhile.
Recruitment to both arms of the reserve is continuing satisfactorily, and the total strength is now 4,678—the full-time reserve strength is 889, and the part-time strength 3,789. The right hon. Member for Down, South is quite correct. There is a slight diminution in the part-time reserve figure, but the overall full-time and part-time reserve figures show an increase in strength and capability.
Mr. Michael McNair-Wilson: Will the Secretary of State be kind
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enough to explain more fully why such large numbers of people were turned away from the RUC out of the 2,900 applicants? Is there any one factor which acts most as the sieving process to keep them out?
Mr. Mason: I do not think that I can highlight one factor. Some divisions are up to establishment, and a lot of people are turned away from them. This is one of the recurring problems.
Also, there is a very tough screening process. I would like to see a better blend in the RUC. I would like to see Church and political leaders urging strongly that more members of the minority community should join the RUC, and encouraging more applicants in areas of under-establishment.
Mr. Wm. Ross: The Secretary of State is talking about divisions being up to establishment. I understood that there was no fixed establishment of the RUC. Surely when he is talking about divisions being up to establishment, he is talking about reservists within divisions.
Mr. Mason: There are areas in Northern Ireland where the full-time RUC has been fully catered for. It is true about the RUC part-time reserve. I am content, however, that the Chief Constable and his officers are doing their utmost to get the right type of person, wherever they can, within the right divisions and at the same time maintain an establishment of 6,500.
Mr. Powell: Will the Secretary of State consider with his advisers how some of these general factors could be brought to public notice more than they have been hitherto? This might be part of the answer to the problem that I posed to him.
Mr. Mason: I took note of what the right hon. Member for Down, South said in his opening remarks. I shall see whether I can move in that direction, subject to consultations with the Chief Constable.
In present circumstances the police cannot be left to face unaided the murderous activities of terrorist organisations. Military support is still needed to achieve our long-term aim to restore in the

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Province a situation in which the police are solely responsible for the maintenance of law and order as they are in the rest of the United Kingdom. Until that time the RUC and the Army will continue to function in partnership. We should remember that intelligence gathered by the Army has been of great value in bringing terrorists before the courts.
We continue to have about 14,000 men of the Regular Army stationed in Northern Ireland. These numbers will be reduced only when the Government are quite convinced that this can be done without risk to the lives and property of the people.
The General Officer Commanding keeps the deployment of troops in Northern Ireland under constant review. The aim is always to have men available—whether it be the SAS or any other unit —where they are needed most to complement police operations. In a number of areas, first-line support for the police is now provided by the Ulster Defence Regiment. This enables Regular forces to be concentrated in the most vulnerable areas.
The Ulster Defence Regiment is being strengthened in line with its increasing operational rôle and particularly to provide a 24-hour cover in its particular areas of responsibility. The House will know that the Government are recruiting as a first step an additional 200 full-time members. This recruitment has now begun, and we shall do everything in our power to reach the target as quickly as possible. I hope that further recruitment beyond that figure can be attained.
The right hon. Member for Down, South mentioned particularly the UDR and the recruiting campaign for the part-time UDR. A higher proportion of young men are joining the regiment. In the last 14 months nine of the 11 battalions have been called out for full-time service in the Province, and the reserve of the regiment is operational at weekends.
I assure the House that all arms of the security forces co-operate closely with each other. But the training that is appropriate for military forces is not necessarily equally appropriate for the police.
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As for equipment, new radio sets will be supplied, I hope, in satisfactory numbers later this year.
Mr. John Carson: In what areas is the UDR providing a backup force for the RUC?
Mr. Mason: I could not say offhand in which areas the UDR is operating, and I do not think that it would be right, for security reasons, to spell it out in detail. However, I have spent some time with the UDR and I know that men and women of the regiment, at great sacrifice of their time and with undoubted personal risk, are helping to make Northern Ireland a safer place to live in. All elements of the security forces are defending the Province against crime and bloodshed. They deserve the warmest support, not only from this House, but from all parties in the Province, who have a clear responsibility to give them their wholehearted and unambiguous backing.
Many of those who criticise the security forces appear to have little concept of the problems that they face or the dangers that confront them. Their work calls for steadfastness, loyalty and courage, and unyielding application to harsh problems. These are qualities which the forces in Northern Ireland show in fullest measure. I am proud of every arm of the security forces and I am confident of their continuing success.
But tributes are not enough. Earlier, I spoke of the success of the security forces and explained that it is the purpose of the present policies to crush both the morale and the resources of the terrorist. I have also made it clear that in spite of these successes the Government are far from complacent. The deaths and assassinations continue, and words are not enough to describe either the pointlessness of these appalling acts or the depth of sorrow and despair felt by families—indeed, whole communities.
No less wasteful is the continuing spectacle of young men and women coming before the courts to receive sentences that will put them behind bars for many years —perhaps for the best years of their lives. To them and others who may embark on terrorist activities I can only say that if convicted they will pay the full penalty of the law. To those who entice them into these activities with a

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specious promise of early liberation and a hero's welcome back into society I would say, "The sooner you stop telling these lies the better it will be for your young people and their families." The sentences of the courts will not be set aside for political considerations; there will be no amnesty; and there will be no question of special treatment for those who claim with unsurpassed arrogance that they have a divine right to maim and to kill their fellow countrymen. Special category status has not been recognised since 1st March 1976. I emphasise once again that there is no going back on that.
Finally, a word about the future. It would be easy, and it may be tempting, to think that because the Government's policy takes effect over a period it is wrong or deficient. Some people urge that the Army should withdraw. I believe that that is the recipe for civil war. Others demand more troops, but sheer numbers are not the most important criterion: rather, we should make available in men and resources whatever is required as necessary. Others talk of harder measures. There is nothing the terrorist would like to see more than for the Government to introduce arbitrary arrests, punishment without trial, punishment for political beliefs and affiliations, and blanket reductions in civil rights. The resentment that these measures would arouse would make the security problem far worse than it is today and prolong it further into the future.
The great strength of the present policy is that it rests on the law—on punishment for criminal acts proved beyond reasonable doubt in open court. Other measures may be needed at times, but in the long run this is the only way that law and order has ever been successfully achieved in a democracy. It is the way that it will be achieved in Northern Ireland. We are determined to see the security problem through to the end, and I tell the people of Northern Ireland that they will not be abandoned.
7.55 p.m.
Mr. Airey Neave: The House is greatly indebted to the hon. Member for Antrim, South (Mr. Molyneaux) and his colleagues for this debate. I do not wish to take up too much of their time.
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In a cogent speech, the right hon. Member for Down, South (Mr. Powell) had much to say with which I entirely agreed—as did the Secretary of State, who showed considerable resolution in what he said about his aim of bringing organised terrorism under control. That is what we should like to see also.
In passing, I would thank the right hon. Gentleman and his Department and the security forces for the efficient security arrangements which they made for the visit of my right hon. Friend the Leader of the Opposition on Monday. I was glad to see that in a lunchtime talk in St. Anne's Cathedral the Secretary of State said that there would be no clever solutions or cynical sell-outs in Northern Ireland. That is the kind of language that we are glad to hear him use.
Although we would not accuse the right hon. Gentleman in any way of complacency, statistics are not enough. It is welcome that 10 organisers of terrorism have been arrested by the RUC—this is something that I have often mentioned in the House—but we have still a long way to go. I am inclined to question, as the right hon. Member for Down, South did, that the message has yet got through to the IRA. It is dangerous to think that it has got through already. I do not think that it has. We must keep up this relentless pressure to ensure that it does get through. The right hon. Gentleman should have the help of the media and use all psychological warfare for this purpose. I repeat what I have said before about that.
After all, Northern Ireland today is a sad contrast to 1968, when it had the lowest crime rate in the United Kingdom. We have a tremendous job to do here. I think that the Secretary of State realises that.
I think that the right hon. Gentleman also realises that he has to give the people of Northern Ireland hope that this year will see the beginning of the end of terrorism. I think that is what he meant in his speech. People need some hard evidence that the Government have the will to win. His determination to push the campaign through must be put beyond doubt.
Saying the right things, which the right hon. Gentleman continually does—and I agree with him—is not quite the same

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as doing the right things. He has not yet had the opportunity to carry this campaign through in getting control of terrorism. I agree that the rates of conviction are extremely high and I join in his congratulations in this regard to the RUC.
But people do not feel conviction, as the right hon. Member for Down, South said, about what is happening in Northern Ireland when Seamus Twomey can go and speak from somewhere in Northern Ireland—on French television, not British television—and make threats against the United Kingdom, saying that the bombing will continue and so forth. There is a glaring gap in security when that kind of thing can happen. We should be glad to hear, since he has made those threats and since he is a member of a proscribed organisation, that if he returns to Northern Ireland, the Secretary of State will take certain steps about him. What he has done is a defiance of the whole authority of the law.
My right hon. Friend the Leader of the Opposition and I went to an RUC station in Belfast on Monday. We were very much impressed by the improvement in morale there, by the much better spirit and the feeling that they are getting on top of things. We saw many fine young men and girls who had recently been recruited to the RUC during this very successful year. I agree with the right hon. Member for Down, South that there should be a higher target than 6,000. However, we welcome the fact that the RUC is receiving better equipment. The buying of the M1 carbines, for example, and the arming of some RUC vehicles will help them in their capacity to deal with terrorist violence. One cannot put the RUC into the front line without doing that. They must be given those weapons. I note that the right hon. Gentleman the Secretary of State nods in agreement.
Turning to the specialist branches of the RUC, particularly the Fraud Squad, may we have some information on what progress has been made in halting the paramilitary movement into commercial exploitation and protection rackets? The Fraud Squad of the RUC is concerned with these matters. How many convictions have there been against those collecting protection money? Has there been any evidence of an increase in the
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willingness of those intimidated to complain to the security forces? Has there been any improvement in that direction?
My hon. Friend the Member for Epping Forest (Mr. Biggs-Davison) asked the Under-Secrtary yesterday about the figures for the UDR. The figures were a little disappointing: only 47 new full-time recruits so far to the UDR. The right hon. Member for Down, South makes a strong point that it is disturbing to note that there has been a slow downward trend in the strength of the UDR from a peak of more than 9,000 to its present figure. We ought to repudiate the propaganda attacks which have been made on the regiment. It is a courageous body of men and women and they have been subjected to a tremendous number of attacks during the last few months. We should bear in mind that these people work, and fight only in their spare time. The question of full-time con-rates is extremely important. We would like to know when it is planned to carry out the increase to 1,000 which has been referred to.
I have one or two final points to make. I do not want to take up too much time because I know that many Northern Ireland Members are anxious to speak. Have the Government any information to tell us about the sources of IRA arms and funds? And is any progress being made in cutting off the sources? We were glad to note from a report in the Irish Times a few days ago that the Department of Justice in the United States was taking legal action against the Noraid Committee. We hope that that will have some effect. These are serious matters, as the Minister knows.
Is there any method of reducing the proceeds to terrorists funds from bank robberies in Northern Ireland? The proceeds are currently running at £500,000 a year. That is another main source of terrorist funds.
It seems to me that the Government really need—and I dare say that the Secretary of State is gradually working on this—a strategic plan to bring organised terrorism under control during 1977 and to destroy the hopes of success of the IRA. In this connection, the Irish Times reported on 18th February that the Provisionals were ready for a "ceasefire". I do not know what that means.

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Could we be quite sure about it? I think the Secretary of State made it clear, but it cannot be too often repeated, that we shall never be tricked again into a "cease-fire" such as the one at the end of 1974. But we shall pursue the terrorists until they are obliged to stop the bloodshed and get no "deal", as was described in the recent book by Mr. Joe Haines, which was very revealing and indiscreet.
We welcome the remarks of the Secretary of State and we hope that he will be successful in bringing terrorism under control.
8.3 p.m.
Mr. Martin Flannery: The motion speaks of the:
"unabated continuance of terrorist violence in Northern Ireland".
That is very true. I have taken part in every debate on Northern Ireland in the three years in which I have been an hon. Member and I intend to try to take part in many more. We are a very select small gathering in these debates we know one another, we talk together and I am sure that, like me, hon. Members receive letters and threats every time they speak.
In my opinion we are getting nowhere. The optimism which we continually show in the Chamber is unjustified and unwarranted. Before I came here the same hon. Members had been saying almost the same things for years and unless there is a change in policy we shall still be here 10 years from now, possibly the same people, saying much the same thing and getting nowhere, just as we are getting nowhere now.
I do not wish to be paternalistic, but when I think of the Northern Ireland Members who have lived in the situation my heart goes out to them because of the horrors they have to face each time they go home. My heart goes out to the people in Northern Ireland, to the children and to the vast Army which we have there. I think that my right hon. Friend said that there we had 14,000 soldiers in Northern Ireland. That is the equivalent of an army division during the war, which could be of the size of 14,000, 15,000 or 16,000 men. It is a vast array of force and it is doing an honourable job to the best of its ability where there is the
"unabated continuance of terrorist violence."
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We continually discuss this problem as though it were a security problem and not a political one. Hon. Gentlemen know that, to the point of boring them, I am constantly arguing that it is political and has to be discussed as such, and that it is as important as security. Security is vitally important as I am sure hon. Members on both sides will agree. It is a vital necessity, it is a partial solution, it is a palliative, but it is not the solution to the problem. It is time that we stopped discussing gaol and gaolings. If we were to put everybody in gaol, what would that prove, except that we had big gaols. We shall have to put more and more people in gaol and the melancholy lists of acts of terrorism, killings and gaolings will go on indefinitely.
If anyone here thinks that a situation will come about where one sides beats the other to its knees, he is dreaming. That is not the solution and it never will be. It was not the solution in Algeria, for instance. The solution is political.
Although I feel deeply about security, the motion is not helpful because it will not result in more and more troops going to Northern Ireland. If they did it could even deepen but not solve the terribly intractable problem which my right hon. Friend is facing as best he can, and it could bring about the hardening of attitudes. I am against a polarisation developing where we always talk about beating the other side, and the other side reciprocates by saying that it will not be beaten. We have heard, for instance, where soldiers on foot duty have searched a street for armaments, and as a result someone is arrested. It is often claimed by people who are arrested in such circumstances that an injustice has been done.
The continuing slaughter comes from both sides. I have spoken to many hon. Members, some within the last 24 hours, and I have heard the same thing. They speak as though only one side does the killing. The terrorists are on both sides. They reciprocate with violence against one another. We shall not solve it by looking at the problem that way. We must not be sectarian. We must try to cross the sectarian divide by building bridges. The cost in blood and treasure is immense. We never talk about that, but what is happening is colossal in terms of money and death and it is mounting at a phenomenal rate.

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The situation will not suddenly change. Waiting for something to turn up is the politics of Mr. Micawber. The bloodshed will not suddenly dry up and blow away. It will be there and hon. Members will be asking for more and more security and more and more troops until we discuss this in its political context.
Mr. Powell: The hon. Gentleman's participation in these debates is welcomed by my hon. Friends and myself, but there seems to be one factor which he persistently omits. That is the fact that the political object of the IRA is one which is not acceptable not merely to Her Majesty's Government of the United Kingdom but to the Government of the Irish Republic, of which the IRA is as much the enemy as it is of anyone else. That is what it seems that the hon. Gentleman always overlooks.
Mr. Flannery: The right hon. Gentleman is very welcome to intervene at that level, but I must say that I had not overlooked that and I constantly mention where it all sprang from. Hon. Gentlemen know that I want the terrorism to stop. I agree with the Irish Government. I had conversations with some of them last year. One of my hon. Friends led a cross-party delegation to see them. We discussed these matters with the major parties in Southern Ireland, and they agreed with the right hon. Gentleman.
However, let us never forget where this was spawned from. The reality is that the lack of democracy in Northern Ireland, the failure to extend any democracy from the majority to the minority community, spawned the IRA. Until there is real democracy of the type that we have in this country, in which Catholics may vote Labour or Tory and do not vote merely as a separate community, and until there is no sectarian divide between the communities, we shall get nowhere. It is the lack of democracy that has spawned the men of terror. The only thing that will prevent these men from following their path of terror is, in addition to security, more and more democracy.
It will not dry up and blow away. It is time for a change. I shall conclude on this point because hon. Members who live among the men of terror have much to say.
Mr. McCusker: Over the years, my hon. Friends and I have heard the hon. Gentleman continually talking about more and more democracy and about political solutions. Will he talk in practical terms that we can understand? These generalities are all right, but we cannot take matters further by generalities.
Mr. Flannery: The hon. Gentleman is wise about what has happened in Northern Ireland. He knows more about it than I know. However, he knows the reality of what I have said about where all this sprang from. I want a change of mind. I want hon. Gentlemen to know that unless more democracy is extended, the present situation will continue indefinitely.
Mr. Robert J. Bradford: Will the hon. Gentleman give way?
Mr. Flannery: I shall finish my speech shortly, when hon. Gentlemen will have an opportunity to speak.
Having said that security is a real and continuing problem but that, alongside security, more and more democracy is necessary, I want to disagree with my right hon. Friend. He knows my viewpoint, but I shall repeat it. I believe that unless we engage in a new political initiative, we shall be here in 10 years' time and that the killing will still be going on. We must address ourselves to that matter. I have no solution, but I believe that the various sides must be called to-together around a table to say what they want to say. A famous figure from the Conservative Benches once said "Jaw-jaw is better than war-war".
These discussions must take place between the varying sides without there being engendered a belief that by talking one is somehow weakening. The situation will not suddenly change. It is no good waiting for it to change. I suggest to my right hon. Friend and to Opposition Members, who are motivated by the highest principles, that it is time for a change and time for all the various sides to sit together and to say what they want to say to one another, because a beginning must be made soon.
8.14 p.m.
Mr. Robert J. Bradford: I had not intended to respond to

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the speech that we have just heard. However, I must put it to the hon. Member for Sheffield, Hillsborough (Mr. Flannery) —although I would not welcome an intervention from him—that it would be interesting to note who Kevin O'Higgins had to put to the wall at the very beginning of the democratic State that we now know as the Republic of Ireland. There was no grouse then about a lack of democracy. The IRA was recognised for what it was—and is. Action had to be taken then in a way that was anything but kid-gloved.
I come to the substance of the debate. Before touching briefly upon four points, I pay tribute to the three branches of the security forces in Northern Ireland. My right hon. Friend the Member for Down, South (Mr. Powell) may well have done this before I arrived in the Chamber. If so, I apologise to him. I associate myself with words of gratitude expressed to the three branches of the security forces. I refer particularly to members of the bomb disposal squads, particularly those who work in the Belfast area. As a Belfast Member, on behalf of my friends and constituents, I pay tribute to the men who daily risk their lives to save industry and lives in the Province. We also associate ourselves with remarks made by the Secretary of State about the UDR and the RUC.
Having said that, I come to the first point that I Want to ventilate. That concerns the rôle of the RUC. We heard from the Chief Constable some months ago that the RUC would be assuming a rôle of primacy in the Province. I understand that a directive is at present with commanders of the RUC spelling out this new policy in clear detail. I should very much like the Secretary of State to tell us, in clear unambiguous terms, what the primacy of the police involves. It seems that there is the risk of a slight contradiction, at least, because whatever else the primacy of the police means, it means that they must be in the main thrust of our anti-terrorist measures.
We would, of course, like the RUC to be a civil force, as that terms is understood in this part of the United Kingdom. However, the facts of life in Northern Ireland are inescapable. The RUC must be involved in anti-terrorist measures in the Province. Therefore, does the primacy of the police mean that
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the police, having been rearmed and having been given the kind of up-to-date equipment that they require, will be in the forefront of the anti-terrorist policies?
I come now to a point that I hope the Secretary of State will take on board. A few moments ago we were discussing the psychological boosts that the security forces required. One of the greatest boosts that the Secretary of State could give to the RUC at present would be to say that Lord Hunt was absolutely wrong in 1969. Indeed, I think that Lord Hunt now admits that he was wrong in 1969. If, however, that was to come from the Government tonight, it would be a great psychological boost to the RUC. The Government should state that this House was wrong in disarming the RUC in 1969 and wrong in trying to impose a mere civil rôle then.
If the Government say that, they must give a very clear directive to the security forces. They must say to them "While you have a civil policing rôle, somehow you must be directly involved, and when you offer yourselves for service in this constabulary, you should understand that you will be the major part of our antiterrorist thrust."
I agree that morale is, perhaps, slightly higher now than it was some months ago. However, there is still a grave concern and a degree of confusion, and this must be removed if the RUC is to play the kind of rôle that we know it can play. I make no apology for saying that this might mean resurrecting a special force. I hope that that is what the Government mean.
When we had a special force, particularly in the outer regions of the Province, those men were singularly suited to interpret the actions of those who they knew were involved in terrorist activities and were able to circumvent them in a way which saved the Province from the horrendous suffering to which we are now exposed. If we want to keep a dual rôle, if we are to say that the RUC must still assume a civil rôle, as I hope, we must also be logically consistent and say that there must be part of this force whose sole task it is to counter terrrorism and destroy terrorists.
Much play is made of the word "information". It is argued that we are now receiving more information about

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terrorism than ever before from areas which were hitherto opposed to the RUC. That may be true, and if it is we are grateful. But information is not enough. There must be co-operation. Seriously, and without nit-picking, I ask the hon. Member for Belfast, West (Mr. Fitt) whether he would not induce his party overtly to support the RUC, and I ask the peace leaders to come out unequivocally in support of the RUC. If they declare themselves to be pacifists, so be it. I disagree with them fundamentally, but if they care for Northern Ireland, if they recognise the real problem there, let them, too, come out with reluctant politicians in support of the RUC.
I move on quickly to the rôle of the Ulster Defence Regiment. This matter was fully covered by my right hon. Friend, so I shall not detain the House on it, except to say that whilst I unhesitatingly accept the Secretary of State's statement, and whilst I have no doubt about his integrity, the UDR itself believes that there are political restraints on its operations in the Province. Therefore, I suggest that the Government have a great public relations exercise to do within that force if they are to remove the suspicions—indeed, they are more than suspicions—that there may well be actual members of the force who are assuming a political rôle without the knowledge or consent of the Northern Ireland Office and are keeping the UDR out of so-called sensitive areas. We need to have every committed man in Northern Ireland going into the areas where terrorists are known to operate, where they are known to plan their bestial policies. Therefore, I earnestly plead with the Minister to do everything possible to remove the suspicions or, if they exist, to remove the restraints.
My third point concerns communication in times of crisis. Again, I refer to the urban situation, to the Belfast situation. There are times when terrorists strike at a bus station or a railway station and no attempt is made to make the public aware that such a target has received the IRA's attention. I do not know whether hon. Members representing constituencies on this side of the Irish Sea are aware of the confusion that even a bomb hoax causes in the centre of the
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city. It would surely not be beyond the bounds of possibility for the Northern Ireland Office to second civil servants to establish a temporary centre so that people who have to get from their businesses to the outlying reaches of the Province may at least have somewhere to discover where and when to catch a bus. I have seen people having to mill around for a whole day, not knowing where to go or what to do because of a simple bomb hoax. I hope that the Minister will address his mind to the possibility of establishing better communication in times of crisis.
My final point is about the apparent double standards in the application of the law in Northern Ireland. I have a copy of the Belfast Telegraph in which there is a report headed
"12 men are fined under an 1851 Act".
The report was about 12 men in the Dunmurry area in my constituency who, in trying to draw attention to the plight of their colleagues in the Maze Prison, obstructed traffic for a short time. I do not condone that action, but nor can I condone the fact that the men were brought before the court when every week on the Falls Road there is the same kind of action and no one is charged. I live at the very top of the Falls Road in the Andersonstown area, and I assert my right to travel down the road to the centre of the town. On numerous occasions there have been all kinds of demonstrations without charges being brought.
The police are finding it very difficult to keep the confidence and support of people in the law-abiding areas, particularly when this kind of thing is well known. Double standards in the application of the law will have to cease forthwith, or the Minister will make the RUC's job and our job impossible. Neither we nor the RUC have any wish to find ourselves in that kind of situation.
8.27 p.m.
Mr. Ian Gow: I intervene to reply to some of the points made by the hon. Member for Sheffield, Hillsborough (Mr. Flannery), for whom I have the greatest respect. Those of us who have followed his speeches in the House on the subject of Northern Ireland know the depth of the sincerity of his feeling. It was my good fortune to be a member of the party to which the hon. Gentleman

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referred which went to Dublin last year. But when the hon. Gentleman calls on the Government to embark upon a new policy of talking, of negotiating, of sitting round the table—which, I repeat, he does from the highest motives and with the deepest sincerity—he is unwittingly and contrary to his own deeply held convictions and purposes giving precisely that comfort to the enemy which I know he would be the last person ever to want to give.
There is, sadly, in my view and that of my hon. Friends, no alternative to fighting this way—for war it is—until it is carried through to victory. This terrorism, this war, in Northern Ireland, is not a war of the choosing of the United Kingdom Government.
The war is being waged by terrorists who have a political objective. The objective, at least, could be regarded as perfectly legitimate and honourable. There are people in Ulster whose purpose is to sever Northern Ireland from the United Kingdom and to incorporate it in the Republic. There are even people who would like to set up an independent Northern Ireland. That, at least, is a purpose that we can understand. Anybody who wishes to achieve that purpose is entitled to stand freely at elections and to advocate either union with the Republic or independence for Northern Ireland. What is in no sense permissible is that, having failed to achieve that objective through the ballot box, people should then resort to the bullet and the bomb.
I agreed with the right hon. Member for Down, South (Mr. Powell) when he said that what was crucial to the victory over terrorism was a conviction by the terrorists themselves that they will never achieve through violence that which they have failed to achieve through the ballot box. I fear the words of the hon. Member for Sheffield, Hillsborough who said "Let's talk, let's sit round the table and see whether we can reconcile the point of view of those who wish to incorporate Northern Ireland into the Republic or to create an independent Ireland". I do not want to use a provocative word, but perhaps what is wanted is a Marxist State. There is an unbridgeable gulf between those who have that objective and those who, like me, are Unionists and who want Northern Ireland to remain part of the United Kingdom.
Mr. Flannery: I am grateful to the hon. Gentleman for giving way, and I thank him for his kindly words about what I feel. But he is overstepping the mark in saying that the struggle in Northern Ireland broke out on the basis of people wanting to unite with the Republic. That would be a simplistic way of judging the commencement of the struggle. It is far more subtle, profound, deep, and difficult to grapple with than that simplistic point.
Mr. Gow: The hon. Member for Hillsborough and I are not in agreement about this as, indeed, we are not in agreement on other matters. But in so far as it is possible to detect a political objective in those who are engaged in cruel and callous violence on a massive scale in Northern Ireland, that objective is a wish to incorporate Northern Ireland into the Republic. One is going back into history in talking about that.
It is the activities, however sincere, of the hon. Member for Hillsborough and of the hon. Member for Sheffield, Brightside (Miss Maynard), who says that we must withdraw the troops from Northern Ireland, and the hon. Gentleman's call for an end to the Government's policies and for new discussions with the men of violence sitting round the table—a policy specifically repudiated by the Secretary of State in his speech today—that give encouragement to the terrorists in Northern Ireland.
That is why I was glad to hear the Secretary of State tell the House in the clearest terms that the Government will continue with their battle and struggle against terrorism, and that they will continue to make it clear to the terrorists that there will be no negotiations with them and no possibility of political talks until violence has been repudiated as a means of obtaining political objectives.
I welcome the debate. The Secretary of State and hon. Members who are supporting the motion are doing the House and the country a service. I hope that the message will go forth from the House that although there are those on the Labour side of the House—but not, I think, on this side—who believe that the withdrawal of troops or the opening of negotiations would be helpful, the overwhelming view of the majority of the House is that the Government are to

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be supported in that vigorous policy against terrorism to which the Secretary of State referred.
8.34 p.m.
Mr. John Carson: I should like to associate my remarks with those made by my hon. Friend the Member for Belfast, South (Mr. Bradford) in paying tribute to the security forces in Northern Ireland and the tremendous work that they are carrying out under difficult circumstances. I recalled, while listening to the debate, that when an 18-year-old soldier was shot in the Old Park Road five weeks ago, his companions carried on doing their duty in the most polite and courteous manner, almost as though nothing had happened. That is the sort of action that should be noted by the House and for which much credit should be given to the security forces, who are carrying out a difficult task in Northern Ireland.
I was impressed by the speech of the Secretary of State and his assurance that there would be no withdrawal of troops until the battle against terrorism has been won. That was a message of hope for the people of Northern Ireland, because as recently as 17th December the Secretary of State said that the GOC intended to slim down his forces by 500 men.
That statement caused great fear throughout Northern Ireland. Murders are still taking place daily and people are being forced out of business day after day. There is an average of two murders every week in my constituency and it is understandable that there should be concern when we hear statements such as that by the GOC.
There are 600 soldiers responsible for a very large area, with 15 interlacing areas, in my constituency, which stretches from the Glencairn estate to the Shore Road and to the Bawnmore estate. There are 90,000 people in this area, with only 600 soldiers backing up the police, the limited UDR presence, and a few reserve policemen. That is not enough to combat terrorism and to bring to court the people involved in sectarian violence. I hope that the Secretary of State will take on board the need to increase the number of soldiers in North Belfast. The 600 men have to eat and sleep, and that number
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includes many working in intelligence, running operations rooms, working in the cookhouse, and so on. Hon. Members can guess how few soldiers are active on the ground in support of the police scattered over a wide area and in hostile parts of my constituency.
Other events add to the fear of people in Northern Ireland that there will be a withdrawal of troops. Last night the hon. Member for Belfast, West (Mr. Fitt) drew my attention to an article in the Belfast Telegraph, in which a member of his party is reported as saying that he had received an assurance from two highly-placed officials in the Northern Ireland Office that there would be a withdrawal of troops. Even British subjects—people who call themselves loyalists—are advocating the withdrawal of troops.
The Secretary of State cannot emphasise too much or give assurances too often that there will be no withdrawal of the British Army from Northern Ireland. A senior police officer told me that I could be assured that there would not be a soldier left on the streets of Northern Ireland by the end of 1977.
Some of my constituents and others with whom I have had contact tell me that one need only look around to see that the British Government are cutting down on defence, including the labour force, and are selling off properties belonging to the Northern Ireland Office in South Belfast and the North Down area. I have even been informed that the Army tour of duty, now four months in length, is being cut to three months. I hope that the Minister will be able to answer these questions.
One can understand the fears of the people of Northern Ireland when they listen to the politicians and when they see certain things happening, and also hear, from other sources, that there is to be an Army withdrawal. It is up to those of us who represent them in this House to impress upon the Government that they must give a categorical assurance that there will be no withdrawal, that the Army will stay in Northern Ireland until the terrorists and others who are embarked on a course of destruction are defeated, normality is restored, and the rule of law is handed over to the RUC, which is equipped to carry out the job.

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We were told by the Secretary of State on 17th December that there was to be an increase of 200 full-time members of the UDR. That increase has not yet been implemented. I am informed by a close source that the pay structure has not yet been decided. I ask the Minister to tell us when it will be decided and when these 200 extra full-time members of the UDR will take up their jobs. But recruiting 200 extra full-time members of the UDR is merely to touch the tip of the iceberg. I have advocated—I make no apology for it—that 200 is not sufficient. We need a full-time company in each battalion to go to the support of the RUC in its policing job.
I want to touch briefly on the proper deployment of the UDR. There has been an improvement in the situation but there is still a feeling of frustration and of anger amongst its members that they are not being allowed to carry out the job for which they were recruited. On 4th February, I asked about the number of applicants to join the regiment in 1976. I understand that £63,000 was spent on Press and television advertising for recruitment to the regiment. Those advertisements were impressive, but I believe that if men of the UDR were involved in the duties advertised we would get many more recruits. Out of 3,092 applicants last year, about half were received into the UDR.
My right hon. Friend the Member for Down, South (Mr. Powell) spoke about recruitment and those who have been received into the regiment, and I shall not take up time repeating what he said, but we should ask why, after so much expenditure has been involved, only half that number has been accepted into the UDR.
In my own constituency there are limited areas in which the UDR can patrol. In the past we have encouraged, and tonight I would appeal to, members of the minority to join the UDR and play their full part as members of Her Majesty's forces in protecting Northern Ireland against the terrorists who are out to destroy it.
In 1940 43,000 people in Northern Ireland—a large number—were involved in security. In 1977, if we include members of the UDR, the RUC and the RUC Reserve, the grand total is only 16,000. With the scale of IRA and other
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terrorist activity in Northern Ireland that number is insufficient to combat, pursue and bring the terrorists to justice in the way that I am sure the Government would like to see it done and the way in which my right hon. and hon. Friends and the hon. Member for Belfast, West have advocated. The terrorists should be brought to justice and dealt with in the courts, in the proper way.
The Minister of State, Northern Ireland Office (Mr. John Concannon): The hon. Gentleman should add the 14,000 British troops to his total of 16,000.
Mr. Carson: I accept what the Minister says, and I appreciate his intervention, but I was referring to the number of people from Northern Ireland who were involved in security, and I was trying to relate that to the number involved in 1940.
As some of my hon. Friends are keen to take part in this debate I shall be brief. Although my hon. Friend thet Member for Armagh (Mr. McCusker) has not tugged my coat he has looked at his watch.
The Minister can correct me if I am wrong, but in some areas of Northern Ireland the RUC Reserve is at full strength. I have said before in this House that the RUC Reserve is a grand force, but it has been deployed in the wrong way. We have an example in Bangor. I have been told by an authority that in Bangor there is very little for the reserve to do. It is a very peaceful area and there is not the sectarian violence which I and some of my hon. Friends experience in our constituencies.
I should like the Minister to consider whether the Chief Constable should be given the power to take reserve policemen from the Bangor area and put them into North Queen's Street police station or Tennant Street police station and assist the RUC and the reserve police, who are very much under strength in those troubled areas.
I understand that the reserve police can choose exactly on which night they want to do their duty. It is essential that the Chief Constable should have the power to delegate reserve members of the police force and to call upon the services of the

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RUC Reserve at the weekend, when there is often violence on a large scale.
I have had approaches from members of the RUC who have applied to join the special patrol groups. They have appeared before a board and have been accepted. Yet, after six months, they have not been taken into the SPGs. I understand that these people cannot be taken into the special patrol groups immediately because divisional commanders in certain areas cannot afford to lose such men.
I suggest that this is where the reserve police can play a great rôle. Full-time reserve men could easily take the places of policemen who are well trained and experienced, and who would be very welcome within the SPGs.
A great deal of publicity was given to the police receiving the Ml carbine. At the weekend pictures appeared in the Press showing that the IRA could produce a better weapon than the M1 carbine. I believe that an order went out from the Army authorities to get those effective weapons which are now in the hands of the IRA. That was to counteract the statement made by the Chief Constable that the police would be receiving the M1 carbine.
Now, many weeks after that Press announcement, the police still have not received the M1 carbine, or, indeed, the reinforced arming kits which have been ordered for the Land Rovers. I understand that they are now trying to get an arming kit for Land Rovers with a different type of roof. If a bullet went through the roof of a Land Rover it would pierce that type of equipment and mean certain death to those inside.
I understand that the police strongly reject the type of equipment that is being forced on the RUC. I do not know whose fault it is. Perhaps the Minister will enlighten us. Is it the fault of the Chief Constable or the Police Authority? I have been in close contact with the Police Authority recently. I do not think that the Police Authority has been as effective or efficient as it should be. Perhaps the Chairman of the Police Authority is involved in too many committees and does not have ample time to give to the almost full-time job of looking after the welfare and interests of the RUC, which is carrying out an extremely difficult job.
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I think that it has now come home to us in this House that we must support the security forces in Northern Ireland. I have touched briefly on many vital points essential to the police, the reserve police, the UDR, and the well-being and future of Northern Ireland. I think that we all agree that there is no way out until terrorism in Northern Ireland is crushed. We are determined—I hope that the Government and the House are equally determined—to see the job through in the not-too-distant future.
8.55 p.m.
Mr. Gerard Fitt: It is not often that I find myself in agreement with the hon. Member for Belfast, North (Mr. Carson), but I am in fullhearted support of some of the sentiments that he has expressed, especially his remarks about the lack of protection that seems to be afforded to his constituency. We must bear in mind that it is a vast area, geographically. We must also bear in mind the strength of the security forces that can be seen on the streets. I live in the North Belfast area, and it is a fact that quite a number of the most atrocious murders have taken place there, as it hinges on West Belfast. No steps seem to have been taken to prevent such murders. I find myself in agreement with the concern that the hon. Gentleman expressed.
As one would expect, the motion has been brought about by those who represent Northern Ireland constituencies. I am in fullhearted agreement with my hon. Friend the Member for Sheffield, Hillsborough (Mr. Flannery), when he says that their approach is the wrong one. The demand contained in the motion is for an increase in police strength, an in-increase in the strength of the Army, an increase in the strength of the security forces, better recruitment, and better arms. Such demands are not the answer to the problem of Northern Ireland.
I have repeatedly stated, in conjunction with my hon. Friends, that political decisions must be taken before we can expect peace to come about in Northern Ireland. My hon. Friend the Member for Hillsborough said that there must be more democracy in Northern Ireland and that if we have an increased democratic concept we shall have less need for battalions of soldiers. That is quite right.

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I give one example, of which the hon. Member for Abingdon (Mr. Neave) will be well aware. The Government, with the full support of Her Majesty's Opposition, thought it was right last year to put on the statute bok the Fair Employment (Northern Ireland) Act. The Act was designed to do away with discrimination on religious grounds in the seeking of employment in Northern Ireland. One would think that no one could take any objection to such an Act, yet it was bitterly opposed and contested by those who represent the Unionist view in Northern Ireland.
Many local authorities—they are not under the control of the party of the hon. Member for Abingdon—have torn up the Act—a measure that had the full support of the Government and Opposition. They have torn it up and have said that they will not implement it. Such actions are not designed to bring about confidence within the minority community in Northern Ireland.
I know that it is expected of hon. Members in this place to say that they give their wholehearted approval to every action of the security forces. It is expected that we shall support everything that they do. That is the implication of our approval. However, it must be admitted that the Army in Northern Ireland has made mistakes. It is as well to face the fact that the Army is not infallible. It has made mistakes, and its mistakes should be brought to the notice of the House. For example, some time ago a regiment that is known as the Black Watch came into my constituency. Given the history of Scotland and the history of the regiment, it was not the best type of regiment to enter a minority area.
A number of soldiers were continually arresting and harassing innocent people on the streets. They planted fake evidence, so that the people concerned would have to serve sentences of imprisonment. However, those soldiers made one fatal mistake. They arrested one young lad and in the course of harassing him and beating him, they planted bullets on him. They brought that lad to the police station and said "We have arrested this terrorist, and he had bullets on him".
Mr. Powell: What is the point of all this?
Mr. Fitt: The House will hear in a moment. What they did not know was that young man was the nephew of a prominent member of the RUC and that the lad could in no way have been a terrorist. As a result of dealing with that case, the then Chief Constable of the RUC, James Flanagan, began to have doubts about the truthfulness of reports that came to him from that regiment. He ordered an investigation by the RUC, and the constabulary followed the regiment when it left Belfast to go to Germany and elsewhere. As a result of those inquiries, a fortnight ago five members of the Black Watch were brought before the court in Northern Ireland and were found guilty of planting evidence on innocent civilians and of causing them to serve terms of imprisonment. Those soldiers were convicted and sentenced for carrying out crimes in Northern Ireland.
Where are those men to serve their sentences? I was told in a recent parliamentary answer that they are to serve them in Scotland. I have never been a supporter of the IRA's demand that those who have committed offences in England should be transferred to Ireland. I have never once lent my support to that objective. But what is sauce for the goose is sauce for the gander. If members of the British armed forces in Northern Ireland are sentenced by courts in Northern Ireland, they should serve their time there.
Two of the five soldiers involved in that matter were also involved in the controversial killing of one of my constituents, a man named Leo Norney. Many eye-witnesses to that tragedy said that that young lad was not carrying weapons and was not a terrorist. Two of the Black Watch soldiers subsequently convicted by the courts of planting fake evidence were the men responsible for that killing. I believe that enough doubts have been raised over the case of those members of the Black Watch to cause the Secretary of State for Defence or the Secretary of State for Northern Ireland to reopen the whole case of the killing of Leo Norney.
Another matter is causing great annoyance in Northern Ireland—
Mr. Powell: Since the hon. Gentleman is now leaving that point, will he make

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clear whether he would fail to support the Metropolitan Police because members of that force had been rightly convicted of a crime? Why should he withhold his support from the RUC because members of the RUC have been similarly convicted, or from the Army because members of the Army have been similarly convicted?
Mr. Fitt: I have not said that I would withhold any support from the security forces in Northern Ireland. I am saying that where members of the security forces are found to have exceeded their duties and have caused people to be placed in prison, those matters should be made known to the House.
Let me refer to the murders referred to by the hon. Member for Belfast, North. Some of the most heinous murders that have taken place since the present troubles began have occurred in the North Belfast area. Victims have been found in brutal circumstances with their throats cut. Those murders cannot be too hotly condemned. Yet on the occasion of one recent murder—and every weekend I have to go to the funerals of constituents who have been murdered—the RUC put out a statement advising people not to use a part of central Belfast, North Street, up to the Antrim Road and Cliftonville Road, at night for fear of assassination.
That is a condemnation of the RUC. Members of the RUC should be seen in greater numbers in the inner Belfast area. It obviously has enough men to do that. I am not an expert on security, but I suggest that armed RUC men and women should patrol that area at night to protect innocent people. There is a possibility that the assassination squads will try to get armed policemen and women, but only by taking extreme measures such as that can we hope to get our hands on the murderous gang that has been operating for so long.
I agree with what the hon. Member for Belfast, North said about the Army. There are many rumours emanating from the loyalists and from the military organisations and others. Rumours are circulating that the British Army is about to be withdrawn from Northern Ireland. I urge the Minister to tell us once and
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for all whether there is any truth in that rumour.
I ask my hon. Friend to be careful about his answer to my next point. Some of the incident centres that were in operation officially up to a year ago are still operating. Some telephone bills and rents are being paid by the Government to keep the centres in existence. I am think of one in particular in North Belfast. If my information is correct, the Minister should be candid with the House and tell us why the Northern Ireland Office is still keeping these so-called incident centres open.
Mr. Carson: Is the hon. Member aware that in January 1975 the then Secretary of State gave permission for the licensing of Army-style 9 mm pistols to be used in incident centres?
Mr. Fitt: A great deal of concern was expressed in the House about that at the time. I was the first to mention it, and it was referred to by the Secretary of State for Northern Ireland. That could not have helped to solve the security situation in Northern Ireland.
I turn now to the search procedures that the Army carries out on civilians. I know how difficult it is for an army to try to stop the carrying of arms by civilians, particularly females. The law is that a soldier may ask a female to open her coat on the ground that she might be carrying an Armalite rifle or a similar weapon. However, it can be very embarrassing for a young girl to be surrounded by a number of soldiers and to be asked to open her coat. That has happened on many occasions, and remarks are sometimes passed by soldiers. They are not all angels. When a patrol is engaged in searching females it should be accompanied by a female member of the security forces.
9.9 p.m.
Mr. James Kilfedder: The hon. Member for Belfast, West (Mr. Fitt) made the bold statement that only those countries with the fullest democracy have no fighting in their midst. On that basis the only country that is democratic is Russia and perhaps others that are totalitarian and dictatorially suppress the population. Northern Ireland is not such a country. The hon. Member for Belfast,

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West believes that democracy in Northern Ireland should accord a special, privileged position to the SDLP. That cannot be done, and even if it were done the IRA violence would not end.
It is not because of any statement by the hon. Member that I feel sad about this debate. Who would believe, from the attendance in this Chamber, from the placid even complacent atmosphere —something I deeply resent—that Northern Ireland is in its eighth year of agony? Who would believe, from the tenor of some of the speeches, that there are some areas in Northern Ireland which, as we talk, as darkness has fallen, themselves fall under the dominion of the Provisional IRA? These are areas where old people are afraid to move out of their homes, where young people are intimidated into acts of terrorism, where life is brought to a halt and people's lives constantly endangered.
Whenever a foul terrorist act occurs in England there is a hue and cry in this House and throughout the country. This does not happen when the same thing occurs in Northern Ireland. I do not believe that this debate on security will have any meaningful effect. It may have some effect on people in Northern Ireland who may feel that this debate is achieving something. But it is like giving an aspirin to a person dying of cancer. We hear hard and tough speeches, as if the Government were being rocked on their feet. The only way they will be rocked is if they are harassed, and harassed until they do something for the hard-pressed people of Northern Ireland. The Government can be harassed only in the Division Lobby— [Interruption.] I hear the cackle of hens behind me, roused by a fox. The truth is that, except on devolution, those hon. Members will not harass the Government.
Consider the motion that has been tabled. This motion reads:
"That this House takes note of the unabated continuance of terrorist violence in Northern Ireland".
"Takes note"! This motion should condemn the Government for allowing the people to suffer. This is not a proper motion to table, because it is deceiving the people of Northern Ireland who believe that the fight for the Province is being conducted on the Floor of the House. It is not being conducted here.
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The rough speeches are made in Northern Ireland. The people are stirred up there. But the fervour should be in this Chamber because this is where the people's representatives are. The only way to act is through the Division Lobby.
I presume, because of the wording of the motion, that there is a pact between the movers and the Government to the effect that there will be no Division. If the motion had been worded in such a way as to attack the Government they would have had to respond and refuse to accept the motion. The Government can accept this motion. It is a sad situation, because the only constitutional way that the people of Northern Ireland have of expressing their anger is through their elected representatives voting in the Division Lobby.
The Government should have been indicted for failing fully to protect the citizens of our part of the United Kingdom. The motion should have demanded, not meekly call for, the measures that we require to end the campaign of terror which has crucified Ulster for eight years. The Secretary of State has published placards in Northern Ireland and advertisements in the newspapers and on television saying".
"Seven years is long enough."
That is apparently not so. We are now in our eighth year. Shall we still have advertisements in the ninth year? Shall we still have them in the 14th year? I believe that we may have. I go along with the hon. Member for Sheffield, Hillsborough (Mr. Flannery) who said that we may well be debating this subject in 10 years' time. This is because the violence goes on steadily and nothing effective is done about it.
I propose, as I have said often enough before, that the battle should be brought to the Floor of the House. That is what we are here for. It must be done now because the people of Northern Ireland have had enough. With 1,700 dead and 17,000 permanently injured we have had enough of violence in Northern Ireland, from whatever group it comes. Whether Protestants or Roman Catholics, the people of Northern Ireland are subjects of the Queen and citizens of the United Kingdom and they are entitled to protection, no matter in which part of Northern Ireland they may live.

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How many more are to be injured or butchered by the Provisional IRA before the Government force their authority properly on the Province? How many more years will elapse? Perhaps the Minister will tell us when he replies. The bloody and savage destruction waged by the Provisional IRA in Northern Ireland is a complete vindication of the Ulster Unionist position which is that we can never surrender one iota to their campaign and conspiracy. Until the Provisional IRA is completely eliminated from Ulster, no law-abiding citizen can travel the country in safety and no one can feel secure in his own home or at his place of work.
There is a number of measures that the Secretary of State should take, but I have only about one minute left in which to put them. First, the notion was bruited abroad years ago, when General Freeland and the Army were brought into Northern Ireland, that the Army was there to assist the civil authority. In my judgment the Chief Constable, under the Secretary of State, should be made responsible for the direction of security, and the Army should be there to assist the Chief Constable at his request. That is what I demand—the Ulsterisation of the security of the Province.
Secondly, I demand that more Army personnel should be brought to Northern Ireland. At one stage we had 20,000 soldiers in Northern Ireland, but now the number has been reduced to about 14,000, although the violence is unabated. It is argued that having a large number of soldiers will not necessarily bring the violence to an end, but if there were 20,000 or 25,000 soldiers in the Province, how much easier would it be to stop cars, carrying travelling gunmen, explosives, rifles and ammunition? How much easier would it be to protect people along the border as well as in Belfast? It would have a psychological impact on the Provisional IRA, which would realise that the Government at last mean business.
Also, since we hear so much from politicians, I seriously suggest that the law should be changed to allow Northern Ireland Members of Parliament to join the UDR or the Police Reserve, because we so often hear them castigating people in Northern Ireland for not coming forward. Let them join, because they would
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be as much use—or even more use—parading up and down the afflicted parts of the Province as sitting in the House exchanging compliments with Ministers.
The point is always made that the soldiers are needed for NATO, but Northern Ireland is on the flank of NATO and we need the soldiers there to protect that part of Western Europe. I fear that these words will not be listened to by the Government, who are glad to have this debate as a platform for putting forward statistics of successes in capturing criminals and explosives. But, apart from that, it will have no other effect on the people of Northern Ireland, and I would not wish anyone to believe that it will have any other effect. The only statistics that the people of Ulster will accept from the Government are the statistics showing the number of dead and injured in Northern Ireland. When that number goes down dramatically they will realise that something has been done at long last to protect them as citizens of the United Kingdom.
9.20 p.m.
Mr. Wm. Ross: There are many things that could be said in a debate such as this, but unfortunately we must restrict ourselves to the more important aspects of the security situation in Northern Ireland.
Reference has already been made to the photographs of the IRA showing off a heavy machine gun, which photographs were published in the newspapers about a week ago. I believe that that was a purely propaganda exercise, for unless the IRA intends to expand its warfare in Northern Ireland it has no need of such a weapon. The Armalite rifle and the other weapons that it already possesses provide sufficient fire power for the task that the IRA has set itself.
One thing that is clear throughout all the horror of Northern Ireland over the past few years is that efforts to buy off terror and terrorists cannot and will never pay. The clearest proof of this appears in the endless obituary columns in the newspapers of Northern Ireland. That which cannot be bought off must be beaten off.
I view with the gravest suspicion the demands in some Ulster newspapers and some Irish newspapers, from people like

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Mr. McAteer and Mr. McBride, that the IRA should be put down at the conference table. I believe that the IRA can be beaten off only by depriving it of any hope of victory. There should be no talks with it and no recognition, under any circumstances. The incident centres that have been referred to should be closed down immediately. The Minister who is to reply to the debate must tell us why they are still operating and what they are costing the country.
We must demonstrate the will to win in Northern Ireland, up to now, in this House and in the Province, we have been far too concerned about the public image of the Army and of the security forces there. We have been taken to the Strasbourg Court by the Dublin Government, who face a nelection this year. A large patr of that action was possibly electioneering. It seems that that same Government forget about the activities of their own heavy squad in their own police force. I ask the Government here to bear in mind that while we have been nice to the IRA it has been anything but nice to us. While the Government have shown decency towards the IRA in Northern Ireland our people have been getting buried every day of the week.
There are no nice wars, and, particularly, there are no nice guerrilla wars. People get hurt in wars. They get hurt in losing them, they get hurt in a holding operation, and they get hurt in winning them. The terrorists can be stopped only by being killed, and until the day comes when we kill the hard core of terrorists in Northern Ireland our problems will remain.
The terrorists do not need a lot of guns or explosives; they simply need propaganda, and they naturally get it because, unfortunately, underdogs are always popular in the world's Press. Especially, they need a certain amount of support on the ground. That support will always be forthcoming when the terrorist seems to be winning. He will seem to be winning until the Government show that they will win.
We cannot buy people's hearts; we can only convince people that a majority has the right to peace and decency, and the right to rule. We cannot convince those who are naturally opposed to us that the will is there unless they see actual proof
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of that will. That will must be accepted through the ballot box. If by our actions, we show that we really mean to win in Northern Ireland, victory is certain. If we do not show that will, no victory can be achieved.
9.25 p.m.
Mr. James Molyneaux: In your unavoidable absence, Mr. Speaker, it became clear that some hon. Members were under a misunderstanding about the nature of this debate. They seemed to have failed to notice that it was a debate on security on a motion about security and they expressed regret that we were not discussing political solutions. I hasten to remind them that my right hon. and hon. Friends on this Bench have taken an entirely different view. We have made absolutely sure that hon. Members have unlimited opportunities for discussions on political solutions beginning, with your permission Mr. Speaker, tomorrow afternoon.
The hon. Member for Sheffield, Hillsborough (Mr. Flannery) and the hon. Member for Belfast, West (Mr. Fitt) will regret that their bedfellow of last night, the hon. Member for Down, North (Mr. Kilfedder), has deserted them and that he entirely disagrees with the line he took last night in supporting the Government. I have no doubt that there is relevance to Northern Ireland in the debates that will engage our attention in the weeks to come. If hon. Members have any doubts about that they should read our reasoned amendment tabled on Second Reading and the humble contribution that I made on Second Reading. They will find constructive suggestions there about the future of Northern Ireland, but I drew the line at the inclusion of the gunmen representing the IRA, or any other gunmen representing anyone else.
Last June pleas were made for the establishment of a full-time operational detachment of the Ulster Defence Regiment in each battalion. It has been decided that the UDR should play a more important rôle in supporting the RUC and it makes sense to press ahead with the formulation of full-time units. They would provide the most efficient and economical method of providing a 24hour UDR presence. Such round-the-clock availability would make possible much closer co-operation with the RUC.

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It might be argued that it is possible to call up whole battalions for full-time service at any time of special need. But the difficulty is apparent to those of us with some experience of the situation. The problem arises when we have an influx of troops and reinforcements in great numbers superimposed on an organisation that is not geared to and not capable of providing logistic support. There would be difficulties presented in this case if such call-ups were prolonged because we would be overloading the administrative transport and communications structures which are not designed to cope with a full complement of battalions of the UDR at any one time.
It is doubtful, too, if the practice of fairly frequent call-ups to full-time duty could be sustained without causing very real hardship to members of the UDR. In many cases in the past some have suffered severe financial loss and it would be unreasonable to add to their burden.
Last July the then Secretary of State for Northern Ireland promised that the UDR would be strengthened but he did not go into any details and we did not press him at the time. There appears to have been some disappointment about the falling off in numbers from the peak period of early 1972 when the numbers reached 9,100. There now appears to have been a drop of almost 1,500. It looks as if even the present level is being maintained only through recruitment of women.
There are two or three outstanding reasons for these disappointing figures. The first is the delay in processing applications. We are still not satisfied, although we have drawn attention to this matter many times, that they are being dealt with as speedily as possible.
I have been told by the Ministry of Defence that a considerable number of applications have been withdrawn. I do not believe that these people have changed their minds after signing the application form. I think that they simply become fed up with the long waiting period between offering their services and receiving notification of acceptance. They are also frequently discouraged by inexplicable rejections of many of their friends. It is particularly difficult to understand why someone is refused who
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has served with distinction with one of the fighting Services and could be regarded as excellent UDR material.
Another cause of the poor recruitment is the lack of convincing evidence that the UDR is being used effectively for the purpose for which it was designed. Potential recruits totally fail to understand, for example, why, when a joint military-UDR patrol arrives at the boundary of a certain area, it is required to shed its UDR content, which is then transported to a pick-up point to be reunited with its military colleagues. I find that difficult to justify, and the general public totally fail to understand it.
I recognise the work of many senior officers in the UDR, but there is a weakness in the fact that there are few officers at the top who have served at battalion level in the UDR or have ever taken part in operations of the regiment. More urgency is needed in the provision of operational equipment. My right hon. Friend the Member for Down, South (Mr. Powell) referred to the problem of obsolete wireless sets, the unsatisfactory level of maintenance and the difficulty of acquiring spares. The Secretary of State tonight repeated his promise that new and more sophisticated equipment will become available, but we should like some assurance that his full weight and that of his Ministers will be placed behind UDR procurement officers to ensure that there is no avoidable delay.
It is generally felt also that too little has been done to improve co-ordination between the UDR and the RUC in preparing for the reduced internal security role of the Regular Army. Despite what the Secretary of State said about difficulties in training schemes involving two separate forces, I would ask him to see whether it might not be possible to encourage officers and NCOs of the UDR and the RUC to engage in limited exercises and training sessions. The time will certainly come when that kind of contact and experience of working together will prove not just valuable but absolutely essential.
I want to make another small suggestion. Surely there is a need for an RUC liaison officer to be placed perhaps not at battalion level, but certainly at the headquarters of the UDR. It would not be too much to ask that a senior serving or

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a retired RUC officer could be found a place on the RUC Advisory Council. These things may seem small, but I am sure that they will lead to an improvement in the atmosphere, in the relationship and in the co-operation between these two forces. It is not only desirable but will become strictly essential.
We welcome the announcement on 17th December approving the enrolment of 200 additional conrate soldiers for the UDR. But we must point out that this cannot be regarded as being anything like an adequate substitute for the 600 regular troops whose withdrawal from Northern Ireland was announced at the same time, when one takes into account that the full-time recruits to the UDR will presumably not be available for some time. I imagine that many of them are still getting through the tortuous screening process and following that they will have to be trained.
Furthermore, the withdrawal of the troops not merely reduces patrolling by the Army but it also, in many ways, weakens the capacity of the UDR to do its patrolling. The UDR find that it now unfortunately has to waste time doing guard duty on premises which were formerly occupied by the Army. Surely that is a great waste of resources and manpower.
A further withdrawal of regular troops should not be contemplated unless there has been a matching increase in the strength of the locally recruited forces, or there are real indications that there is likely to be a dramatic reduction in the level of terrorist activity.
We have all welcomed the forthright declaration by the new Chief Constable of the RUC to the effect that the overriding objective of the force would be the defeat of the Provisional IRA and that this would take priority over all other aspects of police work and would be allocated whatever personnel, equipment or weapons were required.
I am also pleased to note that there has been some improvement in the supply situation. I hope that that will continue and that there will be a further improvement. I shall suggest a small step which could accelerate that improvement. I understand that in Great Britain a chief constable is given a budget within which he has comparative freedom to work in the matter of contracts and supplies. In
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Northern Ireland, however, the Chief Constable has to seek the approval of the Police Authority before he can make such purchases. That procedure might be admirable in the purchase of boots, for example, but it is not appropriate and not ideal when it comes to negotiating for supply and, what is probably more important, the design of anti-terrorist weapons, when some makes may still be on the classified list. We ought to try to devise a less cumbersome method to enable the Chief Constable to obtain speedily whatever is essential to counter the rapidly changing terrorist tactics. That degree of flexibility is necessary. He must not have his hands tied. He must not have to appear before the Police Authority to justify expenditure on items which are urgently needed and which may, and very probably would, save lives.
I shall not ask for precise details of the number and strength of the special patrol groups of the RUC. I hope that in both respects they are adequate. However, if they are not adequate, or if, for example, they are not as well equipped as their opposite numbers in the Metropoltian Police in London, I hope that that deficiency will be remedied speedily. If they are under strength, I hope that there will be a removal of the apparent ban on the inclusion of mobilised reserve constables, because this would avoid the draining away of the regular police from many of the undermanned RUC stations.
There has been a great desire on the part of a vast number of citizens to play a legitimate part in the defence and security of their own localities, but one feels that still more opportunities could be provided by way of acceptance of applicants into the RUC Reserve. I make a very special plea, through the Minister and others who may be listening, to the Police Federation of Northern Ireland to modify its attitude towards the reservists. I accept that all of us are entitled to look after our own special interests, but I plead with the Police Federation to remember that many people have to make very real sacrifices of personal interests in the present state of emergency. I do not think that the Police Federation, on reflection—and particularly the men they represent—having considered the implications, would be inclined to resist this simple request.

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My colleagues and I supported the decision taken by the present Secretary of State when he was Secretary of State for Defence, and by his right hon. Friend the former Prime Minister, to involve the Special Air Service in the ugly situation existing at that time in South Armagh. I have always felt that there is a place for a force of this nature in a terrorist situation, and I have no doubt that its presence, and the fear of its presence, made a very significant contribution to stablising the situation in the constituency of my hon. Friend the Member for Armagh (Mr. McCusker)—not, as many of us have come to call him, the hon. Member for South Armagh. That was a tribute to the effectiveness of those of his constituents who lived in the firing line of the southern part of his constituency.
However, while I am reluctant to trespass on the territory of a colleague, I suggest to the Secretary of State that the SAS might perhaps be encouraged and permitted to widen its sphere of activity. Should the Secretary of State ask me to nominate an area for its attention, I am sure that my hon. Friend the Member for Londonderry (Mr. Ross) will not mind if I say that the southern part of Londonderry, which is also within the jurisdiction of my hon. Friend the Member for Mid-Ulster (Mr. Dunlop), in constituency terms, would be a suitable area in which the stabilising force of the SAS would be very beneficial.
I come now to the question of deterrents. I recognise that all parties in the House are divided on the issue of capital punishment. Our party is no exception. While I have consistently voted in favour of capital punishment, others have equally consistently and sincerely opposed it. However, on whatever side we may find ourselves, I suggest that there is an obligation on all of us to ensure that punishment is made to bear at least some relationship to the crime. Terrorism is a crime. The terrorists themselves have to be convinced of that, and those engaged in the enforcement of the law must be clear in their minds that they are dealing with criminals of the very worst type. If it is felt that capital punishment is not defensible, the alternative must be a convincing substitute.
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It must be an alternative that is as irreversible as the death penalty itself.
We cannot repeat too often what the Secretary of State said tonight, that there will be no amnesty. The idea that one day a deal will be done and that all the thugs, gunmen and murderers will again be permitted to walk openly on our streets is a false notion which gives hope to terrorists and, perhaps even more important, to would-be terrorists. The expectation and belief that they may be permitted to win sustains and motivates those enemies of society. It is the duty and responsibility of the House, of all of us who take part in these debates, to deprive them of that which inspires them to continue.
I trust that in this debate we have made progress towards that end, and I invite the House to support the motion.
9.45 p.m.
Mr. Kevin McNamara: In making the same invitation, I should be grateful if we could be informed what the motion means by:
"calls for a further increase in the strength and effectiveness of the Ulster security forces."
Many of my hon. Friends and I would feel that our support for the motion was on the ground that we supported an increase in the strength and ability of the police force in Northern Ireland and a determination by the Government to arrive at a situation in which we had a police force acceptable to the whole community. We do not want to see merely the negative side that we have seen in the debate, which to my mind has lacked much in the spirit of reconciliation.
Although we want to deter terrorism and the men of violence, from whichever side they come, it would be helpful, in all the talk about political solutions, if we at least tried to understand the circumstances in which the violence continues. We would have welcomed a spirit of reconciliation, particularly from the Ulster Unionist Bench, where it was conspicuously lacking in the speech of the hon. Member for Down. North (Mr. Kilfedder). I suppose that this is a battlefield and the hon. Member must be the Rupert of debate, because he has disappeared.
The hon. Gentleman spoke contradictions, calling for an Ulsterisation of the security forces and then for an increase in the British Army presence. He got

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catcalls from his hon. Friends for being in the Government Lobby last night. I was happy to be there with him, but I have always been a Home-Ruler. I had thought that I might see some of his hon. Friends there, because I believe that the Ulster Unionists want devolved government for Northern Ireland and that that was what the Convention Report was all about. But it seems that what they want for Northern Ireland they do not want for Scotland and Wales. However, I shall not pursue that matter too far, because I might well be in the same Lobby as them later.
We relentlessly pursue the terrorists, but there must be an understanding by all the parties concerned that we must work for reconciliation. Something that has gone almost unnoticed in the House and country is the tremendous amount of money that the Government have just allocated to rehabilitate Belfast. In many ways that will do as much to reconcile people and improve the situation there as would the provision of extra guns or the introduction of more repressive measures. The more we think in terms of jobs, homes and security for people, the more we get away from the atmosphere in which terrorists on either side can flourish. That should be the aim all the time—not to give way to the terrorists but to ensure that in all our policies for Northern Ireland we seek to create a situation in which people will not be afraid of one another but will be prepared to work and talk together and, we hope, to share government together.
9.49 p.m.
The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): I hope that the House will forgive me for having left myself only 10 minutes in which to wind up the debate, but I thought it as well to enable as many hon. Members as possible to take part. I was glad that they included two of my hon. Friends, because lately I have been feeling like the boy on the burning deck, with plenty to do but wanting a bit of support from some of my colleagues. The first thing that I must do is to scotch some of the rumours that are obviously high-flying in Northern Ireland.
I do not know how often we must say this, but the Secretary of State frequently asks me how often he must say it and I tell him "At least three times a week
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and every day, if possible", so I do not know how much more often we must say that the Army in Northern Ireland will stay at its present strength of about 14,000, that it will be strengthened as may be necessary at any time, and that it will continue until it has done its job. We shall go on saying that for as long as necessary. When I have meetings with various bodies in Northern Ireland and this point is brought up they are told to their faces that this is a rumour. But the Government often find later that the rumour has been used in a politically-motivated way.
I also want to scotch another rumour quickly, before it does untold damage. My hon. Friend the Member for Belfast, West (Mr. Fitt) mentioned the incident centre in the New Lodge Road and he seemingly thought that public funds were being given to support it. The truth is that when this property became one of the Provisional Sinn Fein incident centres a telephone was needed. The Northern Ireland Office did not install the telephone. It was for the PSF to arrange that with the GPO. All subsequent financial transactions have taken place between the PSF, as a private subscriber, and the GPO in the normal way. No public money was given for that purpose. I hope that that scotches the rumour, but if it does not I shall have to say it again next week.
I also want to scotch the rumour that Northern Ireland tours of duty for the Army are to be reduced to three months. I do not know where these rumours come from. There is no truth in this and from long experience the Army has found that the four-month emergency tours are about right. There are no plans to change this, There are, of course, some units in Northern Ireland that are on 18-months' accompanied tours, but there have always been some units on such tours.
As to the pay structure for full-time members of the UDR, it is fair to say that improved terms and conditions of service for full-time UDR members are expected shortly.
I can say to my hon. Friend the Member for Kingston upon Hull, Central (Mr. McNamara) that we accept the motion in the sense that he read it. It includes the police, the police reserves and all the

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local forces within Northern Ireland, but it does not include the Army.
Mr. Stan Thorne: Unfortunately, the Minister himself led us astray by drawing the attention of the hon. Member for Belfast, North (Mr. Carson) to the fact that the security forces included 14,000 soldiers, I remind the Minister that the last few words of the motion are "Ulster security forces". Therefore, the concept is fairly established that when we talk about security forces we mean the police and the Army. Therefore, it is implied in the motion that an increase in the Army can also take place.
Mr. Concannon: I do not think that my hon. Friend the Member for Preston, South (Mr. Thorne) has followed the debate properly. The motion refers to local security forces. That is how I understand it, and from what was said by United Ulster Unionist leaders in the House, that is also the way that they understand it.
There has been some talk about the UDR and 200 full-time members. What has been forgotten is that there are already 1,600 full-time members of the UDR, and this figure of 200 is additional to that number. To those who have been referring to recruitment I can say that while there are no recent figures, I increasingly spend my Sunday mornings touring Army establishments in Northern Ireland. I recently found myself talking to the commander of the 6th UDR Battalion in Omagh. He told me that he was pleased with recruitment into his battalion. He also mentioned how much co-operation there had been in that area between his force and Army battalions that had served there. There is no particular problem in that area, and I find similar feelings on most of my Sunday morning tours.
In the debate there seemed to be some confusion about recruitment to the RUC. We should distinguish between the regular force and the reservists, both full-and part-time. Recruitment to the regular force is highly successful. Only a proportion of applicants is accepted by the Chief Constable, who has the responsibility, under statute, for the appointment of members of the force. The selection procedure includes consideration of age, height, health, character and education.
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The qualifications are those that obtain in the rest of the United Kingdom. Surely no one would suggest that they should be relaxed, particularly in present circumstances in Northern Ireland. The strength of the part-time reserves has shown a slight drop in the last year, and it was to these forces that my right hon. Friend referred when he said that certain areas were up to strength. Part-time reservists serve in their home areas and are not mobile units like the regular forces. No purpose would be served by attracting more recruits than can be used productively.
There is good reason to believe that the flow of arms and funds across the Atlantic has diminshed in recent months, due, in no small part, to the United States authorities. They have arrested suspected gun runners with the help of evidence from Northern Ireland, and on 14th February a civil suit was filed by the Justice Department against Noraid to ensure that United States law in respect of the transmission of money overseas is complied with. There is no complacency about this issue on either side of the Atlantic. There is a great deal of cooperation between the authorities, but it would be wrong, in the interests of security, to go into details.
It has been suggested that the police have been denied the tools for the job. I cannot ignore the fact that the assessment of operations and the provision of appropriate arms and equipment are, by statute, matters for the Chief Constable and the Police Authority. The Chief Constable is advised, in relation to arms and other protective equipment, by a force working party that has been set up and on which the Police Federation is represented. There is an opportunity for police officers to make their views known.
I know that the police force has in hand arrangements to provide certain vehicles with improved protective features. A number of specially designed personnel carriers are being tested and new rifles have been acquired to replace other weapons. I am satisfied that adequate procedures exist for the provision of all necessary equipment.
The necessary resources are available, and the Chief Constable and the Police Authority have my full support.

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There are other issues with which I should have liked to deal, including prison administration —the subject for which I am particularly responsible. I feel that I have been saying this daily for the past year, but the special category for prisoners ended on 1st March. Those in prison who are not accepting prison rules have, by their actions already lost 11 years in remission of sentences.
I hope that I have managed to convey to the House our thanks for the way in
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which the debate has been conducted and the basis on which the Government ate prepared to accept the motion.
Question put and agreed to.
Resolved,
That this House takes note of the unabated continuance of terrorist violence in Northern Ireland and calls for a further increase in the strength and effectiveness of the Ulster security forces.

NORTHERN IRELAND (CRIMINAL DAMAGE)
10.0 p.m.
The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): I beg to move,
That the Criminal Damage (Northern Ireland) Order 1977, a draft of which was laid before this House on 3rd February, be approved.
The Government's intention to introduce this order was announced by my right hon. and learned Friend the Attorney-General on 2nd July 1976. The purpose of the order is to extend to Northern Ireland, with certain modifications necessary to take account of other Northern Ireland statutes, the provisions of the Criminal Damage Act 1971, which applies to England and Wales. The 1971 Act was based on the recommendations of a report by the Law Commission, and it has worked well from the points of view of both the police and the courts.
While the order is not primarily directed against terrorism, the Chief Constable believes that it will help the Royal Ulster Constabulary in the daunting task which faces it in the present unhappy situation. The benefit to the police will result from the simplification of the law. The order also provides for greater flexibility of sentences, and creates new offences of threatening to destroy or damage property and of possessing anything with intent to destroy or damage property.
The existing law relating to damage to property is contained in the Malicious Damage Act 1861, much of which is obsolete. Some of the penalties in the Act are difficult to justify. For example, while destruction of works of art under Section 9 carries a maximum penalty of six months' imprisonment, the maximum penalty for destruction of hop-bines is 14 years.
I do not think that I need go into details of all the articles of the order, but there are one or two provisions to which I should draw attention. Article 3 creates the two main offences of the order. The first is the simple offence of destroying or damaging another's property, intending to destroy or damage it, or being reckless as to whether destruction or damage would be caused. The second
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main offence is the aggravated one of destroying or damaging any property intending to endanger the life of another, or being reckless as to whether the other's life would be endangered.
This article provides that any offence of destroying or damaging property by fire shall be charged as arson. The common law offence of arson is abolished. The new statutory definition of arson has a wider and more satisfactory meaning than that at common law which is restricted to the burning of houses.
Articles 4 and 5 create the offences of threatening to destroy or damage property and of having custody or control of anything intending to use it to destroy or damage property belonging to another person.
Article 6 provides the penalties for offences under the order. For the aggravated offence under article 3 and all offences of arson the maximum is life imprisonment; and 10 years for the simple offence, where the destruction or damage is not caused by fire, and for threats under article 4 and offences of possession under article 5. The maxima where cases are tried summarily are two years' imprisonment or a fine of up to £500, or both.
Article 9 enables magistrates' courts to try, with the consent of the prosecution, all offences created by the order, except the aggravated offence under article 3 (2). In this respect, the order differs from the comparable provision in the 1971 Act. The difference is necessary to take account of the accused who just says nothing, and follows the precedent of the Protection of the Person and Property Act (Northern Ireland) 1969.
Perhaps I should also refer briefly to article 13(5) of the order, which has no parallel in the 1971 Act. The House will be aware that under the Northern Ireland (Emergency Provisions) Act 1973 a range of offences of a kind associated with terrorism are treated as scheduled offences. This means that when tried on indictment—that is, in a higher court —they are heard by a single judge sitting without a jury. The House will know of the reason for that arrangement.
At present, 16 offences under the Malicious Damage Act, and the common law offence of arson, are classified as

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scheduled offences. The effect of article 13(5) is that all the main offences under the order, with the exception of the offence of simple damage where fire is not involved, will become scheduled offences. Provision is made, however, for the Attorney-General to certify that an offence shall not be treated as a scheduled offence in a particular case.
These are the main provisions of the order. As I have said, the purpose of the order is to apply to Northern Ireland the provisions of an Act which has worked well in England and Wales since 1971. I believe, and so does the Chief Constable, that the provisions will work equally well in Northern Ireland, and I commend the order to the House.
10.5 p.m.
Mr. Airey Neave: We congratulate the Minister of State on the way that he explained the order. We welcome the order because it is an important development in the law. There are four new scheduled offences directly or indirectly connected with terrorism. It is a considerable consolidation of the law on terrorism. For that reason it is important for Northern Ireland.
The Secretary of State kindly wrote to me and to other hon. Members on 16th November explaining some of the objects. He has elaborated on them sufficiently tonight. But, of course, it is very important that it should be realised what a vast amount of damage is actually done in Northern Ireland at present as a result of damage to property and arson. Can the Minister of State give us an estimate of the total damage to property in Northern Ireland in 1976 at some convenient period either now or later? We were informed by the Daily Telegraph on 3rd February that the cost of damage by fire in 1976 alone was over £40 million whereas in 1975 it had been £13·4 million. It has now more than doubled.
In connection with the new scheduled offences we welcome article 6, which the Minister of State referred to, which imposes a maximum sentence of life imprisonment for offences of arson and other unlawful damage under article 3. An important development is the making of threats to destroy or damage property, a scheduled offence, and also the possession of anything with intent to destroy or damage property. Some people might
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think that the maximum penalty of 10 years was not quite sufficient, but I make no complaint about that. Obviously, the possession of anything with intent to destroy or damage property could be connected with an offence of terrorism. That is an important development.
We also welcome the fact that, since damage to property is such a major part of the offence of terrorism, this simplifies the law. It will not only counteract terrorism but will help the RUC in its prosecutions, because some of these offences were not adequately covered by the common law or by the Malicious Damage Act 1861. We therefore welcome the order and the way in which the Minister of State commended it to the House.
10.8 p.m.
Mr. J. Enoch Powell: The Minister of State must experience curious sensations when he finds himself a few seconds before ten o'clock discoursing upon the general security situation in Northern Ireland and then, after the lapse of the fraction of a minute and the drawing of one breath, presenting the House with such a lucid and comprehensive explanation of the draft order before it.
However, when the Minister referred to the fact in the previous law the heinous offence—which it clearly is—of damaging or even destroying a hop-bine carried a penalty of 14 years, a doubt just crossed one or two minds whether the Minister of State was quite sure what a hop-bine was.
Mr. Concannon Mr. Concannon indicated dissent.
Mr. Powell: The Minister of State is clearly well briefed and enlightenment will in due course come when he winds up the debate.
The order is not that new dispensation on criminal damage for which we are waiting and which, I hope, will be presented to the House when it comes rather in the form of a Bill than an order.
We are dealing with the harmonisation of the existing code for the punishment of criminal damage in Northern Ireland with that introduced in Great Britain by the statute of 1971.
In Northern Ireland, as in Great Britain hitherto, the basic legislation has been the Malicious Damage Act 1861. It is salutory occasionally to be reminded

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that for 122 years the law in Ireland, as in Great Britain, was made exclusively in this House. Of course, some of the law which this House made applied only to Ireland, just as some of the law applied only to Wales or to Scotland. Therefore, in this instance it is not so much the legislation of the last 50 years of the devolved Parliament of Northern Ireland as the legislation of 1861 as it has continued to apply to Ireland which we are bringing up to date.
I do not think that anyone who studies the order and the explanatory material upon it can doubt that this is a rationalisation process which was highly necessary. Although the Act and this order would be necessary if there were no terrorism, I agree with the hon. Member for Abingdon (Mr. Neave) that some of the principal effects of the order must be extremely welcome against the background of terrorism.
I should like to refer to three consequences. First, the law relating to such offences is simplified. That must make for quicker and surer administration of justice in that greater flexibility in sentencing is provided. I think that I am right in saying—perhaps the Minister will confirm—that, although some harsh penal sentences, such as 14 years for the hop-bine, may be somewhat modified, the general effect is to render the punishment available to the courts more severe under the new code than under the existing one.
Mr. Concannon Mr. Concannon indicated assent.
Mr. Powell: I am glad to have the hon. Gentleman's assent. That is one area in which this is a definite gain in present circumstances.
Secondly, there is the new offence of threats. The threat of damage can sometimes in present circumstances in a city such as Belfast be as serious and as much a danger to human life as the actual damage. Indeed, there are circumstances where the relationship could even be inverse and a false alarm or hoax could cause more chaos and loss of life than actual damage. That provision is welcome.
While on that point, I should like to refer to article 4. What is the effect of the words
"intending that that other would fear it would be carried out"?
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I take it that the object of those words is to exclude from the effect of the article a mere frivolous threat such as might be made either in jest or in some unserious way in circumstances where the person threatened would know that it was not intended to carry out the threat. I trust that there is no question that hoaxes could be excluded by that wording and that the only intention is to eliminate acts which we would all regard as innocent even though in some cases they might be rather foolish. That is the second benefit that we should get from this new dispensation—namely, that the hoax and the threat of violence become a criminal offence.
Thirdly, there is the new offence of possessing articles with the intention of destroying or damaging property. This, clearly, can be a useful weapon to the security forces in the same way as the possession of a firearm is an offence just as is the unlawful use of a firearm.
I draw the Minister of State's attention to article 5, which, I accept, reproduces textually the corresponding section of the 1971 Act but which is extremely difficult, I find, to construe. Perhaps the hon. Gentleman will accompany me in my difficulties in construing article 5(b). It reads, when construed, as follows:
"A person who has anything in his custody or under his control intending …to use it or cause or permit another to use it … to destroy or damage his own or the user's property in a way which he knows is likely to endanger the life of some other person, shall be guilty of an offence."
I think the Minister of State will admit straight away, and will not feel inhibited in admitting, that that is not the most lucid piece of draftmanship with which he has ever been confronted. Although it is already on the statute book, it is not exactly clear in its effect. I think that the user in paragraph (b) is a reference to "another" person in line 2 of the article whom the guilty person may be allowing to use the article, and that the person himself who may be guilty uses it to damage his own property or, alternatively, entrusts it to someone else to use it to destroy that other person's property. But in both cases they must be doing so in circumstances calculated to endanger some life.
I trust that I have roughly got that right but it is a most obscure piece of drafting. If we had been proceeding, as I

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hope we shall be in future commonly, by way of a United Kingdom Bill, those dealing with the Bill in its various stages, especially a Bill of this sort that is of particular importance to Northern Ireland, would have had the benefit of the scrutiny and intelligence that Northern Ireland Members could bring to bear upon it. I venture to wager that if the Bill presented in 1971 had been presented in 1977 as a United Kingdom Bill we should have succeeded in making the corresponding clause to article 5 much more lucid.
At all events, this is a piece of uniformity, it is a new area of uniformity of the law in Northern Ireland and in Great Britain, to which I believe no possible objection or criticism can apply and from which only advantage can accrue. In that context my hon. Friends and I welcome its having been brought forward.
10.18 p.m.
Mr. William Craig: I, too, join other hon. Members in welcoming the order. It will be a useful addition to the law, especially in dealing with the terrorist offences that plague us daily.
I do not want to put the Minister of State on the spot but as I thought about the consequences of the order I could not but help think of some of the worst type of offences that result in damage to property—for instance, the crime that we describe as a proxy bombing. I ask the hon. Gentleman to ponder for a moment, as the order is drafted, what sort of penalty would be imposed upon those who use blackmail to cause others to bomb and damage property.
I hope that the Minister will address his mind to dealing with those who conspire to cause damage to property and will see that they will be dealt with in future. I believe that those who conspire and cause others to go out and carry out these jobs are just as guilty and as deserving of heavy penalties as are others. I should like some assurance that the order is wide enough and will be adequate to enable life sentences to be imposed.
10.20 p.m.
Mr. Concannon: I am grateful for the welcome given to the order. It seeks to pull together and to make more flexible
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the laws of Northern Ireland and put them on a par with some other matters in a Northern Ireland context. Furthermore, it seeks to bring parity to the situation.
I am glad that we have not confused the argument in this discussion between compensation and matters involving destruction. If we had confused those considerations, it would have confused the discussion on the order.
I was asked to give a figure of estimated damage last year in Northern Ireland. I can only say that compensation claims have been made and are in the pipeline—in other words, claims are still coming forward. I should not like to attempt to give a figure of such damage because it would be difficult to slot it into a particular year. The figure is quite considerable —well over £100 million—since the legislation came into being. Claims to the extent of about £60 million are now pending.
The report in the Daily Telegraph caused me some concern. I do not know how that newspaper reached its figure. We are examining the situation, and I shall write to the hon. Member for Abingdon (Mr. Neave) when we have reached a conclusion.
The first thing I did on hearing the right hon. Gentleman was to find out what a hop-bine was. I am still not exactly sure what a hop-bine is, but I think the right hon. Gentleman now knows the answer. I understand that it is netting that is stretched out among the hops in the same way as one uses such nets for runner beans to run up. I hope that that satisfies the right hon. Gentleman's curiosity. I certainly would not argue about the good sense of those who drafted the provisions in 1861 and I would not seek to question their priorities in those days. I merely stressed that matter to suggest that up to now we were working under those laws in Northern Ireland.
Mr. Powell: It has been confirmed to me that hops do not grow in Northern Ireland.
Mr. Concannon: It shows how sensible we are to get rid of that legislation. I understand that there are no elephants in Northern Ireland either.

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Although article 4 merely follows the wording of Section 2 of the 1971 Act, this will be a valuable new offence in Northern Ireland because in many cases it will apply to persons who make hoax bomb threats. At present the police in Northern Ireland generally have to proceed against such persons either for the common law offence of causing a public nuisance or for wasting police time. That is not a satisfactory situation. Offences under article 4 are punishable by imprisonment of up to 10 years. This will be a valuable piece of legislation for the police in Northern Ireland and for the general public. It will do a great deal to prevent frivolous cases being brought.
The word "custody" in article 5 means physical custody and "control" imparts the notion of the power to direct what shall be done with the property in question. The use of the phrase "in his custody or under his control" rather than the term "possession" is intended to avoid the difficulties of interpretation that have arisen in the past.
The essential feature of the proposed offence is not in having custody or control of something that can be used to destroy or damage property since that would include everything from a tin-tack to a bulldozer. It is the intention to use something without lawful excuse to commit damage which makes the possession criminal, as many articles which may on occasion be used to commit criminal damage may be possessed lawfully. The provision includes the intention of causing or permitting another to use the article in question. For example, it may involve an associate of a criminal organisation who keeps materials which may be used by other members of the organisation for a prohibited purpose.
I was also asked about people who destroy their own property. That is not an offence if that is all that is done. But if it is followed up by a claim for compensation or insurance an offence is committed.
I am not 100 per cent. sure about the matter referred to by the right hon. Member for Belfast, East (Mr. Craig) but I shall write to him and tell him whether what he said is correct.
I commend the order to the House.
Question put and agreed to.
Resolved,
That the Criminal Damage (Northern Ireland) Order 1977, a draft of which was laid before this House on 3rd February, be approved.

NORTHERN IRELAND (CONSUMER PROTECTION)
10.26 p.m.
The Minister of State, Northern Ireland Office (Mr. J. D. Concannon): I beg to move,
That the Consumer Protection and Advice (Northern Ireland) Order 1977, a draft of which was laid before this House on 17th February, be approved.
The order contains two highly desirable provisions which will bring Northern Ireland consumer law further into line with that presently existing in the rest of the United Kingdom. The first will make control of goods which fail to meet safety requirements of Consumer Protection Act regulations more effective. The second will enable district councils to provide advisory services to consumers. The opportunity has also been taken to bring the defences available under the Northern Ireland Consumer Protection Act into line with those in other recent consumer legislation.
It is for the convenience of the House that I leave it that. The provisions are considered to be necessary, and, accordingly, I commend the order to the House.
10.28 p.m.
Mr. John Biggs-Davison: I shall be at least as brief as the Minister who introduced the draft order. I should like to ask him two questions. First, by amending the Consumer Protection Act (Northern Ireland) 1965 the draft order will make it possible for proceedings to be instituted against manufacturers or importers who supplied the goods in question instead of or in addition to the retail supplier. By whom will these proceedings be instituted? Will it be by the consumer or the retailer, or both?
I turn to the power to provide advice to or for the benefit of consumers of goods and services. We are informed that

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the Belfast City Council is already cooperating closely with the Department of Commerce in the establishment of a multi-purpose advice centre. The question that springs to mind in these difficult days is: what is the cost likely to be? What will be the cost of the similar centre which is to be set up in Londonderry? I shall be obliged if the Minister can give a little information on those points.
10.30 p.m.
Mr. Robert J. Bradford: It has rightly been said that there are two important aspects to the order. The first is in article 3, which brings Northern Ireland legislation broadly into line with that in the rest of the United Kingdom, and the second is in article 4, which deals with consumer advice centres or facilities for giving advice to consumers. It is on article 4 that I wish to dwell. I wish to put a number of questions to the Minister in the hope of extracting further information which will be helpful not only to Northern Ireland Members but, if the debate is reported in the Press, to the public in Northern Ireland.
I first wish to know how the new advice centres will liaise with the existing Northern Ireland Consumer Council which has its headquarters on the Knockbreda Road. Is it not possible that there is duplication in the Belfast area? I understand that the new centre will cost about £50,000. How will it function in a way that is different from the work of the Northern Ireland Consumer Council? Will the operations of these two bodies merge? What is their relationship? If they are to remain separate, can it be argued that there is a need for another advice centre at a cost of £50,000? Is it not possible for the Northern Ireland Consumer Council to work through the Citizens Advice Bureaux, making its expertise available in that way, rather than incurring extra expenditure by giving each district council the right to buy property and establish a fairly elaborate set-up?
Turning now to personnel, I understand that the present Consumer Council is made up only of consumers. The point has been made to be by someone with a life-long interest in this subject that the council could well function more profitably if there were traders represented on it. They could be made aware of the concern over the initial cost of the pro-
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duct and its retail price as well as asking the right sort of questions which would help to keep prices at a realistic level. Is the Minister satisfied that there is a broad spectrum of opinion on the council?
I understand that the Northern Ireland Consumer Council does not accept individual complaints but deals largely in generalities. Will the district councils, when they are formed, receive individual complaints and reach decisions on them? If so, that might be one of the best reasons for bringing them into being. Will they go so far as to recommend certain products? There are those of us who feel that this might be the most helpful way for them to do their job. What liaison will exist between the district councils, the weights and measures departments and the Price Commission? Will there be a direct liaison? Is there one at the moment?
10.35 p.m.
Mr. McCusker: The people of Northern Ireland learned last week, not for the first time, that Northern Ireland was the most expensive region in the United Kingdom, and those of us who live there will support that assertion. They were told, I suppose to console them, that the gap between Northern Ireland and the other regions was getting smaller. If that had meant that the cost of living in Northern Ireland was falling there might have been some point in explaining that fact, All that is happening, however, is that the cost of living in the other regions is creeping up. With the exception of very few items, things in Northern Ireland are more expensive than they are in the rest of the United Kingdom. We have discussed some of them at length over the past few weeks. This means, therefore, that Northern Ireland is both the most dangerous part of the United Kingdom in which to live and the most expensive.
Because of his preoccupation with violence and constitutional affairs, I am sure that the average consumer in Northern Ireland is not so aware of his rights as are people in other parts of the kingdom. Any attempt to educate the Northern Ireland consumer to take full advantage of his rights under the law is to be commended. Also to be commended is the drive of the district councils to gain greater powers. Although this is a very small movement, we support

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the move to give these councils greater powers.
We are more concerned with making the public cost-conscious so that it wants to get value for money. We must, however, sound a note of caution, and that is what my hon. Friend the Member for Belfast, South (Mr. Bradford) has sought to do. There is little point in establishing centres which cost tens of thousands of pounds through a direct levy on the rates if at the end of the day we do not get value for money. I hope that in using this power the district councils will ensure when setting up their advice centres that they are not duplicating the facilities already provided by the Citizens Advice Bureaux, and so on. The advice centres should be tailored to the needs of the smaller community, and they should not go in for elaborate offices operating on a full-time basis. The district councils can use this provision to the advantage of the ratepayers, and I welcome that.
10.38 p.m.
Mr. Concannon: At the outset I said that the order contained two highly desirable provisions to bring Northern Ireland consumer law into line with the existing law in the rest of the United Kingdom. The Consumer Council and the advice centres will cover two different functions. Those of us who represent seats in Great Britain come across these regularly. The Consumer Council deals with the general questions of consumer matters. The advice centres deal with individual complaints and inquiries.
Perhaps I may explain the working of the system as it operates in my area of Nottinghamshire. My county council conducts an examination of a specific area of activity. It then circulates advice, perhaps by advertisements in the newspapers. It might deal with house conveyancing one month, carpets the next and something else the month after. It points out where to get not only the cheapest buys but the best service to go with them. The shops are now accustomed to this method of finding out what they are charging.
I was asked about the prosecution of importers and manufacturers. It would be for the Department of Commerce to
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determine which cases are suitable for this approach.
A total of £100,000 has been set aside out of Government funds for the establishment of advice centres in Belfast and Londonderry. A maximum of £60,000 has been promised to the Belfast City Council, in its capacity as agent for the Department of Commerce, towards establishing the advice centre there, provided that it takes over the centre completely after the order comes into operation.
That is not so in Londonderry. The Londonderry City Council would not enter an agreement with the Department of Commerce, so the Department decided to establish an advice centre there and staff it with its own trading standards staff. The cost will be borne by Government funds other than those set aside for establishing advice centres. We hope and anticipate that the Londonderry City Council will take over the centre, but if it will not the centre will close down after a year. Basically it is up to the Londonderry City Council.
If other councils feel that they individually, or an amalgam of a number of them, want to set up an advice centre, they should get in touch with my Department, which will offer all sorts of assistance as long as the money lasts. Those that are first in the queue will be the first to get assistance.
Mr. Bradford: Am I to understand that because the Londonderry City Council is not taking the advice centre under its wing the Belfast ratepayers will have to pay for their centre but the Londonderry ratepayers will not have to pay for theirs?
Mr. Concannon: No. We have set up the centre in Belfast on the understanding that once the order has gone through it will be taken over by the Belfast City Council. There is no problem there. The Belfast council was only too eager and anxious to take over the centre.
In Londonderry we could not come to a similar agreement. The Londonderry council did not want an agreement. So we carried on with the establishment of the centre, and we are staffing it ourselves out of Government funds. If the Londonderry council does not take over the centre after a year, I am afraid it will have to

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close. It is our wish that the council will take over this function.
Resolved,
That the Consumer Protection and Advice (Northern Ireland) Order 1977, a draft of which was laid before this House on 17th February, be approved.

NORTHERN IRELAND (LOCAL ELECTIONS)
10.43 p.m.
The Under-Secretary of State for Northern Ireland (Mr. Ray Carter): I beg to move,
That the Northern Ireland (Local Elections) Order 1977, a draft of which was laid before this House on 2nd February, be approved.
The next general election to district councils in Northern Ireland will be held on 18th May this year, and the purpose of the order is to provide for these and future local elections.
Proportional representation was introduced on an experimental basis for the 1973 local general elections and the provisions of article 4 of the Electoral Law (Northern Ireland) Order 1972, which provided that the single transferable vote system of proportional representation be used, applied only to the 1973 elections and to by-elections for councils elected at them.
Parliament subsequently made provision for the single transferable vote system of proportional representation to be used at Northern Ireland Assembly elections and later for elections to the Constitutional Convention. The order provides for this system to be used at future district council elections. It also gives candidates at contested elections the right to send election addresses post-free, restricts postal voting to persons likely for specified reasons to be unable to vote in person, raises the limits on candidates' expenses and provides for the filling of casual vacancies. Articles 1 and 2 of the order provide for commencement, extent and interpretation. The order applies only to Northern Ireland.
The Local Government (Northern Ireland) Act 1972 provides that each ward shall return one member. As proportional representation is being used, it is necessary to group wards into multi-member district electoral areas, and article 3
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makes such provision. These areas, which are prescribed in Schedule 1, are the same as those used at the 1973 elections.
Article 4 provides for elections to be held under the single transferable vote system of proportional representation and contains some consequential amendments of the Electoral Law Act (Northern Ireland) 1962.
Article 14 of the Electoral Law (Northern Ireland) Order 1972 extended the hours of poll for all Northern Ireland elections to 7 a.m. to 10 p.m. The extended hours, however, were never used at district council elections, as the Electoral Law (Northern Ireland) Order 1973 provided that at the 1973 district council elections the hours of poll would be 8 a.m. to 8 p.m. It is considered that these hours, which apply also at local government elections in Great Britain, are sufficient, and paragraph (4) of article 4 removes the application of article 14 of the 1973 order to district council elections.
Article 5 relates to candidates. Paragraph (1) provides that a candidate will be nominated for a district electoral area and that the number of councillors to be returned for each district electoral area will be the same as the number of wards in that area. Paragraph (2) provides that a candidate will not forfeit his deposit if he obtains at any stage of the count one-quarter of the quota.
Paragraph (3) gives candidates at contested elections the right to send election addresses post-free. This concession was introduced for the 1973 elections because proportional representation greatly enlarged electoral areas and also because in some areas some candidates were precluded by the security situation from personal canvass in all parts of that area. The size of the areas has not altered, and, sadly, there are still parts of Northern Ireland where a candidate might be prevented from visiting a section of the district electoral area for which he is standing.
Paragraph (4) makes consequential amendments to the Local Government Act (Northern Ireland) 1972.
There was provision in the 1973 Electoral Law Order for unrestricted postal voting. The reduction in the number of polling stations in some areas because of the serious security situation made it

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difficult for some electors to vote in person, and, in addition, there was a fear that electors in certain areas would be intimidated into boycotting the poll. The number of polling stations has since increased sufficiently for electors in all areas to vote in person without undue difficulty, and the fear of intimidation at elections has diminished.
It is generally agreed that postal voting should not be unrestricted, and article 6 of the order limits postal voting to Service voters or to those who, because of physical disability, the nature of their work or religious convictions, are likely to be unable to vote in person. This follows the equivalent law in Great Britain.
The limitations on candidates' expenses at local elections in Northern Ireland, particularly those applying to joint candidates, are generally lower than those applicable to local government candidates in England and Wales, and representations were made by Northern Ireland parties for the Northern Ireland limits to be raised. Article 7 makes the limits the same as those applied at local elections in England and Wales.
Articles 8 and 9 deal with casual vacancies. Article 8 provides that district councillors may by unanimous decision appoint a suitably qualified person to fill a casual vacancy. Article 9 provides for an election to be held should the district councillors fail to appoint someone under article 8. This is, of course, the current procedure, and it has worked reasonably well.
As I mentioned earlier, Schedule 1 sets out the district electoral areas for each local government area. Finally, the rules under which elections will be conducted are set out in Schedule 2.
Broadly, the order re-enacts the provisions of article 4 of the 1972 Electoral Order, articles 4 and 6 of the 1973 order and regulations made under the 1972 order. The principal difference in the provisions for future elections is that unrestricted postal voting is to cease.
10.49 p.m.
Mr. John Biggs-Davison: I thank the Under-Secretary for his clear exposition of the draft order. As he said, the local elections due on 18th May will be the second such elections to
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be held according to the single transferable vote system of proportional representation. I had the good fortune to be one of the group of hon. Members from all quarters in the House at that time who toured the Province during the local elections of 1973—the last local elections and the first to be held under the STV system—in order that we could judge the working of the system or attempt to do so for ourselves. It was remarkable and creditable how efficiently the returning, presiding and polling staff concerned applied the new system —which is what one would expect of the public servants and teachers of Northern Ireland who do this sort of work. However, except in Londonderry, I think, the new system has not led to pronounced changes in the party complexion of local councils.
This was also the case when proportional representation was abandoned for Stormont elections after those of 1921 and 1925. Electoral reformers argued that the first-past-the-post system polarised politics and that in Northern Ireland it militated against moderation.
If the House will forgive me for going back in history for a few seconds, let me remind hon. Members that when the question of PR was discussed with British Cabinet Ministers at the time of the Boundary Commission by leaders in the Irish Free State, Kevin O'Higgins favoured its restoration in order
"to provide adequate parliamentary representation for minorities."
For his part, Sir James Craig, then Prime Minister of Northern Ireland, condemned PR as un-British. It is interesting that Mr. Cosgrave, the father of the present Taoiseach, said that he would like it out of the way in the Irish Free State.
I am not attempting to pronounce about this, but I wonder whether Ministers have received representations for or against STV for local council elections. In Northern Ireland easy accessability of elected persons was highly prized and its disappearance has been deeply regretted. The STV system, with multi-member electoral areas, tends to restrict the close relationship which should exist between councillor and constituent. Therefore, I wonder whether the Under-Secretary would care to say something about this matter when he replies to the debate, and whether he has received any opinions from individuals or bodies about the working of this system.

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Under direct rule, as the hon. Gentleman knows, authority has become very remote, particularly because of the "Macrory gap". I hasten to say that Sir Patrick should not be blamed for that, because he reported on the assumption that the mother of Parliaments would not strangler its Ulster Daughter. But the loss of a tier of democratic representation was mentioned by my noble Friend, Lord Belstead when the draft order was considered in another place.
I should also like to ask the hon. Gentleman whether it is true that the fears of intimidation have diminished, because he mentioned this in relation to the reduction in the number of polling stations and the ending of unrestricted postal voting which obtained in 1973. I was very much surprised to read the words
"the fears of intimidation have diminished". —[Official Report, House of Lord, 17th February 1977; Vol. 379, c. 1756.]
They were uttered by Lord Donaldson of Kingsbridge in the other place. I was surprised when I heard the same words from the Under-Secretary's lips just now. I wonder whether that is really true and whether it is a reasonable argument in favour of the change—which may be right. But to say that it is justified because the fears of intimidation have diminished I beg leave to question, in the present state of partial anarchy in the Province.
There is one way in which the conduct of elections in Northern Ireland differs from that on this side of the water. When we were touring Northern Ireland in 1973 I noticed that there did not seem to be much success in preventing the law being broken—perhaps the law is different—with regard to the posting of electoral propaganda on public property, such as telegraph poles and even traffic signs, which is not desirable. The matter is not covered by the order, but does the Under-Secretary expect that when the elections are held next May there will be an improvement in this respect?
Article 8 sets out a procedure which many hon. Members will find strange. I am not aware of a precedent in Great Britain for the filling of casual vacancies on councils by a unanimous decision of councillors. It would be a bit hard if a member of a smaller party, or perhaps an
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independent person, wished to contest a seat which had fallen vacant when there was an important local issue at stake and was prevented from standing. Is that desirable? Perhaps there is some very good reason which the Under-Secretary can give us, but on the surface it seems that article 8 would tend to reinforce the polarity of politics which the method of the single transferable vote is intended to mitigate.
10.57 p.m.
Mr. James Molyneaux: First, I thank the Minister and his right hon. Friend the Secretary of State for agreeing to the request from this Bench for the early publication of the draft order. The Minister will be aware, not being unaccustomed to elections himself, that it is a great benefit to those public servants who have to conduct the elections and to those unfortunates who have to submit themselves as candidates, and the perhaps even more unfortunate people who have to try to get the candidates elected. On behalf of them all, I express our appreciation.
Article 7, dealing with the limitation of election expenses, would appear not to work out quite as intended. Far from increasing the limit, it reduces it in 15 of the 98 district electoral areas. In the old legislation Belfast was treated separately, having a limit of £300, compared with £100 in other areas. I gather from what the Minister said that there is now to be a flat rate for the whole of Northern Ireland. I do not know whether the hon. Gentleman has received any representations on the matter. My hon. Friend the Member for Belfast, North (Mr. Carson) and my hon. Friend the Member for Londonderry (Mr. Ross), councillors for Belfast and a country area respectively, may like to fight this out later. Therefore, it might be unfair to involve the Minister at this stage.
With regard to the voting rights of mental patients, there is a marked difference between the law under the Representation of the People Act as it applies in Great Britain and the electoral law of Northern Ireland. Under that Act residents of mental hospitals and establishments are registered and, therefore, have the right to vote. The Minister will be aware that in the report of the Working Party on Electoral Registration

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of Patients in Mental Hospitals attention is drawn, in Annexe 1(2) to the special position of Northern Ireland.
As one who was formerly involved in the administration of various mental hospitals and institutions in Northern Ireland, I hope that this is an example where the law in Great Britain could be brought into line with the law in Northern Ireland and not—as all too frequently happens—the other way round. The Minister may like to look at the possibility of drawing the attention of those who are engaged in elections to this variation to that there will be no misunderstanding. The Minister knows that in a Westminster election those people would not be permitted to vote as they would be under the order that we are now discussing.
As to proportional representation, our objections in the past have been based on the fact that the system is regarded as alien and foreign to that which applies in the rest of the United Kingdom. We have never accepted that Northern Ireland should be treated differently, and we still hold that view. Nor do we feel that any particular advantage can be derived from it.
I remember that on the day after the first experiment, an hon. Member who, at that time, held considerable responsibility for affairs in Northern Ireland said to me when we met in the Tea Room, "I am afraid that we have to accept that a majority is still a majority, no matter how we fiddle the rules." He was disillusioned about the outcome of the experiment. We could have told him from our own experience that it would not make a bit of difference—except that it does make a difference in the matter that has been drawn to our attention by the hon. Member for Epping Forest (Mr. Biggs-Davison); namely, that of breaking the close contact and identification of the electorate in a ward with a specific local councillor. In both town and country areas there will be a situation where there will be perhaps half a dozen councillors milling around in a huge area and an elector will not have any idea as to which one would be most likely to see to the redress of any particular grievance.
I put in that advertisement as a warning to those who may be tempted to
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experiment with proportional representation on a larger scale on this side of the Channel. They would be well advised to keep clear of it.
We welcome the order in principle and we trust that the local elections for which it makes provision will proceed smoothly. We also hope that, in due course, when these worthy councillors have been elected they will be given further scope in the shape of improved powers and that that will, in turn, lead to the restoration to Northern Ireland of the missing upper tier of local government that is presently enjoyed by all other citizens of the United Kingdom.
11.4 p.m.
Mr. Gerard Fitt: The Minister has said that the order is largely a replica of the existing system of electoral registration except for the fact that we are to be denied postal facilities on the scale that we had in 1973. The reason that has been given for that is that there is less risk of intimidation now in Northern Ireland. Like the hon. Member for Epping Forest (Mr. Biggs-Davison), I do not see that the intimidation has in any way diminished. The Provisional IRA has not yet announced that it is going political, and since the last elections in Northern Ireland the UVF has been proscribed. At the time of the last elections it was a legal organisation, but now it is illegal. I am certain that the PIRA will do in the next election as it has done in the past; it will not have the courage to put forward candidates because it knows very well that they would be rejected, and the whole philosophy would be rejected with them. Consequently it will attempt to intimidate electors and prevent them from going to the polls. This would have a serious effect on the SDLP and other parties representing the minority in Northern Ireland. It is highly unlikely that the Provisional IRA or its thugs would be able to intimidate loyalists from voting, but in the North Belfast area in which I live I have seen vicious intimidation of electors in 1973 and subsequent elections. I also remember the intimidation that I had to withstand in the two General Elections in 1974.
The Minister cannot truthfully tell us that intimidation in Northern Ireland has diminished. My party would be prepared to fight elections under whatever

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regulations are in force, but it would be helpful to people living in ghetto and interface areas, particularly in Belfast, if they could have postal voting as they did at the last election.
No one can take offence at the other provisions in the order. However, the hon. Member for Epping Forest said that the STV system was designed to get more moderates elected. Remembering who was elected to City Hall and to the Convention, I can only say that the hen. Gentleman could have fooled me! In many cases, STV had the reverse effect from that suggested by him.
We are having to live with the STV system, and I do not think that it has done any harm. It gave the minority an increase in its number of seats in the Convention, but that was probably because the membership of the Convention was increased from 52 to 78. I do not believe that it will change the decisions of the electorate to any great extent.
Mr. Biggs-Davison: Would the SDLP be happy if Northern Ireland returned to a first-past-the-post system?
Mr. Fitt: No. We should prefer to have the STV system.
11.3 p.m.
Mr. Wm. Ross: There are three aspects of the order that I wish to raise. The first deals with the problem of persons wishing to be treated as absent voters. We are told that they must fill in a form and we are told what type of form it is and how it is printed, but there is nothing about how these people are can get their hands on the forms. We need to know. Do they have to write in asking for an application form, will the forms be available from post offices, or will people have to fill in an application form for an application form? This is an important matter.
The second matter relates to the large shifts of population that have taken place in Northern Ireland over the past two years. I am one of the few hon. Members who has been elected to a body under a proportional representation system and in the Limavady Council area where I live we have one ward with 2,000 electors and another with fewer than 200 electors. Such inequity cannot be allowed to con-
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tinue and I do not believe that it was ever thought that such a shift of population would take place. I realise that I have probably quoted extremes, but many large shifts are taking place in many areas of Northern Ireland.
We need to know that something is to be done to bring about a more equitable distribution of wards and also a more equitable distribution of areas of electoral population within groups of wards for local government elections. The same will apply to any future election at any level that may be held in Northern Ireland under the proportional representation system.
Thirdly, I turn now to the system of election itself. As I recall it, when the STV system was first proposed for Northern Ireland, all the Press comment that I could get hold of — there was an awful lot of it—seemed to be saying that the aim was to get consensus politics in Northern Ireland, whatever that may mean. We had consensus politics in this House last night, but it did not seem to make everyone happy. I abhor the PR system not only because it was brought into being to destroy the party of which I am a member, but because of its inherent defects. It failed in the object of destroying the Unionist Party, and for that I am eternally grateful to the sensible people of Northern Ireland, who continued to elect it and who will, no doubt, continue to do so for many years.
Under this system of election it is easier to get elected. It is a refuge for minority viewpoints which have fancy but not always soundly-based policies. They can, nevertheless, put themselves forward, get a fair bit of publicity, and get elected. It is also a way out for people who want to avoid making hard decisions, because it can be used to obscure the issue before the people. Because it fudges the issue so much, it makes people seek an easy way out.
But generally in such a situation there is not an easy way out, and in the long run the system will only make matters worse. Above all, it removes responsibility from the representative of a single geographical area in which, regardless of his party, he at one time, under the old system, became a unifying force. Now the single Member has been replaced by

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a number of equally powerful, equally responsible—
Mr. J. Enoch Powell: Equally irresponsible.
Mr. Ross: My right hon. Friend has chosen the better word—equally irresponsible representatives of the people in those areas, representatives who have to compete against each other.
Publicity becomes the thing for them. Those of us who have lived with this system know that to be true. It is not as great a force at local level as in the steps above, but it is a system abominable to work in and with and one that I shall reject as long as I live. By putting different parties, different viewpoints and different personalities within the same geographical area, we do not make the divisions less; we make them ever deeper, ever more bitter and ever more vicious. That cannot be avoided under such a system.
Some people think that competition between public representatives at any level leads to better representation. It does nothing of the sort. It does not lead to better service to the electorate. It means that the representatives, even those from the same party, very often play each other off—and the electorate will do that even if the representatives do not. It means that publicity for what one has done or what one is alleged to have done becomes the thing. It means that the sensible person can often get chopped down because he is not publicity conscious—I say that with great feeling because I have seen it happen at all levels, and it is something that no political party can afford and no country can afford.
The destruction of the representative principle is dangerous for the representatives. It is dangerous for political parties as we know them in this country. It is eventually a dangerous thing for the people. Proportional representation leads to quick success. It means far too often a reduction in the general standards of behaviour of both electorate and representatives.
Finally, and above all, it tends to confuse the electorate. I believe that any political party with a solid, saleable policy will get itself elected—the present Government got themselves elected in
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1974 because they had a saleable product. I believe that any party with a solid policy can get itself elected if it can sell its policy. If not, it is because that policy is inherently unacceptable to the electorate in the area.
I beg the Governmenet to think again about proportional representation before the next local government elections in Northern Ireland. We should get rid of that system, and the sooner the better.
11.16 p.m.
Mr. McCusker: It is a pity that the hon. Member for Epping Forest (Mr. Biggs-Davison) did not update his review of proportional representation in Ireland by telling the House that only a few years ago Jack Lynch tried and failed to have it abolished in the Republic. Whether that commentary supports what was said by my hon. Friend the Member for Londonderry (Mr. Ross), I shall not try to elaborate now.
The Minister told us that the original intention was not to have proportional representation in the local government elections in Northern Ireland. Great care and attention and a lot of time was put into devising wards so that allegations of gerrymandering could not be made. After that work had been carried out, because they wanted to introduce proportional representation, the wards were grouped together in the best possible way. Unfortunately, the best possible way is not the best way if there is to be proportional representation. I am assuming that is a fait accompli now.
Wards were grouped together to make some kind of sense, but the operation was a catastrophe for reasons which have been mentioned. For example, one of the bigger groups of wards in my constituency covers an electoral district stretching from the middle of Portadown to the middle of Lurgan and it has six representatives. Five of those representatives live within half a mile of the western boundary of that district. Therefore, four or five electoral areas do not have representatives within them. That is not due to the size of the area. It is one of the weaknesses of proportional representation.
At the last election it was suggested that an attempt would be made after the election to allocate people to particular wards. No attempt has been made to do

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that. Will the Minister tell us whether consideration has been given to that suggestion?
Undoubtedly, those who are elected under this system are responsible to everyone and to no one at the same time. The system creates many problems for us. After a constituent has visited all six or seven representatives in a local council area and got no satisfaction, he finishes up at our door. Of course, he omits to tell us that has has been to all these other people. It is normally left to the Minister to tell us that he has already been approached on so many occasions by other people.
The Minister has been asked to consider widening the allocation of postal votes. I suggest that would be and is dangerous with a proportional representation system. If it were a straight system, as for election to this place, I should say by all means let us have it if it is thought that the pressure on the community is such as to deter people from voting in the ordinary way.
But there are abuses in the system. If one party is collecting postal votes for one candidate, the abuse is not great because those postal votes will go to that one candidate. But we had a classic case in Armagh during the Convention election. The SDLP—I asked the hon. Member for Belfast, West (Mr. Fitt) to remain, but he is not here—collected and brought all the postal votes to one central location. The candidates who were standing for the Convention then met to decide how to allocate the postal votes to each other.
Seamus Mallon, one of the candidates, managed to convince the meeting that he was in most danger of not being elected. A decision was taken that most of the postal votes would be marked up and given to him as first preference. The consequence was that poor Paddy O'Hanlon, who had represented South Armagh for many years, failed to get elected. That is because he did not get a sufficient share of the postal votes.
The account of the meeting was published in a journal in Ireland and Seamus Mallon threatened to take action. As he did not do so, I can only conclude that the account of the meeting was correct. That is one argument for not having a proportional representation system on
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this occasion. I hope that we shall stick to the standard procedure as is laid down.
The Minister may also remember that there was a dispute about candidates' qualifications at the last election. In the review of qualifications has any action been taken to avoid the type of dispute that occurred in Fermanagh District Council, which did not set that council off on the right footing?
The last matter that I raise is of particular regard to Northern Ireland. I refer to the situation when someone is though to be personating and he is so challenged by a polling agent. In the regulations it states that before he is arrested the polling agent who makes the oral challenge has to commit himself in writing that he is prepared to go to court and allege that the individual is personating. If the unfortunate person is caught and accused of personating and if the polling agents reneges and refuses to sign, is there any action that the aggrieved person can take against the false allegation against him? If the Minister cannot answer that question now, I hope that he will contact me later.
11.23 p.m.
Mr. J. Enoch Powell: In many of the draft orders that come before the House at this time of night we are bringing the law in Northern Ireland into accord with the law in the rest of the United Kingdom. It is a process that my hon. Friends and I heartily support. Northern Ireland being an integral part of the United Kingdom, we never fail to proclaim that in our opinion the law that applies to those who live there should be as far as possible identical with the law that applies to those who live in Great Britain. We assert that the burden of proof is on those who say that the law in Northern Ireland should be different in any particular case.
The three orders that the House has been dealing with this evening have all been of that character. The two that we have disposed of have produced homogeneity in their respective spheres between the law in Northern Ireland, which they have altered from what it was hitherto, and the law in Great Britain. Now we come to the third order, but here we stop half way.
The order brings the law on local elections into accord, in most respects, with

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that prevailing in Great Britain. It brings the law for postal voting at local elections into accord with the law for postal voting in Great Britain. That, I think, is right. I think, with the hon. Members for Epping Forest (Mr. Biggs-Davison) and Belfast, West (Mr. Fitt), that it is right not because of any diminution which there may or may not be of the prevalence of intimidation but because, as my hon. Friend the Member for Armagh (Mr. McCusker) has amusingly explained, there has been widespread and quite intolerable abuse.
In presenting myself for the first time as a candidate for a parliamentary election I was amazed by the behaviour of some of my supporters and the expectations they appeared to attach to the possibility of accumulating hundreds of postal votes. Having secured my first election to this House by the fact that my workers and I had managed to accumulate more postal votes than my opponents, and thus created the small margin by which I was first elected, I was astounded by their enthusiasm for hundreds of postal votes and the immense demand for postal ballot forms. I discovered that they had made a mistake and had assumed that the law at parliamentary elections was the same as that under which they had conducted local government elections.
This opened my eyes to the possibilities of abuse under the unrestricted postal vote system. That is sufficient to cure any but foolish people in Great Britain who argue in favour of further major extensions of the facilities for postal voting. I am sure that in parliamentary elections we have gone as far as it is wise or right to go, and I am also sure that the law for local government elections should be the same as for parliamentary elections. Therefore, I welcome the step towards uniformity brought in by this order.
But at that point the enthusiasm of the Government for producing uniformity in all parts of the United Kingdom comes to a dead halt, for they maintain in this order the difference introduced by this House for the special benefit of Northern Ireland in 1972. In Northern Ireland in 1972 the law on local government elections was made different from that in the rest of the United Kingdom in order to
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produce specific results which those in charge of affairs wanted to see produced in Northern Ireland. In short, they hoped that it would result in fewer Unionist and more non-Unionist candidates being elected. It was a piece of gerrymandering by the imperial Parliament and the imperial Government based on the incomprehension of the real circumstances in Northern Ireland on which the Government of the right hon. Member for Sidcup (Mr. Heath) were at that time operating.
We now all know and admit—this has been admitted from both sides of the House tonight —that in the circumstances of Northern Ireland the proportional representation system —the single transferable vote—has not altered the balance of the parties appreciably at all.
The hon. Member for Belfast, West said that it was an advantage that there had been more seats in total. Perhaps that is so—and so say we in respect of representation in this House. It would be an advantage if there were more seats in total, but we do not claim that there would be an alteration in the proportion or balance of political representation as a result. Nor has there been an alteration as a result of the gerrymandering of 1972 in the representation of the respective parties elected at local government elections. But what has happened is that a stigma has been placed on the people of Northern Ireland—namely, that they are to operate under an electoral system which the rest of the United Kingdom rejected and is not prepared to accept—and which, I opine, should there ever, by any mischance, be any direct elections to a European Parliament, will not be accepted for those direct elections.
It has had an odd effect: the stigma of deliberate differentiation without purpose. But it has also had the effect that the results have been severely to damage, as my hon. Friend the Member for Londonderry (Mr. Ross) described so eloquently and vividly, popular representation and the representative principle and responsibility in local government in Northern Ireland.
The first three hours of this Supply Day, so generously placed by the official Opposition at the disposal of various minority groupings in the House, were spent by the Liberal Party peddling once

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gain their demand for proportional representation. It is greatly to be regretted that a cross-section of hon. Members who took part in that first debate of the day, and particularly the occupants of the Liberal Bench, did not stay on to this relatively early hour to receive the benefit of the ounce of practical experience instead of the ton of mere theory in which the Liberal Party deals. Then they would have been able to learn and hear from those who have actually experienced it what is the effect of proportional representation upon the representative principle, what abuses and what disorders it introduces into representative, democratic bodies.
I add only my own observations on the effects of it in my own constituency. I take from the district of Banbridge, in which I reside, the electoral district area B which comprises eight wards. By the way, while I am dealing with wards I draw attention to the fact that the absurdity is crystallised in the order in article 5(1), which says that there are to be as many councillors as there are wards but the candidates are to be nominated for the district electoral areas.
Another personal reminiscence: I was puzzled when I began to find my way round the electoral registers in Northern Ireland at the phenomenon of wards. I inquired what the purpose of the wards was. I discovered that they were not used for any ascertainable electoral purpose. They were not used for polling because at that time there were polling districts. They were not used for local government elections. They had no purpose except for slicing up the register into inconvenient slices.
Here is the nonsense in article 5 (1). The whole electorate is to be divided into wards, the purpose of wards being to elect representatives. Even in the City of London, which hon. Members opposite despise and want to abolish, the wards are electoral areas. We may not approve of the methods but wards have a meaning. But wards in Northern Ireland have no purpose. One creates them, one produces statistics and organises the register in terms of wards, but then one makes no use of them.
I turn to district area B of district 16 to which I was about to come. It comprises the ward of Croob and the ward of
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Dromore. The ward of Croob is a huge ward with relatively low population and comprises the Dromara Hills, that landmark that is visible from most parts of the eastern half of the Province and which rises to a peak in Slieve Croob where people who are so minded can visit the Army post which is sited there, mostly in mist and other unfavourable climatic conditions.
Dromore comprises not the whole but the central part of a small and highly historic cathedral town. It is totally absurd that there should be the same—I was going to say representation, but that would be under-stating the case—block of eight representatives for the inhabitants of Croob and the inhabitants of Dromore. Of course the inhabitants of Dromore ought to have a representative who would be representative of Dromore —and the people of Croob ought to have a representative of Croob.
I will say more. The representative of Dromore and the representative of Croob ought to have their different points of view when they come to the Banbridge District Council. They should be arguing for different priorities and should be representing different conditions and explaining to their fellow councillors how different are the circumstances of their respective constituencies.
That is what representative Assemblies are all about. That is what happens in this House and what happens in every elected authority in Great Britain. But it is what is prevented from happening in Northern Ireland by proportional representation.
It may happen by accident—it would only be by accident, but it is unlikely—that one representative would come from Croob. It is more likely that one would come from Dromore, and even more likely that more than one would come from Dromore.
The whole thing is an obscenity from the point of view of elective democracy. It is the most undemocratic system that could be devised. Why is it being perpetuated by a Government who have set themselves—and they have had all our support and encouragement—to the business of producing uniformity of law in this integral part of the United Kingdom —Northern Ireland—with the rest of the United Kingdom? It is because—I shall

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offer them, as I believe it to be, the most generous explanation—we can only crawl out gradually from under the shadow of our past follies.
The follies of 1972 were not, in the first instance, the follies of the Labour Party. The Labour Party only went along with the follies perpetrated by the Conservative majority. Nevertheless, a certain guilt by association with these follies attaches to the Labour Party. So there have been successive decompression chambers through which they have succeeded in reascending to the atmosphere after having plunged so deeply into the follies of 1972 and 1973.
I do not wish to be ungenerous. Here is one decompression chamber that has worked. We have got rid of the notion that all will be well if everybody can vote by post. We have still to get rid of the notion that all will be well—but only in Northern Ierland—if there is election by the single transferable vote. We shall have in due course an order that will produce uniformity with the rest of the United Kingdom and restore genuine elective democracy to Northern Ireland.
I give warning that my right hon. Friends and I will not cease to complain of this system, which we are unhappily perpetuating tonight, until it is removed by a further order, or by a single clause in a Bill, by which the thing can be simply done, as the best dentist can extract a rotten tooth.
11.40 p.m.
Mr. Carter: I should like to preface my remarks on the observations of individual Members by relating my own experiences as the Minister responsible for the Department of the Environment in Northern Ireland. As hon. Members know, I have spent some considerable time going to all parts of the Province, not on fleeting visits but spending two and three days in some places as the guest of the local authorities. Although this order has generated some heat in some respects tonight, I have not discovered—and I do not say this simply to defend the order but merely to record my experience—that there has been a great deal of hostility towards the system of democracy that we have in Northern Ireland.
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In defence of local authorities and those serving on them I can say that there is a tremendous amount of good will among all shades of opinion.
Mr. Powell: Of course there is.
Mr. Carter: The right hon. Member for Down, South (Mr. Powell) says "Of course there is." I find that a lot of people in Great Britain believe that people in Northern Ireland are at each others' throats all the time. I said that I would give my own experiences because this is an opportune moment to put on record the fact that there are scores of people of widely differing political persuasions on local authorities in Northern Ireland who get on extremely well together.
I have been to the Belfast City Council and talked to the assembly there. I have spoken to the Londonderry City Council. I have been to Armagh, Newry and many other councils besides. Without exception I found that people got on extremely well together in spite, as we have heard, of the controversy that surrounds some aspects of the democratic structure there.
Mr. Molyneaux: Would the Minister accept my assurance that if, in his key Department, he was to decide that he could add yet another upper tier of responsibility, he would find that there again the elected representatives would work happily and constructively for the good of the people who sent them there?
Mr. Carter: The hon. Member has had a good deal to say on that subject recently. As my right hon. Friend has repeatedly made clear, it is for the political parties in Northern Ireland and others to come together to produce something that will be acceptable to the broad mass of the people in Northern Ireland. We await such an emergence. If it emerges I have no doubt that the people will come forward to fill the places on such a body and will get on extremely well together. It is as well that the House knows this because there is a great deal of ignorance in the rest of the United Kingdom about the affairs of Northern Ireland.
I turn to the observations of the hon. Member for Epping Forest (Mr. Biggs-Davison). He asked whether there had

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been any petition against the retention of the single transferable vote system. The simple answer is "No." We have had no criticism, in a petition form at least. The hon. Member referred to the fact that the proposed relationships between elected representatives and the people they represent might suffer as a result of STV. I can only say that from personal experience I have not found this to be so. I do not think, from my discussions with the Association of Local Authorities on a wide range of subjects, that there is any criticism of the system in that respect.
He referred to the powers of local authorities, which I suppose are bound up with the questions asked by the hon. Member for Antrim, South (Mr. Molyneaux). There is the so-called Macrory gap which has been referred to by my right hon. Friend the Secretary of State. One would hope that in the not-too-distant future that gap will be bridged.
As Minister responsible for the Department of the Environment I shall do all I can to increase the ability of local authorities to participate more in the functions for which they are currently not responsible. Hon and right hon. Members will have noticed that in the recent change in housing policy, as it is now directed at Belfast, I have now involved the city council in the housing drive to rebuild and renovate Belfast. I believe that in vital matters such as housing the elected representatives have an important part to play. I sincerely hope that the city council can work fruitfully with the Northern Ireland Housing Executive, myself and the Department in bringing about a transformation of Belfast.
The hon. Member referred to intimidation and asked whether it had increased. My impression is that the next round of local elections will not be accompanied by the same level of intimidation as may have existed in the past. Westminster elections have been held without a significant degree of intimidation.
The hon. Member asked about bill-posting. The law in Northern Ireland is basically the same as the law in the rest of the United Kingdom on this matter. We shall be taking all steps possible to ensure that billposting is kept to an absolute minimum.
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The hon. Member concluded his remarks by asking how the casual vacancies were filled. The method employed may not be a perfect way of dealing with the matter, but, once again, it seems to have worked out pretty well in practice. There have been no objections to the method used for the lifetime of the last elections.
Mr. Biggs-Davison: What was the reason for instituting this procedure? Is the Department against by-elections?
Mr. Carter: The reason is that it simply maintains the party balance as it was at the time of the elections. It appears to have worked out extremely well. Casual vacancies have occurred and people have been nominated to fill them. There has been no criticism of the system as far as I am aware.
The hon. Member for Antrim, South questioned the changes in the expense limits. Generally, the limits have moved up, although some have moved down. Now that we have a flat rate plus a sum per elector there is a tendency to proportionality across the board. The rights of mental patients are exactly the same as in the rest of the United Kingdom.
The hon. Member questioned, as did other hon. Members, the whole philosophy of proportional representation. He said that the system was quite alien. He will not expect me to deal at length with the question of PR. I can only say that from personal experience I have not heard any great criticism of the system. I know that hon. Members who are used, in a Westminster sense, to something entirely different have different views from people who are involved in local government in Northern Ireland.
My hon. Friend the Member for Belfast, West (Mr. Fitt) opened his remarks with a criticism of the fact that we are restricting postal voting. He was probably alone tonight in defending the past practice. There was the opportunity for a great deal of abuse, and that has been the experience. I listened with interest to the story of the hon. Member for Armagh (Mr. McCusker). I do not know whether it is true. My hon. Friend the Member for Belfast West was out of the Chamber at the time. Perhaps if he gets together with the hon. Member for Armagh later he will get the story.

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There is no doubt the there is an opportunity for abuse with an unrestricted system, and I am pleased that hon. Members welcome the fact that this practice is to be the subject of some restrictions.
My hon. Friend the Member for Belfast, West referred to the practice of intimidation. The last two sets of Westminster elections have gone off reasonably well without any significant incidence of intimidation, and I hope that this will be repeated at the local government elections in May.
The hon. Member for Londonderry (Mr. Ross) asked how a man or woman who is absent can acquire a postal ballot form. If a person is absent and does not know about the elections, he or she will not get a vote. If a person is absent and knows about the election, he or she will have to make an inquiry in order to vote. There is no obligation on the authorities to seek out people and inform them.
Mr. Wm. Ross: Where will the forms for absent voters be available, and how does a citizen go about getting one?
Mr. Carter: The electoral officer will have the forms. The hon. Member must know the practice. The citizen will have to go and get one himself or write away for one. It is a simple procedure.
Reference has been made to the fluctuating electorates in Northern Ireland, and clearly this is a problem. Given the security situation, there is nothing we can do. We hope that a maximum number of people will get their names on to the electoral register.
The hon. Member for Londonderry referred to the question of proportional representation. I know that he feels that it is alien. But if he talks to councillors in Londonderry, as I have, he will find that it works quite well. The hon. Member for Armagh spoke of the weaknesses of proportional representation. I suppose that all electoral systems have weaknesses of one kind or another. It is largely a matter of opinion, practice, and, above all, custom.
Councillors' qualifications are determined by the Local Government Act, and while I am unaware of the problem in Fermanagh which has been mentioned, there is no reason why there should be
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any difficulty in the next elections. The problem of personation was also raised. I am not sure about that one I will write to the hon. Member for Armagh about it.
The right hon. Member for Down South supported strongly the suggestion that we restrict postal voting. With the sole exception of my hon. Friend the Member for Belfast West, this proposal has been received with unanimous approval tonight. The right hon. Member for Down, South concluded with a wide-ranging criticism of the PR system and suggested that we might come back at some time in the future with a Bill, presumably in another stage of the decompression procedure, bringing Northern Ireland back into line with the rest of the United Kingdom. I am afraid that I cannot give the hon. Member a time, place or date for such an event, but with his persistence and that of his colleagues, perhaps such a Bill may one day come about.
However, at this moment the experiment is continuing. I hope that tonight the order and all that is in it will receive the support of the whole House.
Question put and agreed to.
Resolved,
That the Northern Ireland (Local Elections) Order 1977, a draft of which was laid before this House on 2nd February, be approved.

THE UNIFICATION CHURCH
Motion made, and Question proposed, That this House do now adjourn.— [Mr. Ashton.]
11.55 p.m.
Mr. Paul B. Rose: In October 1975 I raised on the adjournment the activities of the so-called Unification Church and I trust that the evidence that I presented then will be considered in conjunction with what I say tonight, so as to avoid repetition. Sixteen months later, however, the Home Office is still considering the evidence, the DPP has not yet acted and the Charity Commissioner has been playing Pontius Pilate, while lives are wrecked and fraud prospers. Meanwhile, I have a file of such massive proportions that the leader of the Moon cult would tremble in his paranoid shoes were the contents made available by a full public inquiry.

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Only the use of widespread intimidation, backed by the infinite resources of what is now estimated to be a $50 million empire, prevents the Press from doing more than scratch the slimy surface of what must be one of the most evil phenomena of our times. In a letter dated 27th January 1977 to Mr. Johnson, the vicar of Stratton St. Margaret, who has done sterling work in countering this bogus and blasphemous private army, the Charity Commissioner admitted:
"Unification Church appears to be a collective name covering many different organisations and it has not, so far as I am aware, applied for registration on the Central Register of Charities under that name. There are two charities registered which are concerned with the teachings of Sun Myung Moon:

1. The Holy Spirit Association for the Unification of World Christianity; the activities, incidentally, are stated to be 'throughout the world'.

2. The Sun Myung Moon Foundation."

Both refer to the "Divine Principle", which has as much in common with Christianity as had Ghengis Khan.
The Charity Commissioner takes no cognisance of the "Divine Principle", which, on his own admission, he has not read. He refuses to consider the interlocking matrix of organisations which take advantage of the charitable status of the parent charity, the Sun Myung Moon Foundation, and the other charity and which promote political propaganda. He takes no cognisance of the pattern of fraudulent collecting and the convictions for collecting without permits, which unfortunately merely deal with the small fry. He takes no cognisance of Moon's involvement in fraud, corruption, bribery of Congressmen and intelligence gathering, in spite of the current revelations in the USA. He is blissfully content to ignore the heart-rending letters of parents and families torn apart by their activities and the psychological techniques which they employ to brainwash disturbed youngsters into becoming itinerant candle vendors for the greater profit of Moon and the benefit of their British leader, Mr. Dennis Orme.
Indeed, the Charity Commissioner has far more discretion than he has ever admitted. His action on the Exclusive Brethren, for instance, contrasts starkly with his inaction on these fraudulent
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charities. I now have a list of 82 organisations which are front organisations for Mr. Moon, many of them operating in this country. They use the same premises and the same personnel as the charities. Two of them—Unified Family Enterprises and Cartographer Crafts Ltd.—are limited companies. Others, like the One World Crusade or the Foundation for World Peace and Unification, are equally indistinguishable, but they act as the political wings of what is supposed to be a charity, and certainly political ends cannot be charitable ends. No one has bothered to examine their sources of finance, or, indeed, those of the International Cultural Foundation, yet another of the very many front organisations.
Mr. Orme, the Director of the Unification Church, Trustee of the Sun Myung Moon Foundation, Director of Research for the Federation for World Peace and Unification and, indeed, acknowledged in a whole number of newspapers on different dates to be the leader of the cult in Britain, stated as follows in his own magazine on 30th June 1975:
"Jesus taught that we should hate our father and mother and love him first."
It is this doctrine that has brought myriads of letters pouring in to me. I want to read from just one, received last week, because three-fifths of these youngsters are sent abroad, mainly to Korea and Japan, and countless parents would come forward but are blackmailed into silence for fear of losing contact permanently with their children. The letter that I wish to read says this:
"Since I last wrote to you about my son with the Unification Church in Japan, there have been developments that I want you to know about.
On the afternoon of 31st January I had a 'phone call to say Tony was on his way home and would be arriving about 8 p.m. Well he was brought in, he didn't recognise anybody, didn't speak, just a vacant expression on his face. The two ladies made a quick exit saying they had a train to catch back to London (I later realised they had come by car). It wasn't till they had gone that I realised what Tony was really like. He wouldn't, or couldn't eat or drink, so we got him straight to bed. We even had to undress him and put him into bed. He was also incontinent. I called the doctor the next morning, he came and said he would have to go into hospital, but he got a psychiatrist to see him as well who also agreed he must go into hospital. …
That day I got another 'phone call from Mr. John Ralph"—

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that is one of the Moonies—
"(he rang as soon as Tony arrived home as well) saying Tony was fine on the Sunday. But what he didn't say was that Tony had been in England a week. We found that out from his passport."
That is the experience of one parent. It is exactly in line with the research of Professor John Clark, an American psychiatrist who had a public meeting in the House of Commons on 19th July last year and who said that his research had shown
"that one-third of the recruits were schizophrenic, one-quarter had personality problems and 42 per cent. were passing through the normal process of maturation…
Unacceptable pressures were applied to potential recruits. Once brainwashed they were taught to raise funds. The motivation for the organisers in the case of the Unification Church is private gain, and a lot of money is involved."
Mrs. Lees, who lives in Wiltshire, was reported in the Daily Mail on 25th September of last year as saying about her son, who is now in Japan,
"Converts are preached at 12 or 13 hours a day. They go into a stupor. They act like slaves to the movement."
I shall not repeat the experiences of the Rank's daughter, which I outlined in the previous debate on this subject.
I have case history after case history and sworn testimony of ex-members. I have the diary of a girl, Rosalind Mitchell, whose father was conned into giving away an £800,000 estate in Stanton Fitzwarren. My hon. Friend the Member for Ipswich (Mr. Weetch) has raised the question of pressure to hand over money to the sect in relation to one of his constituents. In the Rank's case there was some attempt in relation to a £27,000 inheritance. There are letters of a similar nature on my file from all parts of the country. I have to treat many of them in confidence because the parents are too terrified to speak out loud.
A short analysis by Marvin Calper, a doctor of philosophy and clinical psychologist, describes the brainwashing process as follows:
"Suppression of the individual's rational judgment process is fostered by sleep deprivation and sensory bombardment. Mobilisation of guilt and anxiety in the indoctrinee intensifies this inhibitoin of judgmental processes
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and at the same time to heighten suggestibility a child-like ego state is fostered in the individual. He is constantly manipulated and modelled by skilfully applied methods of indirect suggestion."
Rosalind Mitchell's deposition, which I have, confirms this. The special report on the Unification Church, its activities and practices of 18th February 1976 in the United States gives countless letters of testimony from parents and ex-member victims. A suicide, an attempted suicide, a woman who wound up in the intensive care unit of a psychiatric hospital in Boston and an inordinate number of trauma cases in another hospital near the Moonies' 205-acre estate at Barrytown are just a few examples.
All this is relevant to this country, whatever the Charity Commissioner says, because British citizens are sent to the United States on 40-day training courses, with a lure of a £10 fare but with no knowledge of what they are in for. Many of the converts are sent to the United States. Three of these students are now officers of a group which has been formed to counter that body, a group of which I am chairman, called Family Action Information and Rescue. It works together with parents and relatives, clergymen of all denominations and journalists who have been horrified by what they have seen. All are able to testify to what Carol Stedman, a former Moonie, described as "a nightmare called Moon."
Mr. Moon's tax-exempt status in the United States, according to last Sunday's issue of The Observer, brings him in £15 million income a year. In this country his followers are contributing to his baronial residence, his two yachts, two limousines and bodyguards through the benevolence of the Charity Commissioner, who has eyes but will not see.
These are just random examples. Another is a girl with a brain tumour at the Moonie headquarters at Lancaster Gate, which are guarded night and day, not so that people cannot get in but so that they cannot get out. She was told by the leader of the sect in Britain, Mr. Orme, that universities and colleges were Satanic. As Dr. Beckford, now doing research on the subject, wrote in Psychology Today:
"Marriages and engagements have been broken when one partner acknowledges Moon as lord and master. Promising careers have been shattered and families have been split."

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Richard Dunn, a former member, described in a letter to me how:
"For something I did wrong, getting up two hours late, say, I would be punished by being forced to kneel in a prayer position for three hours … All my freedom had been taken away from me by them."
Meanwhile, on 5th August 1973 at the Washington Hilton, the Freedom Leadership Foundation, whose finances are totally mixed up with the charitable bodies and which acts as the political wing in the United States, was listening to Mrs. Orme and enjoying a six-course menu of iced fruits, breast of chicken, black cherries in port wine sauce and crushed strawberries. I know, because I have the menu.
Nearer home, in February 1973 The Family News, published at Rowlane Farm, Dunsden, another of the sect's properties, was urging its converts to
'Get on with selling … the funds we had were spent on the costs of travel and clothes for those who went to America. Sell fast. Go like the blazes!!! Be adventurous for God. He will protect you and yours. He will be right behind you. Remember, when you are out on the pavement doing your bit for Father"—
Moon—
"that you are the children of True Parents. Think of the leader. Think of him wearing a crown as the King of Kings."
If ever there was an incitement to break the law, couched in rather odd phrases, that was it. Indeed; the Moonie pledge includes swearing
"I will fight with my life"
for Moon.
But out on the pavement, following convictions at Newquay in 1975, on 20th January of this year another conviction for unauthorised sale occurred in Bristol. On the previous day a spokesman for Guildford Borough Council had said that the Holy Spirit Association had not been issued with a street traders' licence and could be fined under the Guildford Corporation Act. He said:
"The sect founded by 56-years-old Korean divorcee and multi-millionaire Sun Myung Moon has been investigated by Guildford police following several attempts to sell leaflets and goods without a licence."
I have had reports of obtaining by deception or other offences from all over the country. The last one came last Sunday from a lady who works on the religious programme on Scottish radio in Edinburgh.
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The paranoic Mr. Orme had the effrontery to complain to the Chief Constable of Devon and Cornwall Constabulary, alleging a conspiracy involving Chief Inspector Foulkes and me in a vendetta against the Unification Church. His allegation was investigated and Mr. Orme was informed that his allegations were without foundation, as I was informed in a letter of 6th August 1976.
Undoubtedly Orme commands the operation of these charities, companies and other multifarious bodies in Britain. The Sunday Mirror of 26th September 1976 described him as
"intimidating … The most terrifying man I have ever met".
I mention this because any individual who dares to criticise the Unification Church is likely to receive a libel writ from three unknown youngsters, dupes who have been appointed trustees of Holy Spirit Association and whose own parents have written to me. If they are using the funds of a registered charity for such action they are acting ultra vires. Heaven nows where the money comes from, but perhaps Mr. Moon knows.
The Minister should consider this financial aspect since I have had it confirmed from independent sources that their accountant has been attempting to obtain loans of up to £600,000 on the collateral of property owned by these registered charities to export it illegally to the USA—to which end two meetings were held in Geneva. The sources are impeccable but confidential.
How would the money be used? The answer lies in current inquiries in the USA Internal Revenue Service into the illegal import of money and the Federal inquiry into corruption and intelligence by Moon' entourage. The Washington Post, the Guardian, the Sunday Times and the Daily Telegraph have all carried reports of the involvement of Moon, his interpreter and closest aid, Pak Bo Hi, and Tongsui Pak, an investor in his Diplomat Bank, in a conspiracy to bribe Congressmen, obtain contracts, provide prostitutes and to influence US policy in Korea.
The Financial Times exposed the connection between the FLF and the Korean CIA on 12th July 1976. A Dr. Lee, who sought political asylum in the US in 1973, revealed the same. Alan Tate Wood,

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former leader of the FLF, which is the political wing of the so-called charity, also defected, and I have one of the three copies of his statement in this country. I shall read one passage that I regard as significant. It says:
"Moon's is the only 'Christian' group in Korea that has not suffered at the hands of President Park's brutal suppression of free speech and civil liberties. Moon, far from repudiating the Park government's beating and torture of Korean ministers, sponsored and organized a pro-government rally last summer in which 1,200,000 people participated according to a press release given by the Unification Church in Washington. This is the equivalent of John the Baptist holding a pro-government demonstration in Jerusalem in support of King Herod."
What does Moon himself say? We know Mr. Orme entertained Korean diplomats at his rather spacious home when he lived at Barn Hill and that he used to drive a white Jaguar there, but what of Moon? He says of Christianity:
"The Christians are the ones who hate us most, they hate us because Satan is in them."
This is what he says of Jews:
"The 6 million Jews that died in the holocaust were paying their just indemnity for killing Christ."
He says of his goals:
"The whole world is in my hands and I will conquer and subjugate the world."
Moon says:
"The present U.N. will be destroyed by our power."
He has also said:
"The time will come without my seeking it, that my words will almost serve as law. If I ask a certain thing it will be done."
Moon has said:
"Our strategy is to be united into one with ourselves, and with that as the bullet, we can smash the whole world."
To his followers he has said:
"Even if you have to be beaten and driven out to the place of death, if you are ready to obey your True Parents—"
Moon and wife—
"in utter devotion then you are sure to go the heavenly course"
Another is:
"In order for you to be a dynamic lecturer, you must know the knack of holding and possessing the listeners' hearts. If there appears a crack in the man's personality, you wedge in a chisel, and split the person apart."
God knows how many people have been split apart in this country while the Home Office and the Charity Commissioners have done nothing about these charities.
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What emerges from the thousands of documents in my files, which are open to inspection, is that Moon is a megalomaniac and degenerate who used to indulge in what was called a blood cleansing ceremony of intercourse with his female initiates. He was expelled from Korea for corrupting public morals and he has built a vast commercial and political empire based on barbarian methods and intimidation of opponents. The one thing that he cannot do is to silence a British Member of Parliament, even with 100 libel writs, though he can bribe American Congressmen—we have certain advantages here.
He is a political pimp and gangster who has proclaimed himself to be the Messiah who will succeed where Christ failed, yet the Home Office have written in a letter that he is not an undesirable—and this at a time when it is about to deport the American journalist who first exposed Moon.
I have only 20 minutes in this debate. I have enough on my files to speak for 20 days on what I know about Moon and these charities. I only hope that the Home Office and the Charity Commissioners will do something to deal with what I have referred to as a rather nasty cancer in our midst.
12.18 p.m.
The Under-Secretary of State for the Home Department (Dr. Shirley Summerskill): I appreciate the concern with which my hon. Friend, the Member for Manchester, Blackley (Mr. Rose) views the position and activities of the various bodies associated with Sun Myung Moon. My hon. Friend has been both assiduous and meticulous in accumulating information about these bodies. Much of this he has passed to the Home Office, where we have studied carefully all the material he has sent in. My colleagues and I have been left in no doubt about my hon. Friend's strength of feeling in the matter and the active concern he has devoted to the subject.
My hon. Friend has chosen to relate the debate tonight specifically to the charitable status of the Sun Myung Moon Foundation and its associated bodies. The first thing that I have to say to my hon. Friend on the question of charitable status is that it is a matter for which there is no ministerial responsibility

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whatever. Decisions on the registration of charities are solely for the Charity Commissioners to take, in accordance with their interpretation of the law and consistently with the duties imposed on them by statute. The commissioners' decisions are subject to appeal, not to any Minister, but to the High Court. Short of legislation—which it would not be in order for us to discuss this evening—there is no way in which my right hon. Friend could intervene in these matters.
Secondly, I must make it clear that registration as a charity does not imply a value judgment regarding the effectiveness or desirability of the organisation that is registered. It simply means that the objects of the organisation, as expressed in its deeds, are charitable according to the general criteria of English law, under which charitable purposes include inter alia the advancement of religion. On the question, therefore, of charitable status for organisations connected with Mr. Moon, all that I can do to assist my hon. Friend and the House is to state briefly the facts as I have ascertained them from the Charity Commissioners and to explain how the matter now stands.
There are two bodies registered as charities in England and Wales which are connected with Mr. Moon. One, the Sun Myung Moon Foundation, was registered as a charity in 1974. Its stated objects are, broadly, the advancement of monotheistic religion, education and other general charitable purposes. The other registered charity is the Holy Spirit Association for the Unification of World Christianity, registered in 1968. Its object is
"to promote the Christian faith by the worship of God and the study, teaching and practical application of divine principle and in particular to support, expand and advance Christian Unity throughout the world".
Since registration, these charities have, as they are required to do, submitted copies of their accounts to the commissioners and these are open to public inspection in the Central Register of Charities.
I understand from the Charity Commissioners that there has been a series of complaints to them about the activities of these charities, in particular about the life-style of their adherents and their methods of fund-raising. While these complaints stem from an understandable anxiety on the part of many people—
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parents of converts, parish councils near the Unification Church's centres, and members of the clergy, amongst others —the Charity Commissioners have not been presented with any evidence that these charities have acted in breach of their trusts. I know that, if any such evidence were forthcoming, the commissioners would investigate it very closely and take whatever action was found to be necessary.
Having explained the position on the charitable status of these organisations, I should like to make a number of general observations. My hon. Friend has expressed concern—and indeed I think he has been wise to emphasise this aspect of the matter—about the effect the activities of these bodies have on individual people, especially young people. He has drawn attention to what he believes are psychological dangers and harmful effects upon families. He has claimed that children, particularly vulnerable and impressionable teenagers, are split off from their families, that they are forced, through psychological pressure and other techniques, to devote their whole lives, and any financial resources they possess, to Mr. Moon's organisations. My hon. Friend has forwarded to us several case histories, some of which are harrowing to read—cases of hardship and distress, the agony of parents and the disillusionment of young people.
The first question which must be asked is whether the activities of these bodies are within the law. Has any crime been committed? This is not a matter for the Government to judge, but it is most important that anyone who has evidence which might suggest that a criminal offence has been committed should make it known to the police. My hon. Friend has been assiduous in forwarding information available to him, and my ministerial colleagues and I have made sure that any information passed to us which could conceivably bear on a possible criminal offence does go to the police. I must, however, say that the information that has been provided so far has not, in the judgment of those responsible, warranted prosecution for any major criminal offence. But there have been a few prosecutions on minor charges connected with street collections.
If these organisations keep within the law, it is a very serious matter indeed to

1597
suggest that the Government should take action against them none the less. My right hon. Friend and I may as individuals take the view that the doctrines advanced by Mr. Moon are lunatic. We may be particularly suspicious of the motives of people who, while claiming to benefit humanity, have substantially enriched themselves. But these are matters of opinion, and surely it is one of the principles of a free society that people may propagate ideas which the majority of us do not share and do not like.
If the Government as a Government took action against organisations which they regarded as wrong-headed or even worse, we should be living in a rather different kind of society. The cost of
1598
such freedom is that some people will spend their money foolishly, be led astray by charlatans and even misunderstand the motives and feelings of their families and true friends. But when we decided that people should be treated as adults from the age of 18, this meant that they had the right to make their own choice on the way they wished to lead their lives and to make their own mistakes.
There is, of course, a wider context—namely, the international one.
The Question having been proposed after Ten o'clock on Wednesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put pursuant to the Standing Order.
Adjourned at twenty-five minutes past Twelve o'clock.

Second Reading Committee
Wednesday 23rd February 1977

The Committee consisted of the following Members:

MRS. JOYCE BUTLER in the Chair

Armstrong, Mr. Ernest (Under-Secretary of State for the Environment)

Hughes, Mr. Roy (Newport)

Hunt, Mr. John (Ravensbourne)

Clegg, Mr. Walter (North Fylde)

James, Mr. David (Dorset, North)

Cowans, Mr. Harry (Newcastle upon Tyne, Central)

Le Marchant, Mr. Spencer (High Peak)

MacCormick, Mr. Iain (Argyll)

Crowther, Mr. Stan (Rotherham)

More, Mr. Jasper (Ludlow)

Dean, Mr. Joseph (Leeds, West)

Mudd, Mr. David (Falmouth and Camborne)

Durant, Mr. Tony (Reading, North)

Gould, Mr. Bryan (Southampton, Test)

Taylor, Mrs. Ann (Bolton, West)

Grocott, Mr. Bruce (Lichfield and Tamworth)

GENERAL RATE (PUBLIC UTILITIES) BILL [Lords]
10.30 a.m.
The Under-Secretary of State for the Environment (Mr. Ernest Armstrong): I beg to move,
That the Chairman do now report to the House that the Committee recommend that the General Rate (Public Utilities) Bill [Lords] ought to be read a Second time.
This Bill fulfils promises made in reply to Questions in the House in August and October last year that legislation would be introduced as soon as possible to validate some formula rating orders which had inadvertently been allowed to lapse, and to correct a mistake which had been made in another order. The lapsed orders prescribed the formulae which should have applied to the National Coal Board, mines and quarries generally, and statutory docks and harbours. The order requiring correction is the one which prescribed a new formula for the gas industry from 1st April 1976.
This is a short Bill, but because it deals with complicated matters it is by
1600
no means simple. I shall attempt briefly to explain as simply as I can the main provisions of the Bill.
Clause 1 deals wth the lapsed orders. In common with many public utilities, the National Coal Board, mines and quarries and statutory docks and harbours are rated by formulae, since normal methods of valuation would be very difficult to apply. Such formulae are often determined under order-making powers to avoid having to come to Parliament with a Bill every time an amendment is needed. This is the case for the industries in question, and the order-making powers were contained in Section 35 of the General Rate Act 1967. Five orders were made either under this section or under the section in the Rating and Valuation Act 1961 which became Section 35 on the consolidation of rating law in the 1967 Act, and they are listed in the Explanatory and Financial Memorandum.
Section 35 of the 1967 Act was superseded by Section 19 of the Local Government Act 1974, and the 1974 Act quite

1601
properly repealed Section 35. The Act contained no saving for the orders already made under Sections 35, but it gave power to include savings of that kind in commencement orders bringing parts of the Act into operation. Unfortunately, the commencement order bringing the repeal of Section 35, among other provisions, into operation failed to make the necessary saving for the Section 35 orders. Those orders have thus been void since 1st April 1974, the date when the repeal of Section 35 came into operation.
This means that the property occupied by the NCB and other mines and quarries are now, and have been since 1974, rateable in accordance with the ordinary rating provisions of the General Rate Act 1967 and not, as was certainly intended, in accordance with the formulae prescribed in the lapsed orders. A new order for docks and harbours, made under Section 19 of the 1974 Act, came into effect on 1st April 1976. Thus, docks and harbours were rateable in accordance with ordinary rating provisions in 1974–75 and 1975–76 but are now rateable under the new order.
All interests affected have acted on the assumption that the orders have remained in force. To leave matters to be sorted out under the present law would cause a large number of amendments to valuation lists, involved negotiations, and probably litigation, to no good purpose.
Clause 1 of the Bill, therefore, provides that any order made under Section 35 shall not be affected by the repeal of that section by the Local Government Act 1974, and furthermore that all such orders shall be deemed to have been made under Section 19 of the 1974 Act.
Additionally, the clause provides for one of the revived orders—the Docks and Harbours Valuation Order 1971–to be revoked from 1st April 1976. This is because the order was superseded on that date by the Docks and Harbours (Valuation) Order 1976. The 1971 order was not revoked at that time because it was realised that it had already lapsed.
Clause 2 deals with the error made in the Gas Hereditament (Rateable Values) Order 1976. This order specifies a method for determining the rateable value of the British Gas Corporation from 1st April 1976 onwards. It does this by applying a formula to the earlier value specified in
1602
the General Rate Act 1967 but unfortunately, when the formula was devised, the fact that the 1967 value had been substantially increased by order in 1972 was overlooked.
Although the current order refers to the value specified in the 1967 Act, we are advised that this reference must be taken to mean the 1967 figure as amended by the 1972 order. This gives a rateable value of about £150 million instead of the intended £60 million. Although it is the £60 million which, as broken down in accordance with the prescribed formula, now appears in the valuation lists, the entries in the lists have not been calculated in the manner required by law and valuation officers could be compelled to insert the higher rateable values in the valuation lists. Thus, the British Gas Corporation could find itself being liable to pay two and a half times as much as Parliament clearly intended.
Clause 2 amends the order to specify the intended value of £60 million in place of the existing incorrect formula, and this amendment is retrospective to 1st April 1976. Additionally, we are taking the opportunity of ensuring that the enabling power, Section 19 of the Local Government Act 1974, allows a figure to be specified instead of a formula. This is dealt with in Clause 4. I am sure hon. Members will join me in greeting this latter provision with some relief, since it should result in at least some simplification of rating formulae that the House may have to consider in the future.
Clause 3 provides for the indemnification of rating authorities, valuation office officials and all other persons against any consequences incurred as a result of the errors rectified by Clauses 1 and 2. Valuation officers have been responsible for maintaining valuation lists in accordance with the orders in question, and rating authorities have been levying rates on those values. All those concerned in such activities have proceeded on the basis that the errors have not been made.
The net result of these measures will be to ensure that the rates on the industries concerned have been paid, and will be paid, in accordance with the provisions previously agreed by Parliament. The proposals will not injure the ratepayers concerned. They have acted on the assumption that these errors have

1603
not been made, and the intended rateable values have been accepted.
I apologise for the fact that this Bill is necessary. In mitigation, I can only say that the law for which my colleagues in the Department and I are responsible is vast and is constantly changing. That is not to suggest that we should take such matters lightly. Far from it. We shall continue in our attempts to ensure that such amending legislation is not found to be necessary. I hope that the brief and clear explanation which I have given will commend itself to the Committee.
10.38 a.m.
Mr. Tony Durant: We greet this Bill with some reservations, though we recognise that it is necessary to honour what was said in the House. I must, however, comment that it illustrates the way in which we prepare our legislation. We do not always get it right when we ought to get it right, and this is something of which the House should take more recognation. We should not find it necessary to come back and do this sort of thing. We have heard the words "overlooked" and "forgotten" and other similar words, and I do not think that this is satisfactory.
There is no doubt that it is a complicated Bill which is difficult to understand by anybody's standards. The formula requires tremendous mathematical ability and imagination to understand it. It is also arbitrary in that it settled, without much option, a complex formula. it illustrates again the difficulties of the whole rating system.
The Minister has told us that the public utilities have continued to be rated as though this Bill was in existence. I hope that that is so, and I shall be grateful for his assurance on that. I am asking this question only out of concern that local authorities may suddenly lose more money. If I can be assured that that will not happen, I shall be grateful.
The Bill shows once again that we should not have postponed the revaluation, which was put off by the Government recently. It was put to the House that a revalation should be commenced, but it was then put off. This was a mistake because it makes continual difficulties for valuation officers, who have less and less evidence
1604
on which to settle the valuation of anything. This is one of the great difficulties for valuation officers, and I think it a pity that we did not do the revaluation which has been put off.
Layfield in his report expresses strong views about rating public utilities, and I shall make two small quotations:
"Local authority associations have suggested that the current arrangements are unsatisfactory"
in rating public utilities, and that they
"would prefer some form of independent arbitration."
I think that that should be considered when the Government look at the Lay-field Report and make their own rating proposals.
There may be an argument for reverting to a more commercial type of rating for public utilities. There is a danger with the present rating system that public utilities will hold on to properties and land because they receive rather favourable treatment in rating. If, however, they were commercially rated they would look at their sites more carefully in order to save money and might decide to get rid of them. To release more land and property from public utilities, might be a good thing. This is something at which we can look when we debate the Layfield proposals.
There is no doubt that there is an urgency about the whole rating question. A Bill like this highlights the urgency of debating the Layfield Report and making concrete proposals on rating and whatever re-rating system the Government propose.
The public have had enough of the present rating system. The Opposition have had strong views on the matter. We have urged the Government to have the report discussed as early as possible. I know that the inquiry is proceeding at the moment, but it is time that we had a debate in the House on the Layfield Report, to be followed by concrete proposals, so that the public may know what is to happen.
Otherwise, in general terms, we accept the Bill. It is necessary. We must have it to ensure that the system works properly. The Opposition have no intention of dividing on the matter.
10.42 a.m.
Mr. Armstrong: I am grateful for the comments of the hon. Member for Reading, North (Mr. Durant). I confirm that we, and valuation officers themselves, have acted as though the orders were in force. There will be no cost to rating authorities or to ratepayers. I give that assurance readily.
It is true that revaluation was postponed because of consideration at Lay-field. All I can say is that the Layfield Report is under consideration. We all have, of course, criticisms of the rating system, but the trouble comes when we have to suggest alternatives. That is when the argument begins. The truth
1606
is that there are no easy options for raising the money necessary for our public services. I take the point raised by the hon. Gentleman opposite about the rating of public bodies, but this Bill is necessary in order to rectify the matters which I raised in my opening speech. I hope that the Bill can now be accepted for Second Reading.
Question put and agreed to.
Ordered,
That the Chairman do now report to the House that the Committee recommend that the General Rate (Public Utilities) Bill [Lords] ought to be read a Second time.
Committee rose at seventeen minutes to Eleven o'clock.

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Butler, Mrs. Joyce (Chairman)

Dean, Mr. Joseph

Armstrong, Mr.

Durant, Mr.

Clegg, Mr.

Gould, Mr.

Cowans, Mr.

James, Mr. David

Crowther, Mr.

Taylor, Mrs. Ann

PRICES AND CONSUMER PROTECTION
  Consumer Councils
  Consumer Councils
  Babcock and Wilcox Ltd. And Herbert Morris Ltd.
  Babcock and Wilcox Ltd. And Herbert Morris Ltd.
  Price Control (Public Instruction)
  Price Control (Public Instruction)
  Price Commission
  Price Commission
  Inquiries and Questionnaires
  Inquiries and Questionnaires
  Fireworks (Injuries)
  Fireworks (Injuries)
  Price Reductions
  Price Reductions
  Alarm Systems
  Alarm Systems
  Price Commission (Referrals)
  Price Commission (Referrals)
CIVIL SERVICE
  Scottish Cities
  Scottish Cities
  Patronage
  Patronage
  Civil Servants
  Civil Servants
HOME DEPARTMENT
  Judges' Rules
  Judges' Rules
  Local Authority Grants (Commonwealth Immigrants)
  Local Authority Grants (Commonwealth Immigrants)
  Television Licences
  Television Licences
  Shotgun Certificates
  Shotgun Certificates
  Television (Wales)
  Television (Wales)
  Messrs. Agee and Hosenball
  Messrs. Agee and Hosenball
  Illegitimacy
  Illegitimacy
  Crime
  Crime
  Shoplifting
  Shoplifting
  Criminal Injuries Compensation
  Criminal Injuries Compensation
  Malawi Asians
  Malawi Asians
  Animals (Experiments)
  Animals (Experiments)
TRADE
  Copper (Imports)
  Copper (Imports)
  Air Travel Reserve Fund
  Air Travel Reserve Fund
  Textiles (Imports)
  Textiles (Imports)
  Imports
  Imports
  Companies Registration Office
  Companies Registration Office
  Court Line
  Court Line
AGRICULTURE, FISHERIES AND FOOD
  Nitrates in Water
  Nitrates in Water
  Statutory Instruments
  Statutory Instruments
  Fishing Limits
  Fishing Limits
HOUSE OF COMMONS
  Welsh Affairs
  Welsh Affairs
TRANSPORT
  Road Accidents
  Road Accidents
  Radioactive Material
  Radioactive Material
  Driving Tests (Dundee)
  Driving Tests (Dundee)
  Railways (Charges)
  Railways (Charges)
  M3 (Inquiry)
  M3 (Inquiry)
ENVIRONMENT
  Disabled Persons
  Disabled Persons
  Office Building (Havering)
  Office Building (Havering)
  Fuel Bills
  Fuel Bills
  Statutory Instruments
  Statutory Instruments
ENERGY
  North Sea Oil (Product Yields)
  North Sea Oil (Product Yields)
  Research
  Research
  Derv Consumption (Northern Ireland)
  Derv Consumption (Northern Ireland)
  Gas Prices
  Gas Prices
  Coal Prices
  Coal Prices
  Electricity Prices
  Electricity Prices
EDUCATION AND SCIENCE
  Teacher Training
  Teacher Training
  Oil Rig (Government Order)
  Oil Rig (Government Order)
  Coal, Gas and Electricity Boards (Profit and Loss)
  Coal, Gas and Electricity Boards (Profit and Loss)
  Youth Service Forum
  Youth Service Forum
  Teacher-Pupil Ratios (Avon)
  Teacher-Pupil Ratios (Avon)
  London University
  London University
  Comprehensive Schools (Gloucester)
  Comprehensive Schools (Gloucester)
  Schoolchildren (Costs)
  Schoolchildren (Costs)
  Gloucester College of Education
  Gloucester College of Education
SOCIAL SERVICES
  Day Centres
  Day Centres
  Giro Cheques
  Giro Cheques
  North-Western Regional Health Authority
  North-Western Regional Health Authority
  Children Act 1975 (Custodianship Provisions)
  Children Act 1975 (Custodianship Provisions)
  Dental Health (Children)
  Dental Health (Children)
  Dental Charges
  Dental Charges
  Queen Elizabeth Military Hospital
  Queen Elizabeth Military Hospital
  Medical Staff (Secondment Overseas)
  Medical Staff (Secondment Overseas)
  Unemployed Claimants
  Unemployed Claimants
  Earnings Rule
  Earnings Rule
DEFENCE
  Royal Air Force (Pay)
  Royal Air Force (Pay)
  Illegitimacy
  Illegitimacy
  Hovercraft (Minesweeping)
  Hovercraft (Minesweeping)
  Belfast Aircraft
  Belfast Aircraft
  Royal Air Force Regiment
  Royal Air Force Regiment
  Gannet XL480 Aircraft
  Gannet XL480 Aircraft
  Training
  Training
FOREIGN AND COMMONWEALTH AFFAIRS
  Rhodesia
  Rhodesia
  Helsinki Final Act
  Helsinki Final Act
SCOTLAND
  Scottish Trades Union Congress
  Scottish Trades Union Congress
  Scottish Assembly
  Scottish Assembly
  Paper-Making Industry
  Paper-Making Industry
  Fishing Industry
  Fishing Industry
  Scottish Development Agency
  Scottish Development Agency
  Craiglockhart College of Education
  Craiglockhart College of Education
  Dundee
  Dundee
  Teachers
  Teachers
  Prisoners
  Prisoners
  Berneray-North Uist (Causeway)
  Berneray-North Uist (Causeway)
  Truancy
  Truancy
  Mental Health Patients
  Mental Health Patients
  Homeless Persons
  Homeless Persons
  Empty Houses
  Empty Houses
  Employment Creation
  Employment Creation
  Public Service Manpower
  Public Service Manpower
  Industrial Sites (Glasgow)
  Industrial Sites (Glasgow)
  A9, Blackford Village (Bypass)
  A9, Blackford Village (Bypass)
  Economic Prospects
  Economic Prospects
  Abortion
  Abortion
  Mortgages
  Mortgages
  Arbroath High School
  Arbroath High School
EMPLOYMENT
  Immigrants
  Immigrants
  New Year Bank Holidays
  New Year Bank Holidays
  Unemployed Persons
  Unemployed Persons
  Steel Industry
  Steel Industry
  Stoke-on-Trent
  Stoke-on-Trent
  Expenditure
  Expenditure
INDUSTRY
  Postal and Telephone Charges
  Postal and Telephone Charges
  Post Office (Finance)
  Post Office (Finance)
  Small Businesses
  Small Businesses
  European Space Agency
  European Space Agency
WALES
  Statutory Instruments
  Statutory Instruments
NATIONAL FINANCE
  Fiscal Drag
  Fiscal Drag
  Pensions
  Pensions
  Inflation
  Inflation
  Public Sector Borrowing Requirement
  Public Sector Borrowing Requirement
NORTHERN IRELAND
  Secondary Education Reorganisation
  Secondary Education Reorganisation
  School Meals
  School Meals
  Gaelic Athletic Association
  Gaelic Athletic Association
  Unemployment Benefit
  Unemployment Benefit
  Houses (Repair Grants)
  Houses (Repair Grants)
  Work Permits
  Work Permits

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

TEES-SIDE STRUCTURE PLAN: SEAL SANDS
Lord GISBOROUGH: 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 accept the importance of Seal Sands to migratory birds and will reconsider their decision to allocate the whole of the existing area of mud flats to industry.
Baroness STEDMAN: My Lords, the final decisions have not yet been taken by the Secretary of State in his consideration of the policies and proposals in the Tees-side Structure Plan, including those relating to the unreclaimed area of Seal Sands. Draft modifications proposed by the Secretary of State have been advertised and placed on deposit, and the objections and representations received will be considered before the decisions on the Structure Plan are issued. I should point out that the modifications proposed by the Secretary of State in respect of this area of Seal Sands have been supported by the Cleveland Council.
Lord GISBOROUGH: My Lords, while thanking the noble Baroness for that Answer, may I ask whether, in view of the fact that the Port Authority has now revised its estimate of trade for the Tees for 1981 from 80 million tons down to possibly only 30 million tons—between 30 million and 60 million tons—and in view of the fact that the Port Authority in a letter dated 16th December last stated that it did not expect this land to be used for 20 to 30 years, it is possible that the reference to priority for industry by the Secretary of State could be described in the panel's words as "highly speculative";
170
and, therefore, is it not possible that it should be reserved for the SSSI, as it is at the moment?
Baroness STEDMAN: My Lords, the object of the Structure Plan is to give some indication of the uses that might be made of the various areas within a county's authority, and the suggestion made at the moment in the draft plan, that Seal Sands should be earmarked for future use for industrial purposes, does not mean that it is going to happen right away. It means that, as and when the demand builds up, as the draft plan stands at present it is suitable land for that sort of development. It certainly will not happen overnight, and until that time presumably the birds will still be there and it will still be an area of special scientific interest.
Lord TRANMIRE: My Lords, is there not a difficulty that in the neighbouring sites of special scientific interest there are no mud flats as there are on Seal Sands, and as these migrant waders cannot change either their feeding habits or their diet we shall lose them if this plan goes forward?
Baroness STEDMAN: My Lords, I think perhaps that is a possibility; but when the decision is made that Seal Sands will be used for this purpose there will have to be consultations between the Port Authority and the Nature Conservancy Council in order to try to sort out which are the ideal alternative sites. Then of course we may have the difficulty of how we are to educate the birds to go to the alternative sites.
Lord SANDYS: My Lords, are the Government aware that only 13 out of 68 possible sites under the Ramscar Convention have been listed, and does this not indicate a lack of interest by the Government in the wet lands?
Baroness STEDMAN: No, my Lords, because the 13 sites that we have listed and have registered under the Convention comprise something like 20 per cent. of the total number of wet lands that have been implemented throughout the world.
Lord WYNNE-JONES: My Lords, would my noble friend agree that while it is extremely important that we should pay attention to the wildlife, including the

171
migratory wildlife coming to this country, the people of the country also matter? Unemployment in that part of the country is extremely high, and the development along the Tees is most important for the future of the industry there. Will my noble friend bear in mind that it is a tragedy if the Port Authority has decided to drop its requirement from 80 million tons a year to 30 million tons a year?—because this is a human tragedy, not just a matter of numbers.
Baroness STEDMAN: My Lords, every case is considered on its merits, and so far as my Secretary of State is concerned, he will have the task of considering how to balance the environmental claims and the environmental desires against the needs of industry in the development of the area to which my noble friend has referred.
Lord SLATER: My Lords, is my noble friend aware that I have some knowledge of Seal Sands since I represented that area in another place, and I was rather surprised at the question asked by the noble Lord when he mentioned that no development would take place for at least 30 years? I am grateful to the Minister for the interest that is now being taken in regard to the development of these sites on Seal Sands relative to Tees-side.
Baroness STEDMAN: My Lords, at the moment we are considering the Structure Plan, and that is what is in the mind of the Secretary of State.
The Earl of LAUDERDALE: My Lords, will the noble Baroness bear in mind that the employment of humans is far more important than provision for migratory birds, who have the whole world in front of them? And is it not the case that Seal Sands industrial and maritime development is one of the out-standing economic successes of this country in the last 25 years? It fronts upon Europe and has a most important petro-chemical industry which is competing satisfactorily and enthusiastically all over the world.
Baroness STEDMAN: My Lords, as I said, it is a question of weighing up the balance between the environmental needs and the needs of industry.
Lord INGLEWOOD: My Lords, may I ask the noble Baroness not to be blackmailed by the employment arguments represented as justifying the destruction of almost everything else? With regard to Seal Sands, they are undoubtedly important even in their present reduced area; they are the only site of their kind between the Farne Islands and the Humber.
Baroness STEDMAN: My Lords, I am not proposing to be blackmailed and I do not think I am being blackmailed. What I am saying is that the Secretary of State has to bear in mind the balance between the environmental needs and the needs of industry. I have confidence that my Secretary of State will weigh these two factors in his mind.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, perhaps your Lordships may not be aware that the clock did not start until four minutes after the commencement of business and should now have registered eight minutes. We have 36 speakers tonight. It think it is the feeling of your Lordships that we should proceed to the next Question.

VAT AND CAR CHARGES
2.45 p.m.
Lord SELSDON: 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 why VAT is not reclaimable on car and estate car charges for business use; and whether they will consider an apportionment between private and business use for tax purposes.
The Parliamentary UNDER-SECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Baroness Birk): My Lords, VAT is not reclaimable because these vehicles can be used for private purposes as well as business purposes. Apportionment would not be possible without running a serious risk of abuse.
Lord SELSDON: My Lords, I am most grateful to the noble Baroness for the rather standard reply. May I ask her

173
whether she will acknowledge the importance of the business market to the motor car manufacturer, particularly at present when, in view of inflation and pernicious taxation, the private individual is finding it increasingly difficult to buy a new car? May I ask her whether she would urge her right honourable friend the Chancellor to look very closely at all the various anomalies that exist in the taxation of business and private cars?—because anomalies exist which are complicated, lead to increased bureacuracy friction and often total unfairness.
Baroness BIRK: My Lords, I think the noble Lord will agree that there seems to be quite an amount of confusion; he seems to have quite a shopping list of things that he wants the Chancellor to look at. So far as this question is concerned, there are two duties which car owners have to pay; that is, the excise duty and value added tax, which is a second duty. I do not accept that this has an effect on the car industry, because if the noble Lord is arguing that people who are using their cars for private purposes should not pay VAT like the rest of us, then that argument was unacceptable to us and to the Conservative Government who brought in this measure in 1972. So far as the effects on business costs are concerned, which may have been what the noble Lord had in mind, I think we must keep this in perspective and realise that most of the carriage of goods is done in business vehicles which are exempt from VAT.

QUEEN ELIZABETH HOSPITAL, WOOLWICH
2.48 p.m.
Lord WALLACE of COSLANY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether a definite decision has been reached on the number of beds to be allocated at the Queen Elizabeth Hospital, Woolwich, for use by the Greenwich and Bexley Area Health Authority.
Lord WELLS-PESTELL: My Lords, the scale of use of the Queen Elizabeth Hospital by National Health Service patients is still under consideration by my right honourable friend the Secretary of State for Social Services, in consultation with my right honourable friend the Secretary of State for Defence.
Lord WALLACE of COSLANY: My Lords, is my noble friend aware that there is now increasing urgency for some definite decision to be reached, because the Area Health Authority itself is heavily engaged in probable closures of hospitals. If a large number of beds is involved it will mean possibly the closure of yet another hospital. We in the area authority are desperately anxious to finalise a situation which has gone on for far too long, and for which I do not blame the Secretary of State for Social Services.
Lord WELLS-PESTELL: My Lords, I am aware of the concern which the noble Lord has expressed. I myself have been reading the Consultative Document produced by his Area Health Authority, of which he himself is the vice-chairman. It is a very important document. It contains a number of recommendations and shows that a good deal of thought has been given to the matter by my noble friend's Area Health Authority. It is because of the importance of the document and its ramifications that my right honourable friend is bound to take it into consideration with not only the Area Health Authority but also the Regional Health Authority and the Ministry of Defence, which is responsible for this new hospital which is to be opened fairly soon. These matters do take time, but I can assure your Lordships that no time is being lost in this case.
Lord MOYNE: My Lords, is the noble Lord aware that the military authorities have announced that the civilian facilities for emergencies which it was understood would still be available in the remains of the Tidworth Military Hospital after its closure will not now be available? Would the noble Lord look into that question, which seems to have some parallel with the Question on the Order Paper, although I admit that it is going a little wide of the mark?
Lord WELLS-PESTELL: My Lords, if I can say so very kindlily to the noble Lord, this is ground that we have been over many times. The noble Lord and various Members of Parliament were received by my right honourable friend the Minister on this matter, and I was present. I think the noble Lord will appreciate that every possible consideration was given, though the result was not one to his liking. I do not think we can go over that ground again.

UGANDA: COMMONWEALTH MEMBERSHIP
2.50 p.m.
Lord ELTON: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they agree that the time has now come for the Commonwealth Prime Ministers to consider the suspension of Uganda's membership of the Commonwealth pending the return of that country's Government to an observance of the basic human rights of its citizens and whether they will bring that question to the attention of the Prime Ministers of the other Commonwealth countries at the earliest opportunity.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, I understand the strong feelings aroused by the recent reports from Uganda. I share them. This is, however, a delicate issue with far-reaching implications. It would need very careful consideration.
Lord ELTON: My Lords, I thank the noble Lord for that Answer. Is he aware that it is a question of suspension and not of expulsion from the Commonwealth and that it is directed at the Government, not at the people, of Uganda? In that context, does the noble Lord not think that the Commonwealth, which contains people of all colours and members of almost every religion, is the ideal forum in which to expose recent events in Uganda for what they are and by this means to demonstrate that it is not merely
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Christians and not only white people who regard these events with a revulsion which is shared by this House and which was expressed by the Prime Minister in another place yesterday?
Lord GORONWY-ROBERTS: My Lords, yes, indeed. I appreciate the points made by the noble Lord—in particular that this effects not only Christians but people of good faith everywhere. What the noble Lord said about the nature of the Commonwealth is very important. By definition, as an international association of people of all religions, many languages and many colours, it could be the right forum for deciding issues of this kind. However, it could also be a forum where new and abrasive feelings might be aroused, with the very best of intentions otherwise. This is what I meant and it is what my right honourable friend meant when he spoke in the other place yesterday. The noble Lord's suggestion will need careful consideration, and it will get it.
Baroness GAITSKELL: My Lords, I support the sentiments of the noble Lord, Lord Elton, 100 per cent. Could not the noble Lord's Question be reinforced by the wonderfully courageous statement made by the most reverend Primate on the news this morning, when he issued a challenge to the United Nations asking for all of us to get together and look into this terrible régime? I spent nearly three months as the delegate in the Human Rights Committee of the United Nations. There were times when the air was thick with hypocrisy because the only condemnations of violations against human rights were against South Africa, Chile and Israel. There was not a whisper about the Amin régime. The least we can do is to support the request of the noble Lord, Lord Elton.
Lord GORONWY-ROBERTS: My Lords, I am sure that noble Lords and others will have noted with respect and attention the remarks made by the Archbishop in the news programme. They do indeed come close to what the noble Lord said in his Question. Noble Lords will know that my right honourable friend the Prime Minister stated in another place yesterday that our delegation to the Commission on Human Rights in Geneva

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has been instructed to call for an investigation into what has transpired in Uganda. This investigation would embrace the whole issue of human rights in Uganda.
Lord FLETCHER: My Lords, is my noble friend aware that whatever is done about the suspension of Uganda's membership of the Commonwealth, the threatened arrival of President Amin in this country would create very considerable resentment among many sections of the community? Will the Minister consider the desirability of conveying that to President Amin?
Lord GORONWY-ROBERTS: My Lords, there is no doubt that my noble friend is right and I assure him that the second part of his question, which contains a suggestion, is very much in the mind of my right honourable friend and the Government.
The Lord Bishop of WINCHESTER: My Lords, can the Minister tell me whether Her Majesty's Government understand that, apart from the tribal structure, the Churches of Uganda constitute the only institution which can still give to its members a sense of solidarity and security and a focus of resistance? In the light of that, do Her Majesty's Government recognise that an all out attack on the Christians of the country is an attempt to undermine and destroy that remaining focus of cohesion among the people? Therefore, are Her Majesty's Government prepared to treat these events not so much as an instance of religious conflict and persecution as an issue of the human rights of a whole people?
Lord GORONWY-ROBERTS: My Lords, yes, indeed; human rights include, at the very summit, a respect for religious conviction and practice. However, I very much appreciate what the right reverend Prelate has said about our considering very carefully how best to sustain our own people, however few, in Uganda, who are almost all Christians and—although they are there clearly by their own considered choice—how best to protect them and, indeed, in the larger sense how best to sustain and help the people of Uganda as a whole. This is the consideration in which the Government, and any other Government, would have to engage very carefully.
Lord GLADWYN: My Lords, irrespective of the wider considerations to which the Minister has very properly drawn our attention, do the Government not think it likely that if this creature comes to the Commonwealth Conference no self-respecting person will be present at any function or meeting which he may attend?
Lord GORONWY-ROBERTS: My Lords, yes; I should not disagree with that prognostication, and a great many others that have been voiced here today and which I welcome. I hope that Hansard is perused very carefully in Kampala.
The Lord Bishop of SAINT EDMUNDSBURY and IPSWICH: My Lords, is the Minister aware that when I was in Nairobi at the weekend, for the memorial service to the Archbishop of Uganda, I was approached by a considerable number of Ugandan refugees—some of whom are very responsible people whom I know and have known for years—who had arrived that very day? Does the Minister know that there is widespread, deep fear throughout Uganda that the killing of the past may be far exceeded by the killing possibly of the present and the future, and that the Ugandan people—and those who spoke to me were representative of a considerable section—believe that only some kind of outside intervention can help? Are Her Majesty's Government aware that, although it is clearly right that the matter should be referred to the United Nations Commission, some kind of speedy action is of the greatest importance?
Lord GORONWY-ROBERTS: My Lords, I am most grateful to the right reverend Prelate. We share his fear and his sense of urgency. I must repeat that the best course of action designed to dispel that fear and to overtake that emergency remains to be considered with very great care indeed.
Lord JANNER: My Lords, in view of the deep anguish that is caused not only in Christian circles but, as has already been stated here, in many other circles, is not this the time for something to be done which will clearly indicate to the President of Uganda and his colleagues that the world will not stand for this

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kind of terrorism, for this horrific set of actions which have been undertaken in recent times, and also before recent times, by the President? Is it not really an occasion on which we, as a civilised nation, can turn round to Amin and tell him bluntly that he is not welcome in this country, and that if he comes the people here will be deeply distressed about his presence? Is it not indicative of what often occurs there that, happily, the 95 people who were saved in the Entebbe incident owe their lives to the fact that they were rescued?
Lord GORONWY-ROBERTS: My Lords, I cannot quarrel with my noble friend in the least. It is right to point out that the right reverend Prelate and I, in referring to people of the Christian faith, indicated the wider circle of concern and danger which would include all faiths. As to the suggestions which my noble friend has made, I repeat that this House is probably one of the best places in which these views can be made known. Let us hope that from this House, and in other ways, the message will reach the right quarter.
Lord LEATHERLAND: My Lords, may I ask my noble friend and the Government to bear in mind that if the association between the British Commonwealth and Uganda is severed, then a new association between Uganda and Communist Russia or Communist China might very soon be established?
Lord GORONWY-ROBERTS: My Lords, that is indeed possible, and my noble friend is quite right to bring up the possibility. With his question and my answer, I would hope, in my other capacity, that I might invite the House to pass on to other business.

INDUSTRIAL DEMOCRACY: BULLOCK REPORT
3.2 p.m.
Lord CARR of HADLEY Lord CARR of HADLEY rose to draw attention to the Report of the Committee of Inquiry on Industrial Democracy (Cmnd. 6706); and to move for Papers. The noble Lord said: My Lords, I hope your Lordships will think it right to have
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taken this early opportunity to debate the extremely important Bullock Committee Report. I am encouraged in thinking that your Lordships think it is right by the large number of speakers who have put down their names to address your Lordships, including many with exceptional knowledge and experience of industrial life.
I am, and I am sure all your Lordships are, particularly looking forward to the first contributions to our debates from the noble Viscount, Lord Trenchard, and from the noble Lord, Lord Elibank, who I know have great direct personal experience to bring to bear, as is perhaps shown by the fact that they could have made their maiden speeches a long time ago had they not been so fully occupied in gaining the experience on which they are going to draw when they address us later. Perhaps I can assure them from personal experience that they will not find it as fearful an occasion addressing your Lordships' House for the first time as no doubt at the moment they may be thinking.
I am sure that the House would also wish me to congratulate and thank the noble Lord, Lord Bullock, and the members of his Committee, for tackling this extremely important but extremely difficult task. We all greatly regret that the noble Lord, Lord Bullock, cannot be with us today. I understand that he has not been well for some time. I am particularly sorry because I am afraid that I feel bound to make some rather severe criticisms of the majority report of the Committee, which of course he himself signed. I would therefore particularly have wished to have been able to hear what I am sure would have been a powerful answer from his own lips.
Perhaps I may also make clear that I am going to concentrate on the majority report of the Bullock Committee, not because of any lack of sense of the value and indeed the great importance of the minority report, but because the Government announced at the beginning that it would be on the majority report that they would at least make the base from which they would conduct their consultations; although I welcome the fact that that attitude has, I think, become progressively less rigid as each day has gone by.
There really is little doubt that, if we could substantially increase the degree of creative participation, and therefore create a greater sense of involvement and common purpose among all those who work in industry and commerce, the whole country would become more prosperous and our society more united. I hope it is therefore common ground that it is essential that we should take a strong initiative towards what has come to be called industrial democracy. But I believe that it is also essential that we do not attempt to do this by putting into practice the proposals of the majority of the Bullock Committee.
The Bullock majority proposals are a wholly unacceptable starting point, because they are based on false principles which are both fundamentally undemocratic and contrary to the requirements for making British industry more productive. Instead of creating more unity and more common purpose the Bullock Report's proposals would create more division and more conflict. They would stimulate strife rather than co-operation between the two essential partners in any business enterprise; namely, those who provide their money and those who give their work and skill. This would lead to less investment in British industry.
Then, given the large number of unions represented in most British companies, the proposed method for nominating worker-directors would set one trade union against another in competition for board places. The proposals would increase the division and tension between the half of British employees who are not trade unionists and the other half who are. They would devalue both the status and the role of those employees who, by qualification and merit, have become managers and technical specialists, and they would gradually destroy the private enterprise system, and therefore the mixed economy to the support of which the present Labour Government are supposed to be committed.
The subject of the Bullock Report is described as industrial democracy, but the majority proposals really make a mockery of that title. If these proposals were to be extended throughout all British companies, almost half of all employees would be disfranchised. Even if they remained limited to companies with more than 2,000 employees, where the degree
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of unionisation is usually significantly higher, the proportion of employees with no democratic rights would still be substantial. Moreover, this denial of rights is selectively concentrated on all those employees who have reached the upper and middle ranks of managerial and technical employment. This is grossly unfair.
Trade unions should rightly have the major part in the development of industrial democracy, but they cannot, in any fairness, claim, and they must not be given, a watertight statutory monopoly. Moreover, the actual method proposed for selecting worker-directors is, I submit, particularly intolerable. Even if we were to accept that no one but a member of a recognised trade union could become a worker-director, the candidate should surely be subject to election by a secret ballot of all employees. It is unthinkable that we should pass a law as proposed which would permit a committee of shop stewards simply to nominate directors from among themselves. Even if we were to disregard the interests of all non-trade unionists, it really is not right to assume that trade union members, as a whole, would wish to choose the same person to be a shop steward as to be a director. They might well decide that different qualities are needed for two such different jobs. I fear the truth is that the Bullock Committee's majority report is not really about democracy, but about power, about putting British industry and commerce under trade union control; and this is a proposition, I submit, for which there is no sign of majority support in this country.
Trade unions may be democratic and they usually are, in the broad sense that usually, though perhaps not always, they represent the wishes of the majority of their members when they undertake collective bargaining on questions of pay and conditions of employment. But this is not true when they turn from their industrial to their political role. I submit that in political matters it is demonstrable that trade unions are often highly undemocratic: that in many cases a small minority tail wags the large majority dog; and there is no evidence to suggest that the majority of trade union members support the objective of trade union control and the destruction of the free enterprise system, which is nevertheless written into the rule books of many

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unions. But there is every reason to think and to fear that a substantial number of shop stewards who might be nominated as directors would be dedicated to this purpose, particularly if they did not have to seek election and re-election in a fully democratic way.
Turning to the industrial effects of these proposals, they would, I submit, reverse the strong and much-needed trend of recent decades towards more genuine and dynamic professionalism in the direction of British companies. Appointment to the unitary board as we know it now in the British system should be on the basis of individual merit and function, and this principle should apply equally to the choice of both executive and non-executive directors. For the success of British industry in international competition, the board of a company should be a genuine meritocracy. Whatever may have been the position in this respect in the distant past, this is increasingly true of more and more British companies, and this is a trend which everybody ought to welcome.
Yet the Bullock proposals would wantonly reverse this trend. They would cause the removal from boards of large numbers of experienced directors who are needed on their boards and who hold their positions there entirely on merit, and they would block these places for the future. Moreover, the problem is made worse by the insistence of the majority report that, unlike in Germany, there should be no special provision for management to fill any of the employee-directors places. The implication peeping through the surface of the majority report is that one ceases to be a worker and becomes a shareholder's man as soon as one rises a step or two above the shopfloor, and this is one of the majority report's most divisive aspects, and I believe an offensive one.
The majority of the Bullock Committee, presumably through lack of experience of how boards actually work, seem obsessed with the representational function of boards. This is totally unrealistic. Directors under the present system are of course aware of their ultimate responsibility to the shareholders; but their daily actions and attitudes are not dominated by a consciousness of being shareholder
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representatives. They are seldom nominated by shareholders. Except in rare cases—unless a company gets into trouble—new directors are nominated by the existing board as people judged to have the necessary qualification to fill particular gaps, and the role of the shareholders is normally simply to endorse or reject the board's judgment and choice. Thus, the dominant motivation of directors under the present system is to use their experience and professional skills to make the company successful, and this is surely in the best interest of shareholders and employees alike.
What may seem wrong under the present law, and what indeed may be wrong, is that the sole right of endorsement of nomination to every place on the board rests with the shareholders and not to any extent with the employees. But this is not the imbalance which the Bullock Report seeks to redress. What the Bullock majority proposes is something quite different. They do not propose that employees, like shareholders, should have a right to endorse or reject the board's views about whether a particular person has the qualifications best suited to fill a particular board vacancy. They propose a general right and practice quite different in kind from that normally exercised by shareholders; namely, for a block of places on the board to be filled by the trade unions on a wholly representational basis.
Within the context of the 2X+Y formula recommended by the Bullock Committee majority, the logical response of shareholders to this proposal would of course be to fill their quota of directors with nominees from the organised share-holders; that is, from the big institutions and pension funds. Does anyone think that this would be a sensible, even if it were a practicable way to set up the active leadership and direction of a company's affairs? Such a response from shareholders would, luckily, be unlikely to happen in practice; so the reality would be that we should get boards with an incompatible mixture of dominantly functional directors from one side and dominantly representative directors from the other with the balance made up by a further number of directors of unpredictable qualifications and experience.
Thus, the truth is that, quite apart from any other objections, the Bullock

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Report's majority proposals are wildly impracticable from the point of view of the smooth and efficient direction of British companies and they must, I submit, be rejected on this ground alone. But in addition to the points I have already mentioned, there are a number of other fundamental objections to the majority's proposals. For one thing, they contain a fundamental fallacy as to why there should be absolute parity in terms of power on the board between shareholder and employee-directors. This fallacy appears to be based on the proposition that the trade union which would be nominating some of the directors would be expected to accept the same responsibility as the body of shareholders who would be nominating the others.
But nobody is expecting that; least of all, as far as I know, are the trade unions prepared to offer to accept such equal responsibility. In the last resort, for example when a company breaks up, the shareholders must accept the greater responsibility; the shareholders must accept the possibility of losing all or part of their money. They come last in the queue while the employees, rightly, come near the top of it when a company's assets have to be disposed of and distributed. The unions would be mad and entirely wrong to allow the salvage of the interests of a company's employees to be put on an equally low level of priority as its shareholders. This is an unanswerable reason why, in the last resort, the share-holders must be able to have control.
In personal terms, each director, executive or non-executive and no matter by whom elected, must accept equal responsibilities and liabilities; but because of where the greater responsibility falls in a last resort situation, the shareholders collectively must, in justice, be able to exercise control, otherwise risk-bearing capital must in the end disappear—and who would benefit from that?
Another major cause for rejecting the Bullock Committee's majority proposals is their incompatibility with European practice. We are, after all, members of the European Community and, given this fact, it is in our own interests, as well as being our duty, to develop our own institutions in a way which harmonises with those of our European partners. Indeed, the Bullock Committee was
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charged to take European practice into account. The result of its doing so, however, has been to lead the majority, extraordinarily, to make proposals radically at variance with European practice—at variance in principle and not only in detail—and this point needs emphasising because on a superficial hearing it may not be apparent.
To bring home this point, just look at the position in West Germany, which is so often quoted as an example in being so far ahead of us in the development of industrial democracy. So they may be but, if they are, it is not because they have gone down the road recommended by the majority of the Bullock Committee. In West Germany, ultimate shareholder control is preserved, even where there is or will be parity in numbers between the share-holders and employee directors. There is normally only one union in each company representing shopfloor employees. The German unions also positively support the mixed economy with a strong private sector. They also accept that collective agreements are legally binding and that strikes are illegal unless certain clearly defined procedures have first been gone through and the decision to strike is supported in a secret ballot by 75 per cent, of the employees. Moreover, in West Germany all employees are enfranchised. These really are something much more than marginal differences, yet the Bullock Committee appears to have given little more than cursory consideration to their bearing on the chances of success of the sort of system which it recommends and which has a highly geared employee representation on the top boards.
This brings me to the last of the fundamental reasons that I want to mention for rejecting the Bullock Committee's majority findings. This is the manner in which the Committee conducted its inquiry and made its report. This was bound to create distrust rather than confidence and to stimulate fierce dissension rather than agreement. Let me hasten to say that the blame for this rests not on the noble Lord, Lord Bullock, and the members of his Committee but almost entirely with the Government, first, for having laid down terms of reference which were not just inadequate but grossly biased, and then for allowing the Committee a wholly inadequate amount of time for such a fundamental inquiry. These were severe and

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unfair handicaps to place on the noble Lord, Lord Bullock, and his Committee. I have no doubt that, but for those handicaps, the Committee would have taken more oral evidence, perhaps particularly in order to talk the matter through with those unions who put in written submissions which were not in full harmony with the formal TUC line. The official TUC line on worker-directors has changed rapidly in recent years, so that a full examination and discussion in the report of the reasons for this change and an assessment by the Committee of the stability within the TUC of the present view, and the extent to which that view is held throughout the whole union movement, would have added greatly to the report's value and authority to the country and to everybody concerned.
I believe that a most serious criticism of the Committee's inquiry is that, so far as can be seen from the Report, the Committee failed to put to the unions and consider in depth a number of basic questions about changes in union structures and attitudes in the context of the radical new environment proposed. The unions are asking for, and the majority of the Committee are recommending, most radical changes in our industrial institutions. These would require from share-holders and management most radical changes in their procedures and attitudes. But what changes in old established procedures and attitudes did the Committee ask the unions to consider in return? For example, in return for becoming the single channel of representation at all levels and for having parity of board membership, would the unions be prepared to give any undertaking that it would be their policy to use their board membership to support the mixed economy and the continued future of the companies on which they have directors, rather than to pursue the objective of destroying the private sector which is enshrined, either overtly or by implication, in the rules of a number of the most important unions?
Then, would the unions themselves make a strong new effort to solve the problems of multi-unionisation which in many British companies makes traditional collective bargaining and the development of new style participative representation so much more difficult and dispute-prone than is the case in other countries?
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Would the unions be ready to make sure that their own internal processes were properly democratic? That is far from the case in every union at the moment. Surely, questions of this sort ought to have been raised and discussed by any Committee proposing to make such radical recommendations because they really are essential to the problems that we are facing.
To say this is not to criticise the unions for having developed structures, procedures and attitudes which are deeply rooted in ancient industrial history and no doubt justified by that history. But, if we are to have a really new deal in industry, should not the unions, as much as the other parties in industry, be prepared to change and to throw away old habits and attitudes in return for the new deal that they are seeking? We shall never get a reconciliation of the divisions in our industrial society unless and until all parties are prepared to stop justifying their past and present records and to start being genuinely ready to give as well as to take.
This brings me to what needs to be done in a constructive way. The majority recommendations of the Bullock Committee must be rejected because they are impracticable, unfair and undemocratic, and would be the cause of endless and bitter strife. But that is no excuse to sink back and accept the status quo. The status quo is not good enough either to ensure reasonable standards of living for Britain in the future or to make British industry a better and happier place in which to work, and a place that is more attractive for a life's career, to a larger proportion of our best young men and women—something we were talking about only two weeks ago.
There must be a partnership between capital, management and labour and the only way to build a genuine partnership is to build it from the bottom upwards, starting with everyone having a right to full information; leading from there to genuine consultation; moving on from this to real participation in decision making on matters affecting everybody's daily working lives; and ending up in real accountability to each of the partners for a company's basic strategy and philsophy of action. This structure of partnership cannot be built in a day, a month, or a year. Different companies are at different

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stages and need to design their structures in different ways to fit in with differing needs and traditions. So there must be flexibility. There must also be the minimum of compulsion and the maximum of voluntary action. But exhortation and generalised expression of good intentions are not enough. The trade unions would not accept it, nor should they. Nor should the country as a whole, because our national need for progress is too urgent.
How, then, should we proceed? Above all, I believe that we must seek to identify the maximum degree of common interest between the different partners and the widest possible consensus. I am old-fashioned enough to believe that consensus is far more creative than tension. To this end, the Government should clear the stage and enter into genuinely open-ended discussions with the CBI, the TUC and, I suggest, with the financial institutions best able constructively to represent the genuine interests of shareholders, remembering that nowadays the majority of shareholders are no longer a small number of rich men but are the mass of ordinary people in their capacity as pensioners or prospective pensioners, as contributors to various types of savings schemes, or as the holders of all sorts of insurance policies all of which are basic to the security of their lives. So the shareholders' interest is the interest of everybody who walks down Whitehall and Oxford Street and who walks down the street in every other city and village in this country every day. It is not some specialised minority interest.
I suggest that, in timing, the objective should be to produce a Green Paper for public discussion well before the end of this year; a white Paper containing more or less firm proposals and including a first exposure draft of any legislation which may be necessary in the first half of next year; with the intention of initiating administrative and legislative action in the 1978–79 Session. I am sure that the key to success will be to proceed stage by stage, making a plan of action for only a few years at a time, so that we can learn as we go and gather mutual confidence and agreement in the light of experience. The need of the country, and the deep feeling of most people of all Parties and persuasions, is for reconciliation and for a genuine attempt to find common ground.
The trouble with the Bullock majority report—and its tragedy—is that it has highlighted and maximised the divisions while obscuring and minimising the potential area of agreement. So it has formalised the battlelines and sent the different parties back to man their barricades, when the need was to draw them out on to open ground. If only now we can remove from the stage those features of the Bullock Report which are the most contentious and divisive, the most unpracticable and the least tested by any experience, then a great deal of progress is possible when we make a new start.
For example, in their submission to the Bullock Committee, the CBI did not oppose all idea of legislation; on the contrary, they said that some kind of enabling and back-up legislation was necessary so long as its purpose was to support and speed up flexible voluntary action and not to replace it by an imposed formula. Equally, within this voluntary context, the CBI evidence specifically did not rule out employee representation developing at board level. Surely, my Lords, this offers a fruitful basis for reaching genuine agreement on a constructive programme of action for, say, the next four or five years.
Let us suppose that we had a new legal framework which formally recognised a duty, already accepted of course in practice by all good boards, to take into account the interests of employees as well as shareholders; which also laid on all companies above a certain size a duty to reach a participation agreement with its employees within a fixed time; which also laid on all companies a duty to disclose information to employees equivalent to the present duty of disclosure to all shareholders, and to include in their annual reports an account of the actions taken each year to promote participation; and which, in addition, set up some independent machinery to provide guidance on the kind of schemes which have been found to work well and to conciliate and, if necessary, in the absence of agreement within the time limit, to arbitrate on what schemes should be adopted. Let us suppose for a moment the coming into being of such a minimum new legal framework. Would we not then get a great deal of progress over the next five years—and get it through voluntary

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agreement? And would not the experience gained put us on much firmer ground in finding agreement about how best to go on to satisfy what is an undoubted need, at least in my view, to provide better accountability on major issues of strategy and principle, to shareholders and employees alike?
The hard fact is that almost by definition participation and industrial democracy can grow only on the basis of agreement and not through conflict. What then should industrial democracy mean? If it is allowed to develop so that well-qualified management is constantly interfered with and undermined in its capacity to initiate and carry through policy decisions, we shall all suffer both in our standard of living and through increased industrial strife. But if it can be steadily developed through agreement—so that looking downwards from the boardroom, a board of directors must make sure that all employees at all levels are fully briefed and are given genuine opportunities to participate in the decisions which directly affect their own lives; and so that looking upwards from the boardroom, a board of directors has to be more effectively accountable to representatives of both share-holders and employees for its major strategic decisions and for the general philosophy on which the company operates—then we shall all gain. Industry will become more efficient, Britain will become more prosperous, and British companies will be happier and more satisfying places in which to work. That, my Lords, I believe is the target and ambition which Government, trade unions, employers and everybody concerned should set themselves. I beg to move for Papers.
3.36 p.m.
Lord BYERS: My Lords, the House is indebted to the noble Lord, Lord Carr of Hadley, for initiating this debate at this time. In the course of my speech I will endorse a number of the arguments which he has submitted to your Lordships, and inevitably I think there will be repetition in the debate as those of us who have had wide experience in industry and commerce draw similar conclusions from that experience. The Bullock Committee has performed one useful service to the community. It has placed what they call "industrial democracy" firmly on
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the political agenda and started what I for one hope will prove to be a useful and a stimulating national debate over the next year or so.
Having said that, I must express my deep regret that one of my oldest friends, for whom I have the greatest respect, should have accepted the chairmanship of this Committee, hamstrung as it was bound to be by its loaded terms of reference, and that it should, I hope unwittingly, have produced proposals which cannot possibly fit into the real world of industry and commerce as it is practised daily in this country today.
The Liberal Party has a long and radical record on employee participation and worker involvement. In the Liberal Yellow Book of 1928 called Britain's Industrial Future, this whole question was examined by a very distinguished committee of the Party under the chairmanship of Walter Layton, who was late to become a Member of your Lordships' House. The Committee contained, among others, Lloyd George, Keynes, Seebohm Rown-tree, Sir Herbert Samuel and Sir John Simon. It was assisted by specialist committees, many members of which had first-hand knowledge of industry or commerce. In my view it did a much better job than Bullock will ever do.
It stated, nearly 50 years ago:
"One large element in successful management is the evoking of a team spirit. This can best be got by consultation. The manager who is unable or unwilling to see that co-operative working is more effective than autocracy, though more difficult to direct, confesses his incompetence as a manager."
It went on:
"There have been many different plans for recognising the claim of the worker to an effective voice in those aspects of the business which concern him. The value of any plan must in the end be tested by its effect in increasing or impairing the efficiency of the business."
That is one important test by which Bullock must be judged, as the noble Lord, Lord Carr, said.
My first objection to the majority Bullock Report is that it throws a spanner into all the work and thinking that is developing and has developed over the last few years in establishing a firm foundation for genuine worker involvement in industry. By its terms of reference, Bullock has had to take a short

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cut which in my view, if implemented, would end in disaster. It would be totally counter-productive and disruptive to impose worker directors on unitary boards by Statute without creating the participative and communications net-work at different levels of a company. This is the much more important and the much more urgent task, and one to which much thought is being given in many companies today.
The second objection is that a statutory duty to reorganise a unitary board of any kind on the lines suggested by majority Bullock could totally disorganise the proper function of the board itself, and those of us who have had responsibilities as executive directors can recognise that in the Bullock Report without any difficulty at all.
The condition that the unitary board must be composed on the 2X plus Y basis means inevitably that the board must be substantially increased in size or that it must lose some of its present directors, including some of those with specialist responsibility or knowledge. The idea that directors are elected by the share-holders is, as the noble Lord, Lord Carr, said, a total myth. What happens in practice is that a management team or directorate is built up over a number of years with some quite considerable skill. It is only when things go wrong that shareholders begin to get restive and to assert their rights. The Bullock proposals do nothing to guarantee improved efficiency: rather the reverse.
The third objection is that running right through this report is the concept of conflict and confrontation within the board as an inevitability. If the majority proposals are accepted, then confrontation and conflict are bound to arise from time to time. The Bullock proposals envisage these conflicts being settled by a vote in which the jointly appointed directors, the Y directors, will play a major part. My industrial experience has been that very few matters are and can be settled by a vote in a boardroom. In fact, a board which has to make decisions on the basis of a vote is an unhappy and usually an ineffective and short-lived one. Somebody has got to do something about it if they get to that situation.
The fourth objection is that the two-tier system, as in Germany, is totally rejected.
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In fact, if worker directors are to be elected their proper place, in my view, is on a supervisory board or, as the Liberal Yellow Book proposed, a supervisory council, as they called it, whose duty would be to meet at regular intervals to hear detailed reports, to cross-examine and criticise the board of directors and to be the ultimate authority over the higher appointments, including those of the directors themselves. That is a workable proposition, but it is quite different from putting 2X plus Y on a unitary board, as Bullock proposes. It was also proposed in the Liberal Yellow Book that the supervisory council could, if desired, consist of an equal number of shareholders and employees' representatives. That, I think, is the sort of thing which would be acceptable in many companies today; but not on a unitary board.
The fifth major objection to the Bullock proposals, in my view, is the monopoly of power they place in the hands of the recognised trade unions to appoint the worker directors. My Lords, let there be no mistake about it; we need strong and competent trade unions in this country, but the drive to place more and more power in the hands of the trade unions, as envisaged under the new pensions arrangements and again in the Bullock Report, can only distort our industrial system. It will antagonise managers and disfranchise half our industrial workforce. Those of us who have been pressing for rapid progress on worker involvement want to see systems developed which carry the confidence of the total workforce, both union and non-union. Anything less than this will be divisive and frustrating. For these reasons, I hope that the majority proposals will be soundly rejected. I know that the authors of majority Bullock feel that they have met these objections; but, my Lords, having read that report I feel that they are totally unconvincing in the arguments that they put forward, which stem, unfortunately, from the lack of day-to-day experience of having to serve as an executive director at board level. I do not blame them for that: I blame the Government, in the way they chose this particular Committee to report on this very important matter, where experience means a great deal.
I believe that in continuing the debate on Bullock we should give priority to two

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important considerations which are linked together. The first is to acknowledge that for the time being industry should really not be obliged to digest any more legislation. It has got far too much on its plate as it is; and, in any event, it ought to be concentrating on improving productivity, dealing with investment and getting our exports up. Just consider, my Lords, some of the measures with which industry is now grappling as a result of what has been done by both ourselves in this place and in another place. The Social Security Pensions Act, which comes into operation in April 1978, is a very important piece of legislation which is putting quite a burden on the companies concerned. Then there is the Employment Protection Act; the Remuneration Charges and Grants Act, the pay code; the Prices Act; the National Insurance Surcharge Act; the Equal Pay Act; the Sex Discrimination Act; the Race Relations Act; the Dockwork Regulation Act; the new Companies Act; the Restrictive Trade Practices Act; the Development Land Tax Act; the health and safety at work legislation, and any number of Finance Acts that have to be coped with. In my view, my Lords, it is time to call a halt and to give industry, and particularly the bigger firms, a breathing space so that they can get on with the real job of work.
My second contention, which fits in with this plea for a moratorium on legislation, is that we should proceed along the lines proposed by the Industrial Society in their excellent booklet Practical Policies for Participation, in which they recommend a period of consultation and experimentation. They list the many options open to companies to improve participation and, if necessary, to secure representatives of employee interests at board level. They say—and they are right:
"The plain fact is that there is no substantial experience in this country to point the way to success, and hence the need for a period of experimentation".
They list a number of realistic suggestions from which employers and employees might select one for experimentation appropriate to their particular circumstances.
I think the Government's role is to keep the debate going and to devise
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fiscal incentives, methods for monitoring success and failure, and methods of exchanging experiences and information between those participating—and I do not see this worker involvement being necessarily confined to the very large companies. If, as we on these Benches believe, genuine worker involvement leads to greater efficiency, it should be applicable to all shapes and sizes of firms. But the worst thing the Government could do—and it would be a real disservice to society—would be to impose by legislation the majority proposals of Bullock or, in my view, any half-baked compromise. Let us spend the next two, three or four years profitably finding out, not a standard solution—I do not think one exists; there is no standard solution to these problems—but different schemes which are applicable to different organisations and different situations. In that way, given the right incentives, we could make a great deal of progress.
The Bullock Report, my Lords, proposes an Industrial Democracy Commission. This might well provide the basis for co-ordination, approval and monitoring of different schemes. In some ways it could act rather like the occupational Pensions Board, which, under recent pensions legislation, is charged with satisfying itself that companies wishing to contract out have fulfilled the necessary requirements before issuing a certificate for them to contract out. In the same way, an Industrial Democracy Commission, armed by the Chancellor with a financial or fiscal incentive, such as a reduction in corporation tax, or some other method, could approve schemes of worker involvement agreed by management and workforce which attained certain standards. Along these lines we really could make some progress, but to impose majority Bullock by Statute would, in my view, be a recipe for disaster.
3.49 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Kirkhill): My Lords, it is now just one month since the Bullock Report was published, at which time my noble friend Lord Oram reported to your Lordships the Statement made in another place on behalf of the Government by my right honourable friend the Secretary of State for Trade. As the noble Lord, Lord Carr, mentioned in his opening

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remarks, Lord Bullock himself has been unwell in recent weeks, and as a consequence has been unable to take part in the public debate which has been taking place since, and even before, the report was published. I am sure we all regret that he is unable to be with us today.
My Lords, the Government set the noble Lord and his colleagues on the Committee a heavy task. We asked them to report within a year, which they did. They received and studied a great quantity of evidence and they took themselves to Sweden and to Western Germany to study at first hand the arrangements for worker participation on boards of companies already in operation there. And they have produced for us a closely argued set of proposals in both the majority and the minority reports which give us a valuable basis for discussion and consultation in the coming months. I feel sure your Lordships will wish to join with me in wishing the noble Lord, Lord Bullock, a rapid return to full health and, at the same time, in thanking him and his colleagues for the work they have done. As the noble Lord, Lord Byers, has just said, it is pleasing that the noble Lord, Lord Carr, has secured this debate today particularly as it is clear from the list of noble Lords who intend to speak that the House shares Lord Carr's view and my own of the importance of this subject and that we can expect an interesting and constructive debate; although I need hardly say that I would draw a different conclusion from the report from that which has been expressed by the two previous speakers this afternoon.
It may be helpful to your Lordships if I recall the main points of the Government Statement made on publication of the Bullock Report. First, we repeated the Government's commitment to a radical extension of industrial democracy through representation of the workforce on company boards and to the essential role of trade unions in this process; second, we said that we intended to undertake consultation with the CBI and the TUC, on the basis of the majority report, in order that as much common ground as possible might be identified; third, we made it clear that we intended to bring forward legislative proposals in this Session of Parliament; fourth, we expressed the hope that the consultations would take place in a positive and constructive atmosphere with
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recognition by both sides of industry of the need to seek a lasting settlement. I am glad to say that this process of consultation is now under way. There has also been a great deal of comment and discussion in the newspapers, on television and on the radio, and we have received letters from organisations and from the public, all of which I believe will be helpful to the Government in reaching conclusions for the framing of our legislative proposals.
The Government's commitment to worker participation at board level has stood for some time now and there is no change in that. This is why we asked the Bullock Committee to confine its consideration to the methods by which this might best be achieved. Although the signatories to the minority report felt it was unsatisfactory that the terms of reference excluded the question of "whether"—the question of "how" had formed part of the remit—the majority did not feel this was a limitation and, indeed, made it clear in their report that the terms of reference had not prevented them from examining the wider aspects of participation in decision making, including the relationship of board level representation to changes below that level.
My Lords, looking back over the 30 years since the war, there has not been a single period when our economic performance can be said to have been entirely satisfactory. There have been times when we have fared less badly than others, but the economic pundits here in Westminster and elsewhere have been consistent in underlining for us our poor performance in the international league tables on output, productive investment, propensity to spend and to import and failure to export and invest. We have deflated, reflated and inflated. More recently, staggering under the impact of the massive rise in oil prices and adverse international trading conditions, unemployment has risen to unacceptable levels, the cost of money has soared. There is no simple reason for all this, in my view, but there is a common theme running through the statements of successive Chancellors of both Parties since the Sir Stafford Cripps era, of the need to improve output, productivity and industrial relations.
In terms of strike records, we do ourselves less than justice. A national strike

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in France may rate a paragraph on the foreign pages of The Times and no mention at all in other papers; but industrial stoppages here are front page news, inevitably, and the outside world may be forgiven for assuming that we are a country torn by industrial strife. In practice, over the years the international league table of days lost through strikes is one in which we do quite well compared with other countries. Nevertheless, the record of industrial relations in some sectors of our industry is rightly a cause for concern. And here I am talking not simply about the ultimate breakdown, the strike, but the underlying atmosphere of suspicion and confrontation which all too often prevails, particularly in relation to the need to adapt to change, both in technology and in the market place. The pace of change is accelerating all the time and if we are to cope with this we must amend our institutions to recognise the common interests of employees, management and shareholders alike in the creation of wealth, improved efficiency and desire for expansion. Happily, there is a consensus in the country at large about the need to develop our institutions for participation at all levels in industry. The argument is about the form participation should be encouraged to take.
The Bullock majority report, of course, discussed at some length (in Chapter 6) the existing practices for collective bargaining and participation and the dissemination of information about company policy and performance; and they rejected the notion that there was in some way a choice between legislation and evolution. On the contrary, they saw employee participation at board level as a means of strengthening industrial democracy below board level and as a guarantee and catalyst for effective participation at all levels. But the Bullock majority concluded that extension of participation below board level was not an alternative to board level representation and that the two were necessary and, indeed, complementary. The Government share this view.
My Lords, worker participation at board level is not new to Western Europe. Indeed, most countries have formal arrangements of one sort or another. In West Germany, for example, workers have been represented on the supervisory boards for 25 years. Legislative arrangements exist in one form or another in
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Germany, Holland, France, Luxembourg, Austria, Norway, Denmark and Sweden.
Lord HARMAR-NICHOLLS: My Lords, has the noble Lord inadvertently misled the House when he suggested that the Committee recommends that participation in the form it recommends is necessary? Surely their instructions were to take for granted the Government view that it is necessary. They were given a limited directive to say how it should be done. Is that not a fairer description of what happened than that which the noble Lord has given?
Lord KIRKHILL: My Lords, I do not consider that I have in any way misled the House as to the interpretation of the Committee's instructions. If I may say so, I think that the noble Lord may have perhaps misheard what I said, or he may have misinterpreted what I have said. If he will read Hansard, then what I confirm to him now is something that he might agree with retrospectively. I was going to say that although Belgium has no formal provision for representation in the private sector, some corporations in the public sector have employee representation. Within the Community, only ourselves, Italy and Ireland have nothing at all.
Thus, there is in the Government's view a well-established movement in Western Europe where worker representation on boards is seen as a natural and genuine extension of democratic principles into industrial management and as a logical part of the evolution of the mixed economy. Some of the comment made in recent weeks seems to suggest that the Government were alone in pressing a novel and doctrinaire innovation on to a reluctant industry; whereas the fact of the matter is that a great many of the objections which are now being raised to worker participation at board level in this country have been raised just as vociferously—I assure your Lordships of this—in countries in Europe, and experience there has shown that a great many of the fears were ill founded and have not been borne out by experience.
Indeed, looking at the relative economic performance of the United Kingdom against countries in Europe which have introduced participation arrangements, it is hard to escape the conclusion that the introduction of industrial democracy here

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will not prove as dangerous or damaging as it has been held likely to be. On the contrary, in West Germany, for example, both management and the unions are firmly convinced that participation at board level has made a real contribution to their economic success.
Lord BYERS: My Lords, will the noble Lord make it clear that, in that context, he is talking of a supervisory board, and not a unitary board?
Lord KIRKHILL: My Lords, I am at this point talking about some form of participation at board level. A good deal of concern——
Lord SHACKLETON: My Lords, may I interrupt the noble Lord? I am sorry, but he is making a number of very positive statements. Has he read the report that was commissioned by the Bullock Committee, made by Mr. Batstone and Mr. Davies? This says nothing of the kind. It says that where worker-directors have had an effect it has been only marginal. Can the noble Lord tell us whether he has actually read this report?
Lord KIRKHILL: My Lords, I have read the report but I have also, of course, as a Government Minister, been in receipt of other information. I have other contacts. I have made my own decision as between comments in the report and other information given to me, and I am expressing that before your Lordships' House this afternoon.
My Lords, a good deal of concern has been expressed in many quarters about the proposals in the Bullock majority report for the involvement of trades unions in the process of triggering the move to appointment of worker-directors and in the actual appointment of worker-directors. They proposed, it will be recalled, that it would be for recognised trades unions (with bargaining rights on behalf of at least 20 per cent, of all the employees in the company) to make a formal request for a secret ballot of all employees. If the majority comprising not less than one-third of all eligible employees was in favour of representation on the board, the process of reconstituting the board would begin.
The Bullock majority proposed that the arrangements for the selection of employee
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representatives would be made by a joint representation committee representing all the independent and recognised trades unions in the company, and that this committee would act as the nominating body for employee representatives. Thus, under the Bullock majority proposals it is for the unions to trigger off the procedure and to settle the arrangements for selecting the worker-directors. This has been widely criticised on the grounds that it adds greatly to the power of the unions, and that, moreover, it seems to exclude, other than in the initial ballot, employees who are not union members. This, it is argued, is a negation of democratic principles.
The Bullock majority argument is based largely on the proposition that the trade unions in industry already provide the natural channel for the expression of employees' views and aspirations, and that in the larger companies particularly the incidence of trade union membership is already very high. They point out, moreover, that the function of unions is already widening beyond the relatively limited area of collective bargaining, and indeed that the scope of collective bargaining itself is also widening. The majority conclude that the trades unions provide the natural vehicle for the expression of employees' views, and that it would be wise and sensible to use their machinery for decisions about industrial democracy and the appointment of worker-directors.
In his Statement on 26th January last, my right honourable friend the Secretary of State for Trade said that the Government were committed to the principle of worker participation and to the trades unions essential role in this. The Government, however, acknowledge that there is genuine and deeply-felt anxiety about the Bullock majority proposals in respect of the role of trades unions in industrial democracy and, while wishing to proceed on the basis of agreement and consensus and to adapt and to build on to existing practices and procedures wherever possible, recognise that this is an area which will need careful thought. It will undoubtedly figure largely in the consultations now going on with both sides of industry, and the Government will do their best to reach agreement on the basis of sensible arrangements which will command widespread support.

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The underlying aim is to establish the right in law for employees to have representation at board level. That is not to say that we must or would seek to impose a rigid organisational framework on all major companies regardless of their circumstances or the particular field in which they operate. In many cases management and workers will negotiate sensible and practical arrangements without any need to have recourse to the legal provisions, and we shall certainly encourage this to happen wherever possible. We are, however, convinced that this will not happen either quickly enough or widely enough unless the right in law exists. We want to see provisions enacted based, if possible, on the broad agreement of both sides of industry.
It is undoubtedly true that there has been an unhappy record of confrontation in some sectors of our industry. All of us this afternoon are rightly concerned about this. Happily, there are signs of development at all levels of a much better feeling of search for consensus on all sides, and the achievements through the pay policy tend to be to this end. I conclude by emphasising that in the Government's view the development of industrial democracy in companies and worker participation at board level, and at all other levels in companies, is a logical development of the progress which has already been made, and we believe will make a real and lasting contribution to the standard and quality of life for those working in industry.
4.9 p.m.
Lord KINGS NORTON: My Lords, I have been given a much higher place in the list of speakers today than I would have expected or indeed would have wished for, because I intend to deal with only a single point, leaving the many other facets of this very disturbing report to the diverse talents and experiences of the other noble Lords who are going to speak and who have spoken. I feel that between them they will undoubtedly cover the ground, except possibly for a single point which I want to bring to your Lordships' notice.
There is one matter which has not so far been mentioned today, and I have not seen or heard it discussed in any other place, but in my view it is of importance
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for our consideration of how best we should improve our administrative system in industry. The impression one gets from the majority report is that we now have in the United Kingdom a single-tier system, and that, with major modifications, this is what should be retained. From the minority report we get the impression that we now have a single-tier system but that we should have a two-tier system. It is only fair, however, to add—and it has been said already this afternoon—that the minority reporters have made it clear that their proposals result only from what they regard as an unsatisfactory remit. But while we certainly have at present what the report calls a "unitary board system", in fact in my experience, which is now quite long and varied, we already operate in practice a two-tier system, and if the proposals of the minority report were accepted we should be operating a three-tier system.
In every company with which I have been concerned there has been, under the board, a management committee. The board is responsible for the policy of the company but the implementation of policy, the day-to-day management, are matters to be dealt with by a management committee, executive committee or managing director's committee—whatever it may be called. It has different names in different companies, but its most obvious characteristics are that it is composed solely of executives and is chaired by the managing director. If that is not a two-tier structure, my Lords, I do not know what is. In fairness I must add that the majority report shows some awareness of this structure, notably in Chapter 7; and gives examples, in cases of very large companies, of more elaborate sub-structures below board level. But I have not detected in the minority report an appreciation of the fact that it is indeed proposing a three-tier system.
Comparisons are widespread with what is done in West Germany of what we do here, and of course these comparisons are relevant. But I think we have to be very careful indeed how we make them. In my opinion, we both have two-tier systems but they are extremely different, and it is not always necessarily helpful to try to apply West German methods here. Their supervisory boards, which have no executive directors, meet infrequently and have little to do with the running of the

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company. The company is managed by the Vorstand, which is composed entirely of executives. That kind of two-tier system obviously suits West Germany, but I believe that our present two-tier system suits us.
The backgrounds to the two systems are very, very different. In West Germany—and this is very important—there is not the great shareholding public that there is in the United States and the United Kingdom. The proportion of capital contributed by the banks in West Germany is vastly greater than it is here. Also, as has been said already this afternoon, the number, position and attitudes of the unions are quite different. Altogether, I believe—and here I think I am saying the same thing as the noble Lord, Lord Carr, said in rather more detail—that we shall be wise to improve our system in evolutionary ways rather than by drastic change.
As I think Mr. Michael Shanks made clear in his article in The Times of 15th February, there is little in European experience to guide us and, in my view, little to enthuse us. Only four countries—and here I disagree with what was said by the noble Lord, Lord Kirkhill—West Germany, the Netherlands, Luxembourg and Denmark, have successfully introduced legislation for co-determination, which is the name given to worker representation on boards. In France it is a dead letter, and if they do anything at all it will be of a rather peripheral nature. In the countries I have mentioned, where they have successfully introduced a system of this kind, once again the backgrounds are entirely different from our own. Even the Bullock Report itself says at page 69:
"We must try to build upon the flexibility of the present system."
Its attempt to do so, however, results in the incredibly rigid proposals set out on page 103. Those proposals are vastly more drastic than anything yet achieved in other EEC countries. As noble Lords have already made abundantly clear, they could have disastrous consequences and, in my view, the minority reporters have not provided an acceptable alternative. Indeed, I doubt whether they have done so in their own views either.
4.15 p.m.
Viscount WATKINSON: My Lords, I should like, if I might, to add my con-
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gratulations and thanks to my noble friend for raising this very important matter. After all the controversy following the publication of the report, and perhaps preceding it as well, it really was time that we debated this in Parliament. My noble friend and the noble Lord, Lord Byers, have dealt in great detail and very effectively with the report, and I do not want to take up your Lordships' time in discussing its details. It seems to be widely agreed that its slanted terms of reference and the haste with which it had to come to its conclusions entirely precluded the proper study of what I think we would all agree is a very difficult and complex subject. If one needs further proof, then I think it is perhaps worth saying that the only members of the Bullock Committee who had wide practical experience of running large companies said, in the first paragraph of their minority report, that they regarded the terms of reference as,
"…a far cry from satisfactory or even wise remit."
I listened very carefully to what the noble Lord, Lord Kirkhill, said and I hope that what he said was that the Government are going to keep a reasonably open mind. If I may, I will come later to what the Prime Minister was kind enough to say, but I must make it plain to him that so far as the attitude of the CBI is concerned, we did our best to warn the chairman that if he felt absolutely bound by the terms of reference—and certainly the report has been bound by them—then he should expect "unremitting hostility" from the CBI and all its members. That was said as long ago as last March. I would merely add that that statement, made nearly 12 months ago, has been borne out by subsequent events. I now happen to have had the opportunity of consultation with nearly all the firms who would be directly affected by the report and I have never seen such complete unanimity of opposition as exists to all its proposals.
So my personal view of the report is one of intense disappointment. A year has been wasted and the report has, quite simply, got it totally wrong in practical terms, as other noble Lords have already pointed out. That is why it provides no service to anyone for industry not to say to the Government that we cannot reasonably discuss, much less

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co-operate in, any matters such as the imposition by law of trade union nominated directors on to company boards or parity of representation between shareholders and trade union nominated directors, or a trade union monopoly of choosing the worker-directors through the so-called "Joint Representation Committee". Even the report itself concludes that those processes would lead to friction, difficulty and conflict within the board—and so they would, my Lords.
I think, if I might express a CBI opinion—and I do not think it is fair not to do so if I speak in this House, because I am committed—we feel that this report should now be set quietly on one side. Let us give the noble Lord, Lord Bullock—and here perhaps I might echo what other noble Lords have said: of course it is not his fault and of course we deeply regret the circumstances that mean he cannot be with us today for this very important discussion—and his colleagues, the credit for putting this important issue on the national agenda. I could go on and say that perhaps even that was not really necessary since it has been on the agenda of most leading companies and most associations—including the CBI and the Industrial Society—for a very long time.
I should like now to turn, because I think we have reached the stage in the debate when we should do so, to what constructive policies might be put forward to enable progress to be made towards a true industrial partnership—and it is partnership that I want to talk about.
Here, if I may, I declare a deep personal interest. It is in this concept of a working partnership between all those who are employed by a company to which I have given many years of my life. I remember this afternoon my first very amateur attempts to work towards such a partnership made, I regret to say, over 20 years ago when I was junior Minister in the old Ministry of Labour under a very great Minister of Labour, whom I will always remember, Lord Monckton. I believe that the word, "partnership" is much more descriptive of what we are trying to do than catchwords like "industrial democracy", which is largely a meaningless phrase, or "worker-directors", for who today on a worthwhile board is not a worker-director? So may I take a few
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minutes only to explain what we should like to persuade the Government to do?
First, it is quite unchallengeable, and one could adduce a great deal of in-controvertible evidence, to show that the vast majority of employees have as their main interest the immediate circumstances which surround their own particular job. One may say that this is so self-evident as not to need saying, but it was, strangely enough, given no priority in the Bullock Report. I have read Chapter 6 which the noble Lord, Lord Kirkhill, mentioned. It is totally unconvincing and, I think, deals very unfairly with much that has been done by both trade unionists and employers in getting along with this kind of proper participation at the work place. Industrialists believe that this is where it all begins. The concept of a practical working partnership must have its foundation on day-to-day contacts and a full flow of information between those who manage and those who are employed at the actual work place. That is why, in all our talks with Government, we have stressed the necessity to begin any worth while examination of the problem at the grass roots.
We do not believe that the 2X+Y proposal for board structure, which is the nub of Bullock, is viable, anyway. But the point is that any solution imposed from the top would never work. A proper structure of participation or partnership in industry has to start from the bottom. So that the first step we would wish any Government to take is to study the practical proposals for employee participation set out in Chapter 9 of our policy document The Road to Recovery. These proposals contain legal backing and they would enable companies, large and small, to set up whatever methods of working together meet their own particular circumstances, first at shopfloor level and then up through the company.
May I say that these proposals do not at all disagree with those of the Industrial Society put forward by the noble Lord, Lord Byers, or the proposals put forward by the British Institute of Management and many other bodies. All practical opinion has said that Bullock is totally wrong in trying to start from the top, and I listened with some alarm to the noble Lord, Lord Kirkhill, this afternoon appearing to say

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that this is still the Government's view, because if it is I fear that it is totally wrong.
The essential requirement is that the system should start from the bottom and should be flexible, to enable each company to take the path that it believes bests suits the needs of its employees and its managers. We do not shirk the possibility of legislation, as I told the Prime Minister last week when he was kind enough to see us, nor do we oppose the concept of employee-directors in any way. But I emphasise that the appointment of employee directors would spring from a successful infrastructure of partnership below board level based on participation agreements, which under our proposals every company employing more than 2,000 people would have to sign.
If I may, for the purposes of a practical illustration—because if this is ever going to work, then, for Heaven's sake! It has to be based on practice and not on political theory; and we have had much too much political theory in Bullock—I should like to describe a working model that has proved itself, which I myself helped to set up, together with my fellow directors and our shop stewards, when I was chairman of Cadbury-Schweppes. Every place of work in the company had its own joint consultative committee. These were formed of employees and management who were employed at that particular place of work. They were elected in secret ballot and the chairman alternated between the employees, who were normally shop stewards, and the managers, who were those managers running that particular plant.
In a large company, such as the one I am describing, which is widely diversified, there are many operational groups with considerable sovereignty; and I do not disagree with what the noble Lord said about two, three or even four tier boards. I do not think that this is a great issue at the moment. So that where there were operational groups, those groups had their own boards of directors. There had to be close contact with them, because, obviously, at group level a great many decisions bear directly on those employed in the group. So committees at the workplace elected, again by secret ballot within each groups, to a group council which had a direct relationship with the group
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board, had the right—and I mean the right—to meet and discuss with the group board any matters that the group council wished to put forward to the board.
Finally, these group councils elected upwards again to the main board level what, for convenience in my old company, was called a company conference. We called it a conference merely because we felt that we had too many committees and councils, and we wanted to make this top one specially important. This conference, like all the other bodies, was comprised of 50 per cent, management members and 50 per cent, employee members. Of course, there was a good deal of union membership on both sides and its chairman was, and is, a director of the main board of the company. So there you had a direct link of a director presiding over this company conference, who was already a member of the main board.
The company conference or council had the agreed right to discuss directly with the board matters such as finance, the performance of the company, development and plans for expansion or contraction, and social and environmental policies and human relations. Group councils, of course, discussed matters with their group board, and plant committees naturally looked to local problems such as safety, recruitment, immediate production problems and so on. At all levels, full information was provided to the councils about profit and loss, the sales position, raw materials, customer problems and capital investment. As your Lordships will see, the whole concept rested on the firm foundation of the efficient operation of joint consultation at the place of work, at the grass roots. Incidentally, these local bodies were also visited regularly by the chairman and the deputy chairman, again at their place of work, so people did not feel that although they had representation they did not also see the boss.
This whole concept was invented not by management but by our own senior trade union members, and that company was the only one that put in a memorandum to Bullock, which I regret was totally disregarded, signed jointly by the shop stewards and the management, recommending this much more practical way of proceeding. I very strongly hold this belief, that people who give much of

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their working life to the service of a company have as much right to have their views considered as those who have bought shares in a company, and the system I have described gives them that right and it works.
I just want to say that what I have described, a practical system, is entirely within the published proposals put forward by the CBI, entirely within the evidence which the CBI submitted to Bullock. I very much regret that we were refused a second hearing, as we were when we wanted to develop our case further and were not allowed to go and do it. I know that time was short and I am not at all blaming the noble chairman. However, I am able to say from my personal experience that these proposals work well, and I cannot understand why the Government are not willing to try to develop this kind of real industrial partnership, as opposed to the kind of disruptive confrontation that will inevitably arise from an endeavour to impose the 2X+Y system on a main board, and then force it down through the company as a whole.
In conclusion, if I may venture to say this, perhaps the Prime Minister does, in fact, understand the problem as it is in reality, because his view, as expressed in the other place and to us when he kindly saw us, is that any solution will work only if there is a broad measure of agreement on all sides—and that I am sure must be right, whatever else is right or wrong.
May I end by saying that there can be progress with industry and its members if we start from the bottom to build a partnership and do not merely tinker with it at the top. This is what we hope we can now discuss with Mr. Dell, and that is the remit which the CBI gave to our Director-General to discuss with Mr. Dell, with the agreement of the Prime Minister. However, I must make it totally plain that the Prime Minister is not in any way committed, and I am sure that his view was properly expressed just now by the noble Lord. But, equally, we must make our view plain, if we are to rest on the basis that we shall not make progress unless we are in reasonable agreement.
Therefore the view of most industrialists and certainly of all members of the CBI is that we are willing to work hard to
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develop a broader concept of industrial partnership because we believe that it has much to contribute not only to the efficiency of British industry but to the wider job satisfaction of all those who work in industry. We have wasted a year on Bullock. Let us now put this aside and try to find a practicable, workable solution, built up from the floor of the shop and fully involving both management and employees all the way. That would be a job, my Lords, worth doing.
4.31 p.m.
Lord COOPER of STOCKTON HEATH: My Lords, we are indebted to the noble Lord, Lord Carr of Hadley, for initiating discussion on this very important topic. As the terms of reference to the committee of inquiry asked the committee to pay particular attention to the TUC Report on Industrial Democracy, I propose to comment on the broad approach of the TUC.
In the first paragraph of their report the TUC make three basic assertions which are fundamental to TUC thinking. First, they say that throughout their history trade unions have generated a substantial measure of industrial democracy in this country. Secondly, they say that all trade union activity has served to further this objective. Thirdly, they say that so far as they are concerned the term, "industrial democracy" cannot be considered outside this context. This goes far to explain their attitude, that any changes must be based on trade union machinery. In a word, the unions, more than anyone else, have created such industrial democracy as exists and in their view industrial democracy is a further evolutionary step forward. But the only practical way is in consultation with the unions. This view is supported by the recognition that collective bargaining is, and will continue to be, the central method of joint regulation in industry.
The TUC report then indicates that there are a number of specific questions of close concern to work people which are not being effectively subjected to joint regulation through the present processes of collective bargaining and that additional forms of joint regulation are therefore needed. They say that this extension of collective bargaining to new areas has become more urgent—I think this is true

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—as capital has become more concentrated, and that the central decisions of boards of directors seem increasingly remote from any impact by work people through their own organisations.
What kind of extension of collective bargaining is intended? The Donovan Report recommended the extension of collective bargaining at shop floor level—and this is what is advocated in the TUC report—to deal jointly with such matters as the recruitment of labour, training, redeployment, manning questions, speed of work, work sharing, discipline, redundancy dismissals and such fringe benefits as sick and injury pay and vocational pensions. These are all matters for grass roots joint consideration. The other new form of joint regulation is expressed in a claim for representation to obtain a degree of joint control at the point where strategic decisions are taken, namely at board-room level.
How does the Bullock majority report deal with the proposals of the TUC? Their reaction is well summarised at page 160 of their report. In paragraph 2 they say that during their inquiry they found a widespread conviction, which they share, that the problem of Britain as an industrialised nation is not a lack of native capacity in its working population so much as a failure to draw out their energies and skills to anything like their full potential. They express their conviction that the way to release those energies is to provide greater satisfaction in the workplace and that to assist in raising the level of productivity and efficiency in British industry and, with it, the living standards of the nation is not by recrimination or exhortation but by putting the relationships of capital and labour on to a new basis which will involve not just management but the workforce in sharing responsibility for the success and profitability of the enterprise.
This new relationship between capital and labour will come about, says the report, only as a result of giving the representatives of the employees a real and not a sham or token share in making the strategic decisions about the future of the enterprise. A crucial test of this is the right of representatives of employees, if they ask for it, to share in the strategic decisions taken by the board.
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This, in their view, requires membership of a reconstituted unitary board, not a supervisory board. Finally, they draw attention to the change in attitude of the TUC in being willing to accept a share in responsibility for the efficiency and prosperity of British companies. This change, they believe, offers an opportunity to create a new basis for relations in industry which should not be allowed to pass.
The minority report shows little enthusiasm for industrial democracy. This is my opinion. In paragraph 4 of their report they say that those who work in industry are not ready for radical change. This is often said, but what you have to consider, so far as you are able, are the collective desires of employees. It is the trade unions, as on other industrial relations questions, which express that desire. In paragraph 6 of the minority report it is said that the aim is to bring the boards of private industry under trade union control. That has been said here today. Trade union influence, yes; but to say control by the unions is absolutely unwarranted. Throughout the TUC document the TUC have consistently asserted that they want an extension of joint control—which, of course, is an extension of collective bargaining. In paragraph 12 of the minority report they accept the case for participation on supervisory boards. In paragraph 15 they also very properly draw attention to the many states of development in the many different structures of many different firms. Hence there must be, they say, due regard for the evolution of the changes required.
I said that the minority report lacked enthusiasm. A clear example of this is in its concept of the duties of the board. Paragraph 38 suggests that members of supervisory boards should not be involved in determining policy but should be primarily concerned with the quality of management. This, I suggest, is a very restrictive function. No doubt this kind of attitude is what the majority had in mind when they spoke about sham or token representation. Another considerable restriction is on qualification for board membership—that is to say, 10 years' service with the firm and three years as a member of their proposed employee council.

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There are other views on Bullock—I suppose many views—but I should like to comment broadly on the evidence of my own union, the General and Municipal Workers, to the inquiry. They favour a more flexible approach, but they consider it necessary to have a legal obligation on company management and directors to consult and negotiate with trade unions on all major decisions involving investment, closures, mergers, organisational changes and the redeployment of labour. They consider that the precise machinery for extending industrial democracy should be left to negotiations between the company or enterprise concerned and the unions. They draw attention to the fact that this flexible approach would appear to cut across the terms of reference of the Bullock Committee, which refer to accepting the need for a radical extension of industrial democracy in the control of companies by means of representation on boards of directors. The terms of reference of the Bullock Committee in fact go beyond the TUC policy. In 1974 the Trades Union Congress endorsed the Industrial Democracy Report, but significantly modified the report by passing a composite Motion which contained the following passage:
"Congress rejects the mandatory imposition of supervisory boards with worker directors and calls for a more flexible approach giving statutory backing to the right to negotiate on these major issues, but relating the control more directly to collective bargaining machinery".
This approach supports the need for change, mainly by collective bargaining, but with a legal obligation to negotiate on strategic policy matters having a direct effect on the security in employment of the employee.
In recent years attention has been drawn to, and opinion expressed on, the changing role of the trade unions in society. These changes are closely associated with the dramatic structural changes in industry. Changes in the attitudes of workpeople are perhaps the most profound. The Donovan Report 1965–70 drew attention to the shift of power in the unions from the centre to the grass roots and recommended that this trend should be encouraged. Aubrey Jones, writing on his impression as chairman of the Prices and Incomes Board for 1965–70, expressed the view which the Bullock Report refers to,
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that the tendency was for men possessing nominal equal political rights to claim equal economic rights.
I believe this is a sound analysis of the prime motivation of workpeople today and one of the main reasons for seeking change. The trade unions wish to deal with the consequences of change by traditional collective bargaining. In my view, Government policy should be as far as possible to have a minimum amount of legislation to deal mainly with company law and the obligation of employers to negotiate. I believe there is much common ground in industry, accepting the need in one form or another for the extension of industrial democracy. Believing this, I consider the form this should take should be left to the parties to negotiate the most suitable machinery to suit each individual undertaking.
My Lords, the economic future of this country depends very much on getting this development mutually agreed. The Government will have discussions with the TUC and the CBI on this report. I express the hope that this debate will contribute to the Government's consideration of the report and particularly to the need for maximum flexibility.
4.44 p.m.
Viscount TRENCHARD: My Lords, I rise to make this, my maiden contribution, with perhaps more than the usual trepidation. While this subject is clearly of burning interest to an industrialist, it is also possibly a subject where maiden angels would fear to tread. I gather it is your Lordships' practice to declare an interest, and the first interest I wish to declare is that I believe I have been for the past ten years a worker-director on a full-time basis in a large multinational firm, and it took me 20 years of full-time management experience to be elected to that position. I note that the majority of the Bullock Committee recommend that six months should be the period for eligibility for election to boards. It is true that nearly 30 years ago, after six months' experience, I had some very strong opinions on how the firm should be run, but it is fortunate for both the business and for employees and the shareholders that nobody took the slightest notice of me! An industrialist can be positive in this area of the debate only of how to

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improve co-operation and involvement of all the people working in large organisations.
Perhaps indeed this is the problem of our age, but the description that emerges from the majority report of the Bullock Committee is one that I find very hard to reconcile with my experience of the fulltime executive boards of either a multi-national company or—as has not yet been mentioned in the debate—subsidiary boards in charge of large United Kingdom operations.
The emphasis on collective bargaining as a main and important function of those meetings and of the duties of the directors, I find hard to reconcile with the struggle to get through the essential management affairs with all the executives contributing from their knowledge and experience with a view to arriving at solutions in the best interests of the business as a whole. I have never known a vote to be taken. Employee questions and industrial relations are of course among the most important subjects, but they are a minority of the work of the boards of which I have experience.
This is perhaps the moment to discuss the European situation, which has been ably described by my noble friend. In my experience—and I have some experience of them—the systems really are in practice very different from anything in the recommendations of the majority report. The phrase we use in English is "supervisory boards", but it is often translated, perhaps more accurately, as "supervisory councils", and it is a specially designed forum—a centre of communications, a meeting place for shareholders, employees and management, specially structured to discuss the general long-term situation, some general policies, and the functions are defined in many Northern European countries. The bases of this system have already been mentioned: a very different trade union situation, with much more regulation and with the enforceability of collective agreements, but above all it is based on the works councils with secret ballot elections in which every employee takes part. In all the systems which so far operate parity has not been reached.
I am aware that British industry is criticised for being behindhand in this area, and the criticism is often made that
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the management of British industry is poor and that too few efforts have been made in the past to initiate works councils and floor level participation. There is indeed some truth in the suggestion that we are behind, but there are reasons for it. My own experience is that there are good, bad and indifferent managements in all countries, and that if the last war was an objective test of leadership, which must be the first cousin of good management, then I do not think on average we should denigrate ourselves.
So far as works councils are concerned, when I joined industry joint consultative councils were the fashion and the rage, and at that moment many British ideas were being exported to the Continent. It has to be said that since we gave those joint consultative councils no legal backing in this country, in a number—fortunately, not in every case—a very strong shop steward movement in our trade union position has brought about the cessation of what was essentially a British initiative. There are many modern systems—and the noble Viscount. Lord Watkinson, has described one of the most notorious—and these, in my view, are working every bit as well as systems in practice in Europe.
While still on Europe, I think we must be careful not to put too much emphasis on the trappings of co-operation. The devastation of Germany and Holland by the war and the enormous lowering of their standards of living faced every citizen of those countries with the stark necessity to rebuild and to co-operate in order to do so. This was perhaps, in my view, a deeper motivation responsible for the progress, and the earlier progress, that was made in those countries. In more static situations it seems that human nature becomes a bit obsessed with bargaining about distribution and pays too little attention to the maintenance and creation of wealth. Thinking people in Europe today do not believe that they have got the final answer to this major problem. They are worried. Systems—the trappings, as I have called them—can be used, of course, to aid co-operation, and they can also be used to aid confrontation.
My Lords, are there limits to the application of democracy that we can learn from studying history? As a system

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for law-making, and for long-term questions of the same nature, it is proved, and undoubtedly is the best. As a system for the executive functions, whether in Government or in industry or in any other human endeavour, are there severe limitations? Does history suggest that efficiency is correlated with firm and strong management, fast management and decision taking; even—dare I say it?—in the executive area, with a little bit of discipline?
The boards of which I have experience find that it is necessary that not every decision of the board can be taken by democratic processes, despite the fact that those decisions are most important. There is simply not the time, or the time to get the knowledge, for one to be able to make a contribution and have a say on every subject. Security is a problem that has been mentioned outside this House, and it is a human fact that on some questions there will continue to be different opinions for as long as you wish to consult different people. Again, for forward movement of a large organisation and for its cohesion, there are limits to the practical application of democratic processes in the executive function. It is for this reason that I support those who have already recommended that special forums—whether they be supervisory councils as on the Continent, or whether they be systems such as Lord Watkinson has described—are more appropriate to the problems we face.
My Lords, I am sure we would all agree that there have to be rules and safeguards for Parliamentary democracy. I believe industrial democracy to be no less important; I believe that rules and safeguards must be made, and secret ballot election by every employee seems to me to be absolutely essential. I say this not just to enfranchise the non-union members, but to ensure that every union member votes specifically for whoever he considers will be the best participator in the job of helping his company forward in a competitive market situation, of helping it to economise and become more efficient, to make profit and to progress, and essentially in the long-term. I do not believe that it will always be found, and particularly perhaps in the British situation, that employees will choose the person
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who at the moment is the strongest collective bargainer, whether he has been elected, chosen, or nominated by other means. Is this the moment to dare to ask the leaders of our great trade union movement whether they should overhaul their election procedures, to see whether this conflict which has been mentioned several times this afternoon could not be narrowed? If they ensured not only that their systems are democratic but that their systems are seen to be democratic, would this not help?
Is it also fair to ask that before seeking participation in the private enterprise sector of a mixed economy there should be a commitment to the maintenance and prosperity of that sector? Finally, my Lords, I believe, with some research and experience and not just opinion, that the average employee in business wants participation, and this is what he wants to get out of it: he wants to be kept in the picture as to what his company is doing; he wants an opportunity to make points and suggestions; he expects management to manage, decide, and get on with the job; he wants consultation on the carrying out of the decisions as they affect him. The last point to remember is that any major reorganisation in this area is going to tax directors and managers of industry to a very high degree. An enormous amount of time will be required from them. I would merely say that in this area, therefore, I believe it impossible to proceed without the backing of the majority of directors and senior managers.
4.58 p.m.
Lord LEE of NEWTON: My Lords, the noble Viscount, Lord Trenchard, began by telling us that he felt more like a maiden angel at this moment, and, if he will not misunderstand what I mean, he passed through the Pearly Gates to great acclaim, not only by celestial choirs but by we humbler inhabitants of Westminster. I was very pleased that he widened the subject-matter by pointing out the psychological effects in Holland and other parts of the Continent which had been over-run during the war, where industry had been decimated and so on; because I believe that in this country also we have certain barriers which have been established because of our own history. Indeed, I believe that a great deal of the negative thinking we have had in British industry—

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indeed, one reads it in the financial columns today—has been caused perhaps by the loss of an Empire and the dominant role we once had in industrial matters throughout the world.
I believe that the reactions to our change of fortune in that respect have much to do with our relative failures to control, and indeed to expand, our industrial and economic life during the last 50 or 25 years. Indeed, when a nation such as ours also pioneered the first Industrial Revolution the world ever saw, and created the very structures by which our manufacturing industries were organised—and organised so successfully during that period—it is extremely difficult for those who are still taking part in industry to adapt themselves to the fast pace of change which we have seen in the last 20 years or so. Basically, that is the cause of a great many of our problems. It was Macaulay who said:
"Change if you would preserve".
It is a thought that I commend to the nation in general and to this House in particular.
I believe that the Bullock Report is a pretty dry and not very well argued document about an extremely difficult subject, a subject which none of us dares now neglect. If any of us feels elated at our economic and industrial performance over the past half century, let alone the immediate post-war period, he will doubtless oppose such far-reaching suggestions as the creation of worker-directors. Those who see the report as the dawn of an industrial millennium will give it a quite unrestrained welcome. I believe that given a great deal of very careful preparation, it can make a useful contribution to industrial progress. However, I also believe that both employers and trade union organisations have a great deal to do during the preparatory stage, if we are to reach that position. I believe that it can be a helpful development providing that we make the right arrangements. I put it no higher than that.
I have mentioned some of the problems we all face. Within the trade union movement there are two basic schools of thought on the attitude that the movement should take towards this kind of development. One school of thought continues to see the role of the trade unions as being
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to demand, and indeed to fight for, the best possible living standards for their members and to have nothing whatever to do with the problems of management. That is a perfectly defensible role for it to take. The other school of thought argues for far greater participation in management in every phase. Indeed, this is what those trade unionists who have signed the majority report represent. There is much to be said for that point of view. The problem is that we cannot marry the two.
Before the movement can engage in a full implementation of the majority report, it must come down as a whole firmly on one side or the other. To be split on a fundamental issue of this type means tragedy, if it embarks upon it at all. Therefore, it has to do a great deal of hard thinking and decision making before it can come down on one side or the other. Indeed, in the evidence given by the electricians, which is outlined in the Bullock Report, we see the school of thought that I mentioned. They say that they want nothing to do with our problems and that they want the best for their members. I do not ridicule that in the very least.
The institutions and firms where a great deal of forward thinking and action has already taken place—the internal machinery which the noble Viscount, Lord Watkinson, described—have gone a great deal of the way to prepare for worker-directors on boards. Indeed, I am a product of the internal machinery of one of the great firms of this country. Therefore, directors or trade unionists cannot be proud of the fact that in a particular firm there has not been that kind of preparation. They are living in the age of the dinosaur if they have not advanced to the point where the actions which the noble Viscount outlined have not been taking place for a great many years.
Some of the letters which have been sent to the Prime Minister by leading figures in the City and about which we have read today are way behind the speech made by the President of the Confederation of British Industry today. I was very pleased at what the noble Lord said. I did not, for instance, appreciate—it is probably my fault, but I did not—that the noble Viscount said:
"We do not oppose worker directors."

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Those are his words, which I took down. Therefore, the argument is not one of principle between the two sides; it is a question of when we implement the report. I wholeheartedly agree that this kind of reform cannot be imposed from the top. Anyone with any knowledge of industry knows that that is simply not "on"—it is quite silly.
Nor is it the case, as I shall try to show, that one can rely implicitly on what the noble Viscount called "grass roots organisation". I agree that without constructive grass roots organisation we cannot have worker directors. However, the present boorish anarchy in the British car industry comes from workshop organisation—from grass roots organisation of the wrong type. I can remember the time when my own union, the engineering union, the Transport and General Workers' Union and, I think, the General and Municipal Workers' Union had to go into a number of car firms and force those trade unionists, who were masquerading in the name of these great national unions, to recognise the rules of those unions. At present my own union executive is instructing the workers at British Leyland to go back to work—and a lot of notice they are taking!
We must not run away with the idea that merely because we have grass roots organisation, we have reached the stage where we can implement the Bullock Report. That does not follow. However, there are exceptions. For years in the vast majority of our great engineering industry there has been constructive partnership participation in all the phases which the noble Viscount, Lord Watkinson, described. I should have thought that where they have achieved that level we cannot ask that they should wait until the laggards catch up with them. This is one of the great problems which the Government, the Trades Union Congress and the Confederation of British Industry will now have to face as they decide where the next stage will take us.
The expression "trade union monopoly" has been used. The advancement in the partnership between employers and workers has been possible only because of trade unionism, because of the constructive attitude of the trade unionists. I have said what I have said about the Bullock Report, that it is woolly in its thinking in many of these things. But I
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would not accept that because they say that the most convenient way of organising whether workers accept the need for worker-directors is through trade union machinery, that means a monopoly. As a matter of fact, when the poll is taken on this issue it will be taken by everybody and not merely by trade unionists, according to the Bullock Report.
Therefore, do not let us run away with emotive expressions. I repeat that, despite all the differences I have outlined, the two schools of thought, this nation would be in a very sad state indeed were it not for the fact that we are now in the second year of a wage restraint policy organised and implemented by the trade union movement. No non-unionist can organise that kind of thing. As we are agreed on all sides, unless we had that policy we would have no chance of coming through this difficult period we are now engaged in.
Lord HARMAR-NICHOLLS: My Lords, is the noble Lord saying that he reads the report to say that a non-trade unionist could be elected as a director?
Lord LEE of NEWTON: My Lords, I said that they talk about triggering off the whole thing, and to do it they would use the trade union machine, but in the decision taking as to whether or not you ask for worker-directors, every employee in the firm, as I read it, is eligible to vote. That does not mean to me a trade union monopoly.
I talked about the wages policy. We are hearing about pamphlets that are to be distributed by The Stock Exchange describing the need to get rid of dividend restraint in any way, shape, or form. In the mind of the workman, this of course is allied to what they deem to be a refusal to accept the principle of worker-directors. When I read about the rather fast one that Sir Arnold Weinstock has been pulling—I see that the noble Lord, Lord Nelson, is in the Chamber and he knows a bit more about this than I do—I was thinking the other day that had I remained in the purity of my employment in what is now GEC, it is possible that I could have been a worker-director, and I may have objected to Sir Arnold working a fast one to the extent of £170 million for his shareholders while I was accepting wage restraint on behalf of my colleagues.

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We must be careful—and this is why I attach such great importance to Lord Watkinson's speech—to make it quite clear that the refusal to accept Bullock is not based on fear that worker-directors would stop the kind of thing we have seen at GEC from being developed throughout the whole of British industry, for if it is then we would give up any idea of a Phase 3 of the incomes policy. I think that that would be a great tragedy indeed.
I shall not delay your Lordships much longer. I believe that it is now utterly essential that without any further delay the Government should invite the TUC and the CBI to meet them in a series of meetings at which they would hammer out together how we can begin, if necessary, to enforce workshop organisation through works councils and a far more comprehensive approach to what working people require and need in industry in these days, rather than leaving it that while the dinosaurs do not move the more progressive ones are held back. That is the problem that we now face, and I hope that the Prime Minister will, as soon as may be, call together and begin that type of meeting. They can do nothing but good.
5.15 p.m.
Lord GEORGE-BROWN: My Lords, first of all may I associate myself with the congratulations tendered to the noble Viscount on his maiden speech. As one whose last speech in this House seems so long ago, I feel that I am making mine for the second time. I assure the noble Viscount that that is even worse. It was a well-informed and particularly striking speech, and I think that we were all very impressed. I personally, as one who has completed in a way the whole spectrum from worker, trade union official, Minister, and now member, like the noble Viscount, of boards of multinational and United Kingdom companies, found that much of what he had to say fitted with my own impressions.
The noble Lord, Lord Lee, thought of one important function in drawing our attention to the two schools of thought in the trade union movement. It is tremendously important to get clear whether we want to be consulted and taken into account, or whether we want
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to participate in the decision-making process, and therefore in the acceptance of responsibility for the carrying out of those decisions. I unhesitatingly declare that I belong to the second school of thought. I equally unhesitatingly declare that it is of paramount importance to the nation that our people should be encouraged to accept the responsibility.
Consultation, as I well know, and as the noble Viscount, Lord Watkinson, described it at Schweppes, is a first-class arrangement for ensuring that people know what is going on and feel that they are being told what is going on, and are being given an opportunity to express their point of view. But we shall not get the productivity which is our vital need at this moment, we shall not get the acceptance by the car industry workers or anybody else the noble Lord, Lord Lee, referred to, until they become responsible for the decisions that are taken, and are not merely told about them or consulted about them.
In that sense we have been very slow indeed. Managements in this country have been as slow as the unions, and managements have failed. Let us face it, the CBI, or the old FBI, the various management organisations, have failed over the years to pull people into doing something that maybe they did not feel they wanted to do, but in fact if one was leading the Army one knew they ought to do. This House must give a lead to the Government in the discussions which are about to take place, as I understand it, on that matter.
I hope I am right in believing that when the noble Lord, Lord Kirkhill, was speaking—using the phrase which has been used by other Ministers before—of legislative proposals coming before us from the Government in the summer, that did not necessarily mean legislation, and that there is in fact a difference in their minds. The words are different. "Legislative proposals" can mean a Green Paper, a White Paper, or all sorts of things; "legislation" means dashing in with a Bill, and that can land us in the same trouble as the Government unnecessarily got themselves into last night. Indeed, I hope that it is proposals, and that the noble Lord, Lord Oram, an old pal of mine, will say to the noble Lord, Lord Kirkhill, and through him to

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the Government, that I hope that the Government thinking goes a good deal further than the speech which the noble Lord, Lord Kirkhill, was allowed to make today before they even get down to legislative proposals, because I feel they were still stuck in a trench which I rather hoped they would have left.
One of our problems is that we still misuse the language very badly; I have talked about management confusing consultation alone with participation, the acceptance of responsibility. But the trade unions and certainly Bullock confuse industrial democracy with the entrenchment of trade union power. This is perhaps not the place and maybe I am not the person to argue whether the second part is right or wrong, but it is not the same thing as the first part.
Industrial democracy is something quite different, and it means everybody. The one group who have not been mentioned today is comprised of what I would call front-line management, the chaps who are really where the buck stops; foremen and junior managers in offices and shops as well as workshop workers. These are the fellows who all have to be involved, whether or not they choose to join a union and whether or not it is traditional in the places where they work. If we are to extend industrial democracy to any sensible meaning of the word, they must all be brought in.
On this, as on pretty well everything else, Bullock is totally inadequate. Like the noble Lord, Lord Carr of Hadley, I deeply regret the absence of the noble Lord, Lord Bullock; not only the reason for his absence, but because it is so much more satisfactory to say these things in front of a chap when he is able to come back at one. However, it is not our fault that he is not here, any more than it is his, and one must say them. In a long and sinful life in the other place—
Lord MAYBRAY-KING: Hear, hear!
Lord GEORGE-BROWN:—and I shared most of those sins with my noble friend, a former Speaker there—it was my business to read and sometimes try to act on all sorts of reports, commissions and bodies of inquiry. With great respect to Lord Bullock, I do not think I have
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ever read a shoddier production than the one we have before us, and it gives me no pleasure to say that. It is, however, my view. It is inadequate all through. We have a list of the places where they went when they visited the Continent, but we are not told much—indeed, we are told nothing—of what they saw or what they thought of what they saw. We are given a list of the people who submitted written evidence to them of their own free will and volition, but the Bullock Committee seem cavalierly to have dismissed pretty well all of it. I have not had a chance to read it, so I do not know how much I would agree with the evidence given by Sir Eric Faulkner and his colleagues, but it is rather ridiculous when people as distinguished as that in such an important sector of our commercial and business life do not have their views taken into account.
At one period of my life—I fear that it was about 35 years ago—I worked in a commercial enterprise in which one or two other noble Lords—the noble Lord, Lord Shackleton, certainly—also worked. I refer to the John Lewis Partnership. I note that among the written evidence supplied was a joint submission by a group of people who included the former chairman of the partnership, Sir Bernard Miller, who was there in the days when Lord Shackleton and I were there. In that partnership there has been a system not only of consultation but of the sharing of responsibility for decision-making; it had been established long before I got there in 1931. In the department in which I worked I served on its main council and I took part even as a very young man in the decision-making process for which its constitution provided. Although people like that, who have had experience of working with such a system, submitted representations, they were never seen or asked to explain them. There has therefore been a degree of cavalier treatment of people with practical experience which, in my view, is of an almost unique kind in the production of public commission reports to the Government or to the Houses of Parliament.
I suppose one can blame that on the terms of reference, which, let us face it, were virtually dictated to the Government by certain leaders of the TUC, and they did not consult very closely with their colleagues, as came out clearly in the

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speech of the noble Lord, Lord Cooper of Stockton Heath. It was, as I say, dictated to the Government by certain leaders and the Government in turn wrote it as the remit to the Bullock Committee, so in effect it was dictated to them, and the report has been produced, as it were, to get the verdict that everybody asked for from the beginning rather than finding out what the verdict should be.
Before I look at Continental experience, I must point out that we have many examples in this country of where we have tried to experiment in this matter. I mentioned the partnership where I worked, but there are others. I remember that as a Minister in 1964 we embarked on what was then known as the Fairfields experiment in the Govan shipyard in which several unions—the engineers, electricians and others—took a share of the equity and where the workpeople were represented on what was referred to by the noble Lord, Lord Kings Norton, as the management or executive committee. They were part of that and the unions had directors on the main board.
That disappeared because the present Secretary of State for Energy, wearing his previous hat, decided to create a much bigger organisation on the Clyde into which Fairfields got pitchforked against all reason and simply got lost. Was that examined? I happen to know that Sir Iain Stewart, who was the chairman of Fairfields—whom I appointed to that job and who did a first-class job while he was allowed to—submitted a memorandum on that experiment, but he was never asked to come along and explain how it worked in the shipyard and to say what sort of results were obtained from it. I checked with him this morning about that. That experiment worked, so we have examples here which enable us to demonstrate that we can make it work in this country.
Then we have the Swedish and German examples to take into consideration. I should have liked to know what the members of the Committee actually thought of the places they visited. When I had the good fortune to be a consultant for five years to one of the larger textile corporations in this country—that is, when I came out of Government—one of the things I did was to look at the Swedish textile industry which was having
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the same problem as we were; namely, having to decide on the closing down of parts of the textile industry, though it was a much more difficult problem for them because of their need to ensure that their self-sufficiency fitted in with their foreign and defence policy.
I was taken to Gothenburg to see a weaving organisation that was to be shut down. The decision to shut it down had been taken by a policy board on which the workers were represented. The management committee, which I attended, which was discussing the consequences of the policy decision and on which sat the chairman of the main board and other directors, was not chaired by him or by any shareholders' director, but by a weavers' representative. They were discussing, as workers in the plant, the implementation of a policy decision to which they had been party. They were now accepting the responsibility for carrying it out and were making sure that it was done in a humane, sensible and rational way.
Did the Committee see that? There, we have the two-tier system and representation on the policy committee, representation also at the lower level. It was, in fact, exceedingly successful and it is clearly inadequate to say, as the Bullock Committee says, that our trade union organisation and our industrial practices have grown up in a different way from those on the Continent, as though that was the answer to all progress from now on. There is no reason why we should not change. Probably, our trouble—if we have one trouble more than another in industry in this country—is that all of us, including workers, directors, management, the whole lot of us, are so wedded to our traditions. When I go round our own plants, I am often reminded of "Fiddler on the Roof" and the wonderful song in which the chap explains why they wear their caps at certain periods in their services. "It's tradition", he says. I am afraid that the Bullock Committee has accepted that very much too easily.
I, like others before me—and one cannot help repetition here—find myself very much in agreement with a large part of what the noble Lord, Lord Carr of Hadley, had to say. Of course, I believe that we must not make the inadequacies of Bullock an excuse for not pushing ahead. Perhaps it is unnecessary to say

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this but, on the other hand, it is worth putting on the record. We do not want to spend the next four years merely discussing it with each other. We must go forward, as I said earlier. One must get the workforce and the lower front-line management involved in accepting responsibility if we are to get out of this frightful log jam that we have at the moment. So we must push ahead. Companies that have got as far as Cadbury Schweppes must consider making the next jump. I have discussed this before with my noble friend. So must other companies. Maybe they will not catch him up, but at least they must get on with the job. I agree that we must have, in any legislative proposals that come forward, provision for the greatest degree of flexibility. It must enable the varying forms of participation and responsibility to be included. The Co-operative Movement must have something to contribute here. I do not even know that Bullock bothered to see them either. I do not believe that the noble Viscount, Lord Watkinson, was here when the noble Lord. Lord Lee, was paying him a flowery tribute. I got the general impression that Lord Lee thought that Lord Watkinson speaks better in this House than he sometimes does on the television box.
Lord LEE of NEWTON: My Lords, can I hear what I was supposed to believe?
Lord GEORGE-BROWN: Anyway, my Lords, the CBI has a great responsibility to push its members who are in a position to go ahead. We must drop the foolishness of playing the numbers game. I do not see the relevance of 2,000 employees to a company. Companies which have that number of employees may well have them spread over all kinds of much smaller units. They do not all work in one vast shed. One would get a silly situation if, because the totality of a company's employees was 2,000, the company was required to go ahead to direct board representation whereas other units alongside them which could be bigger were not required to do so because the total number of employees was fewer than 2,000. I do not think that there is any point in playing the numbers game as Bullock did.
So I end—and I apologise for having taken a little more time than I intended—
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by appealing to the TUC not to confuse the entrenchment of its power with the extension of democratic involvement by all of those in industry. I appeal to the CBI to push hard those companies which can make the next step so that more people can see the results in front of their very eyes. Finally, I appeal to the Government to give the matter a good deal more thought than the speech of the noble Lord, Lord Kirkhill, suggested they had yet had time to do. There is no reason why the Government should have to produce their proposals before the summer. The autumn would be as good. If they would stop producing quite so much legislation in the other House, Ministers would have more time to think about things. I often get involved in the argument about abolishing this House but, the more I see of the other place, the more I come to the conclusion that that is the one to abolish. This is the one which wants keeping, but then of course that has only been true since I left the other place. Anyway, let us have a little more thought on the part of the Government, then we can have a Green Paper or a White Paper or whatever is felt to be appropriate so that we can have further debate on the subject. I hope that, by next year, we shall really have made some progress and shall feel we can risk this.
5.38 p.m.
Lord HARMAR-NICHOLLS: My Lords, I know that it would be your Lordships' wish that I should first say to the noble Lord, Lord George-Brown, how very much we welcome him back to his seat and should tell him that we think that the new "slim line" look suits him well. I found his intervention very helpful because he gave chapter and verse for the main point that I want to make. I believe that so far in this debate your Lordships' House has made a mistake in treating this document as though it were a truly impartial and helpful attempt to examine the industrial and economic conditions surrounding the country. I do not believe that it is anything like that. I believe that it is a political document. I believe that it is a Party political ploy.
The reason I said that the noble Lord, Lord George-Brown, had given a basis for me to make that statement was that he, with his vast administrative experience in high office, has pointed out what an

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inadequate document the Bullock Report is. He pointed out that it did not contain the written evidence upon which the Committee said it had formed its views. It referred to the fact that the Committee had had evidence given to it, but nowhere in the document is the evidence that was submitted set down for people to make up their minds. It is the experience of all of us who have been in Parliament and in politics for any length of time that if it is a political document one is wanting to put out, one does not put too much detail into it. One does not give the evidence for people to criticise. But, if one is having a really impartial objective examination of something which one wants properly examined, one does put that evidence in. I believe that your Lordships in debating this report—for the first time in either House—will be making a mistake if it is treated seriously as being intended as an effective document which will help the general economic and industrial development of this country.
One of the problems is that one wants to make points which one thought about before getting up to speak, but one is then dragged away from these a little by what is said in other speeches. But if one wants to debate these matters it is necessary to pause in order to deal with them. I was rather impressed by the noble Lord, Lord Kirkhill, in regard to the way that he presented matters.
For example, in making the point that he supported worker-directors coming compulsorily from the trade union movement, he said that since the war we have had poor productivity and that has been our great problem. That is true. But he spoke about having had poor productivity since the war in the context of giving an impression that that was because we have not had worker-directors compulsorily appointed. But that is not the reason why we have had poor productivity. We have had poor productivity because of high taxes, charges, inflation and all kinds of threats and Governmental interference; and the people who know the job have not been left to get on with it. If we give an impression that we have had poor productivity only because we did not have worker-directors, then we shall be led up an alleyway that has nothing whatever to do with the problems of this country. Therefore, I hope that whoever replies to the debate from the Government
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Front Bench will make it clear that they are not saying that the poor productivity to which the noble Lord, Lord Kirkhill, referred arose just because we have not had worker-directors.
In furthering his argument the noble Lord, Lord Kirkhill, also said that since the Bullock proposals had been in print he had received many letters and much contact had been made with the Department. I should like the noble Lord to have told me whether the letters he received had said whether the Bullock proposals were good, bad, or indifferent, and whether the messages which they had had by the hundred—or whatever was the quantity he tried to imply—were for or against bringing in worker-directors compulsorily, which is what the Bullock proposals would do. To make those half-statements and to leave them unfinished, which gives an impression which could be quite the opposite to what is intended, is not the right way to go about this matter.
I have great admiration for the noble Lord, Lord Lee of Newton. I have served with him for many years in the other place and he is an experienced politician as well as being a Member of your Lordships' House. What did he say in his speech? He said that the noble Viscount, Lord Watkinson, agrees with worker-directors. Who does not? The principle of worker-directors is commendable; it has been accepted for years. The disagreement is not on the principle of worker-directors. The disagreement upon principle, as I see it, is whether or not the worker-directors shall be compulsorily appointed only from the ranks of trade unions, or whether the normal voluntary development which has gone on over the years will be allowed to go on producing the same kind of excellent results. That is where the difference is——
Lord LEE of NEWTON: My Lords, is the noble Lord saying that he knew some time ago that the CBI had accepted the principle of having worker-directors on the boards?
Lord HARMAR-NICHOLLS: My Lords, perhaps the noble Lord was referring to the noble Viscount in his personal capacity as president of the CBI, but I thought that he was referring

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to him as a noble Member of this House, and that he was saying that the noble Viscount, Lord Watkinson, had suddenly been brought to believe in worker-directors. But, if the noble Lord did not mean that, then my comments do not have the same relevance. My own businesses are very small, but on each of the boards of the two main companies, of which in terms of share control I (or my family) seem to have a majority, half of the board consists of people who were employees until the last few years, and how helpful, useful and constructive they are. But there is all the difference in the world between someone becoming a director because those who have worked with them for years think that they have merited the extra responsibility that goes with being a director, and someone who may not be known to one's company coming in and setting up the machinery to provide for a director to be forced upon one's board.
Another problem arose from the final words of the noble Lord, Lord Lee of Newton. He urged the CBI to get together with the Government and with the TUC and hammer out this matter. I am not prepared to leave this to the CBI. This is not an industrial matter. This is a matter to do with the way of life of this country. I know that the CBI, like all the others, is likely to strike bargains with the TUC which may suit it for the minute, but may not necessarily be in the interests of the nation in the long term. One of the weaknesses of the new managerial society, which has taken over from the older owner-employer society, is that they do not look as far ahead as the old owner-employer organisation did. They were looking ahead in terms of the inheritance of their families and all kinds of things. The new managerial society is very well represented by the CBI and if they can get out of their difficulties of the minute by coming to an arrangement they will do it. I am not saying that they are wrong from their own point of view. I am saying that when issues of this kind are being decided, in terms of what shall be the law of the land in which we live, then we in both Houses of Parliament—who represent the people in their widest sense, not in their narrow employment sense—ought to decide what is to happen.
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I was a little disappointed with the last few phrases of the speech of my noble friend Lord Carr of Hadley. I thought that 90 per cent. of his speech was absolutely acceptable to anyone who is following the problems that are facing this country and the world. But in his final remarks he showed signs of giving way to a little of the pressure that has been embodied in the Bullock majority report. My noble friend seemed to be saying that he did foresee that we might have to have extra compulsory declaration and disclosure, that we have to have some kind of legislation which ensured that certain extra returns were made for unions benefit. He knows, because like me he is in business, that everything one does in business today has to be disclosed. Half of one's time is taken up not in making useful productive things which will lead to something in the future, but in completing records so that somebody can go to Somerset House, pay a shilling and get all the particulars he wants, including trade unions.
If any more permanent restrictions are to be placed on the way in which one runs one's businesses, I do not think it will be in the interests of the country or of the people who work in the industries concerned. I may have misheard my noble friend Lord Carr and I shall read with care tomorrow morning what he said. But the reason why I take him to task is that it is vital that he, speaking from the Opposition Front Bench, re-presenting a Party that may well be the Government in, who knows, a few months time, should not be giving the impression that there is not a great deal of difference on the two sides as to how this matter should be tackled. I do not know whether your Lordships' noticed a report which came out the other day, based upon "motivation of management". There was chapter and verse evidence to show that in their tens of thousands members of managements in this country are wanting to leave to go to work in other countries because of the restrictions and tax difficulties they are facing. I believe that the impression that the Bullock Report has given may well encourage more people to want to do that.
I would rather that my noble friend Lord Carr, speaking for the Party which I join with him in serving, would give to those

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people the impression that while we truly believe in worker-directors, we believe that worker-directors should be chosen because of their merit and because they are known, and not because of their loyalty to some outside concern, such as trade unions. Another point which should be made is that it is not the fault of the noble Lord, Lord Bullock and his Committee. As the noble Lord, Lord George-Brown, said, the document that has been produced was not of particular excellence in terms of the way it was presented, but I do not think that the way in which this whole matter has been started passes the test of objectivity and impartiality that a subject of this kind ought to have had. What is the position? We have a majority report which is supported by six members of the Committee. Three of them are trade union representatives, and that is understandable. They carried out the view that the noble Lord, Lord Cooper of Stockton Heath, said, was the view of the TUC. They did their duty; that was understood: they did not cheat anybody. Those are the three trade union representatives. On the other side we have the three representatives of industrialists, and they represented a point of view which again was well understood. They stood firm by their views, as did the trade union representatives. Then there are three academics on the committee, and they joined with the majority report.
On the face of it, if one views that as being absolutely beyond question in terms of somebody giving thought as to how they weigh these matters, one would say if there are the three trade union representatives, with the support of the three academics, then that is fair enough, and the supposed academic objective ones have come down on their side. But it is not the fault of the members of the Committee. Their views, and the ways in which they looked at things, were well known before they were appointed. I am criticising (if there is criticism in what I am saying) the people who appointed them, because I am saying that careful thought was given to their views and their outlook before they were in fact appointed.
The noble Lord, Lord Bullock, himself had previously labelled himself—and what is wrong with it?—as sympathetic to the Labour Party. That was well-known—and the best of luck! The second member is a prominent Labour supporter and an
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adviser to the Trades Union Congress. There is nothing wrong with that; he does the job very well. The third is a professor from a rather "Leftish" university. He is entitled to be that; and I am not criticising these people as individuals. What I am saying is that if it is that you wanted an objective and impartial report that would carry the weight that such a report ought to carry, then when you were appointing the academics, the balancing ones, to act, if you like, as the umpires, I should have liked to see a Committee which was a little less slanted than this one appeared to be. It is because that is the position that I believe we have got to take that into account when we consider the words which come from them.
I noted with interest what was said by the Director-General of the CBI, who was a member of the Bullock Committee to begin with and who therefore heard much of the evidence, which was not disclosed in the report. What he said was:
"The implementation of this majority report will stop dead in its tracks the voluntary form of participation which has been developing for years".
That is the point I want to make. It is vital that we should have worker-directors. It is vital that we should have represented on the boards, not only of the big companies but of the small companies in this country, people who understand and represent the point of view of the people on the shopfloor. But the people fulfilling that role have got to be, as has been the case up till now, people who have been appointed to the boards because they as persons are recognised as being worthy and as having an outlook which will help the board, and not people who have been forced upon the board because they are members of a trade union, however excellent the record of that trade union may have been over the last half-century. The real issue, if this thing was being discussed impartially and properly, was whether it was thought that, bearing in mind the general standing of our industry in the world, the energy which has to flow from our industries would flow better if we had these enforced members on the board rather than the voluntary ones which we have had so far.
Baroness GAITSKELL: My Lords, would the noble Lord forgive me and give way? He is asking for the right

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people, the managers, to take over, and not all the other people he has mentioned. Where is he going to get them from if they are leaving the country in thousands?
Lord HARMAR-NICHOLLS: My Lords, I am glad the noble Baroness has asked me that, because I truly am disturbed that the ones who ought to be staying here and getting on the boards are contemplating leaving the country in thousands. I believe that is one of the great problems we have to face up to, and a battle we have to win. I am saying that if the ones who want to get on the boards because they are interested and have the ability to do it can see that they are going to get there because of their personal merit and not just because they have been loyal to a trade union, they are more likely to be the ones who will make the sort of contribution that this country wants.
So I beg your Lordships to treat this document for what I believe it truly to be. It is a political document. There is nothing wrong with that provided it is recognised as a political document. But if it is looked upon, as some of the speakers appear to have looked at it, as evincing an objective, impartial, fair-minded desire to examine the industrial and economic needs of this country, neither this sort of report, as the noble Lord, Lord George-Brown, said, nor the evidence in it, will justify that. If it is treated on those grounds, we are more likely to come to that sort of conclusion. That is why, even at this late stage, I should like another Commission to be set up, not merely to carry out the instruction to say how you bring in industrial democracy, but to say whether industrial democracy in this form is, in the view of an impartial Commission, the right way to set about it.
My Lords, the very term "industrial democracy" is a clever gimmick phrase of politicians. We on our side did it. We made great play some years ago of the phrase "the property-owning democracy", to give the impression that our side of the political spectrum were the only ones really interested in people owning property. It was an attractive phrase which, we hope, attracted votes. This phrase "industrial democracy" is only put in because, again, it is an attractive
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phrase and it is hoped that it will attract votes to a certain point of view. I believe we have got to recognise that, because that is exactly how the thing was started. In terms of its being democracy, it is not. True democracy is a decision made by all, not by a section. If we can recognise it as a political problem and settle it as such, and can then get down to talking about the detailed alterations that ought to be made in order to get more effective management in industry as a separate thing, after we have a fuller report from a more impartial Commission than the Bullock Committee turned out to be, then I believe we shall be doing our duty in terms of helping the country much more than talking about words and, as the noble Lord, Lord George-Brown, said, merely quoting numbers, thinking we are talking about something which was seriously intended when clearly it was a political ploy.
Lord PEDDIE: My Lords, before the noble Lord resumes his seat, I wonder whether he would clear up a little matter for me. He has repeatedly stated that he is in favour of worker-directors, but I assume from his comments that he favours worker-directors only if those worker-directors are appointed by the employers, and not by any organisation representing the workers.
Lord HARMAR-NICHOLLS: Yes; the noble Lord is quite right. I believe that the biggest influence in appointing the worker-directors ought to be what the noble Lord calls the employers, ought to be the management, because the management is in a position to look down and see those who have the qualities and can make a contribution, much better than the others can look up and see what sort of contribution they are expected to make. But of course management will heed the feelings of other workers. I come from the industrial Midlands. I have lived always in Staffordshire, never anywhere else; and that place is full of small industries where, up until 40 years ago, people used to leave the workbench and start their own factories. The Guest, Keen and Nettlefold organisation was made up of John Cotterill Limited and people like them. There is the great Rubery Owen organisation, where the old Mr. Owen was a workman and started his factory. There are the Wileys, where Mr. George Wiley

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started his factory. You had worker control in that sense, but those who wanted to get on stopped being workmen in those days and started their factories and became employers. Now we have got to where we have limited companies, and then they merge and become bigger companies. The sort of people with the outlook of those who founded the old firms are the ones who are becoming the working directors. Sitting in this House are noble Lords who I remember as under-managers at the Garringtons Limited works as part of the great Guest Keen and Nettlefold organisation. That is what is going on. I believe that the encouragement from the top to get the right people is what is most likely to succeed, rather than merely making it because you are a good trade unionist—although I believe in trade unionism; but merely being a trade unionist is not sufficient to give you the qualifications for a seat on any board.
5.58 p.m.
Lord BROWN: My Lords, it is fairly conventional to thank the initiator of debates in this House, but on this occasion I really feel that we owe a debt of gratitude of a very sincere kind to the noble Lord, Lord Carr of Hadley, because he has initiated this debate, I feel, at the right time; that is, at a time before, I hope, the Government have fully made up their mind on a White Paper or Green Paper, or whatever it is that is forthcoming. The Bullock Committee has come in for a lot of "stick" today, and I, I am afraid, am going to add to it. I agree with a great deal of the criticism which has been made, particularly by the noble Lord, Lord Carr, and others, but I want to try to set the debate in a slightly different frame of reference, perhaps, from that in which other speakers have set it so far.
I happen to believe that we are dealing with an issue which is even more important than the importance attached to it by others in this debate today; and, in order to illustrate what I am getting at, I comment in this way. In 1832 this House passed the great Reform Act which extended the franchise to the middle classes. In 1876 it passed, along with the other place, another Reform Act, extending the franchise largely to the working classes. Those Acts were regarded as great political milestones. At the time they were of deep concern to Peel,
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Wellington, Russell, Bright, Derby, Gladstone and Disraeli who really got the 1876 Reform Bill through the House—surprisingly so, because his Party was not all that behind him at the time. These debates rocked the nation because they were great constitutional reforms. Yet they were a prerequisite of the development of British society since then. If we had not had them, we should have had chaos instead—chaos of the sort that developed elsewhere.
We are facing a parallel situation today in this country; and of the same magnitude. In debating the issue of industrial democracy, we are debating the changes which will be required eventually to give 23 million people the constitutional right to take an equal right with others in establishing the policy governing the enterprises which employ them. I am trying to elevate the whole discussion to a level of importance which, with respect, I do not think it has yet been given. That is why I agree with the noble Lord, Lord Harmar-Nicholls, in saying that this is not a matter for a compact between the TUC and the CBI but a matter for very serious debate in Parliament. The British people accept Acts of Parliament, however distasteful at times, because they have been produced by a constitutional process which involves everybody, however indirectly. They are governed by due process and not by imposition. The absence of a similar constitutional right to involvement in the internal legislative processes of enterprises by employees is a living, daily contradiction of their political freedom as citizens. Bitterness and alienation from work which are characterising to a growing extent the attitude of the employees in industry today are particularly acute in Britain partly because a greater percentage of the population is in employment—higher than in any other country—partly because a greater percentage of employees are organised in trade unions and partly because we started the industrialisation process before other nations.
Other countries, I think, are already facing the sort of problems we are facing, but with perhaps less intensity. I am sure that in the years to come they are going to face problems of the same intensity as we face today. Britain was the first country to extend the franchise to all its citizens. If we can hold the grisly

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fantasies at bay and stick to cold rational thinking about constitutional matters, we could be the first to extend the franchise to all citizens in their employment roles. That is what participation is about. This has become the most important issue for the survival of Britain as an efficient, prosperous and a humanitarian community. Every other channel of improvement for efficiency, productivity, exports, investment and so on is increasingly thwarted by our failure to solve this sociological problem. Every manager in industry knows this today.
The question is this. Do the Bullock proposals provide for employees the minimum essential constitutional rights? The answer must be, emphatically, no; because they have assumed that these rights can be achieved by direct representation on the boards of companies. This assumption, which superficially may seem reasonable, in fact seriously confuses two major issues. The first issue is to reform the process of negotiation between employees and management. Unless this reform takes place, then no matter how the boards are reconstructed, fighting and alienation from work and feelings of imposition will continue, coupled with withdrawal from the national discussion and eventual withdrawal from work itself. The second issue is that of strengthening the boards by broadening their membership to include those with experience of national trade union thinking, not as representatives of employees but as ordinary board members.
By confusing these two issues, the Bullock Report turns the boardroom into a totally inadequate negotiation forum—and that is what it would do—thus putting at risk its real function and at the same time frustrating the active involvement of employees in policy-making through their representatives. Imagine the situation of a company employing 10,000 people. It is going to have perhaps six employee directors on the board; and they are to represent 10,000 people in the daily negotiations of all the problems. The whole idea is fatuous. With worker directors, very few employees will get a look in. Those who do will disappear into the board leaving the rest to get on with all the difficult negotiations on differential wages, job security, work
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transfer, inevestment priorities and so on. Meanwhile, the major policy changes will be agreed on the board over the heads of the real representatives.
Significantly, the three index pages at the commencement of the Bullock Report contain 74 sub-headings. Among all these 74 sub-headings, the term "works council" does not appear at all. That is very significant. These institutions are summarily dismissed from discussion in paragraph 3 of Chapter 10 on the grounds that, owing to the lack of decision-making powers possessed by works councils, they are not an ideal means of handling employer/employee relations. It does not seem to have occurred to the Committee to consider what would happen if they had real decision-making powers jointly. Nor has it occurred to them to visit some of the several establishments in this country that have used real decision-making works councils. Why on earth should they have spent all that time in Sweden and Germany without looking at forward examples of British companies, I do not know.
My last comment on the report before turning to more constructive comment is on the subject of subsidiary companies. If the writers of the main report had faced from the outset, first, that the majority of industrial employees are employed in subsidiary companies of large groups and, secondly, that the boards of subsidiary companies are not boards in the commonly accepted sense of the term—because they cannot buck the decisions of the group board; and there is a fault in the Companies Acts in this respect—they should never have treated the board of a subsidiary company as the same institution as an ordinary board. It has to contain its discussions within the terms of reference of the main board. If they had taken account of those things, they might have hesitated to attempt the achievement of industrial democracy simply through the restructuring of boards.
Chapter 11 displays the enormous problems which their proposals have invoked. Having in earlier chapters carefully created parity of representation for employees and shareholders on boards, they are then forced by consideration of the existence of hierarchies of subsidiary and sub-subsidiary companies (which are very common) to throw away this parity

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that they have taken so long to establish in the earlier part of the report by giving the group board the right to appoint the "Y" in the "2X+Y" formula. I am reminded of a report which I once received from one of my subordinates in a company I used to manage. It was a long report and it described what we were manufacturing and a very much better method of manufacturing it. I was excited about it and I got the report; but judge my disappointment when I came to a postscript at the end of the report saying: "Sorry. A serious mistake in calculations has meant that this method will not work after all." This report strikes me in the same way. You turn to Chapter 11 and all that has been done before goes up in smoke.
My Lords, the basic need to work out new institutions for constitutional participation arises from changes in the distribution of power which have taken place since 1945. Up to 1939, power had been migrating from employers to trade unions. Since 1945, this migration has accelerated until the potentiality of employers to resist demands from individual trade unions has become almost non-existent. Alongside this shift of power another shift has been taking place. This is the migration of power from the central organisations of individual trade unions down through their hierarchies of officials to the shop stewards. This growing power of employees can readily be seen not only in industry but in the Civil Service, social services, education—in fact, everywhere where one has employment. The question I pose is this: have we to relearn the lessons of the 19th century? That is, where you have power groups without a constitutional means of expressing that power, then you have growing chaos. Participation is not something to which we can say, "Yes, we ought to have it" or "Perhaps should not have it", it is something forced upon us by the fact that there are groups of employees all over the country now who have power as a result of associating together. They will use that power in a chaotic, damaging way unless they are given a constitutional position from which they can exercise it. That constitutional right, I suggest, must now be given by the statutory establishment of unanimous voting works councils in which all the negotiations between employee representatives, trades unions and management take place.
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Let it be clear that I am not talking about joint consultation between a manager and his subordinate, for I believe that the discussion between a manager and his subordinate simply to be a sine qua non of good management practice and therefore essential. But that leaves the manager free to make his own decisions after consulting. I am talking about something quite different; a joint decision-making in the formation of the policies within which managers operate the company, in the same way in which the Civil Service operate the laws made in Parliament. I suggest that there must be statutory provision for a council of this type on each geographical site on which there are more than 350 people employed. Large enterprises would then have many councils. A council is a negotiating body determining all policies for the site it covers within the constraints of such external policies as the law, national agreements between employers and trade unions, and agreements arrived at for the enterprise as a whole. These councils would comprise the most senior executive on the site (the management member of the council) meeting with representatives of all grades and types of employee, including elected representatives of managers.
The role of the management member of the council is to express his view and that of the board, and to seek agreement to change and to provide full information of the plans of the whole enterprise. The role of the representatives is to pursue the views of those who elected them and the policies of the trade unions of which they are members. No subjects would be excluded from council agendas, except where disclosure of information might clearly damage the enterprise. The unanimous decisions of the councils, made within the constraints that I have mentioned, and including of course the assent of the management member, who, like others, would have the right of veto, would be binding on all members of the council and on the board of the enterprise.
There is nothing new in this, except for the absolutely vital constitutional right of all council members to veto change and stick to the status quo until alterations have made changes acceptable to all. It is the situation now. The veto is exercised through threat of strike. If you

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give a constitutional veto, you obviate the need to use power in that way. Withdrawal from rational discussion or from work itself is rendered unnecessary if abstention from a positive vote forces further negotiation. Where there was more than one council in an enterprise it would be necessary to have periodic conferences in which members of all councils could meet together and with the main board. Proposals for change arising at such conferences would be referred back to the individual councils for decision.
The process described will be seen to be precisely the opposite of the common pattern of fragmented negotiation in which each power group negotiates separately and confidentially with top management. I believe that there are a lot of trade unions in this country who want to hang on to fragmented negotiation. There is a great deal of resistance to the setting up of councils such as I have described because one union says that they are going to negotiate for their members and are not going to sit down with other trade unions or representatives and negotiate collectively. The result of fragmented negotiation is leapfrogging with avoidance of face-to-face debate among negotiating groups. This is precisely what is wrecking British Leyland at this moment: leapfrogging and failure of representatives of different unions to meet with each other. All-round consensus is not achievable except by using this principle of unanimous voting.
The basic concept is that no significant power group or management shall be coercively overridden by imposition of a change to which it is determinedly opposed. If that all sounds idealistic and unrealisable, let me reassure your Lordships by saying that the 5,000-strong public company which I used to manage has operated on just those lines since 1948 and is no longer alone as a company in doing so. Paradoxically, far from slowing down the process of decision-making and preventing change, it has had the opposite effect. Decisions are faster, more carefully thought out and less patched up to reach desperate last minute compromises.
The foregoing participative process is not realisable by electing employees on to the board of directors. But boards of directors will not endure as they now
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exist simply as instruments of the shareholders alone, because the power relationships I have described have shifted irreversibly so as to bring the power of employees into balance with that of shareholders. I propose therefore enabling legislation to allow national trade unions to appoint one third of board members as of right; not as elected representatives of the workforce, but as trade union members like any other board members. If trade unions took advantage of this right, the boards would be composed of one-third directors elected by shareholders, one-third trade union official members and one-third executive directors appointed by the other two-thirds. One of the biggest nonsenses of Bullock is to leave out of boards the production director, the marketing director and the technical director. How is a board to get on with the job without having those people present?
Such a coming together of representatives of capital, labour and management face-to-face with the real problems of a company would surely be a contribution to the regeneration of the British industry. This is what we must have. Within a couple of years we should have a cadre of trade union officials within each trade union who, each having served on several boards, would really know about management problems, together with shareholder directors who really knew about trade unions and industrial relations, and did not regard them all as "Reds under the bed".
Finally, I must re-emphasise that under this proposal the board acts as a board and does not usurp the function of employee representation. The employees have their own representative system built up from deep inside the enterprise. The emergence of support for managerial action and the hope for creative functioning lies precisely in the establishment of consensus as between the real representatives of employees, the board and its immediate executive appointees. This conjunction of interest must be found if more large enterprises are to be inhibited from becoming the conflict ridden chaos which some have already become. Let us not look at industry and say that only those which have strikes are conflict ridden, because there is a retreat from work in many companies where there is no palpable conflict. What I have proposed is simply a constitutional

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mechanism allowing for this conjunction of interest to be formulated and made manifest to everybody.
Lord BIRDWOOD: My Lords, if I may intervene very briefly, would not the noble Lord predict some slight measure of conflict in an organisation in which there were one-third trade union directors, while at the same time the organisation itself had works councils drawn from non-union ranks?
Lord BROWN: My Lords, I can see no problem there. The negotiation takes place in the works councils. The board acts as a board: it is not a negotiating body at all—as under Bullock.
6.20 p.m.
Lord ELIBANK: My Lords, in a matter as complex as industrial democracy it seems to me very difficult to express views which are manifestly and obviously wrong; and this is a source of great comfort and consolation to me as I rise to address your Lordships' House for the first time.
In the mass of conflicting opinions which surround the issue of industrial democracy, it seems to me it would be very helpful if we could fix on some main objective that could guide us along the right path. It seems to me that, before going further forward, we should ask ourselves: Why more industrial democracy? Why more participation? This sort of objective-setting would, I think, help to guide Her Majesty's Government in any legislation they might contemplate, and would also set the way for industrial practices and policies over the next few decades.
Objectives could be of various kinds, and indeed many of them have been mentioned already today. One is, of course, that we are under some pressure to fall into line with our partners in the EEC. Some mention has already been made of the experience of the Dutch and the Germans—and one might also mention, outside the EEC, the Swedes—mostly along the lines that it is relevant only to those particular countries and much less relevant to our own. All one can say is that Germany and Holland in particular have a very successful track record of economic and industrial performance, and
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I think we should perhaps look with some humility at methods and techniques in industrial democracy which they have found successful.
There is also the secondary point that we shall be under some pressure, moral and possibly legal, to fall into line with the practices on the Continent. The EEC Commission has already produced draft legislation, Green Papers and so forth; and it is only to be expected that we shall be asked at some time in the future to adhere to that legislation. Another quite legitimate objective which might guide us forward is a belief in pure democracy as such. We have been guided through our Island's history on the democratic path, both at national and local level, and also of course in the workings of sundry bodies, official and unofficial. It is fair to say that as a race we regard democracy, per se, as good, and feel therefore that any extension of it to the workplace must also be good.
A third concept—and, indeed, I think it is fair to say it is the main theme of the Bullock Report—is that an objective could or should be to increase trade union power, on the basis that to do so would improve our industrial relations in this country and so improve our economic prosperity. Lastly—and it is a point I should particularly like to commend to your Lordships—there is the obtaining of improved industrial performance by increasing in some measure the motivation of our workforce.
The last is the least glamorous and the least emotive but, to my mind, it is quite critical to the future economic performance of this country. As I see it, one of the great problems facing the West today and particularly Britain, is the low quality of jobs which have to be performed both on the factory floor and in the office. I think it is fair to say that most of our workers regard the work they do as boring, meaningless and devoid of any real purpose: it is something to fill in the time between 9 a.m. and 5 p.m., and for the most part they live for the evenings and week-ends. How many of our workers, when they set out from home on Monday morning, look forward with keen anticipation to an interesting and stimulating week lying ahead of them?
For many years, perhaps since the beginning of the Industrial Revolution,

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there has been a strong motive force to pursue their labours: and that has been purely hunger. That motive force, which has been very powerful and effective, is being increasingly challenged today for a variety of reasons. The phenomenon we know as "dropping out" has become all too common. Of course it takes various forms, but one of them is undoubtedly an alienation, as the noble Lord, Lord Brown, said, of the workers from their work; and, of course, where unemployment pay in most countries of the Western World has risen to a reasonably high level, the temptation to drop out is all the greater.
Lord BROWN: My Lords——
Several noble Lords: Order, Order! Maiden speech!
Lord ELIBANK: My Lords, there is, I think, no sovereign remedy for this phenomenon; but one remedy which is frequently offered, and one that has received a wide measure of support, is influence in the decision-making process at work. That seems to have a more stimulating effect on workers than possibly any other single factor, including pay. It seems to be a possible route whereby we can secure a greater measure of dedication to the work in the factory and in the office.
I think this is a critical issue because, without that greater dedication, I can see only a greater falling off in the material prosperity which so far we have enjoyed in this country. What has been up to now simply a nuisance, shown in absenteeism and poor-quality products, might quite easily become catastrophic in the sense that work at the factory bench or in the office virtually ceases. Perhaps that is putting it rather over-dramatically, but it is a trend which I can foresee over the next few decades unless this issue of participation and involvement in decision-making is actively pursued.
To say that is not to say that changes at board level are necessarily going to produce the desired result. I suspect that to most workers on the factory floor and in the office the board is a fairly remote body, and whether it is constituted of the conventional type of manager or is made up of trade unionists or academics is a
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matter which impinges very little on them in their day-to-day work. None the less, I believe that the board and its constitution can create the right sort of atmosphere to effect the necessary changes down the line.
We have been told, and I think rightly, that changes of this sort should begin on the factory floor, and that they should begin in what one might term, as a form of "shorthand", works councils. With this view I entirely agree. The only doubt I have—and it was expressed by the noble Lord, Lord Kirkhill—is whether we have the time at our disposal to let this gradual growth of the democratic process begin at the bottom and rise up to board level over what might be quite a few decades. We are under very considerable pressure to improve our economic performance, and I just wonder whether, in some measure, we need the spur of legislation to effect the changes we need in the time available.
I should like to touch briefly on the position of the middle managers, who have not so far been mentioned in the debate today. They, too, are suffering something of a crisis, particularly in the erosion of differentials, in the loss of authority and power and in a general uncertainty as to where they stand, and they present in the industrial scene a particular problem. I have no easy solution for this. In fact, as I try to look ahead, it seems to me that their position can only get more difficult. I think that they are going to lose the power and authority which up to now they have exercised as of right, and I suspect that their role in the future will be much more that of adviser and consultant. This is a change in outlook which the older managers will find extremely difficult to accept, and one's only hope is that the younger ones will be trained along these lines and will accept this new role as industrial democracy and greater participation gain ground, as I hope they will, in this country.
In conclusion, I should like just to reiterate the point I made at the beginning. I think that we should try to fix in our minds the prime objective of going ahead—why we are going to do it. I would suggest to your Lordships that the reason is a belief that we must increase and improve the motivation of our working

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people as a matter of urgent and critical need. I believe that if we do this we can take a notable step forward, both to improve the quality of life of our workers and citizens generally, and also to begin to close the industrial gap between ourselves and our principal competitors in the West.
6.32 p.m.
Baroness SEEAR: My Lords, I should like to add the thanks of those of us on these Benches to those already expressed by other Members of your Lordships' House to the noble Lord, Lord Carr, for initiating this debate today. Ever since the Bullock Report came out, there have been discussions up and down the country, and it is very useful that we have been able to debate it here this afternoon. Also, I am delighted to be able to congratulate the noble Viscount, Lord Trenchard, on the informed and mature speech which we heard earlier this after-noon; and it is a particular pleasure to congratulate the noble Lord, Lord Elibank, on the thoughtful and fluent speech that he has given us this afternoon—so fluent, indeed, that it was very understandable that the noble Lord, Lord Brown, forgot that he was listening to a maiden speech.
Thirty-five years ago, I was management secretary of a works council formed on the old style Whitley pattern, consisting entirely of trade unionists but elected by a 100 per cent, vote of all employees, union or non-union, inside the works. It was a child of its time but it was, for that time, a flourishing and useful works council and from that day to this, quite apart from my Liberal Party affiliation—and, as your Lordships have already heard this evening, and I am sure knew before, the Liberal Party's record of support for employee participation goes back 50 years and more—I have been a convinced supporter of employee participation at all levels.
I believe in it, because I think that it can add meaning to jobs which are otherwise of very limited scope and very limited interest, though not all jobs performed on the factory floor bore people in the way that the noble Lord, Lord Elibank, seems to believe. I believe that it recognises the status of employees today in their companies. I believe, also, as the noble Lord, Lord Brown, has
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explained, that it recognises power and puts authority where power is, which is vital in any organisation. I believe, too, that it forces people to look facts in the face when they have to be responsible for decisions—and this is of the first importance. Nothing turns the boys into men faster than having to be party to a decision, preferably a rather unpalatable decision, and then having to live with the results.
Unless we have real decision-making powers for employee representatives that vital element is left out, as it used to be left out on the consultative committees. It is all too easy to stand on the side, to give advice and to criticise, but not have to come down and be committed in terms of the decision that is made. Perhaps that is why so much of the comment that we get from the media is of such a frivolous kind, because they never have to be party to the decisions or live with the consequences of the advice that they give.
I have quite deliberately been talking about employee participation and not industrial democracy. This is not just a matter of semantics, and I have been doing that because I believe that the analogy of industrial democracy with political democracy is a mistake and has led to a good deal of confused thinking. After all, if you start an argument on a false analogy, you can argue with perfect logic to a ridiculous conclusion. It is a false anology, because if you consider the relationship between Government and citizen, and compare that with the relation-ship between a company and its employee, it is a relationship of an entirely different order, and the role of Government and the role of free enterprise are of a quite different order. After all, Government exists entirely for the wellbeing of the citizens of the nation State. The enterprise can never exist entirely, and it is not its primary task to look after the well-being of the people who work in it.
The wellbeing of the people who work in it is a very important responsibility, and their rights are very real rights and should be recognised far more than they are at the present time. But that is not the raison d'être of the enterprise, whereas the raison d'être of Government is the wellbeing of the citizens. The raison d'être of the enterprise must always

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be the provision of goods and services to meet society's needs and Government has no external function, no external raison d'être of that order. Then, again, the individual citizen is born into a particular nation State and can leave it only with the greatest difficulty, which is entirely different from the position of the employee who makes a limited contract with the enterprise, and can leave it and go somewhere else. These are not analogous situations.
This does not make a great deal of difference in terms of what I would like to see done about employee participation, but I think it clears our minds if—and I know that it is a forlorn hope because the term "industrial democracy" has now been, taken on and is accepted as the term for what we are discussing—we talk about employee participation. But if we are to think in terms of democracy, then we really must mean democracy.
The Bullock Report itself states at the beginning that democracy means that all the people affected by a decision should have a say in the making of that decision. From that there are two consequences. One is that you cannot disenfranchise certain employees, because they do not happen to belong to trade unions. Here I do not accept the argument of my old friend, in the non-political sense, Lord Cooper, when he suggests that people should belong to trade unions—as I agree they should normally—and that the triggering vote which the Bullock Committee suggests is adequate to represent the interests of the rank and file. The triggering vote is only to decide whether an organisation should go ahead with having employee representatives on the board. It does not give the rank and file non-trade unionist his democratic right to vote for the people who then sit on the board, and that is the point which any democratic interpretation must require.
Not only is the democratic interpretation inadequate, as put forward by Bullock. If you say that everybody affected by a decision should have the opportunity to express a view and to have an influence on that decision, then there are other interests, besides those of shareholders and employees, which should be taken into account. There is the consumer interest and there is the interest of the community
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as a whole. Where the market is operating, the consumer interest is adequately dealt with by the consumer's right to vote with his feet. But we in this country, particularly in the public sector, have many industries in which the consumer is captive; there is nowhere for him to go. We run the very real risk, and Bullock does not begin to look at this, that by enfranchising employees who do nothing for consumers in a monopoly situation we shall get a ganging up of shareholder-producer interests and employee-producer interests against consumer interests. Where there is a monopoly, therefore, I believe, particularly in the case of nationalised industries, that boards which claim to be democratic—that is the claim which is being made—should make some room for the representation of consumers. In those key organisations where decisions made at board level affect the community as a whole, we should look again to see in what way we are going to protect the wider community interest.
It is not only the inadequacy of what Lord Bullock has presented us with that I wish to criticise. It is not only what he says; it is what he does not say and what he does not include that I criticise. Nowhere in the Bullock Report is there any suggestion of sharing in the economic side of the business—sharing in ownership. There is not any one pattern for sharing in ownership. To speak about extending employee participation and the rights of employees but not to take on board at all the question of sharing in ownership is to leave a very wide gap in the discussion that Bullock was supposed to undertake. Once again this was not included in the terms of reference; but those were not the terms of reference that many of us, who have believed for many years in employee participation, would have wished to see. Again there is not one formula, but surely it is something that in the discussion of the extension of employee participation should be taken on board and be part of the discussion.
Do not let us forget—other speakers today have reminded us of this point—that we must think about our pattern of employee participation in the light of EEC Directives and European experience, because in Europe the extension of ownership rights has become a very important aspect of the argument. Again

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—here I am referring to what other noble Lords have said, but I want to say it with the greatest possible force—the Bullock Committee seems totally to fail to appreciate the role of management, the expertise of management and the rights of management, particularly middle management.
I believe that on the Bullock Committee there should have been representatives of working managers, not at the very highest level. I have the greatest respect for Sir Jack Callard, but it is a long time since he was a working manager at the level I am speaking about. These are the people, many of whom have worked their way up and who have sweated it out acquiring qualifications and experience, upon whom the development of industry and our prosperity to a very large extent depends. They have as much right to a say in what is going to happen to their companies as any other group. This is not just a matter of numbers. It is a matter of the very greatest possible importance. As has been said before, not only this afternoon but in other debates in your Lordships' House, they form a group which has been very seriously squeezed.
I do not believe that the Bullock Committee understands what management is about. I do not believe that it under-stands the growing professionalisation of management and how badly we need that professionalisation. It has led to the advances which have taken place in many of our greatest companies, because they have recognised the need for professional management. Nowhere do we see this reflected in Bullock, either in its personnel or in its proposals. Indeed, there is one paragraph in Bullock which makes my blood run cold. It seems to suggest that the future role of management is to be rather like the Civil Service—which God forbid! Not only have the Bullock Committee left out of account all share in ownership; not only have they ignored the role of managers and misunderstood their role—if, indeed, they really cared to think about it at all—they have also failed to take any account of the volume of research and experiment which has gone on in this country.
Here let me declare an interest. I speak as vice-chairman of the Tavistock Institute of Human Relations which has worked for years in this field and contributed greatly to that experiment—to
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that work, for it is far more than experiment which the noble Lord, Lord Brown, has so clearly and valuably described for us this evening. There are people in the Institute who have been doing nothing but research in this area for the last six or seven years. They, I know, sent evidence to the Bullock Committee, but there is no sign that that evidence was taken on board. I will give to the Bullock Committee the credit of believing that their evidence was read: but you would not think so if you looked at the report because the essence of that work, the essence of research and experiment up and down the country, tells us two things which come out in different ways from all the different researches which have been undertaken.
First, you have to have participation at all levels. I agree that you cannot leave it at grass roots level. How right was the noble Lord, Lord Lee of Newton, to say that you must not hold the sentimental belief that everything that is done at grass roots level is good for that reason. But you have to have development at grass roots level. You have to have development, as the noble Lord, Lord Brown, has explained, built up by experiment and by a great deal of blood, sweat and tears—as the noble Lord knows, and as any of us who know about his work know—until you have worked out a pattern of participation which penetrates the whole organisation and takes place at all levels.
It is also of the essence of what the researchers and experimenters have found out that you have to have horses for courses. You cannot say that because it worked in this way in the Glacier Metal Company—I know that the noble Lord, Lord Brown, will agree with me—you must take that pattern and impose it on every other organisation up and down the country. We know enough from research to know that this is not true. We know enough from research to know that you have to work out what is appropriate in every circumstance for the organisation with which you are dealing. There is no evidence that Bullock understands this at all, and if it does not understand it then it does not know what it is talking about.
Let us say that we are committed to the idea of employee participation. We accept that we need legislation. We accept that we need something like—although I

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should never call it this—an Industrial Democracy Commission to help us to get on with it. We want people to start working to find out what suits them in their circumstances. We all agree that something must be done, but we must not make the fatal mistake of saying that there is this one pattern, which Bullock has presented us with, and that the law says everybody is to behave like that. The law is often an ass, but I hope that it is not such an ass as that. I can only believe—and I am sorry to have to say this—that the majority of the Bullock Committee knew where they wanted to arrive before ever they set out on their journey and that they selected from the evidence presented to them only those items which fitted that predestined pattern.
6.50 p.m.
Lord HOUGHTON of SOWERBY: My Lords, I want to begin by making a few comments on the political situation relating to the whole question of the Bullock Report and the furtherance of the cause of industrial democracy. The Government have made a commitment and now they are in search of a consensus; and I think one can ask the question: what if they do not get the consensus? What are they going to do about the commitment? We have been told this afternoon that the Government are committed to introducing legislative proposals in this Session of Parliament, and the noble Lord, Lord George-Brown, said that in his view those words did not necessarily commit the Government to the introduction of legislation. I think it would be valuable for us to know what the Government really mean by the phrase which has been repeated time and again by Ministers, that they are committed to the introduction of legislative proposals in this Session. How do they propose to do it? Are we to be given a Green Paper, a White Paper, a draft Bill? What precisely have the Government in mind? Perhaps the Minister who is later to reply to this debate will try to enlarge on that.
The two important speeches made this afternoon were, first, the opening speech made by the noble Lord, Lord Carr of Hadley, and, secondly, the speech of the noble Viscount, Lord Watkinson. Lord Carr represents political power; Viscount Watkinson represents industrial power.
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Between them they have a very important contribution to make to this debate. Opinion is sharply divided: the Bullock Committee was more narrowly split than is fully realised. Had Mr. Methven remained on the Bullock Committee, he would presumably have joined the minority, judging by the speeches that he has made since; and, bearing in mind that Mr. Wilson, a member of the Committee who signed the majority report, had an important reservation to make to it, really the majority report of the Bullock Committee is by the casting vote of the chairman. That is really the truth of the Bullock Committee, and it is perhaps unfortunate that the weight of the word "majority" rests upon that slender margin of opinion on the Bullock Committee. Therefore I think we have to approach this matter realising that opinion is sharply divided and that the two sides of industry appear to be equally sharply divided.
In those circumstances, I think the Government, Parliament and the public must approach this matter with a full sense of responsibility and with an attitude of caution. I agree entirely with my noble friend Lord Brown that we are on the threshold of a revolutionary change in the expansion of our system of democracy as important as the extension of the franchise itself in years gone by. If I recall his words correctly, I think he omitted to mention the equally important change in the franchise occasioned by giving votes to women; and when the noble Lord, Lord Carr, said—and I made a note of his words—
"democracy grows on the basis of agreement and not on controversy",
I do not think history is with him on that. I believe that democracy grows out of controversy. It may be that it has to reach agreement before it can be fully accepted and applied, but controversy there is bound to be on the extension of democracy in whatever form.
The noble Lord, Lord Carr, refrained from uttering a caution which I thought would have come well from him. He should have uttered a warning to the Government against the dangers and consequences of coercion, even by Act of Parliament. Is it not strange how former Ministers on the Benches opposite, in discussing this great issue never refer to the Industrial Relations Act of 1971?

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Yet there are some lessons to be learned from that and I wish they would tell us so, because just as in 1971 the Government found that they could not impose upon the trade unions an Act of Parliament that they deeply resented, equally I think the present Government must beware not to try to impose on industry and management any legislation that they deeply resent.
I believe we have to come to a closer agreement on what we are going to do before we can move forward. I think the Government were rash in entering into this commitment before they could take the full measure of what was involved in the practicalities of what they were proposing to do and the sharp division of opinion that would accompany the consideration of this matter.
What has the noble Viscount, Lord Watkinson, to offer? I found this gravely disturbing. What he said was that the report of the Bullock Committee should be quietly put on one side. But, my Lords, it will not just go away like that. It has to be regarded as part of the debate that we shall have to conduct for some time to come. He then went on to say what he would like to persuade the Government to do. I took note of what he wished the Government to do, and they amounted to no more than proposals for the introduction into industry, of the Whitley Council system, which was introduced into the public services 50 years ago. Indeed what he said was nothing more than the recommendations for industry made by the report of J. H. Whitley in 1919, which was spurned by both sides of industry. They did not want the joint consultative councils, for reasons which I need not go into; and the public services, for whom that report was never intended, grasped the opportunity of getting that form of consultation in the Civil Service and in other branches of public service, and they have flourished ever since. But they are not the assumption by staff elements and unions of the responsibilities of management. They are consultative; there is a large measure of agreement reached between the two sides when they are discussing various matters of common concern, but the staff elements do not take the responsibility for the final decisions of administration for Government.
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The noble Viscount, Lord Watkinson, was really suggesting that that is what he wants in industry. In my view it is very late in the day to begin to talk of setting up works councils on the Whitley model and giving them adequate trial before proceeding further, and in the notable maiden speech to which we listened a few moments ago from the noble Lord, Lord Elibank, he was absolutely right when he said that we have not the time. Fifty years have gone past on the Whitley Council concept and throughout industry, and certainly in the public sector, people are now ready to move forward beyond that. We cannot go back to the original concepts of joint consultative councils, which is what I think the noble Viscount, Lord Watkinson, proposed to do. He said that we had to work hard to form an industrial partnership. What does "industrial partnership" mean? "Industrial partnership" surely means equal shares and equal responsibilities. Partners are equally responsible, but he made no suggestion which in my opinon matched the full meaning of the word "partnership" in this connection.
So I am bound to say that if the stand made by the noble Viscount, Lord Watkinson, this afternoon represents the view of the CBI, it is a very disappointing beginning to the discussion which has to take place, not only between the Government and them but between them and the public. We are all in this. This is not just a matter that can be fixed between the TUC and the CBI, or between the Government and both of them. This is a very important extension of the whole concept of democracy. It is a constitutional change of the first magnitude. The whole structure of industry will be changed in consequence of any movement along these lines. It is a very important matter, may indeed be a grave matter, for the future economy and prosperity of the country.
The Government have to begin to think of some meeting point between the two points of view upon which agreement can be found, or, if agreement cannot be found proposals the Government could feel confident in putting to Parliament and to the country. Here I share the view of those who believe that a considerable amount of flexibility is desirable in the introduction of industrial democracy. I think that the so-called majority report of the Bullock Committee does not contain

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the only form of industrial democracy. The minority report also includes important suggestions for industrial democracy.
There is a good deal to be said, as the noble Lord, Lord Elibank, said a few moments ago, for looking to the European model as one which deserves our close consideration. The Bullock Committee scrambled through their period of sitting in a way which could not possibly have given them the adequate basis for their conclusions which a committee of that kind should require. They did not spend long enough in Europe in examining what is happening there. I went myself and spent a month there, and that was nothing like enough. We want to find out what is the secret of their industrial and economic success. They have a Parliamentary democracy, as we do. Why is it that their system works and ours appears not to work anything like so successfully? Is there a clue there that we could find and apply in this country? Do not let us be insular. Do not let us say: "We are not used to this idea of a main policy board and an executive board; therefore, it will not suit our industry". Why does it suit theirs and why would it not suit ours? These are questions which should be gone into much more deeply.
I would, therefore, suggest that the Government should consider an approach in a framework, first of all, of voluntary endeavour. I would prescribe the conditions of the Bullock Committee, giving the workers and the unions the right to negotiate with the enterprise for the introduction of a measure of industrial democracy. I would not in the first instance put any coercion behind it. I would allow a reasonable period during which voluntary negotiations, based upon the reasonable degree of support for the idea laid down by the Bullock Committee, could be carried out. The trade unions desire to have the voluntary effort in every other connection; they want voluntary wages policy, free voluntary collective bargaining, a voluntary Social Contract. Why not voluntary industrial democracy, at least to start with, and see how far we go before we begin to lay down compulsion for the introduction of this concept. I agree that without good will and without enthusiasm industrial democracy will go on the rocks. There are far too many pitfalls and difficulties, even
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for men of good will to overcome, unless the spirit of co-operation is present in what they do. I think that is more likely to be obtained by voluntary negotiation and agreement than by any form of statutory compulsion.
The second thing I would suggest is that the range of industrial democracy permissible should be rather wide. I would then set up the Industrial Democracy Commission and let it work on guide-lines, approve schemes and advise both sides of industry on what would satisfy the mini-mum criteria of industrial democracy. I think there is a fairly wide range of guide-lines within which the Industrial Democracy Commission could say: "This will satisfy the test. If this will work in your industry or in your firm, go ahead and make a success of it". What may suit one firm may not suit another. I think there are a wide variety of forms of industrial democracy, as long as they satisfy the minimum criteria. They have to do that to be democracy at all. Then in a few years' time one could take stock and see how far people have gone, what forms of industrial democracy have been introduced; then possibly carry the matter a stage further, if lack of co-operation or refusal to co-operate needed some statutory attention. I think those are the lines upon which the consensus might be found. I start, and I hope we all do, from the premise laid down in the earlier part of the speech of Lord Brown, and throughout the whole of the speech of the noble Lord, Lord Elibank. If we start from there, as I do, then I think we move along this path and begin to formulate ideas where the two sides can come together.
One final word: that is, do not be afraid of putting responsibility on workers. They will take more than you think. I have had experience. After all, I was in the Whitley Council system in the Civil Service for 38 years; I helped to build it up; I was Chairman of the Staff Side. I did everything there was to do in the Whitley Council in the Civil Service. In my experience you cannot teach responsibility; you cannot tell people that they ought to have it but cannot have it; you have to give it to them, and when you give it to them you will be surprised how they will respond.
I leave your Lordships with this thought. Far from resisting or resenting or even

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discouraging the attempt of workers to get this position of participation on equal terms of responsibility, industry ought to be welcoming it. I believe that this is the indispensable condition of the survival of capitalism in Britain, and that ought to inspire noble Lords opposite to look at it again. I do not believe that the mixed economy can continue unless there is greater inspiration in the workforce, greater enthusiasm to national prosperity.
As the noble Lord, Lord Elibank, said, we have to get this motivation in order to obtain the efficiency and the output and the capacity to regain our place in the world of manufacture and export of technological development and the rest of it. That is the thought I think we should have in mind all the time. Do not resist—accept. Bring people on; give them the responsibility. It does not really matter about it being union power. Any participation at board level is power; if it is not union power it is worker power, and in most cases there will not be any difference between the two. The real problem is in the area where there is no trade union organisation, where it would be impossible to force trade union organisation in some ranges, especially in middle management, in order to get the formalised basis for their participation in this scheme. That needs special attention. Therefore, there cannot be a completely doctrinaire approach to the question of whether it is trade union representation or worker representation. There may be a mix in order to achieve the common purpose.
7.8 p.m.
Lord HAYTER: My Lords, I should like to take for my text this evening the one sensible remark out of the Bullock Report which your Lordships may have noticed on page 149:
"It may be argued that the involvement of Government in what are essentially business decisions is undesirable."
I am going to come back to the same conclusions as the noble Lord, Lord Houghton, though by a different route. It it were not for the fact that the word "representative" throughout the report has become rather an emotive word, I think I would safely stand here as being the representative of 15,000 employees in my company, of whom 10,000 are in this country, 14,000 shareholders, mostly in this country, and thousands and thousands
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of customers. By the way, that point about customers which the noble Baroness, Lady Seear, emphasised, is a very real point. Unless you get that balance between the three elements, the employees, the shareholders and the customers, you will never have a successful business. One began to wonder, as one waded through the Bullock Report, whether the members of that majority had ever sat on boards before. There was this obsession with voting rights. Last night I thought of all the circumstances in which I had been the chairman of a company, of hospital boards, of a "Neddy" and of a cricket club, and I can never remember having had a vote. The reason for that is quite simple. The people who were on those boards, committees and councils all had a common purpose. There was certainly not this divisive element that is advocated in the report, of having employee representatives, shareholder representatives and co-opted directors.
I should like to share with noble Lords some of the problems of a group of 15,000 employees. When we have a board meeting, if we are sensible the first thing we do is to review our orders and sales, because if we do not look after them there will be nothing to follow in the rest of our business. Then we get into the difficult area of reviewing our major companies—we have to take a look at those companies—their conditions of employment, their differences in design and marketing. In my case, many of those companies are overseas and how blessed it is that most of my directors have been overseas. Shall we gain much from employee representatives who have never seen any of these companies overseas? The same argument would, of course, apply to the budgets of those companies.
To be slightly controversial, there comes a time in any group of companies when, for practical reasons which I shall not try to enumerate now, one has to consider the problem of selling off one of those companies. Be sure of this: in doing that we must watch the interests of employees, shareholders and customers. I can imagine the excitement there might be among the employee representatives until they become appreciative of the full considerations that take place behind such an action. Conversely, if one wished to acquire a company, the same sort of arguments might go through one's mind,

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although one would not, perhaps, want to acquire a company if there was a Bullock Report in the offing.
I wish to make one point which has not been emphasised enough tonight. Throughout all these considerations there is the cash element. If we disregard that cash element we know what happens to companies. I shall not enumerate them, but the many instances of recent times are well within the knowledge of noble Lords. Unless we look after the interests of these shareholders—and they have not been mentioned very much this evening—there will be no continuity in businesses which need further cash elements.
I turn to subsidiary companies overseas. Here I must be tactful. A friend of mine has just returned from visiting Australia and New Zealand where he mentioned the Bullock Report to top level people. They were astounded. They should have heard about it—perhaps our High Commissioners are at fault here. This is where I have to be tactful because I cannot use here the language which the Australians used to express their reactions to the fact that there could be circumstances where a subsidiary company in Australia or New Zealand could be at the mercy—they put it somewhat more impolitely—of trade union elements in this country. We shall have at least four subsidiary companies under the 2,000 rule. We have many problems on which we may mave to take decisions without going back to consultation with the trade unions.
I quoted what I thought was the most sensible sentence from this report, but now I want to quite the silliest one. It is to be found on page 84. It reads:
"It is for consideration whether the directors of a subsidiary company should be able to have regard to the interests of the shareholders and employees of the holding company and of its other subsidiaries."
That statement must have appeared silly to them because they repeated it. The same sentence appears on page 130. The implication is that no one trusts anyone else, and that the directors of the subsidiary company not only do not trust the board of their holding company but also all the other subsidiary companies.
Good business administration depends on clear lines of responsibilities, and
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decisions have to be reached without too much emphasis being placed on this consultative element. There is another curiosity on page 87 to which reference has not been made this evening. It refers to the reporting back of these employee representatives on the board. It reads:
"They must make it their regular job to report on what the board is doing or proposing to do and why."
It continues:
"They must be able to take soundings before a matter comes up to the board so that they can accurately reflect the views and feelings of the employees to their fellow directors."
How on earth will that happen in any company which has to make quick decisions on vital matters? Presumably this consultation back will take place monthly, weekly, daily?—we do not know. However, one thing is sure; it will be in company time.
The noble Baroness, Lady Seear, mentioned consumers. There is another good sentence in the report which reads:
"Consumer interests must continue to be protected but the way to do this is through legislation and through existing consumer organisations rather than by involving consumers in the running of companies."
I could not help reflecting that if one turned that sentence round in one small particular one could equally logically say:
"Trade union interests must continue to be protected, but the way to do this is through legislation and through existing trade union organisations rather than by involving trade unions in the running of companies."
In other words, the idea that each of these elements has to be represented at board level in this divisive manner is, to my mind, a great mistake. However, I must not stand here as a diehard reactionary. I am not. In my company we believe that we do not represent simply the shareholders; we believe that we represent the employees and the customers. We are not anti unions in any sense of the word. The unions have a vital role to play, and it does not help them to extend it to the complex and difficult boardroom matters until and unless they have earned recognition as directors of the company.
At one time I thought that I should be quarrelling with the noble Lord, Lord Houghton of Sowerby, because I was very impressed by the remarks made by the noble Viscount, Lord Watkinson. The

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noble Lord referred to what he called his "workers conferences", and in that respect I felt that perhaps my company had fallen a little behind him. However, we have set these up and I agree with the noble Lord that this is the way in which to pursue this democratic element in a large company.
Despite my text at the beginning of my remarks about the Government, I like the tripartite approach. As chairman of a "Neddy" I know that one can do very fruitful work if one has the three elements of the Government, the employers and the unions working together with their separate training, philosophy and expertise. How- ever, that needs patience and time. This afternoon the noble Lord, Lord Byers, almost converted me to becoming a Liberal. I was very impressed with his speech. I would advocate the philosophy that he advanced; I would advocate the methods advanced by the noble Viscount, Lord Watkinson, and I would also advocate the patience and urgency put forward by the noble Lord, Lord Carr of Hadley, to whom we are very much obliged for initiating this debate.
7.19 p.m.
Earl DE LA WARR: My Lords, I am very grateful indeed to the noble Lord, Lord Carr of Hadley, for initiating this debate for two reasons: first, for the rather obvious one that it has given us the opportunity to have some very tough and hard-hitting discussion about the Bullock Report, and in particular the majority report. The second reason is perhaps slightly less obvious because there has been an almost complete unanimity of view from all sides of the House that participative or partnership schemes, call them what you will, must develop with an increasing momentum from now on.
I believe that there is a tendency in industry today which is far too wide for people to say, "Bullock is so dreadful that it is going to go away ", and at the back of their minds they have the idea that that will be the end of it. I therefore welcomed it when the noble Lord, Lord Houghton, said that Lord Bullock is not going to go away. I believe that it is important that a message should go out from this House that we have all come to the view that we must press ahead with partnership as fast as we can. I hope that
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the maximum publicity will be given to this message. I believe if for nothing else a debate at this time has made the whole thing worth while.
We live in an age of increasing education and still growing specialisation. The result of this is bound to be greater boredom, greater frustration and a feeling of being nothing but a tiny cog in a vast complex of wheels. Fundamental to this is the increase in education that has come about over the years. It is of course absolutely essential that this frustration be removed and replaced with a feeling of involvement. It is essential that the greater degree of education must be harnessed and put to the good of the company and, just as important, in order to increase the happiness of the individual at work.
The noble Lord, Lord Byers, used a very nice, simple, old-fashioned phrase, when he summed this up by describing it as teamwork, because that is really what the whole thing is all about. It is the end as well as the means. A good team has happy people in it, and because it has happy people in it then the team is that much more efficient. At the risk of being simplistic I believe that this sums up what we are about in our desire to move ahead in industry in this country with schemes of partnership.
Formal partnership agreements in the United Kingdom are not yet very common. There are a number of companies which are well advanced with their consultative machinery, but I have to say that there are many more who have scarcely begun, and perhaps as many more again who have not really given it a thought. Therefore, I welcome the initiative of the CBI and the work it has done on participation over the last three or four years. I urge the CBI to go on with its campaign and, if need be—and I think there probably is a need—to give it a bit more muscle than it has had in the past. But let me make one plea: please do not let us have any legislation yet.
The noble Lord, Lord Byers, rattled off with remarkable speed and accuracy the number of Acts of Parliament to which industry has been recently subjected, perhaps over only the last three or four years. Cannot we resolve at this time that at least for a year or two we will give

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industry a chance to do its own thing in its own way. By all means let us have a full-scale participation but do not let us hurry with legislation.
I move to the contents of majority Bullock, which I deplore as much as any other speaker today. I do not intend to go fully into the reasons why this is so, because the case against Bullock has been so cogently argued already. But it must be said by everyone who speaks on this that when you use the phrase, "industrial democracy" and actually mean the massive extension of trades union power then, to put it mildly, you may be said to be toying with the truth.
Half the workforce in this country are non-unionised and about 30 per cent, are non-unionised in the companies that will be affected; that is, those with over 2,000 employees. The report recommends the disfranchisement of this 30 per cent., and it means the disfranchisement of the managers below board level unless they happen to join some managerial union which would then put them in quite a different category. This is a point on which I feel very strongly indeed, because I know that in the company I run just what would be the effect on my younger executives if their ambitions to join the board were suddenly thwarted like that by an Act of Parliament.
I do not want to say anything more about 2X plus Y, that strange and rigid formula, but it seems to me that when the noble Lord, Lord Oram, replies he might give us a bit of help on the real nature of the Y-directors, because the report has said very little about what their responsibilities are to be and where they are to come from. Finally, on the 2X plus Y formula, which is at the centre of the whole matter, let me say that collective responsibility of the board—no matter to whom, whether it is to the shareholders or whatever—is to be abandoned, and with it the cohesion which should be such an important characteristic of every good board.
You may have read an article in 2nd February issue of the Financial Times which quotes Mr. Len Murray as saying the following:
"Shifts in ownership and control are the prerequisite of the Socialist society. We must aim to make cumulative progress in both areas, dually extending the range of the public
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ownership and at the same time shifting control of capital to labour in both public and private enterprise. Parity of board representation will be a major and essential step in this direction."
I want also to quote more briefly from the current issue of the New Statesman:
"What Bullock does is to focus the class struggle at a high level and thus facilitate the way for the working class not just to fight existing management but to replace it."
Some of your Lordships may think, as I do, that these two quotations together serve to show what majority Bullock is really about.
The Bullock proposals, if implemented, will be disastrous in ways that have been described better than I could, and indeed I would not wish to take up too much of your time. To my mind, discussion of this report in any further detail is fruitless but, much more important, it is extremely dangerous because discussion might seem to imply some degree of acceptance, and in my opinion there is no part of the majority report that is acceptable as a basis for discussion. It may be that the Government will now initiate a totally new dialogue. If so, fresh discussions can be started, and that we would all very much welcome. I put it quite specifically that in those discussions there must be total exclusion of any reference to the Bullock majority report. But if it does not go that way—if the Government insist on keeping majority Bullock alive—I ask your Lordships to remember that there are occasions when a battle is to be preferred to compromise, and this is just such an occasion.
7.32 p.m.
Lord BIRDWOOD: My Lords, I do not often speak and, when I do, I try to find something to say which no previous speaker has mentioned. I am going to break that rule tonight because what I think is wanted now is repetition. My noble friend Lord Carr of Hadley said it all, or most of it, and the following speakers have largely been left with anecdote or reinforcement. If this debate can do one thing, it is to reinforce the unanimity of reasoned refutation which this report has aroused.
In any event, I thoroughly approve of this document, not because of its contents but because it forced three intelligent, empiric and deeply experienced men to make public their thoughts on the topic.

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But with that brief, that remit, contained in the terms of reference, there would have had to have been a minority report. Those three men, with something like 80 years' collective experience of running substantial enterprises, when faced, as they were, with begged questions and slanted rhetoric, were most unlikely to join in the wordy justification which emerged posing as an objective report. Those arguments which the majority wished to condemn were largely dismissed as "speculative and unconvincing", yet the authors of the majority were able to make conclusions on their own views. For example, Chapter 9, paragraph 9, states:
"…in our view such a structure"—
In this case referring to minority representation—
"cannot lead to that full participation in decision-making on the board which full responsibility implies, nor to the consequent release of constructive energies which, we are convinced, full participation will do much to produce ".
Not only is this speculative, but the proposals of the report are not what many will regard as "full participation". Chapter 10, paragraph 9, says:
"It follows from our support of the principle of a single channel of employee representation through trade union machinery that our proposals in this chapter do not provide any special rights for employees who are not members of a trade union."
It is worth remarking how non-unionists are not to be given any special rights of representation; they are to receive no rights whatever and the use of the word "special" to imply "privileged" is a device with which we are not unfamiliar. The question proposed for the ballot, the only part of the procedure which is open to all employees, is double-barrelled:
"Do you wish to be represented on boards through trade union machinery?"
The answer must be Yes or No. There are other answers and even other questions, but I do not want to delay your Lordships because we have heard repetition. However, as I said at the beginning, I am sure that in this instance repetition is valuable. I wish to focus on one trifling example of the content, and I draw your Lordships' attention to inconsistency in the relation-ship between the development of statistics and the conclusions drawn from them.
In seeking to justify the sole use of trade union machinery for appointing employee-directors, Professor Bain has
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pursued a process whereby the overall density of unionisation, 50.4 per cent., is first reduced to 38.8 per cent, by exclusion of the public sector, since this lies outside the scope of the report. Quite reasonably, he also excludes, at the end of his process, small firms; these, too, would be outside the legislative scope at least of the report. He then excludes various sectors of industry whose density of unionisation is low, such as agriculture, distribution and construction. The final figure for union density adjusted in this way—that is, for larger firms in sectors other than those excluded—is 71.7 per cent. So far so good. But if, as seems to be implied, this is a justification for representation through trade union channels as the general case, is it not illogical to leave in scope those sectors, such as construction, which were used as building blocks in the process of erecting the 71.7 per cent, tower? He really cannot have it both ways. Either all private sectors of industry are in scope, at whatever lower percentage figure for union density then results, or the single channel of representation should not necessarily apply where the union density is low.
The minority report has its faults. They stem rather much from the frame of reference within which the drafters had to work, and I refer to "perceived legislative intention"—a rather sinister phrase—as well as to the terms of reference themselves. They believed that any legislation on employee representation on boards of directors was premature. But if the Government were in fact determined to legislate quickly, they wished that legislation to be as soundly based as possible. I would encourage the Government to try out these principles in the public sector so that they could demonstrate the success—or, conceivably, less than success—which might follow; a process possibly of putting their mouths where our money is.
Can there be any quarrel with the opinion that the efficiency of industry depends more on sound decision-making than on any other factor, something which has been mentioned many times in this debate? Radical amendment of the very nature and role of the boards responsible for such decision-making, by replacing existing members and introducing an element of rival power-blocs, would be highly damaging. Therefore, a more

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realistic way should be sought, and I think this is to be found in employee representation on supervisory boards—I repeat, once certain prerequisites have been met. These boards would appoint the members of the management board and monitor the operation of the company. Such a concept would, unlike those of the majority report, align closely with the proposals of the European Community, more closely than I consider the majority report indicated, even in their own justification to themselves.
Secondly, the minority signatories plainly hold firmly to a belief that democracy is an inclusive concept, not an exclusive one. It follows that all employees must have a common right to participation in all aspects of whatever procedures ultimately operate. No one should be excluded on the grounds that he or she is not a trade union member; least of all should middle management be excluded because these are the men who actually write the plans of enterprises and implement most of them in their day-to-day work. It is less than honest to say, as the TUC has done in its Guide to the Bullock Report, that,
"…there is no question of 'disenfranchising' anyone wishing to take advantage of this system of…trade union…collective representation."
Of course the trade unions will play an important role, normally the major role, in whatever arrangements are finally concluded, but if they claim to believe in participation and democracy, they must be prepared to eat accordingly.
Finally, there is the question of timing and preparation. In his interesting note of dissent, subject to which he signed the majority report, Mr. Nick Wilson makes the point that recent experience has shown the importance of ensuring that legislation does not run ahead of public opinion in an attempt to engage in social engineering. In other countries where employee directors now sit, there has been a long apprenticeship of participation below the level of the board where the role has been one of co-operation, not of conflict.
I have said nothing this afternoon which others have not said. I commend the minority report as a basis for realistic proposals which will meet the genuine and justifiable aspirations of employees for involvement and accountability. But, for
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the majority report—written, as it is, on the basis of, "Have you stopped beating your wife?"—I spy intellectual acrobatics, I spy the class conflict and I spy power.
7.41 p.m.
Lord MCCARTHY: My Lords, if one intervenes in a debate at this time of night when we have been discussing a subject for over four hours and when there have been something like 17 speakers and there are 15 more to go, one is very much aware of a dilemma. Much that one had wanted to say has been said, so that there is nothing left to say, whereas much of what has been said one has disagreed with, so that one does not know where to begin. I find myself in that dilemma today. I want to focus a few words on three aspects of this issue. First, I want to say something about what I take it the debate on industrial democracy is actually about. Here, I think I prefer the phrase used by the noble Baroness, Lady Seear, "worker participation", though I am sorry to say that the noble Baroness subsequently criticised some of the ideas in the Bullock Report on the assumption that it was really about industrial democracy. Here I think I agreed with a great deal of what she said and I think that I disagreed most clearly with the noble Lord, Lord Harmar-Nicholls.
Secondly, I should like to say something about the central position, as I see it, taken up by the majority of the Bullock Committee itself, because on this I do not think that I really agree with anyone so far, unless it is my noble friend Lord Kirkhill. I feel that Bullock has had a rather bad run tonight, largely because people have misunderstood the main thrust of the argument. Thirdly, I want to say something about what we and, in particular, the Government should do now. Here, I agree most with a very great deal of what my noble friend Lord Houghton said.
First, as regards the nature of the debate, it seems to me that a lot of people and even some people in this Chamber tonight have been talking about industrial democracy or worker participation as though it were in some sense a by-product of the Social Contract. It has been said that it is a political issue and that Bullock is a political report, as though these were some of the further consequences of the

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influence of the Godfather, James Larkin Jones. It is as though if we did not have this man and we did not have this Government we would not have this report and we would not have this problem, as though, in a way, if it were not for the Social Contract, with the commitments that the Government has made in respect of the Social Contract, the problem, if problem it is, would go away.
If there is a problem and one that will not go away, it is one that arises out of the fact that we are members of the European Economic Community. Only those who opposed membership of the European Economic Community can really oppose this, because membership of the European Economic Community has, almost ever since 1970 and certainly since 1972, committed members of the Community to find some way of putting employee representatives on the board of major companies. Although the Green Paper of the EEC—or rather it should be called the "Mauve Paper" because it is mauve—is a little more flexible than the old fifth Directive as to the form that this may take and allows for certain transitional arrangements, the basic thrust of the EEC position is that sooner or later we must make up our minds on the question of the influence of the representatives of employees—not working directors but worker-directors—on corporate management and in particular in respect of corporate management decisions taken at board level.
The problem, if problem there is, is that up to this moment in time the debate on this issue and the leadership on this issue have been taken by the Trades Union Congress. It is the Trades Union Congress which most quickly, fully and comprehensively developed a policy based, as it saw it, on the challenge of the fifth Directive. In comparison to the TUC, as the Mauve Paper says, the Conservative Party while in office never announced its attitude to employee directors but was reported while not opposed to experiments not in favour of general legislation prescribing employee directors preferably in general in the context of works councils. That was the position of the Government of the time, though we all know that, buried in the depths of No. 8 St. James's Square, they were working under successive Secretaries of State on a Consultative Document which never saw the light of day.
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So the TUC took the lead. I do not say this in defence of my own Party. The Labour Party did not take the lead. I suppose that the justification for that was that most members of the Labour Party and certainly the majority of the National Executive of the Labour Party not only hoped that the fifth Directive would go away but hoped that the European Economic Community would go away. Therefore, they did not see the need to work out a policy. However, the Trades Union Congress did. The ball was kicked into the long grass and the Trades Union Congress picked it up. The TUC formulated the policy which is essentially that of the Bullock majority report and is the basis of the commitment of the present Government.
Lord MOTTISTONE: My Lords, am I right in drawing the inference that the TUC has taken the initiative in working towards industrial democracy, or is it merely that they have taken the initiative in producing a paper framework for it? Would the noble Lord not agree that many of the best big firms took a lot of initiative long before the TUC even got down to thinking about it, and that it is the action that matters rather than the writing on the paper?
Lord MCCARTHY: My Lords, I want to go on to say something about what the majority of firms have done. I do not want to suggest that they have done nothing, but what they have not done is to place the representatives of employees on their boards. They may say that they have not done that because the present framework of company law makes it difficult, if not impossible. Nevertheless, they have not done it. It was left to the TUC to present a programme for doing that in the context of British industrial relations.
As I have said, to say that is not to say that the TUC needed to decide as it did. It is not to explain the decision that the TUC took. Indeed, as some noble Lords have already said, it represented in many ways a direct change from the previous position of the trade unions in this country because they had previously been against direct participation of employee directors on the boards of major

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companies. Therefore, it is also import-ant that we should understand the arguments which led the TUC and, in the end, the Bullock majority to take the view they did.
I think that the first argument—and this has been indirectly referred to by some noble Lords, by the noble Baroness, Lady Sear, and by my noble friend Lord Brown—is that the fifth Directive was very strongly in favour of an institution which the trade unions have always opposed; that is, the statutory works council. The fifth Directive appeared to commit us, if we were in the EEC, to a system of statutory works councils elected by universal suffrage, both unionists and non-unionists, which the trade union movement in this country has always regarded as at best a form of rival unionism and at worst the basis for company unionism. Whenever statutory works councils have been suggested, from the early 1940s onwards, the trade union movement in this country have reached for their revolver. At that point in time, not so much the mauve paper but the fifth Directive, looked as though it was centrally based on the introduction of statutory works councils. As I have said, quoting from the mauve paper, it looked as though the Government at that time were thinking in the same way, though we did not have their Consultative Document published. But a mere desire to reject the notion of statutory works councils, which they thought was a form of rival unionism, would not have been sufficient to produce the total change in TUC policy.
The second and most important and lasting reason was that the trade unions had become increasingly concerned about their inability to force large companies, and particularly multi-plant companies, and most especially multinational multi-plant companies, to the bargaining table. They were particularly concerned about the effect of corporate decisions in large multi-plant companies on industrial relations, on questions of investment location-on questions of closures, on questions of the manpower consequences of new processes and so on. They felt that the fifth Directive gave them an opportunity, it gave them a solution. By going not for statutory works councils, but for parity of representation for trade unions only
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on supervisory boards, they had a form in effect of corporate collective bargaining in the boardroom.
Here I want to move to my second point. I do not think that it has been sufficiently appreciated in the debate in this House tonight that what the majority report in Bullock is recommending, whatever they may say, is a form of corporate collective bargaining in the boardroom. That is really what it amounts to. It seems to me that the central role of Bullock is to spell this out, to overcome most of the practical objections, to put before us a serviceable model, if we want to adopt that model, for corporate collective bargaining in the boardroom.
Of course it is perfectly true that they make significant changes from the essential TUC position. Instead of parity they talk about 2X+ Y, but of course the Y really consists of a little of the first X and a little of the second X because the Y is in fact nominated by each one of the two Xs. There is no essential difference. In order to meet the charge that what they are suggesting is a monopoly for trade unions which are not in any way related to non-unionists and their position, the Bullock Committee majority recommend a system of universal elections. Again, I do not think that I am misrepresenting them, and I am not trying in any way to be unfair to them, in saying that they time that election very carefully so that it takes place at a time and in circum-stances in which the trade unions are most likely to win; at least, when the trade unions are ready for the election. So essentially this remains a system of corporate collective bargaining in the boardroom.
This also explains both the opposition to it inside the trade union movement and the opposition to it outside the trade union movement. Inside the trade union movement, for example, the majority report is very often opposed by craft unions. It is opposed by craft unions because they have enough power in collective bargaining anyway, and in any nomination of worker-directors they are likely to be outnumbered. So they are not very much in favour of this form of corporate collective bargaining. It is opposed—no, not opposed, I must be fair, but rather alternative suggestions are put forward by the General and Municipal Workers' Union, which were

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very eloquently put forward tonight on this side of the House, because the General and Municipal Workers' Union believe that it has discovered a more effective form of corporate collective bargaining which it put before the Bullock Committee itself.
But most important of all, if we are to understand, and most surprisingly if we are to listen and try to understand some of the speeches which have been made on the other side of the House, it is opposed by the Left of the trade union movement—by the extreme Left of the trade union movement. These proposals are opposed with even more force than in this House in most speeches, by the IMG, the WRP, the IS and the three or four versions of the Communist Party of Great Britain. The extreme Left of the trade union movement is most vociferously opposed to all forms of corporate bargaining by trade unions at board level. They are opposed to this because they are afraid that once the trade union representatives start to consider the wider issues that have to be considered in the board-room, they will start to be influenced by what one commentator has called the "pinnacle effect". They will start to stand at the pinnacle and look down into the abyss, and they will begin to appreciate some of the constrictions, some of the problems, some of the difficulties of management. "Once we start doing that", say the extreme Left of the trade union movement, "we shall be finished". They would much rather have the trade union movement debate an argument in terms of the claims of profits and the claims of wages, because that is the argument that they understand and that is the argument that they think they can win.
So this explains the degrees of opposition inside the trade union movement to Bullock. It also explains the opposition outside the trade union movement. Much has been made in the House tonight about those who gave evidence to Bullock. It is quite true, as has been said in one of the appendices to the minority report, that about two-thirds of those who gave evidence actually opposed any form of employee directors. This is quite true, especially, of course, in relation to trade union nominated employee directors.
By and large these people felt, from their point of view legitimately, that the power
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of trade unions, especially their influence through collective bargaining, had already gone much too far, and what we needed to do in this country was, if I may say so in the presence of the noble Lord, Lord Carr of Hadley, a kind of 1971 effect in reverse. If we could not restrict their power by legislation, by golly! we were not going to increase their power by legislation. Therefore they felt that be-cause this was a collective bargaining model, and because it would extend the influence of trade unions they wanted no more of it.
Most of the rest, including, I should say, what was said by the authors of the minority report, and to some extent most of what was said by the noble Lord, Lord Byers (I am sorry that he is not in the House), and some of what was said by the noble Baroness, Lady Seear, was actually an attempt to change the subject. It was an attempt to argue that many people sincerely believe that participation and worker involvement in management decisions must in no sense be sullied by being mixed up with the hard conflicting processes of collective bargaining. There is collective bargaining, which is concerned with conflict and with disagreement and which divides people, and which trade unions can do—the lower orders of things. And there are the upper reaches of consultation, of co-operation, of harmony; and that is what worker participation is about.
So we have to develop two different channels, not only at the board level, but at all levels: one channel for the nasty, conflicting, difficult, dividing issues of collective bargaining, which we assign to trade unions; and this other upland of co-operation, of harmony and prosperity which of course we do in a quite separate system with quite separate people. Of course they may be trade unionists if they like, but they will not be there as trade unionists; in other words, a parallel system, but a parallel system which is not necessarily there to undermine trade unionism (at least that is not what these people would say), a parallel system which has its own ideology and its reasons.
Now if this is the case—and I suggest to the House that it is—then at this time of night all one can do is give one's own point of view. I believe that we are beyond the point where most major companies

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can hope to have any form of effective participation, other than participation through trade unions. I believe that the trade union movement is over-anxious about this. I believe that even if we had systems of election, even if we had a recrudescence of joint consultative committees, in the overwhelming majority of the large British companies the trade unionists would dominate and their members would be the members who were elected. To me, this is an unreal battle.
Secondly, I think that even if participation and involvement up to the level of the board is bound to be a trade union dominated arrangement in this country at this time, there are advantages; not only advantages for the trade unions, but advantages for management. Many of these advantages have been put before us tonight, and I do not want to go into them at this late hour. I would prefer to pass on to say something about what I think the Government should do now, because I think that in some ways that is more important. I think the Government must recognise the number of weak-nesses in the Bullock Committee majority report, or (perhaps one should put it another way) the number of questions with which this report does not really deal. It does nothing, as has been said, for the two-thirds of employees in the private sector who work in companies with a workforce of below 2,000. It will take at least four years to make any impact on the problem. No direct stimulus, through Bullock, is being given to participation below board level. There are considerable problems of confidentiality with which Bullock fails to deal; and, as has been said, most notably by the noble Lord, Lord Houghton, I think, there is a very real problem of management consent. At this stage it is impossible to try to impose one single system on British management, and I do not think that the Government can do that.
Therefore in conclusion I would say that what the Government must do is to stand back; what the Government must do is to take up the challenge of the CBI; what the Government must do is to say to the CBI, "Let us talk", as the Prime Minister has said, "about the issue of participation, first of all below the level of the board". Because, my Lords, if the
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CBI, even at this late stage, were really to encourage multi-plant major companies in this country to establish effective corporate bargaining with trade unions, a great deal of the push for the implementation of the majority report of Bullock would die away in the course of a few years. Nevertheless, the Government must say that if progress cannot be achieved and advancement made along these lines, then the proposals of the majority of the Bullock Committee lie behind them.
Let me finish by quoting from Lord Bullock himself, who has been frequently mentioned in this debate, not in an altogether complementary sense. He said in his personal statement on the publication of the report:
"The first publication of such proposals has led to similar controversy and to forecasts of disaster from employers. In every other case legislation has been necessary to introduce the changes required, and in every other case, once the changes have been made, the opposition has died away, the fears have proved to be exaggerated, and both management and unions have found advantage in the new arrangements".
He finished by saying:
"I do not know what action the Government will take on our report, but of one thing I am certain, that the question of employee representation has been placed on the agenda of British politics, and it will not be easily removed".
Lord ROCHESTER: My Lords, before the noble Lord sits down, would he allow me, in the temporary absence of my noble friends Lord Byers and Lady Seear, to say that, as I understood what they were saying, there was nothing in their concept of employee participation which excluded the possibility of joint decision-making as well as consultation.
Lord MCCARTHY: My Lords, I am afraid I am not quite following the noble Lord. The noble Lord is saying that, in the concept put forward by Lord Byers and Lady Seear, they were allowing for joint determination?
Lord ROCHESTER: For joint decision-making, my Lords, as I understood it, as well as for consultation.
Lord McCARTHY: Yes, I will accept that, my Lords.
8.4 p.m.
The Lord Bishop of SOUTHWELL: My Lords, I welcome the opportunity to take part in this debate. Discussions about industrial democracy are part of a much wider, ongoing and creative debate about the future of industry as a whole and about industrial institutions in Britain today. The importance of this debate is such that it must be taken up by the whole community, and not merely by those who work in industry. In this sense, it is comparable to the great education debate initiated recently by the Minister of Education. In the context of admitted confusion about the future of our economy and how to deal with it, with a still unacceptable level of unemployment and with attitudes towards the next phase of the Government's pay policy appearing to harden day by day, an open and honest debate on the issues raised in this report is very urgent, and no one should be deemed to be an inappropriate participant in it.
My Lords, I have read the report carefully, and I am myself convinced that the need for the involvement of employees in decision-making at the highest level is both right and prudent if good relation-ships are to be maintained, work is not to be disrupted, implementation of board decisions delayed and shareholders' interests put in peril. As I understand it, this particular debate is focussed, not on various kinds of worker participation but on the question of whether there should be employee representatives on the board itself, and it is to this that I feel it right to speak. The implications of this report will affect the lives of all of us. To put it crudely, each man's bread and butter is at stake; and all of us, particularly those who are not immediately identified with one or other side of industry, has a right to be heard.
I have considerable sympathy with those who argue that we have had too much legislation in recent years and who are urging a breathing space in which industry can digest all the legislation of the past few years; and, as has been pointed out, the noble Lord, Lord Byers, listed a formidable number of pieces of legislation which have been passed. As one Nottinghamshire factory manager put it to me,
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"We have had too much legislation—industrial relations Acts, health and safety Acts and women's pay legislation. There has been too much for industry to assimilate, and not enough time to get on with the real issues of production".
Another complaint was that the very production of this report has in itself soured industrial relationships which, before, were developing fruitfully.
The person I talked to doubted whether personal relationships are capable of being established by Statute, and believed it to be wiser to legislate only after good relationships had already been built up, albeit slowly and painstakingly. I could subscribe to such a view if I did not believe that events will overtake us. Change will be forced upon us by the very age in which we live; and because change challenges long-held attitudes and threatens our way of living, we shrink from it. For this reason alone, legislation will be necessary. For instance, could industry, left to itself, have sorted out the problems that required the enactment of the Redundancy Payments Act, the equal pay legislation and much else? I fear that without legislation there will be insufficient spur to action, and that we may act too slowly and too late. In saying this, I am not implying that the recommendations in this report are the only right ones.
At a time when so much publicity is focussed on what is wrong in our industrial life, I think it is right that we should pay tribute to the great amount of good that there is in it. There is plenty of good, honest, harmonious working and bar-gaining going on all over the country. Management training has vastly improved. Many, indeed most, of our trade union leaders act with great responsibility, for which we should be properly thankful. The recently published figures relating to the number of days lost through strike action last year were extremely encouraging; and the fact that 98 per cent, of our firms had no stoppages is good news, but news which seldom hits the headlines. The Social Contract, despite strains and stresses, has made a big contribution to our present attempts to cope with the problems of inflation.
Having said this, it is hardly surprising if, with the Government's pay policies restricting collective bargaining on wages, the trades unions are looking for other areas in which to extend their influence.

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It could well be that we are approaching a time when collective wage bargaining, as we have traditionally known it, will never return. Such a prediction is probably anathema to many people, but I cannot see our present economic situation allowing a return to free-for-all bargaining, when inflation hits the weakest and the most vulnerable the hardest. Indeed, such a situation would be morally indefensible. The weak have the right to expect their Government to support them in times of economic confusion. If a free-for-all on wages is prevented then it may well be that the trades unions will find new and different ways of defending the interests of their members, and industrial democracy will certainly be one of them.
It has been said that we should forget issues like industrial democracy and concentrate on the creation of wealth, for only then will we be able to pay for the sort of society we desire. As one Nottinghamshire manager put it:
"It is nonsense bothering with things like this. Industry needs to become more profitable. Creation of wealth is the main problem, not tinkering with politics".
With this I agree. The problems of production are primary, and this is always the danger of necessary decisions concerning production being delayed while other issues are taken up. But this does not preclude a debate on industrial democracy. These are not really alternatives. Both can and must proceed together.
My Lords, having read the submissions of the different groups to the Bullock Committee, it is not hard to detect how passionately differing views are held. Certainly, the debate in this House has revealed those passions. It is easy for passion to distort judgment and make it well-nigh impossible to decide issues on their merits and not according to a pre-packaged view of industry, of industrial relations or of industrial society.
I should like to raise three points that come to me in reading this report and in discussing it with others. First, the problem of apathy. This was mentioned in the speech of the noble Lord, Lord Elibank, whom, if I may be allowed to do so, I should like to congratulate on his first speech in your Lordships' House. The report states that many people in
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industry seem apathetic about industrial democracy. This is probably true. There is a vast amount of apathy relating to most major institutions. It is a well authenticated theory of human behaviour that people are content to let others "get on with it" so long as the status quo is not threatened. Attendance at church and the support of the church is a typical example. It is only when the institution is in danger that anxiety arises and involvement suddenly begins.
From such an argument it might seem that all was well with industry and that apathy is largely a question of contentment. But non-involvement is a dangerous thing, for whatever reason, as it opens the door to fanatics with an axe to grind. The fact that a man (or a woman) can spend 40 hours each week at his place of work and yet be apathetic about how the industry he serves is run, is little inclined to attend branch meetings of his union, or be much concerned with industrial democracy, is surely a worrying state of affairs. We need to recapture the imagination, the enthusiasm and the commitment of people to their employment. I believe that allowing people to share in decision-making (whether along the lines of this report or not) would be a major step in the right direction. Sharing in decision-making means sharing in responsibility and sharing in accountability. Apathy cannot coexist with responsibility.
Secondly, this discussion is ultimately about power, and its proper use and distribution. The noble Lord, Lord Carr, was certainly right in stressing this at the beginning of the debate. I am somewhat surprised that in this House there seems to be a reluctance to recognise that power is an essential element in this argument. This discussion is about power, its proper use and distribution. I do not believe that this report contains the last word about power sharing, but it has certainly spelled out some of the important areas of its operation: the power to be shared between the shareholder and worker; between capital and labour; between the unionised and the non-unionised, between the strong and the weak. I am not sure that the Committee has got the right answer, but I believe its attempt to introduce checks and balances is right. Any plan for industrial democracy will have its faults. There will have to be

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compromises and we must openly acknowledge this. After all, the problem of the distribution of power in society is wider than the problem of industrial democracy.
Thirdly, I must comment on the Committee's recommendation that the trades union movement should be the proper channel for worker representation. It is easy to disagree with such a bold re-commendation and to impute all manner of subversive intentions. There are a few-dangerous individuals who are out to damage industry, but I believe them to be as yet a small and controllable faction.
This is certainly the most controversial suggestion in the report, but I am persuaded that it is a right one and could mark for the trades unions the beginning of a new phase in responsible partnership in industry. There is evidence that over the past two years the shattering economic realities of our situation have created a new mood of responsibility in the trades union movement. The unions have been trying, over a period of time, to rationalise themselves and to seek a common identity and purpose—what in Church circles we call "unity amidst diversity". We might wish for a different trades union movement, but the fact remains that this is the one that we have got and this is the one that has evolved in our country and it already has great power. We can hardly change the system rapidly even if we wanted to. The issue ultimately is one of our capacity to exercise mutual trust. Are boards prepared to accept the trades unions as they are and seek to work closely with them, sharing power and responsibility and seeking all the time to find common ground, or will it be a battle in which we attempt to exploit each other's weaknesses to gain one-sided advantage?
I can see the advantages of a proper definition of roles between management and labour, and there are not a few, as we have heard, who feel that neither trades unions nor their representatives will be helped by being admitted to the boards of companies. If I may once more quote a Nottinghamshire opinion, that of a management consultant:
"Trades unions are trying to do the wrong thing. I much prefer the likes of Arthur Scargill who knows where he stands and who represents his men. The unions' job is to get the best possible deal for their members and they should leave managers to get on with managing".
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It will certainly also be true that there will be the danger that an employees' representative on the board will soon find that he is no longer wholly trusted by those he represents, and that by participating in unpopular decisions of the board, however much they may be in the best interests of the company, he will be regarded as having negated his brief as employees' representative.
These are the hazards of the game. It is difficult for any man to wear two hats and not confuse the role which he is at the time assuming. This is a skill we all have need to learn. Unfortunately, those who have not learned it misunderstand those who have. I believe that it is right for workers to be represented on the boards of companies and to be represented by properly elected trade unionists; and I cannot believe that employee representation can be set up by any method that bypasses the official trades union movement. I believe that when elected the workers will act responsibly and be increasingly trusted for the contribution that they make.
The suggestion to involve trades union representatives on the board is a matter of much disagreement, as is evidenced by the majority and minority reports, a disagreement which, as we have heard, is to be found within the trades union movement itself and certainly throughout the country at large. This suggests that it would be wrong for any hasty action to be taken on this matter. I am grateful for the opportunity which this report has afforded to allow the whole nation to share in this debate. Whatever the merits or demerits of the report, it is a significant contribution to the ongoing discussion about the nature of democracy, not only in industry, but in society at large, and we cannot allow this subject to be swept under the carpet and removed from the arena of public debate at this time.
8.22 p.m.
Baroness HORNSBY-SMTTH: My Lords, I join in the congratulations to my noble friend Lord Carr of Hadley in initiating this debate. He must be well rewarded by the intense interest of the large number of speakers who have participated. Much has been said about the terms of reference of the Bullock Report. There is one aspect which I do

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not think has yet been aired. The terms of reference of the Bullock Committee did not, as is widely misstated, include that there must be employee-directors, but that there must be an extension of industrial democracy through representation on boards of directors. They did not confine the issue to trade union or employee-directors. I join forces with the noble Baroness, Lady Seear, that the terms of reference embraced all those associated, and the report should have embraced the shareholder who risks his money and the consumer who buys the goods, if democracy is to be fully interpreted.
It would appear from the report that the Committee's interpretation of democracy concentrates on the trade unions. The Press and the media have encouraged the myth that that was the sole mandate of the Committee. When one reads the report, it is difficult to get away from the idea that the Committee's main concern was to find out how trade union organisations could best be represented on the boards of directors; and the claims of others—middle-management, scientists, salesmen, managers, shareholders and con-sumers—received scant, if any, consideration in the report at all. Also in its terms of reference the Committee was required:
"to analyse the implications of such representation for the efficient management of companies and company law."
It considered company law at some length; but, as pointed out in the minority report, it produced no evidence that the changes proposed would be beneficial and would improve efficiency, employment, sales, ex-ports or profitability in the interests of the company. Professor Wedderburn reported:
"It is unreasonable to expect employee representatives to accept equal responsibility unless through equal representation on the board they are able to have equal influence on the decision-making process".
That might get a cheer at a TUC conference, but how in practice will it operate?
Some firms negotiate with 10 different unions for widely varying numbers of their employees. Does USDAW, in a large retail complex, representing 2,000 employees, equate with the Transport and General Workers' Union representing 20 truck drivers, and also a director and perhaps 10 typists who are in the Municipal and General Workers' Union in the same firm? This is where the claim of my noble
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friend Lord Watkinson, as also many others who have spoken today, is so important: there must be flexibility to make way for the enormous differences not only in union representation as between one union and another but in particular companies where there is a minority of union representation. It must be flexible, and also I believe it has much more hope of success if it is in a much wider sphere but allowing individual firms to work out the best for their own company.
According to the majority report, directors representing blue-collar workers bear the same responsibility as those representing white-collar workers, apparently regardless of whether the ratio of one to the other is 10 to 1 or 1 to 10. I believe that it is extremely important that the emphasis on individual union representatives should be far more clearly defined in terms of the importance and size not only of the unions but of other employed forces in the company, otherwise this can only lead to dissension as between the unions themselves. They would be in conflict with the Committee's statement that each director should have the same duties to the company as a whole, regardless of whether or not he is appointed by the shareholders, trade unions or co-opted. That principle transcends the multiple union employee and fairly places on him the responsibility, which already applies to a director of a company, that he is there to represent and serve the company as a whole and not a special entity in it.
On more than one occasion Ministers of the Crown—and I was rather shocked to see how glibly the Prime Minister went out of his way to do this—have depicted the Bullock proposals as justified in the light of the success of the German scheme. But they are not comparing like with like. The noble Lord, Lord George-Brown, was right in saying that the report would have been the better if it had given us the analysis of the various countries and institutions that were visited by this Committee, because there is a fundamental difference between the German set up and ours. It is illegal for a German trade union to be affiliated to any one political Party, and thus their consultative and board representatives are not committed to any Party political policy. To that extent they have not forced upon them divided loyalties; and far less are they

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bound by political resolutions to replace private enterprise with nationalisation.
The most recently published programme for Labour envisaged and pledged the nationalisation of banks, breweries, air-lines, pharmaceutical, oil, and food undertakings, to mention a few. What happens to the unfortunate trade union member elected by his fellow members to a board of directors, who has a good working knowledge of a great international company, and becomes convinced that it is more likely to thrive under private enterprise, yet he is burdened and bound by his union's vote that that industry should be nationalised?
I believe that it is a very simple and crucial question as to how free that trade union board member will be to vote for something he considers to be in the best interests of the company as a whole, if that were to conflict with a resolution of his union. In fairness, some trade union leaders—and I may say on television last Saturday I watched a most exciting programme involving four leaders of trade unions—have recognised the dilemma. Some unions are fearful, and rightly and honourably fearful, of that dilemma. They do not want the "poacher turned gamekeeper" exercise at all. They want to preserve the union's right to put the union first and not to put the company first. I think that is a very honourable challenge of conscience on which many union leaders have expressed their views.
I want to say just a word or two about the duties of a director. As I understand it, the duty of a director is to the company as a whole, to secure the fulfilment of the objects of that company and its continuance in business for so long as it is established to carry on the same, with a view to safeguarding the interests of all those who are, and to the extent that they are, interested therein, whether they are suppliers of capital, of work, of goods or of services, or whether they are customers—and subject thereto, to the provision of a stable and if possible rising income, to the extent that those interests of the suppliers of equity, capital and labour shall be reasonably rewarded, and re-warded also to the best of their capacity.
That has many moral and legal implications, not the least of which is that there
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must be no suggestion that employee board directors should be confined to matters of interest only to employees. Indeed, the most difficult problem which has been met in some of the European systems is the very fact that it has been difficult to get employee-directors interested in matters which are not of short-term interest to their own work-fellow constituents. Nevertheless, unless total commitment to the company interest, and to everyone associated with that company, is accepted, any chance that the institution of employee-directors will be beneficial to the company and to the community as a whole will be lost. The acceptance of board membership brings with it confidentiality. I wonder whether we are not creating a top-heavy elite without providing more democracy through the stages from the shopfloor, as has been outlined so brilliantly by a number of earlier speakers today; a system of specialist or departmentalised consultative committees would provide far more scope to train up competent people on the shop-floor who could be promoted to management.
I think it is a pity that greater recognition is not given to the many directors today who started way down in the company. Recently I tried to check up on friends and colleagues that I have known over many years, and a great number of them completed their full apprenticeships in engineering, in paper-making, in building and in a specialised form of the chemical process of their company, before they gathered wider experience in other aspects—possibly in marketing and sales—before finally going on to the board. We have far more working directors who have worked their way up from the bottom to the top than the TUC ever give industry credit for. The tragedy is that the moment a man puts on a white shirt and drives his own car, prejudice immediately designates him as "them" and not "us". But he has won his spurs by merit, in exactly the same way as Len Murray has won his way up from the bottom to the top of the TUC.
If there is to be direct liaison between trade union directors and their constituents on the shopfloor, what happens to the middle management? How seriously will their management decision-making be impaired? Nowhere in the report is

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there any provision for directors-from-employees who, for whatever reason, do not belong to a union. According to the Bullock Report, employee-directors will lead to the right to order the work of employees—so the specialist salesman who gets the orders, the chemists and scientists who evolve the product, and who have won their place by their expertise and personal effort, may come under the direction of those who are wedded to industrial-political policy.
In paragraph 10 on page 7, the report virtually anticipates a divided and not a cohesive board, in suggesting that board representation and collective bargaining machinery would be mutually supportive. I doubt whether it would be so, and I think that is the main contention of those trade unions who have grave doubts about the ability of the trade union member to back his union 100 per cent., if he had dual duties on the main board. It would be dangerously dividing the responsibility of directors from their duty as a whole if this precept of the Bullock Committee was accepted.
We support real industrial democracy, which is not merely limited to half the employees in the country. We want to see everyone within a company having an opportunity to graduate upwards through the consultative committees and to participate in the decision-making within their factory and within their department. We seek wider opportunities for all the workforce, of whatever grade or professional skill; and I believe members of the workforce should rise on merit and not exclusively on trade union patronage, because they all make a vital contribution to the success of the company. We support genuine full employee participation, but I am sure that the system must be flexible enough to meet the widely differing conditions among companies and that it should be elected from within the company and, in no circumstances, nominated from without.
8.38 p.m.
Lord MORRIS: My Lords, I think it is very sad that the Bullock Committee missed an unequalled opportunity and duty to inject new life into the industrial life of our country. As a non-lawyer, I am most hesitant to speak on the law in your
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Lordships' House, which is a veritable eyrie of legal eagles. However, I believe that the law should reflect the undoubted truth that labour—and by "labour" I mean all labour, including management—is a partner with capital and not the servant of capital. By "capital" I mean capital contributed by shareholders and all classes of loan capital. It has now become a truism to hold, particularly with the larger organisations, that those who work for a modern company are more members of that company than the remote shareholder who is now more a lender of capital than a member of a company, participating in the life of that company or, in other words, a quasi-partner.
If we ignore this undoubted truth, we do so at our economic peril. Yet English company law persists in so doing. I regard this shortcoming as fundamental, for if there are shortcomings in the principle what hope is there for the practice? Company law recognises and attempts to define the relationship between the company and its shareholders and potential shareholders, the company and its creditors, the company and its directors, the company and its auditors, and the company and the Department of Trade. Yet in the Companies Act 1948, comprising as it does 462 sections, 18 Schedules and approximately 160,000 words, the word "employee" is used once, and once only, ironically in a proviso to Section 54, which enables a company to lend money to its employees for the purpose of acquiring its shares. I did not care to count the number of times that the word "employee" came into use in the Bullock Report. But one of them has got to be wrong.
Even then, Section 54 was not new to the 1948 Act. Section 54 was first written into the law as Section 45 of the 1929 Companies Act and, as your Lord-ships will appreciate, was very advanced thinking for its time. There is also in the 1948 Act the occasional prohibitive mention of "officers and servants of the company". Your Lordships will appreciate that there is a distinct nineteenth century ring about that phrase. Yet modern company law does not even concern itself with the relationship between the company and those who work for it. Their relationship with the company is

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reflected in the common law of master and servant. With respect, I deem this to be a serious lacuna in the law, yet, strangely enough, it is not surprising that this came to pass.
Much of our company law is designed bearing in mind a company yet formed, yet born, rather than a company as a going concern. When a company is but a twinkle in the promoter's eye, it can be seen as available and potential capital seeking labour, all labour, in order to fulfil its common, wealth-creating objectives. But the law fails to reflect the fact that when the company is born, when it becomes a going concern, the position is completely reversed. The company becomes labour seeking capital and creating capital, in order to further and continue its common, wealth-creating objectives. Labour, the total workforce of the company, has become one of the partners of capital and is not its servant. May I suggest, with respect, that this truth is missed, partly as a result of two fundamental flaws in the philosophy underlying the constitution of the company in English law. It is vital, in my view, to see how this flaw, this disease, crept into the body corporate, for then it may become clear how best to effect a cure.
The need for cheap and simple incorporation of companies was seen by Gladstone, when President of the Board of Trade. This resulted in his great Joint Stock Companies Act 1844. The principle of limited liability was made Statute in the same year and, together with other company law amending Statutes, was consolidated in the Act of 1856. Similarly, a consolidating Act was passed in 1862 and it was this Act that was the first to concern itself with the organisation, constitution and management of the company, and the relationship between its shareholders, directors and creditors. However, all these Acts reflected the underlying philosophy behind the constitution of the old deed of settlement companies, which was based on the law of equity and of partnership, which was similarly so based until it became Statute. One of the main underlying philosophies about these two types of companies was that it was held that the proprietors would be, and would wish to be, involved in the management of the company.
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To illustrate this point, it took the Judiciary of the time, and many others besides, decades to realise that a company was, could be and was very likely to become, something very different from a type of elongated partnership, and the model that was taken for the constitution of the company was Westminster. This can be seen when one looks at the two organs of the company; the members in general meeting, analogous to Parliament, and the directors, analogous to the Government or the Executive. The shareholders, the members, the contributors of capital, were given the right inter alia to attend the parliament of the company, to speak, vote, question and ratify the appointment or dismissal of directors where necessary.
But what of the other contributors of the company's capital, the part-contributors to the internally generated capital of the company, represented, of course, by surplus and by good will? As we have seen, the law was not even concerned with their existence in the body corporate. But, far worse than that, for it is in the constitution, the structure of the company—again, the Westminster analogy—that the basic flaw lies. It is right and proper that in Parliament, as in a court of law, the various interested bodies be set in contentious or adversary positions, for in that way some semblance of the truth has a habit of floating to the surface. But in industrial and commercial enterprise, there is one truth and only one truth, and that truth is not in contention, or should not be. It is that the interests of all those involved in any industrial or commercial enterprise are mutual, not contentious; namely, the expansion, growth and increasing of the wealth of that enterprise for the good of those involved in the company, for the community as a whole and for the wealth of the nation as a result of that.
I heard some of your Lordships say that this development should come from the bottom. I do not believe that. For all labour to be seen to be a partner of capital, it must first be deemed to be a partner of capital in law. With the law as it stands, it should surprise no one that capital and labour should be seen to sniff at apprehensively, run circles around, fight one another and limp away bleeding, like two dogs in a park. The success of

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any union or partnership, be it marriage, be it industrial, commercial, artistic or philanthropic enterprise, be it allied effort in war, depends upon mutual trust born of open, efficient and respectful discourse and consequent achievement of common objectives.
It might be said that these principles should lie in the heart of good management and should not be the concern of the law. I have very great sympathy for that view. But, if your Lordships see what I mean by this somewhat clumsy paradox, there is far too much legislation and not enough law. As an illustration, modern company law, comprising in the main the Companies Act 1948 and the Companies Act 1967, are not law. There is no law therein at all. All they are is nothing other than sets of rules and regulations, designed to encourage good and to discourage bad management. But the law, the issue of Parliament and the courts, must reflect the current needs, aspirations, beliefs and will of the country. This it manifestly does not do. As a country self-sufficient only in great expertise and a potentially superlative labour force, the law must entrench the belief of all reason able men that labour is no longer the servant of capital, but a participating, contributing partner. It can readily be seen, then, that true industrial democracy should be the child of good law and good management.
Good law and good management can never be the child of spurious industrial democracy, and it is spurious industrial democracy that the Bullock Committee proposes. For it not only maintains the contentious or adversary stance; it positively encourages the dog fight, the brawling. It is a badly written Fabian tract, by a committee who could, to their eternal shame, see the trouble only as a power struggle. One needs to look no further than the language of the report. What does the language suggest? It suggests that we keep the great divide, that we maintain the divorce between labour and capital. For instance:
"… now is the time to provide scope for the growing power and unused capacities of organised labour".
That is not the language of struggle, nor of joint venture. And again,
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"… since trade unions are necessary to ensure that employees have an effective voice in decision-making both within the company and within the wider society"—
what has that to do with the company in that context?—
"… we wish to ensure that board level representation is designed in such a way that it does not undermine the unions' representative capacity".
That is the language of power politics, not of industrial democracy and good management. Again:
"The benefits in increasing confidence and understanding between trade unions and employees on the one side"—
here we go again—
"and management on the other,…"
Again,
"… let us maintain the divide, the two sides of industry, with differing interests, not mutual".
Again they refused to see the mutual interest of capital and labour and, as a consequence, the interests of the nation as a whole.
"We recommend that all directors should continue to be required to act in the best interests of the company, but that in doing so they should take into account the interests of the company's employees as well as its shareholders"—
again as if they were different. I should like your Lordships to listen to this lovely passage of English prose from the Electrical, Electronic, Telecommunications and Plumbing Union. This, by the way, is the union of the noble Lord, Lord Lee of Newton.
Lord SHACKLETON: No, my Lords. The noble Lord has mentioned the wrong union.
Lord MORRIS: My Lords, the noble Lord said something about the electrical union, but it does not matter.
"The job of the trade unions is, through collective bargaining, to consider, contest and oppose, if necessary, the exercise of managerial prerogatives. It is not the responsibility of work people to manage the enterprise. It is essential that trade unions retain their independence".
That piece of disruptive and destructive invective is not the language of partnership; it is not the language of union; it is not the language of mutual trust; it is not the language of union brotherhood; it is not the language of democracy, industrial or otherwise. It is the language of the boxing ring, of the gutter, of dog-fights and brawls.

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If the Bullock Committee had considered the problem in the light in which it has been considered by so many of your Lordships with such heady erudition and sublime eloquence, instead of withering their hearts and addling their minds with wishy-washy, Socialist ideology, totally unaware of the economic and other realities of life, they might have produced something richer than this mealy, mealy porridge of misconceived, misunderstood and misrepresented ideas. It will be apparent to your Lordships why the politically motivated are so afraid of true industrial democracy; why they so fear true worker, management, shareholder, creditor partnership through participation; why they so fear the secret ballot; why they so wish to maintain the great divorce between differing skills, working for the common good through their industrial enterprise. For they see therein an erosion of their political power. Then they might have to return to their original duty; namely, to be guardians of the interests of their members, their working conditions, health, welfare, work rates, et cetera. Bullock's brain child is a monster and should be strangled at birth for encouraging the divisive elements in our industrial and corporate life.
The report is threatening the whole future wealth of our nation—every man, every woman, every child. It is incumbent on this Government—upon any Government—to start afresh. However, we have two things to be thankful for. One is that the Bullock Committee has moved many reasonable men to think long and hard—hence this most constructive debate. Secondly, they have given us a new word in the English language. It is a noun. The word is, "Bullock", and it can be most aptly used in such phrases as, "They made a Bullock of it".
8.55 p.m.
Lord SHACKLETON: My Lords, only the noble Baroness and the noble Lord who has just spoken have introduced Party politics into the debate. If the noble Lord says that the language of the EETU is the language of the boxing ring, may I say that his language is that of the hustings and that he ought not to make remarks about a highly responsible union, especially when he tacks it on to a Member of this House who is
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not even a member of that union. Per-haps the noble Lord, Lord Morris, would stop talking. The noble Lord has made a very provocative speech and some very offensive remarks, the only ones which have been made in this debate and I think that all your Lordships will resent it.
The debate has been conducted at a very high level. I should like to congratulate both the noble Lord, Lord Elibank, and the noble Viscount, Lord Trenchard, for speeches which have been very properly praised. Their forebears were well known and were great men. Also, they were well liked. In particular, I should like to say this to the noble Viscount, Lord Trenchard. When I first got into the House of Commons, I was sent for by the noble Viscount's father. I was still in the Air Force then. The noble Viscount gave me three martinis and said, "Now, my boy, there is something serious that I must say to you. You must vote for the Labour Party on every occasion"—sometimes I find it a little difficult now—"except when the Royal Air Force is involved and then you will vote for the Royal Air Force". The noble Viscount was a very great man and we are very pleased to see his son, like the noble Lord, Lord Elibank, bringing such expert knowledge to our debate.
This is the hour when the select band who are prepared to stick it out are still here. First, may I say that of all the speeches I have heard there is none with which I agree more completely than that of the noble Lord, Lord Byers. This maddening quality of his to say a great deal in a short space of time is something which I have never been able to emulate, although this evening I will try to do my best. We can take it for granted that the great majority of the Members of your Lordships' House, like the great majority of responsible business today, recognise that their duties are very much wider than simply to the shareholders. Indeed, the poor share-holder has hardly been mentioned today. Not long ago, I attended a private meeting of the British Institute of Management which was attended by chief executives. It was a very high-powered meeting but we never mentioned the shareholder. I think that the Bullock Committee should be told about this.

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I hope that we are all aware that the old authoritarian views of industry are gone. Like the noble Lord, Lord George-Brown, for many years I was with the John Lewis Partnership, the most complete example of participation. Nobody could therefore suggest that I am not in favour of the concept of industrial democracy, participation, and, indeed, worker-directors. I am bound to say that it took 50 years to develop. It is also worth noting that it has reached such a degree of responsibility, admittedly in a very largely non-union environment, that you find the unionised section electing their managers to the central council rather than their shop stewards. This is the sophisticated approach to which those who believe in worker-directors look forward.
I am bound to say that the Bullock Report does little service to the concept of industrial democracy other than in the role of an Andalusian terrorist who throws a bomb over the wall. It maims one or two people but it gets everyone else buzzing around. To some extent this is the achievement of Bullock. However, it was a rushed job. The people to be blamed for this are not just the members of the Bullock Committee but the present Government. I am sorry to have to say this, but when I think of the enormous amount of research which went into the report prepared by the noble Lord, Lord Robbins, and his Committee and when one looks for the background research for this document one notices the absence of evidence. I do not know whether it is proposed to publish the evidence—perhaps the noble Lord could tell us—but we should like it.
So much of the report consists of a series of statements about what is the right answer, without proper justification being given. No attempts to apply much of the theory to actual situations were made. There were no real case studies. There was a little in the way of evidence—at least, what actually happens at company boards. Many Members of your Lordships' House who will have served on company boards know of the extraordinary variety of things which happen when they meet in the board room, instead of the lavatory, when there is a controversial situation. They realise that in fact it is
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ridiculous, in our concept of a board, to think of it in the great majority of cases as a place where conflicting representative interests are fighting one another.
Of all the chapters in the Bullock Report that are unsatisfactory—I mean intellectually unsatisfactory—I regard the analogy with political democracy as a most unlikely analogy, but in Chapter 6 they set out a number of statements and then proceed to knock them down. For instance, on the subject of investment they say that it was made clear to them that a number of submissions expressed the view that loss of confidence among investors in the United Kingdom might be compounded among foreign investors in British industry. Too true! I have already seen examples of people who are hesitating about a further industrial development, but the Bullock Report dismisses this and says that other views counter this. The only view they quote—and then they say "implicitly"—is that of Mr. Helmut Schmidt and they then go on to reject the German solution anyway. The truth of the matter is that it is not what ought to be; it is what will be in regard to investment in British industry.
There are a number of other aspects. I saw the noble Lord, Lord McCarthy, in the Chamber for a short while and I was rather pleased, because I wanted to answer some of the aspects and, as I thought, his misinterpretation of what the Bullock Report said on the subject of collective bargaining. What the Bullock Report favoured was in fact the three answers—the third answer being to recognise that the 2X + Y formula enables the shareholder representatives to insist that the management negotiating position is not subject to detailed and practical consideration by the board, and the whole of the argument in regard to collective bargaining is one of the most crucial issues. I wonder how many of the Bullock Committee had in fact taken part in negotiations and collective bargaining? Undoubtedly, the trade union representatives had, but I wonder how many of either the academics or indeed some of the industrialists who speak so freely about collective bargaining have ever negotiated with a trade union? I cannot say that I have had a great deal of experience, but I have had more experience of direct negotiation than many people.

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Here it is worth while looking at the one piece of evidence that we have got. It is the document to which I referred the noble Lord, Lord Kirkhill—Industrial Democracy—European Experience. That consists of two reports prepared for the industrial democracy committee by Eric Batstone and P. L. Davies. There is one reference at the beginning of the report which no doubt some of the members of the Bullock Committee hoped would be forgotten. Among other things they said:
"It would be most unwise to see the concept of worker directors as anything more than a marginal contribution to industrial democracy in industrial relations. Of far greater significance will be collective bargaining, and the trend in Europe appears to be an extension of level and the scope of negotiation. Collective bargaining is likely to be far more important."
I think this question of collective bargaining is a key issue in industrial relations, as I am sure the noble Viscount, Lord Trenchard, knows.
On other aspects I find the Committee's dismissal of the evidence given by Michael Young of the National Consumer Council disappointing. Most noble Lords on this side of the House will have known and respected Michael Young and will know that the sort of evidence he gives is not to be dismissed lightly as the Bullock Committee in fact do.
I should like to refer again to the report of Batstone. What they said in the introduction is this:
"There were a number of problems in preparing this report"—
and again I stress that it was a report which was carried through at the request of the industrial democracy committee—
"First, the time constraints upon its preparation have meant that the review is necessarily more partial than would ideally be the case."
"Second, the introduction of worker directors is so recent in many countries that no reliable data on their actual performance are available. Third, much of the debate on industrial democracy is remarkable for its failure to take into account actual experience."
They said this in July of last year:
"Fourth, much of the research undertaken in the area is conceptually and methodologically weak, and difficulties of access to boards have resulted in a heavy reliance upon survey methods. Fifth, few empirical studies of a cross-national nature have been undertaken, and accordingly some account has to be taken of subtleties of word usage and the aspects of industrial relations and company operation which inform, or are taken for granted in, the various studies. In view of these problems any discussion of worker directors
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and industrial democracy in an international context, including this one, has to be treated with caution."
Perhaps I may say to the noble Lord, Lord McCarthy, that the so-called Gunderlach Committee—the Green Paper, of which noble Lords will undoubtedly admire the colour—slips back quite a long way from the draft Directive, and some noble Lords will have seen the piece written by Michael Shanks on this subject, which I will not go into now. There are all sorts of historic reasons in connection with this and those who may have studied the Sudro Report and the practice in France and Denmark and other countries will understand the caution of Gunderlach in not settling on a single pattern of the specific kind we have been given in the Bullock Report.
Mr. Batstone goes on to say:
"It is scarcely surprising that the evidence, largely from Germany, indicates that worker-directors have had a minimal impact…"
I am sorry, it may be a "marginal" impact, but it is about the same—
"…worker-directors have had no important effect on the economy generally, It would be most unwise to see worker-directors as anything more than a marginal contribution."
I do not fully agree with these statements, I am bound to say, because I know cases where it is in fact having effective use. But this was the evidence that was given to the Bullock Committee by their own people.
I do wonder why Bullock picks mainly on Sweden and Germany. It has come up with a plan which, unfortunately, has aroused the most violent opposition, not from shareholders—we have hardly heard from shareholders—but from managers as a body, not just directors. Furthermore, the Bullock Committee has ignored the sensible experience of certain countries like Denmark. There are two worker-directors on the board of any company in Denmark, elected by employees regardless of union membership, paid their directors' fees, and the rest of the board can be as large or small as they wish, instead of this extraordinarily rigid formula that has been produced. We know that many of the unions, and not just the craft unions, are opposed to Bullock.
I will not take up the time of the House much longer, but I am bound to say that this is a long and historic battle among

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Socialists and within the Labour Party. The historic criticism of the capitalist system and of private enterprise in the past has been, leaving aside the issue of the class struggle, that decisions by individual enterprises, by large companies, and particularly international companies, could operate solely in the interests of the owners of these companies, and that by some magical process of a free market everything would work out for the best. There are very few of us, either in the Labour Party or the Conservative Party, who accept this simpliste view today. We believe that the role of the big enterprise is a much more important role than that simply of providing dividends, important though those dividends are if the mixed economy system is to work. It is recognised that companies have a responsibility both to those who work in them and to the public, and not just to those who invest in them.
I am bound to say to my noble friend Lord Houghton that I think he was a little less than fair with the noble Viscount, Lord Watkinson, in comparing the functioning of those admirable institutions, the Whitley Councils, to the sort of council that, under the influence of the great Sir Eric Hooper, he has set up in the past. Of course there is a lot of splendid development going on. I do not disagree with those who say that we cannot afford to wait. There is a great deal of industry, especially those firms with less than 2,000 employees, where much improvement can be done. Some of the noble Viscount's predecessors must be turning in their graves at his radical views on these matters. There is a recognition that there will probably need to be some back-up legislation. The one thing we do know is that violent interventions, particularly in the field of industrial relations, have had a disastrous effect in the past. I was in the Cabinet at the time of In Place of Strife which tore the Labour Party apart. We remember those days and nights when we fought on the Conservative Industrial Relations Act. There was much that was progressive in that Act. It just was not going to be accepted, and the result was a big contribution to the destruction of the Conservative Party.
If we have learned a lesson it is that in many areas one wants to proceed carefully, slowly, not too slowly, with as much
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consent as possible, but ultimately being prepared to back up what is achieved; after a little rest, after the list of new legislation that the noble Lord has referred to—which I have to administer, and I have a lot of help; how small companies manage I do not know—there will need to be backing legislation. I do not dispute the possibility that in the right sort of concept there should be worker-directors on the board. But I personally reject in present circumstances both the majority and the minority reports.
It is worth reminding noble Lords that the history of the Labour movement and much of the trade union movement in England has been anti-syndicalist, and here we have a form of syndicalism in all its nakedness—what is referred to as company egoism in one of these reports. Therefore I object to the Bullock proposals not merely on managerial grounds but on socialist grounds. Those who remember their history must remember the struggles that occurred in the past.
I call in support of this the greatest public administrator that this country has ever known—Herbert Morrison. I was his Parliamentary Private Secretary. He fought the issue of syndicalism for many years, A great deal of the agony and conflict between him and Ernest Bevin was when Herbert Morrison refused to put representatives of the Transport and General Workers' Union on the board of London Transport. He said that he wanted businessmen on the board. I quote from his biography by Donoghue—now well placed with the Prime Minister:
"By 'businessmen' he meant men of a business turn of mind, which might include such people as trade union bodies as well as men of business experience in the ordinary sense of the word. He intended all along to appoint people associated with trade unions and local government. He called the proposals for guaranteed labour representation ' undignified and humiliating': as if trade unionists could not be appointed without an Act saying so. It presumed their inferiority."
I share the views of noble Lords who believe that trade unionists are capable of keeping confidentiality. Indeed, there is evidence in overseas companies and from those who deal with them that it can be done. However, the way does not go the Bullock way. Neither the Labour Party nor the Conservative Party have taken the sustained initiatives which the Liberals have taken. I pay tribute to them for that. I shall still remain on these Benches,

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if the Government will have me, but I hope that this controversy will make the Government face this issue properly and allow discussions not simply with the CBI—although they could do a lot worse—but with many people, and thus to arrive at some sort of consensus, with ultimately some back-up legislation.
9.16 p.m.
Viscount ROCHDALE: My Lords, first, may I say how much I agree with the remarks made by the noble Lord, Lord Shackleton. I thank my noble friend Lord Carr of Hadley for introducing this very important debate and congratulate the noble Viscount, Lord Trenchard, and the noble Lord, Lord Elibank, on their maiden speeches.
There is such an immense amount of experience and knowledge in your Lordships' House on this matter that it almost seems impertinent sometimes to enter the ring. I feel very privileged to speak this evening. This is a very important debate and I hope that I shall not appear too dogmatic. For a great number of years I have worked on different boards. I regret to say that the first board on to which I worked my way as an executive director was over 40 years ago, but I have served on a number of other boards, first as non-executive director and later as chairman. I have also sat on a number of bodies, whether we call them councils, committees or boards, where I have had the privilege of working alongside a number of trade union members. I enjoyed their company, respected their point of view and, indeed, the wisdom and support that they gave.
During my last few years as chairman of Harland and Wolff, the Belfast ship-builders, the company was in the process of being turned by its single shareholders—the Government—into guinea-pigs, the idea being that we should be a "try-out" for worker-directors, participation and so on in advance of any legislation that the Westminster Government might introduce. It was the noble Baroness who mentioned that some companies have as many as 10 trade unions but we had to deal with almost double that number. My company was under mandate to negotiate with them with a view to arriving at a board structure which would include a substantial number of worker-directors. I shall refer to that again later.
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A number of points have struck me very strongly as to what a board, as the apex of the management pyramid, requires for any degree of success. I emphasise the few words, "the apex of the management pyramid", because the board must be regarded as part of management. Yet I have met a number of people in the last year or so who seem to regard the board as something separate from management. I cannot understand that. Anyone who joins the board automatically becomes a part of management. This must be recognised, and it is not always appreciated. To begin with, I find it important to try to assess what we might reasonably hope to gain by the introduction of worker-directors. We must get that clear. If I repeat one or two points that I have made in your Lordships' House on a previous occasion when talking about this kind of matter, I apologise. I regard the board as an important and delicately balanced piece of human machinery. It is rather like the heart of a body. It should not be played about with, except for very good reason, and then only after the most careful consideration. Just as there is no standard heart among any of your Lordships or anyone at all, so there is no standard board. There is an infinite variety of boards, reflecting to a large extent the style and character of the chairman and his chief executives, and of course reflecting the personalities of other members of the board and the size, general circumstances and nature of the company itself.
Against that background, it seems to me that the motto for any board chairman must always be to try to achieve mutual trust and confidence among his members. That is absolutely the first thing that he must do. So that despite inevitably differing views, all strongly, sincerely and correctly held (and this may very well be healthy), there can be complete frankness and openness of discussion in the boardroom without, if possible, any rancour, to be followed in the end with loyal, collective responsibility for all decisions, however they may be made—although, like many other noble Lords who have spoken today, I do not think that I can remember over the years that I have been in a boardroom ever having taken a vote; the decision has always been by consensus.
Another important matter one has to bear in mind is that, if regrettably there

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is any serious and prolonged acrimony in a boardroom, it cannot possibly be kept within the four walls of the boardroom. It is bound to come out and do enormous damage throughout the whole of the company. This clearly presents the chairman with immensely difficult conditions, and it is largely the chairman's job to guard against this. It presents a great challenge. Therefore, if we are made to provide changes, such as the introduction of worker-directors, on a major scale, we must be very clear what we are out to achieve. We must be very satisfied that we really think we can achieve it so that the change does not prove, in the end, to be retrograde instead of taking us forward.
In my view, and to put it in a nutshell, there is only one objective to be sought, and that is greater effectiveness and greater efficiency in the whole under-taking, using those words in their widest sense. May I put it another way: the objective must be regarded not as an end in itself but as a means of creating an even more efficient and viable and—very important—happy company. If we can achieve that, it will be better for everyone concerned. It will be better for manual workers, all other workers whether technical or administrative, shareholders, customers, suppliers; and indeed it will be better for every other person who, in one way or another, is oncerned with, or dependent on, that company. It will give everyone in the company greater security and contentment, a greater sense of purpose, greater pride in achievement, improve morale and confidence, and generally enhance the company's reputation so that all can feel that the whole undertaking is pulling together as an involved, united team. That is what we want. That is what is going to improve efficiency.
I have no hesitation in saying that there are a great many boards—I was particularly interested in what my noble friend Lord Watkinson said about Schweppes-Cadbury—which are well on the way to achieving this sort of high standard, but one must also agree that there are many boards which have not reached anything like that standard, that some have not even left the starting point and that others have further to go. But none would deny, whether they are at the head or back of the race, that there
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is always room for considerable improvement, and if improvement can be gained by the introduction of worker-directors, then I say we should let that be where we set our sights.
During my last year at Harland and Wolff, as I have mentioned, we were under mandate to come to an agreement with the trade unions for including worker-directors on our board. I was a real protagonist for this move because I felt it was the right thing for our company in the circumstances. Obviously I saw many pitfalls, and my experience has led me to certain subsequent conclusions. By 1974 we were already working on greater participation at various levels below the board. I am bound to agree that up to then we as a company had been well below the best current practice; there were historical reasons for this, long before my time, but I will not mention them now.
Eventually we established a joint consultative council over which, to sound a personal note, I had the privilege and great satisfaction of presiding for the inaugural meeting and the next few meetings, until I was able to hand it over to the new managing director we had just appointed. We also established joint productivity committees in different shops right down the line to the floor level, and we had a very important committee consisting of the chairmen and secretaries of the various sections of different trade unions within the yard. This was immensely important, and all this activity was being developed with some success and all the other activities were being improved.
Even so, it was clear to me that there was still a wide gap between what we had been doing below board level and what would happen at board level with the reconstituted board. The reconstituted board was finally agreed with the trade unions and the Government; I admit that I should have preferred that we could have agreed it between the trade unions and ourselves without the Government, but that is another story. The type of board we finally agreed was a unitary one—one-third worker-directors, one-third executive directors and one-third external directors (we may call them non-executive directors) plus a chairman—and, after I left, a further joint implementation committee was established to bring it into being.

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Before I can complete the story, I must say something about the operation of any board such as one with worker-directors. It seems to me that the question of there being two sides of industry represented on a board or some level of polarisation on that board must be done away with; that concept must have been lost on the way up the participation ladder—lower down throughout the company—so that all members, when they come to the board (be they worker-directors, executive directors or non-executive directors) must be able to meet as equal colleagues, have the same sense of interest and the same sense of responsibility, even though they are able to bring to bear very different and valuable experiences.
Lord DRUMALBYN: My Lords, I wonder whether my noble friend can say something about the remuneration of the worker-directors.
Viscount ROCHDALE: My Lords, that is a very difficult point. All I can say on remuneration is that I and my colleagues on the old board were of the opinion that the worker-directors should have the same remuneration as any other director. But that, apparently, was not the view of the then Government in Belfast. The point had not yet been decided by the time I left. There were various suggestions as to how it might be dealt with. I remember very clearly that one suggestion was that the worker-directors should have the same fees but that they should not be allowed to touch them. The fees would be put into a fund to be used in some way for worker or employee purposes. How-ever, that was not finally decided. I shall perhaps come back to the point that my noble friend has raised when I tell your Lordships what the outcome of all this was.
Before my noble friend asked his question, I had been going to say that a seat on the board must on no account be sought as a means of elevating controversial discussion that goes on at the negotiating table or elsewhere to the highest level of the company. The whole concept of worker-directors should not be considered in any company unless and until there already exists at lower levels of the company a real spirit of participation from which has grown an understanding and a degree of good will that makes a move up to the board not a difficulty but a natural and welcome next step.
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I believe it follows that anything like the blanket Statute which I interpret the Bullock Report to be advocating in spite of what the report says in paragraph 6 of page 161, which speaks about the ballot, is just not on. Every company should be allowed to proceed in its own way and at the pace which is likely to suit it best, whether it be by way of a one-tier board, a two-tier board, some other formula or no formula at all—that is, by some ad hoc mutually agreed arrangement. It may be that I am regarded as rather naive for talking about what I regard as the idealistic approach. It may be suggested that I am paying no more than lip service to the appointment of worker-directors. But I hope that your Lordships will accept from me that that would be an entirely wrong interpretation of my intention.
I am not at all keen on the Bullock proposals, but I feel that one must give some credit to the Committee for having assembled a great deal of very relevant material. It must have taken a lot of effort. Your Lordships may not know, but I was the chairman of two major Government Committees of Inquiry and I know the enormous amount of effort that it took to assemble the material which they needed. I feel that one must say, "Thank you" to Bullock for having assembled this, even though there are serious gaps and a lack of balance which have led the majority to conclusions which I cannot possibly support. For instance, there is not nearly sufficient emphasis placed on the role and position of management at all levels, or on the damaging effect that these recommendations may have upon management, particularly at board level.
In my view, the Committee seems far too ready to accept the inevitability of conflict on controversial matters, whether it is between labour and capital on the one hand or between labour and management on the other. That tendency to expect controversy seems to paint an entirely wrong picture of British industry today. It paints a picture that is far less harmonious than is in fact the case, as other noble Lords have pointed out. It merely seeks to continue the picture that we often get from the media, who produce what to them is newsworthy and which is usually the acrimonious aspects.
The majority report is obviously too formalised. I do not agree with their

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conclusion on page 161, conclusion 6, where they say that the plant ballot gives, in their view, a good compromise between enabling and mandatory legislation. It may sound very well, it may appear that that was to be the case, but I am quite sure that in practice when it came to be invoked it would amount really to mandatory action. On the other hand, I definitely agree that some legislation is called for. For instance, I agree with paragraph 38 of the report, on page 84, where it deals with the fact that when directors are formulating their policy and decisions they should take into account the interests of employees as well as of shareholders. Of course, as has been mentioned by many noble Lords today, most good chairmen already see that that is so; but if it is argued that that may not be strictly within the Companies Act, then I say let us have the Companies Act altered to put that right.
I would also agree that legislation would be helpful to cover and encourage participation at lower levels. And I would go further, and I would suggest that there could well be within the legislation some clearly defined intention that this initial legislation—and let it be fairly soon, as other noble Lords have said—should be intended to pave the way for companies to have worker-directors on their boards. The phrasing of such an intention would be a difficult matter. It would have to be very broad and certainly not go into any detail as to the type of board. That must be left entirely to the individual companies.
I should very much have liked personally to have the opportunity of seeing right through the introduction of worker-directors on to our board. I should want, however, to have been left to settle it myself within the company, with the trade unions, and not to be interfered with from outside. If we had come to an agreement it could then have been put to a general meeting, and I hope approved; and as we had only one shareholder, the Government, I think that it would not have been too difficult.
But I would have addressed to myself two words of caution, which I should like to address to your Lordships this evening before I sit down. The first deals with manual workers—potential worker-directors—and the other with executive directors. Bullock rightly rehearses the
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problems that potential worker-directors will have to face: problems of divided loyalties and responsibilities, the difficulty but absolute necessity of continued credibility with their own constituents, and so on.
How real these difficulties are is, I think, evidenced by the fact that I want to mention to your Lordships now. When I left Harland and Wolff in November 1975, the form of the board was settled and there was every intention that worker-directors would be in the saddle, in their place in the boardroom within a couple of months or so. That is now 16 months ago, and worker-directors have not yet been elected. I am not saying that in any cynical way. I am not saying it in any critical way. But I believe that whatever the factors, all of us who are interested in this question should consider very carefully what has gone on in that particular company during the past 16 months, because I think that we should find it most interesting. We should study it not only carefully, but with very considerable sympathy.
My second point is that under Bullock many executive directors will of course lose their seats on their boards because they will be supernumery to the new formula. This alone would undermine morale in management; but when, in addition, it is suggested—and this in on page 102 of the report, paragraphs 34 and 35—that if an executive loses his status as a director, so that his contract is abrogated, but otherwise the company is prepared to keep in being his terms of employment below board level, then if that executive director decided to leave the compensation to which he had a contractual right would be severely limited, that really shocks me most terribly. It shows a complete lack of human imagination and understanding of the feelings of the man who is expected to continue his daily work, but in the embarrassing and often humiliating position of having lost the director's status he previously held. It surely would be far better for such a man to leave that company and go to an entirely new company, and be able to start afresh without the stigma of having lost his directorship.
I can clearly call to mind two individuals in Belfast—I will not name them—whose case absolutely fits the situation I have just outlined. These two individuals left prematurely because, under the formula

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which was agreed by the Government, there were to be only so many executive director positions. There was no provision for transition, so that if there were too many at the time the process started one or other could be dropped off in due course; they had to go then and there. Both these people came to me and said, "We really cannot stay; we must go". While one realised it was not doing the company any good, one had to sympathise with them, and they left.
That sort of thing does an immense amount of harm to the good will and morale of management; and if anything else is needed for a big move to worker-directors, a big change in the composition of the board, it is good will—good will from everyone; from management, from manual workers, from shareholders, from all with whom the company has to trade. That good will is an absolute necessity if the changes we are now discussing for our boards are to bear any fruit at all.
My Lords, I will conclude with one quotation which I think absolutely fits the problems of a board:
"every kingdom divided against itself is brought to desolation",
and that is what will happen unless a new board starts up with complete good will from all concerned.
9.43 p.m.
Lord GORE-BOOTH: My Lords, speaking at this late stage from these Benches, I feel it is my duty to be short. At the same time, there are perhaps a few things which, though they will not be new in this debate, are worth saying. I can mention them only on behalf of myself, but I think they may represent views widely held here. May I first congratulate our maiden speakers. I think one may say that both the noble Viscount and the noble Lord, Lord Elibank, were remarkably articulate and confident, and original in their contributions, and we hope we shall hear from them often again. I should also like to express indebtedness to the noble Lord, Lord Carr of Hadley, for enabling us to have this extended debate on a most important matter which needed discussing.
My Lords, my speech is fortunately very much shortened by the speeches of the noble Lord, Lord George-Brown, and the noble Lord, Lord Shackleton. This is a very gratifying experience, because both distinguished noble Lords
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have at one time or another been advised by me, though, fortunately for them, not on industrial relations. The noble Lord, Lord George-Brown, gave his opinion in language which I could hardly have used myself; but I would add that, quite frankly, if I had received the Bullock Report in my capacity as a senior civil servant at that time, I should have sent it back to the Department and said, "Who has sent me this unfinished document?"
In extenuation of the document, I think that one can and must say that the Committee in a way did not have a chance because it was asked to base its report on the acceptance of the idea of a radical extension of industrial democracy. I must say that if I had been given that mandate, I think I should either have returned it or asked for a great deal more explanation as to the work of the Committee. It was an unfair burden to put on that Committee. If the noble Lord, Lord Bullock, whom we all admire as a scholar and historian, had been a hardened politician, he might have refused the assignment; but, gallantly if misguidedly, he went ahead in the very limited space of time allowed him. We must have some sympathy for him.
I must say that I took what I think was the right course of reading the first ten chapters at one sitting. It seemed to me that that would give the best impression of what it was really like. I must confess that when I got to the end I had gone through a world that I simply did not recognise. I am not a director of any long term or of any great number of companies, but after seven years I know a little of what happens, and there seems to be no relationship between what was described in those chapters and what went on. I do not need to elaborate on this, because all the points have already been made by other noble Lords, but the particular item that I would wish to underline, as other noble Lords have done, is the complete mobility of the concept of director, manager and so on, and the degrees of responsibility that they all have within the greater responsibility of simply making the show work in the general interest.
My Lords, there are perhaps one or two points on which I should like to intervene, again just to show where I am sure future reports will have to do rather better. There was the point about consumers. The report says in page 55,

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paragraph 44:
"We do not believe that boards representing labour and capital could, even if they wanted, pursue profit without regard to the interests of the consumers."
But that happened a few weeks ago in the circumstances of the strike of drivers of lorries carrying bread, with the employers, in order to go on selling bread, and the drivers, in order to keep up their earnings, conspiring together to keep the price higher against the interest of the consumers of bread.
Then there is the question of the German system, which was the subject of much discussion. The report in page 68 says that this is the operation of a system where a supervisory board and a management board are roughly divided between the different levels of management. That is a direct rebuke to the rest of the report in its sketchiness about management. But having set out what is very briefly the essence of the German system, the attitude of the Committee, without any great explanation, simply seems to be: "No SB for us! We are British". Really, no great argument is mounted against this system of getting worker-directors on the supreme policy board, except that it does not seem to be what we are used to. With great deference to my noble friend Lord Kings Norton, with whom I practically never disagree, I do not think that the fact that we are not used to it is a very good argument against it. It may be that people running their industries rather better than we have something that we have not; and not the other way round. We should approach the EEC system not only with a certain comradeship with our fellow Members but also with a little humility about our own performance.
I should like to sum up this brief intervention by saying that I hope that the Government will accept that there is a great need for much more work on this subject in the sense of what a committee could do if it were really experienced and expert, if it had enough time, and if it had a certain determination to agree or to come as near as possible to agreeing. All these ingredients were absent in this case which unfortunately has made something of a shambles of the report. One must do it justice, however. It has given us an opportunity for this exceptionally interesting and valuable debate.
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If I may make one more point on an intervention by one noble Lord, who asked what the noble Viscount, Lord Watkinson, had to offer out of what he had to say. The short answer is success. It seems possible, with good leadership in industry, to work out pragmatically a form of worker or employee participation which works. That may not be adequate for a general application. There obviously are expressions of power, intention, prestige and, indeed, participation, which may require more than that. I do not think that we should dismiss any form of participation and working together as impracticable or inadequate if it is susceptible of further development.
I hope that the Government will arrange the machinery for more study on this matter. If, as would be right, they then publish a Paper, they should bear in mind that the colour matters supremely. I think some noble Lords did not think it mattered. We need some kind of consultative paper which will be debated in whatever forum is available. There should be no limitation of access to any committee that was formed for the consideration. It is far too important to say, "You and you can attend, but that is it". It must be open, on the lines of the American committee system, to anybody who wants to come and say his piece.
Document No. 1 of any body that might be set up should be the Hansard account of this debate, because so much of what is needed to be known has come from your noble and expert Lordships this afternoon. That would be a very good jumping off point for any future discussion. Perhaps the noble Lord, Lord Oram, could say something on this point: after the noble Lord, Lord Kirkhill, opened for the Government, I had another look at the report. I am still baffled about where the so-called trade union monopoly comes in. I do not think that the expression is a good one. At what precise point is it that the non-members of trade unions appear to be umpired off from this business? The noble Lord, Lord Kirkhill, gave us a little hope that the situation might be better than the report suggests. I also have the impression that other noble Lords are not clear what the Government are saying on that point. My Lords, it has been a privilege to participate in this debate which I am sure will bring about great things in the future.
9.54 p.m.
Lord MOTTISTONE: My Lords, I should like to endorse what the noble Lord, Lord Gore-Booth, has said, particularly before he asked his question, that this is a good starting point for something better. The debate has been a disappointment in one respect; there have been so many speeches from this side of the House and the opposite side of the House which, on the whole, reflect the feeling that the Bullock Report is a bad one. There have not been many speeches saying what is good about it. I hope to bring out something good as I proceed with my speech, which I am sure noble Lords would be delighted if I hurried.
In particular I was disappointed by the introduction by the noble Lord, Lord Kirkhill. What he said was just as disappointing and absolutely a repetition of the public statement which was made when the Bullock Report was published. I hope very much that, in closing, the noble Lord, Lord Oram, might take into account some of the remarks that have been made which, on the whole, have endeavoured to be constructive, and give us a slightly different view of how the Government might be going to act in the future.
I think we should be most grateful to my noble friend Lord Carr for having introduced the subject at this stage—good and early, while we are all thinking about it, which will give us a lot of food for thought and an opportunity for developing arguments for putting before the Government, as requested in the report. I should like also to congratulate the two maiden speakers. My noble friend and colleague, if I may so describe him, Lord Trenchard, I have heard before as an after-dinner speaker. I think it is rather a pity that until today he has spared himself from using his great qualities as an orator in our presence. I thought that his was a splendid speech, and I am also very proud that my noble kinsman, Lord Elibank made such a splendid speech that he fooled the noble Lord, Lord Brown, into thinking that he had addressed your Lordships' House many times before.
I hope not to keep your Lordships too long, but I venture to speak for one or two reasons. I suppose the main reason is that in my last job I worked for a
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training board, which is as near a mirror image of a 2X+Y management situation as you can find. I would suggest to your Lordships that perhaps this is a somewhat unique experience for all those who adorn this Chamber, and I should have thought that perhaps some of the experience I gained in that job might be of value.
Your Lordships will remember that training board membership, by Statute, represents an equal number of employers' representatives and employees' representatives, with a lesser number of educational representatives to make a balance. That really looks rather like 2X+Y. I am not in any way "getting at" my noble friend Lord Carr, who is known to be the father of the training boards, because in introducing this subject I am sure he did not think of it in quite the same respect. Indeed, close as the similarity may be between these two formulae, I would urge your Lordships not to read too much into it, because there is a world of difference between a non-profit-making body under-pinned by State support and a free enterprise company subject to the rigorous financial disciplines of the market. It is quite fundamental to the thinking that I believe one must give to this particular point.
What the experience of working with a board has done for me is to accustom me to working with trade union officials in a managerial role, which I rather gather that my noble friend Lord Rochdale was about to experience but never did. I learned, of course, that trade union officials are nothing like as ineffective and partisan as some people seem to believe. On the contrary, people with a trade union back-ground often bring welcome and practical sense to the problems and discussions which take place on a board.
On the other hand, it was clear to me that experience as a trade union representative in many cases is not a good preparation for a top managerial role. Indeed, when one reflects, why should it be? The needs of the two jobs are totally different. Thus, I urge your Lordships to view with considerable scepticism the sections of the report which imply that any old elected shop steward, with a little training, can walk straight into the board-room and make a worthwhile contribution. Some might, but I fear that most will not.

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If I might now turn to the details of the report, there are so many flaws in it that one hardly knows where to begin, but I have picked out a few of the most important. First, there are the terms of reference. Many noble Lords have referred to these but I must refer to them myself, because these surely are the principal reason why the report is so strongly biased, and why the conclusions have resulted in a one-sided majority report, with an important note of dissent and a strong minority report. These three alternatives surely show that the report is a most inadequate basis for action. When, many years ago, I did a staff course, the one cardinal sin that we were warned against when learning to do appreciations of situations, and indeed when writing any form of study paper, was situating the appreciation. This is exactly what the terms of reference have done, and I am sad to say that as a result the study is made fairly worthless.
Secondly, in this very important development of company management, it is surely unwise to press for the report to be completed in a time limit as short as a year. There was a need for a much more careful consideration of the issues involved, and of the effects of the various proposals on ordinary people, before the conclusions were reached. As a result of these two mistaken starting points, inspired by the Government, the report inevitably has many basic failings, but I will single out three of a general nature for comment.
The first is the elaborate arithmetical machinery which has been devised for putting the recommendations into effect. When encouraging social change of any kind, it is surely unwise to devise a scheme in such detail, apparently trying to anticipate every organisational difficulty that may arise. Even within the 700 enterprises concerned, there will be vast differences of detail in organisation and in attitude. The scheme which is best for some will be detrimental to others. It would seem that Mr. Wilson in his note of dissent and, more especially, the signatories of the minority report recognised this.
It might be relevant at this point to remind your Lordships of what I believe
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to be a profound quotation from the introduction to Trevelyan's English Social History, where he is reviewing the whole scene of social development in this country at a time when we were collectively and justifiably full of confidence. He said:
"On the whole, social change moves like an underground river obeying its own laws or those of economic change, rather than following the direction of political happenings that move on the surface of life."
Perhaps we would be wise to ponder this thought before introducing yet more social legislation.
The second failure in the report is the proposal to limit full voting within an enterprise to the initial choice of whether or not to adopt a system. Surely we have discovered during the past 100 years or so that one of the cardinal features of true democracy is universal suffrage, slow though we may have been to introduce it. I recognise that trade unionists do not think it is fair that non-members should have equal treatment in all respects to those who bear the heat and burden of collective bargaining, and in such bargaining situations the argument has much validity. I suggest, however, that the democratic election of employee-directors is not collective bargaining and this brings me to my third point.
The third weakness is the proposal that ordinary people will be able to be both practising shop stewards concerned with the wellbeing of their members in bargaining situations, and at the same time directors of a company. There may be a few gifted individuals who can cope with the divided loyalties which will inevitably result, but I suggest that most of us, when confronted with such situations, have found that it is impossible to serve two masters—as, indeed, the Bible tells us.
I was going to leave it at three shortcomings, but there is a fourth. I have a little note which reads, "McCarthy corporate collective bargaining in the board-room". If ever there has been a more ridiculous statement, that a board room can function if it has corporate collective bargaining within it, I have not heard it. If that is the implication of the report, with the greatest possible respect I

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must say to the noble Lord, Lord McCarthy, that that condemns it, if nothing else does.
Having touched on the shortcomings of the report, what can we find in it that is good? I suggest that the first point which is good is that it is very well written. I found myself reading it all night, which is more than one can say for most Government-issued documents. It is a little difficult to refer to afterwards because it reads so felicitously—no doubt owing to the scholarship of the chairman of the committee. The report is easy to read but difficult to refer to; but perhaps other noble Lords have not encountered that difficulty. The most important feature of the report is that it has accelerated the consideration by enterprises of the need to introduce some form of industrial democracy. Surely this is good. However, as your Lordships will know, many firms are already moving in that direction and approach the problem in ways which are best designed to meet their own affairs.
I suggest to your Lordships that the conundrum which is before us is how to harness these moves in the way best designed to encourage them to develop rather than to impose upon them a theoretical basis which, for all kinds of reasons, some of which I have touched upon, are most unlikely to apply to the individual company, and to harness them in such a way that one does not do too much imposing and yet does not allow the momentum to be lost.
It seems to me that the main failing in this country, of which this is but one solution to the problem, is that we lack two-way communication. There are all kinds of methods and easy ways for directions to come down from the top to the bottom, if that is the way to put it—although in these modern times perhaps one should think of communications going sideways rather than up and down. However, there is not enough machinery for the communications to go the other way. We need to pay attention mainly to developing two-way communication. We need also to recognise that this is a greater failing than the ability of people to be able to jump straight on to a board. This seems to me to be the way forward.
While we are thinking about how things should work in the future one point
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must certainly not be forgotten. Many noble Lords have touched upon it but it is so important that I cannot omit it from what I have to say. There is a real need to consider the position and authority of the middle managers, many of whom are working towards positions on the board the hard way. The efficiency of an enterprise depends greatly on these people. Indeed, in many cases where businesses have faltered in recent years a contributory cause has been the under-mining of the authority of middle management. This has been caused by unions dealing direct with senior management. The majority proposals of the Bullock Report would create just this situation. Indeed, while working for my training board I found that, as a middle manager, there were dangers of that happening to me.
I must conclude by saying that I think industrial democracy is already on its way. If the Bullock Report hastens the process, it will have done good, but the detail of Bullock is partisan and potentially destructive. To be against the detail is not to be against the principle of industrial democracy, and let no one pretend that it is. Let us therefore welcome and encourage movements towards industrial democracy but be wary of legislation at this stage.
Having listened to this debate, it has come into my mind that the answer might be to use the Bullock Report as a basis for a wider examination of the problem. I hesitate to suggest a Royal Commission because they have rather a bad name lately, but something of that order.
Lord SHACKLETON: Oh!
Lord MOTTISTONE: If the noble Lord feels that they have not got a bad name, that is splendid. It may be that that is the right answer, and if the noble Lord, Lord Shackleton, nods his way towards a Royal Commission I would go with him. I think there should be something more fundamental which would look in much greater detail at the problem and take rather longer. At the same time, the great point about it would be that while this was going on companies would have this impetus behind them, because the authority of a Royal Com-mission which takes time over a problem

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is surely greater than that of Bullock, which rushes through a preconceived answer. I would suggest to your Lord-ships that perhaps this is the answer. Something must be done to keep up the impetus, but for heaven's sake! we must not have something which establishes tight rules on the Bullock lines and forces them upon companies whose efficiency will be badly hurt and, what is worse, whose employees will suffer as a result of that sort of application.
Lord MCCARTHY: My Lords, before the noble Lord sits down, I wonder whether he would agree that corporate collective bargaining in the boardroom is ridiculous. Collective bargaining at company level is perfectly reasonable and ought to be conceded. If it were conceded, we should not have all this talk about corporate collective bargaining in the boardroom.
Lord MOTTISTONE: My Lords, the noble Lord, Lord McCarthy, disarms me because he used the phrase. I picked the phrase from him; it is not mine, but his.
10.13 p.m.
Lord RHODES: My Lords, the passion which was aroused against Bullock at three o'clock in the afternoon has given way to a universal desire to go to bed, but I must say that apart from two occasions when I raised my hand in a desire to leave the room I have been in this place for 6½ hours. I have listened to most of the debate, but it is a curious thing that the two speeches that I should have liked to hear very much indeed, I missed. One was made by the noble Lord, Lord Elibank, and the other by the noble Viscount, Lord Trenchard. I particularly wanted to hear the latter, because I have something to say about the noble Viscount's father, and it is something very nice.
I was in the infantry through the Somme. I went to the Royal Flying Corps. I had a lot of hours in the line in the Royal Flying Corps and just before the Armistice I was shot down for the second time. I was very seriously wounded—so much so that I was at death's door for weeks. One thing I shall never forget about the noble Viscount's father was that he sent
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a personal letter to me at the casualty clearing station where I lay. It was read to me in one of my moments of conscious-ness, and I was told that I held on to that letter for several weeks. Who knows?—I might have had my life in my hand. That was due to the noble Viscount's father. He was always thought of as a disciplinarian, but there he was a humanitarian.
During the time in hospital, two and a half years after the war was over, before I could get back into civilian life and back to work, I went to Lewes Assizes. I am going to call in aid a story. Mr. Justice Avory was trying an old lag, a chap about as old as me, and he sentenced him to ten years penal servitude. The old lag looked up at him and said, "Oh, sir, that is a long time and I shall not be able to finish it". Old Avory looked at him over his spectacles and he said, "Well, do your best, my man." This is what I propose to do at this time of night.
What I want to say, in my comments about the Committee, is that unfortunately it was very biased in its terms of reference and in its membership, and as a result the Committee did not get off to a good start. It was not long before it became totally divided. One glaring weakness of the report is the small number of people who gave evidence. On only ten occasions were opportunities given for oral evidence. Contrast that with the 45 times that oral evidence was given to the Plowden Committee which examined the structure of the electricity industry in England and Wales, of which the noble Baroness was a member. Surely the Bullock Committee, with a far larger remit, should have given more time for people to state their case and argue it in front of them. This has been mentioned before. It should have been done. I know what Nye Bevan would have said about this. I often call Nye Bevan in aid in some of these things, because that man was a very wise politician. I heard him say once that he would rather have one piece of oral evidence, where he could see whether the witness believed in what he was talking about, than ten pieces of evidence in writing. It is human nature.
The response to this Committee has been universally negative, and serious commentators in this country and elsewhere have poured scorn on it. It polarises

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the CBI and the TUC instead of bringing them together. In fact, the only person in favour that I have met during this last fortnight since the publication of the report was a foreign businessman; he expressed delight that one of his competitors was going to have his arm tied behind his back. He was delighted; he said, "Get on with it". This report is not about practical industrial democracy; it is not about a genuine comparison with Europe; it is not about the practicalities of running a company. This is an unmistakable bid for more and more union power—let us face it—and that to be vested in the hands of the shop stewards. But will this transfer of power mean that employee representatives on the board will have some responsibility for disciplining or controlling the shop stewards when they are bad boys? Noble Lords should ask themselves that question.
This report has been given the high-sounding title of Industrial Democracy, but some of its recommendations are far from democratic. What about the white collar workers, the blue collar workers, all those junior managerial grade chaps? It would be a folly and a travesty of justice to disenfranchise them. The Bullock Committee called in aid an analogy between its proposal and the great Reform Acts which extended the franchise. I was interested in the remarks made by the noble Lord, Lord Brown. We should take a bit more notice of the noble Lord. In the past many people had the idea that he was a bit of a crank; but he has many good ideas—make no mistake about that. I promised him that I would say that, but I do mean it.
However, this case is quite different. Under Bullock whole grades of workers could be excluded from representation because they are not unionised. It should be borne in mind by these historians that every extension of the franchise, from the granting of the householder's qualification in the last century to the present time when young people can vote at the age of 18, has been accompanied by more and more bureaucracy.
In the early paragraphs of the report Bullock used German and Swedish industrial relations successes to justify board representation in Britain—quite right too. But later in the report he rejects the German and Swedish methods
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because too much authority is given to management and too little control to employee representatives. However, Bullock again calls in aid the German example when he says that investors are not afraid of investing in Germany. The noble Lord, Lord Kirkhill, did nothing to dispel the feeling that this was a specious argument used by Bullock. Perhaps the Minister who will reply will direct some straight thinking to this matter. One cannot call in aid an example to get it off the ground, then suddenly turn round, reject it, start all over again and call it in aid when one needs it.
What about this German comparison which Bullock used when it suited him? To begin with, the Germans have only 16 unions and very often they operate with only one union to a plant. Their unions accept and work within a framework of law that makes collective agreements legally binding and many categories of strike illegal. They separate the management board from a supervisory board on which worker-representatives sit and the supervisory board can appoint or dismiss the managers. The Germans require representation from all the main groups of employees—the white collar workers, the blue collar workers, the junior managerial grades, the lot.
Many of the proposals contained in the report are wrong in principle—they show no understanding of how a board works. Boards in large companies are not run like local councils or old-style Co-op committees. Old-style Co-op committees ring a bell! I met an old employee of mine at the weekend, and he said in conversation, "What do you think about Bullock?". I said, "I dislike it. What do you think, Joe?". He said, "It reminds me of Dobcross Co-op". I said. "How come?".
To put the story in context, we have several villages, but Dobcross is a very hillside one. He said, "There were two Co-ops in Dobcross. One at the bottom and one at the top. They call the bottom one 'bottom shop' and the other 'top shop', but they also gave the name of 'blue Co-op' to the top shop. The bottom shop had a lot of committee men, and all they did on that committee was see to it that their employees did not have any more wages than they got in the mill. And they also put a brake on the manager

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when he wanted to buy something extra. They said, 'No, you must buy what you bought last week and then we will know that we can sell it'." Joe said. "The top shop has four committeemen and one was the manager, and they always paid more divi, and they always had more choice". Joe said that his mother often sent him to the top shop, although she was a member of the bottom shop, because they had more choice. But she always said to Joe, "Don't tell your father when he comes home tonight", because otherwise he would have got a hiding.
Lord WILSON of RADCLIFFE: My Lords, may I ask the noble Lord a question? Is the view that he is now expressing on the Co-operative movement the view which he really holds at this present time?
Lord RHODES: No, my Lords, certainly not. I have a lot to thank the Co-op for, because it was the Co-op who found us a house when my father and mother were put out on the "flags" with six of us because they wanted the house for the coachman, and the Co-op did that. What I will say is that it was through the fire in the belly of about half-a-dozen men—and you were one of them, if I may say so to the noble Lord, Lord Wilson—who really got the Co-operative movement going again after the war was over, and a lot of its success is due to just a few people.
The duties of a large company board are not first and foremost representation and voting. They are there to make decisions, very often in commercial situations needing a speedy answer. How can a board work in these circumstances if it has a block of special interests that has a duty to report back? A board cannot work properly if it is a cockpit for extended collective bargaining either, and in this matter the Germans have it right. They have a vital and fundamental system of consultation at works level together with economic committees which involve employee representatives in the business policy of the enterprise.
I was in Venezuela last October on a Parliamentary Union visit. There had been a successful bid for a bar mill and a rod mill for making steel in Venezuela that we lost. I was interested to know that the big delegation that went out to
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talk about that project included one of their members from an economic committee which involved the employee representatives in the business policy of the enterprise. Surely there is a lesson to be learnt from that. Employee interests are safeguarded, but above all they have a management board which manages, and a supervisory board to which it is accountable.
The Committee has not grasped the fact that there is a difference between a company employing 2,000 and one employing 10,000. It has not grasped the fact that there is a difference between a company with 2,000 in one place and a company with 10,000 employees spread over 100 places. I will give an example. Take a large company with 100 factories, some employing 1,000 and others 10,000, with 20 unions. This is a practical consideration. For such a company, the statutory fallback according to Bullock would be seven employee representatives. How on earth could seven employee representatives create any kind of satisfactory reporting back process? It really is absurb. Any MP will confirm that in those circumstances reporting back would be just an illusion.
Even more important, the Committee has not grasped the fact that there is an enormous difference between industry on the one hand and industry in its structural needs on the other. This is what Plowden said:
"We do not believe that there is a single system of worker representation which could be applied to all industries. Worker representation on the board should not be based on abstract ideas but on the genuine needs of employees and the industry."
In 1950, when I was sent to the Board of Trade by the late Lord Attlee, when Sir Harold Wilson was President of the Board of Trade, the big thing was statutory backing for the development council concept. Harold Wilson was full of the idea and he was going to Harrogate to a cotton board conference. He said, "I'm going to see to it that the wool men toe the line on this; they are going to have a development council". I replied, "You won't, you know". And when he asked, "Why not?" I said, "If the wool men say they're not, they won't. You can take their businesses away from them and it won't make any difference". He asked, "What shall we do, then? I'm going to

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Harrogate next month". I replied, "Ask them to come and see you and talk it over".
There then began one of the most fruitful associations between industry and Government we have ever seen, and it still applies. One of the first industries able to send back its particulars after it was asked for them—this was after the publication of Strategy for Industry and the 1975 conference at Chequers—was the wool industry; it was the first to send in its planning particulars. I do not think one can improve on what is said in paragraph 8.24 of Plowden:
"In our view employee participation will only work if a substantial number of workers want to make it work and are ready to accept their share of responsibility for the industry. Schemes for participation can be imposed from outside but the moral commitment which alone can make them worth while must come from within. Any moves in this direction should have the collective agreement of the industry's employees."
It is Ash Wednesday today, a very important day in the life of churchmen, and I happened to notice in the Prayer Book what is the Scripture for today:
"Blow the trumpet in Zion, sanctify a fast, call a solemn assembly, gather the people, sanctify the congregation, assemble the elders, and let them say 'Spare thy people, O Lord, and give not thy heritage to reproach.'"
That is our responsibility in the months ahead. There has never been a more serious time in the history of this country. It will need all the wit and wisdom of both labour and management and the public generally coming together to weather the storm that is upon us. We can very well say, "Spare us, O Lord, and give not our heritage to reproach."
10.36 p.m.
Viscount CALDECOTE: My Lords, I must apologise to the House for not having been here at the beginning of this debate, and particularly to my noble friend Lord Carr and others who spoke early for not having heard their speeches. I ought probably also to apologise for presenting the House at this late hour with what must be an anti-climax after the wise and entertaining speech of the noble Lord, Lord Rhodes.
On reading this report, I could not help being reminded of the apocryphal civil servant who ended the presentation of
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a case to his Minister with the words, "And those, Minister, are the opinions on which I base my facts." In this report and in the consideration of it, there is really some danger of not seeing the wood for the trees. That is largely because of its biased terms of reference—biased in favour of trade unions, strongly biased against the professional manager.
I hope that your Lordships will allow me, even at this late hour, just a few minutes in which to direct attention to one or two basic issues. I hope, in doing so, not to overlap too much upon what has already been said. I suggest that we need to keep in mind the fundamental objectives of any change that is made in the organisation of industry. The first objective must surely be to make industry more efficient and more profitable; the second must be to provide more satisfying employment to all who work in it. I do not believe that those two objectives are unrelated: certainly, they are not. Nor do I believe that those objectives are in conflict. Of course there are other considerations, but they are secondary or embraced in those two objectives.
So we need to judge the recommendations in this report against those two objectives. However, we must first clear away the misunderstandings and complications that arise from the use of the words "industrial democracy". The Oxford English Dictionary defines democracy as:
"That form of government in which sovereign power resides in the people."
So it is clear, as has been pointed out many times today, that this report with its recommendations is about power. It is not about efficiency or about people getting more satisfaction out of their jobs. It is about power. Unfortunately, the expression "industrial democracy" has received a lot of publicity and is now widely but loosely used. I suggest that it needs a little further examination. Does it mean giving to all employees direct influence on decisions through voting by representatives by some kind of referendum at intervals in the conduct of business? If so, it must be opposed root and branch because it will lead neither to greater efficiency nor to greater contentment in industry.
In industry, just as in making shoes, the cobbler needs to stick to his last. That has been made very clear by

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many speakers today. We do not need amateurs. We must have professionals, experienced people to direct and manage companies. On the other hand, does it mean participation by all employees in the decision-making process through involvement wherever they can make a constructive contribution to the decisions to be taken? If that is what it means, then it has my full support, and I believe that it would have the support of everyone in your Lordships' House. If that is so, then we need to seek the best means to make that policy effective.
May I give your Lordships just one short example of what I mean? It would not be any use asking the financial director of a company to become involved in a discussion on how to make a new tool. It would be equally stupid to ask a toolmaker to become involved in a discussion on the issue of a new debenture. Neither of them could contribute constructively to those discussions. But it would be very sensible, and indeed highly desirable, to get them both around a table for a discussion on the development, design and manufacture of a new product, because each could contribute a lot to that discussion.
Whatever we do we must ensure the continuing authority of management in industry to enable efficient and timely decisions to be taken. But in saying that I should like to make quite clear at once that I reject utterly the expression "the right to manage". I do not believe that those who work as managers in industry have any right to manage at all. We certainly have a duty to manage to the best of our ability, to manage the resources entrusted to us, and to make the best use of them. But we are able to manage efficiently on a day-to-day basis only with the respect and the enthusiastic co-operation of all those who are involved.
But combining the authority needed to manage efficiently with effective employee participation and involvement in the decision-making process is a very difficult art. It cannot be achieved at a stroke. It cannot be achieved by law, least of all by coercion by law. Surely the Government ought to have learnt that, as other noble Lords have pointed out, through the experience of the Industrial Relations Act. It seems a tragedy if we are to repeat that
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mistake and bring in coercion and the law to force this kind of structure on industry, against the wishes of vast numbers of professional managers.
The practice of that art is possible only against a background of a clear, positive industrial relations policy. It often needs acceptance by management of an entirely new management philosophy. It often needs acceptance by trade union leaders of a new trade union philosophy. It is not at all easy to achieve. Managers and trade union officials are often very conservative, with a small "c". They are sometimes very slow and reluctant to change. If involvement is to be effective and achieve anything constructive, there needs to be a very wide exchange of information at all levels. That is vitally important if participation and involvement is to mean anything. You cannot become involved in things that you know nothing about, so the flow of information has to be up and down and sidewards. There have to be explanations and discussion. It is all immensely time-consuming, but it is all immensely worth while. It is time-consuming because it means meetings, visiting, talking, writing, morning, noon and night. If you are going to make the impact that needs to be made in a fair-sized company there is no alternative.
Of course the establishment of works councils, of committees at various levels is of great importance, as the noble Viscount, Lord Watkinson, has pointed out, and can make a huge contribution in dealing with the problem. We have found in our company the establishment of briefing groups—small numbers of people brought together and told the present position, asked their opinion about future plans, and involving feed-back of the views of people at every level on the shopfloor, in the office and at all levels of management——to be a very useful means of passing information, of obtaining opinions and getting people to share in the decision-making process.
But often progress is too slow, often it is frustrating, for neither managers, trade union officials nor employees can be pushed faster than a certain rate along a road of new ideas and new philosophies. As others have pointed out, it needs some of the old-fashioned leadership and example which is sometimes perhaps not accepted today as being as important as

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it used to be. It needs trust in people's judgment and in their integrity. They are all vital constituents to success, but success in what? It is success in making industry, I believe, more efficient, more profitable, through more enthusiastic and greater understanding co-operation of everybody who works in it; in making it a better and a happier place in which to work. But the law can contribute virtually nothing to all that. It is certainly no place for detailed legal interference at board or any level, as proposed by the majority of the Bullock Committee. It is a fallacy—a real, dangerous fallacy—to think of directors as representatives of shareholders intent on looking after their interests alone, vitally important though the shareholders are as providers of capital.
My Lords, as I see directors working in a company employing some 20,000 people here and 5,000 abroad, we look at every issue against the effect of the decisions we take on the continuing prosperity of the company as a whole, in the interests of the employees, of the shareholders and of the customers, and in the interests of a continuing, prosperous business. We do not vote, we do not negotiate, we do not have collective bargaining. The idea is really absurd. There is no room in such discussions for representatives of sectional interests. There is no room for the introduction of collective bargaining between groups of directors. But there are two areas, I believe, where changes in the law could be useful; first, to clarify the legal position of directors, to make it clear de jure as well as de facto, as it is now, that they are responsible for the continuing prosperity of the company as a whole, and of everybody connected with it. Secondly, to ensure steady progress along the path of greater involvement for all employees, and participation by them in the decision-making process, by companies which are too slow or reluctant to go along that road.
Both those points, it seems to me, are very well covered and supported by the policy and proposals of the CBI; and it is encouraging to see that the Prime Minister seems to be becoming converted to the importance of participation and involvement by employees below board level, to take away the concentration on employee directors elected by trade unions to the board. I hope he will proceed
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further along that road and will ultimately reject the majority proposals of the Bullock Committee, and will make it clear that he does so. It will be very interesting to know, when the noble Lord replies to this debate, whether the Government have now decided to set their face against the passing of detailed laws in this highly difficult and complex field. Is that the new trend of Government policy? It will be very interesting to hear if it is. For myself, I hope it is, because that would show that the Government have done what they are always telling us in industry we should do: they would have listened, have consulted, and shown it had been effective in changing decisions which have been taken.
So let us get away from a consideration of power and the law. Let us get back to common sense; to the flexible approach that the noble Lord, Lord Cooper, advocated and indicated to us that his union, the General and Municipal Workers' Union, advocate. Let us get back to the common sense of letting those who understand these problems at first-hand deal with them—the managers, the trade union officials, the employees. Let them all get together and work out a solution. In addition, we want the minimum interference by the law, and the minimum change necessary to make progress along those lines as easy as it can be. That, I believe, is the way to obtain greater involvement by employees, greater participation, greater efficiency in industry and, perhaps above all, greater happiness for everybody who works in it.
10.50 p.m.
Lord BANKS: My Lords, it is clear that the whole House is grateful to the noble Lord, Lord Carr of Hadley, for providing us with this opportunity today to discuss this very important subject, and I would accord to the subject the degree of importance which the noble Lord, Lord Brown, claimed for it. I think that we have had an extremely valuable debate, and in the course of it we have had the privilege of listening to the two most interesting maiden contributions from the noble Viscount, Lord Trenchard, and the noble Lord. Lord Elibank.
There are three principles, it seems to me, which are to be found in both the

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majority and the minority reports. These principles I welcome wholeheartedly. They are, first, that employees should participate in the election of directors in firms over a specified size; secondly, that there should be in these elections parity between share-holders and employees; and, thirdly, directors should be responsible to both shareholders and employees. Those three principles I think are to be found in both the majority and the minority reports. However, the authors of the minority report prefer development towards acceptance of these principles to be on a purely voluntary basis. I think that this was also the point of view of the noble Lord, Lord Harmar-Nicholls, at any rate as I understood it.
So far as I am concerned, I should like to see at least the degree of compulsion proposed in the majority report; and the noble Lord, Lord Kirkhill, described for us the triggering mechanism by which the employees in a company under the Bullock majority proposals would be able to opt for a statutory scheme. I would amend that triggering arrangement if I could by saying that instead of being only a union which had 20 per cent, of the employees in the company in its member-ship, that only that union should be able to ask for a ballot, I would say that a certain specified proportion of the employees, whether or not members of the union, should be allowed to do it. But the triggering process allows a degree of flexibility because employers and employees who have agreed a particular scheme are free to carry it on without interruption if they decide to do so. Indeed, it may be sensible to have a period of delay before the triggering system is even introduced in the first place to see what arrangements could be come to on a voluntary basis before the power to opt for a statutory scheme were available.
I, myself, would prefer a different type of statutory scheme from that advocated in the majority report. I should like to see a lower threshold; for 2,000 employees seems very high and eliminates a considerable section of the population. I would put forward as a suggestion an alternative proposal which I believe would provide the best means whereby the three principles which I have just outlined could be put into practice. All the directors of a supervisory board would be jointly elected
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under this arrangement by shareholders and employees, each having 50 per cent, of the voting rights and the single transferable vote would be used.
Thus, if all the employee votes were to go to the employee candidates, then 50 per cent, of the directors would be employees; but with this method of election there would inevitably be some degree of cross voting and so no director on the supervisory board would be able to say with certainty, "I represent only shareholders" or "I represent only employees"; and directors would thus be responsible to the company as a whole which would be greatly to the advantage of the company.
We should be opting for a two-tier system and in that we should be in line with the proposals of the European Com-mission for the European company; and I agree with the noble Lord, Lord Elibank, that this is an important factor. I agree also with the noble Lord, Lord Gore-Booth, that we ought to be prepared to consider whether we can learn from what is done elsewhere. In opting for a supervisory board, we should be siding with the minority report in that particular issue. The authors of the main report seem to regard the supervisory board merely as an adjunct to the present system, an additional monitoring body; whereas I find it difficult to see how it could be entirely divorced from major policy considerations. In that respect I have a good deal of sympathy with what was said by the noble Lord, Lord Cooper of Stockton Heath.
We on these Benches insist that in the participation all employees of a company, whether or not members of a trade union should have equal voting rights. Just as I reject what appears to me to be the timidity of the minority report, so I also reject the undemocratic nature of the proposal by the Bullock Committee majority report, condemned so often today, for the election process to be entirely in the hands of the trade unions.
We also believe that industrial democracy is not something which operates only at board level; it must be applied at all levels. We want to see a structure of works councils as an essential counterpart to employee representation at board level, works councils of the kind which

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have been described to us today by the noble Viscount, Lord Watkinson, and by the noble Lord, Lord Brown. I cannot accept that the trade union structure—vitally important though it is—is sufficient in view of the fact that half the employed population are not union members.
Our aim must be a genuine partnership between shareholder and employee; and in my view where employee co-operatives are established, in which the shareholders are the employees acting collectively, then they should receive the fullest encouragement from the Government. The Bullock Committee reports deal with ways in which employees can share in control; but, as my noble friend Lady Seear pointed out, industrial partnership has two sides to it. One is a share in control, and the other is a share in profit and asset formation. I do not believe that these two aspects should be considered in isolation. They are essentially complementary.
There are objections to both the majority and minority reports of the Bullock Committee. I find myself in agreement with the noble Lord, Lord Shackleton, in saying that I cannot accept either as it stands. There are other ways as I have sought to indicate, of achieving the three important principles which underlie both reports. The noble Lord, Lord George-Brown, told us earlier that we must not make the inadequacies of Bullock an excuse for not going ahead. The Bullock Committee reports focus attention on the whole question of industrial democracy. While I look for a considerable improvement on what is so far offered, I welcome the fact that at last industrial democracy appears to be on the way in.
10.59 p.m.
The Earl of GOWRIE: My Lords, at this hour, an approaching middle-aged man's fancy lightly turns to the thought of a drink—
Several noble Lords: Oh come on!
The Earl of GOWRIE: I am very flattered by the noble Lord. My Lords, we are also all looking forward to hearing what the Government have to say in answer to the debate, whose length
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reflects the great chorus of anxiety and alarm which has greeted the publication of the Bullock Report. First, I should like from these Benches to add our congratulations to the maiden speeches of my noble friends Lord Trenchard and Lord Elibank—and how honoured we are on this side that they are our noble friends. We are really abandoning, as is appropriate to the age and the political atmosphere in which we live, the concept of the non-controversial maiden speech. Merely to hold the Bullock Report in one's hand is to be involved in controversy. But in the sense that to be controversial is by no means to be discourteous, both noble Lords are in the spirit of our tradition. They spoke much good sense very persuasively, and we all hope that we shall hear again from them before long.
Another tradition of this House is that we try as hard as we can to speak on subjects of which we have had experience. The maiden speech of my noble friend Lord Trenchard was an admirable instance of this tradition. As a former don, who is now a self-employed businessman, I could not be said to have experience working in or administering a company with more than 2,000 employees.
I am inclined, therefore, to approach the subject of industrial democracy with a proper diffidence. But I am fortified by two considerations. One is that neither Lord Bullock, nor Professor George Bain, nor Mr. Clive Jenkins, nor Mr. Jack Jones, nor Mr. David Lea, nor Professor Wedderburn, nor, I think, Mr. Nicholas Wilson (though that may be less certain)—all of them signatories to the majority report—has very special claims to having managed a very large company, either. That seems to me to be precisely what is wrong with, the majority report. The other consideration is that—
Lord SHACKLETON: My Lords, if I may interrupt the noble Earl, Mr. Nicholas Wilson is a very distinguished lawyer who has advised a very large number of companies in a number of areas.
The Earl of GOWRIE: My Lords, that is precisely why I qualified my remarks when I came to his name. The other consideration is that we are here

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more or less all involved in politics, and it seems to me that this report is only peripherally involved with the participation of employees in the affairs and fortunes of their companies, which is what—and here I agree with my noble friend Lord Watkinson—that unsatisfactory catch-phrase "industrial democracy" really means. As my noble friend Lord Harmar-Nicholls pointed out, it is a political document. It is centrally involved in politics. It is, as my noble friend Lord Caldecote said, really about power.
The "iron corset" of the terms of reference, the haste with which the document was put together, the preponderance of academics and union officials—indeed, as witnessed by the very names of Jones, Jenkins and, above all, Wedder-burn—the commitment to legislation as part of the Social Contract before the report was completed, the impossibility of complete or coherent agreement even among the signatories of the majority report, let alone the prospect of legislation on the basis of the kind of division we find with the minority report—all these link the Bullock Committee not with other committees of inquiry or Royal Commissions, but with the Trade Unions and Labour Relations Act, the Employment Protection Act, with the various nationalisation measures and price controls: in short, with the whole machinery of the Social Contract.
I contend that machinery is inefficient. It is inefficient because we have not solved, and are nowhere near solving, the highest rate of unemployment since 1947. It is inefficient because, three years after the fall of the Heath Government and the instituting by Statute of the Social Contract, the inflation rate is nearly six percentage points higher, productivity is relatively lower and we have the largest peacetime borrowing on record. That is what seems to me to be the context of the Bullock Report, or of the part of it on which the Government say they will base legislative proposals.
Before I am accused of being merely negative, may I say that I am a convinced capitalist and I believe that participation by employees in the affairs and fortunes of their companies is essential to the survival of all capitalism. I scrawled that remark this morning before having the
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delight of listening to the speech of the noble Lord, Lord Houghton, when, with much more authority, he said exactly the same thing. I agree with the noble Lords, Lord Brown and Lord Houghton, in the elevation of this subject to a central position in any debate about our economic affairs. I published a little writing to that effect, which has been generally quite well received. My ideas are not in the least novel or original, so I can say that without immodesty. It is surely common sense that in our phase of capitalism the employee must become as important as the shareholder. Indeed, in so many cases he is the shareholder, as the report itself acknowledges, through his participation in the financial institutions of this country by way of bank savings, pension funds, insurance, building society mortgages and the like. As my noble friend Lord Carr said, the interest of the shareholder is only the interest of the man in the high street; or, I would say to the noble Baroness, Lady Seear, the interest of the consumer.
It is not common sense to say that this can be achieved within one Parliament, or even two, still less within two Sessions of Parliament, and at the dictation of men of pronounced political views and very decided political power. Of course there is a place for a legal framework, even if the picture inside it is necessarily an improvisation. My noble friend Lord Carr acknowleged this, with all his experience and authority. The CBI, in the person of my noble friend Lord Watkinson, has done so as well. I would add a small personal note here. I am not myself a great admirer of what I think of as cheer-leading legislation—I think I might be a little nearer to the noble Lord, Lord Byers, in that respect—but I acknowledge that such legislation has a place. As the noble Lord, Lord Elibank, said in his maiden speech, we may need the spur of legislation.
As I listened to the opening speech of my noble friend Lord Carr, I could not help reflecting that one of the ironies of Bullock is that in order for anything approaching the majority recommendations to be enacted, something like the Industrial Relations Act would have to be resurrected. All the comparisons with West Germany, for instance, fall to the ground so long as collective agreements are unenforceable in law; and I am glad

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that I have the authority of the noble Lord, Lord Rhodes, to bring in that point.
Surely industrial democracy should be a matter for free collective bargaining between workers and managers within each individual enterprise. No private sector company with over 2,000 employees exists that would not welcome a greater understanding of management problems among employees and a greater sense of involvement in the fortunes of the company, whether this involvement were by councils, or seats on the board or shareholdings. The tragedy of Bullock, it seems to me, is that it is using such necessary and evolving participation as a cover for further statutory extension of trade union power.
In all friendliness—and this has been a friendly debate—I warn the Government, and through them the union leaders, that if they legislate on the basis of the majority report their efforts will backfire as much as the other Social Contract legislation has backfired. The workers of this country, whether unionised or not, whether white or blue collar, have other things on their minds at the moment than this imposed blue-print for some academic idea of industrial health and efficiency. They are paid too little and they are paid in bad money; and the money they are paid bears little relation to the effort or the skill they bring to their work. They are taxed too highly, because what the Chancellor calls the social wage is too high; in other words, they are not trusted to spend what they do earn in a responsible way.
It may be that they need better management, but what prospect for entering management in the productive manufacturing sector—as the economists Bacon and Eltis have convinced the Prime Minister to encourage us all to do—does this document offer? The majority report is a positive disincentive to junior and middle management who, as my noble friend Lord Birdwood said, look to career prospects in their companies through merit, rather than through the patronage of a trade union. It may be that more workers wish to be able to join management, and this would indeed be desirable. But what likelihood is there of their being able to do so, if the road to management goes by way of the wage
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bargaining sector? As my noble friend implied, it is difficult to run with the hare and hunt with the hounds, or, to put it in the words of the noble Lord, Lord Brown, we really must guard against turning the board-room into a totally ineffective negotiating forum.
I would make just one more point. Although like most noble Lords who have spoken in this debate—I can think only of the noble Lord, Lord McCarthy, and the right reverend Prelate the Bishop of Southwell as exceptions—I have been very critical of both the motives and the conclusions of the majority report, I agree with the noble Lord, Lord George-Brown, when he said that we all, on all sides of the political or industrial divide, must not allow the inadequacies of Bullock to become an excuse for not going ahead with worker participation.
I am not at all frightened of the majority proposals of Bullock because I am wholly confident that legislation based upon them will never be enacted. The Government would simply be faced by too much informed and, indeed, loyal opposition. Consider the speeches of the noble Lord, Lord Cooper, the noble Lord, Lord Lee of Newton, the noble Lord, Lord Houghton of Sowerby, and the noble Lord, Lord Rhodes, in this context. Consider also the formidable arguments brought to bear by the noble Lord, Lord Shackleton, as an ex-Labour Cabinet Minister. It seems to me that the Government are too worried by this opposition—the Prime Minister has made heavy hints to this effect and even the speech of the noble Lord, Lord Kirkhill, showed signs of them today—and by opposition among trade unions themselves to be able to get such legislation through. That would need the improbable result of a massive Labour victory at the next Election. Our job, in the official Opposition, as in Parliament as a whole, is to keep this principle before us while uncovering, as I believe my noble friend's debate has today uncovered, a better way.
11.12 p.m.
Lord ORAM: My Lords, when a month ago the Bullock Report was published and the noble Lord, Lord Carr of Hadley, and I had our brief exchange on the subject in your Lordships' House, we agreed that Parliamentary debate

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would be an important element of the consultations into which the Government proposed to enter. As other noble Lords have said, today's debate has proved to be a most valuable occasion for this purpose. I agree with the noble Lord, Lord Gore-Booth, that the record of the debate will warrant the closest study and will indeed be an important document in those consultations.
The debate has been distinguished by a great number of contributions which have come from all quarters of the House and from very many noble Lords who have been able to bring to bear their own experience of industry and commerce. Like other noble Lords, I would refer in particular to the two maiden speeches to which we have listened. The noble Viscount, Lord Trenchard, said that when he joined the board of his company no one took any notice of him. I assure the noble Viscount that in this company he has been taken notice of and will be taken notice of in future. As to the noble Lord, Lord Elibank, he made a most impressive speech. I hope it does not embarrass him if I say that I agreed with practically everything that he said. In particular, I noted that he said that one of our objectives should be improved industrial performance by improved motivation, and he linked the whole subject of industrial democracy to that concept.
Perhaps at the outset I may be allowed to indicate my own experience in these matters which, though modest, is, I believe, highly relevant to the issues at stake. For five years I was the chairman of a large retail organisation employing some 2,000 workers and, therefore, of a size relevant to the Bullock Report. Yes, I would say to my noble friend Lord Rhodes, it was a Co-op, about which he poked some innocent though somewhat misplaced fun, and I was glad that my noble friend brought him sharply back to a more realistic assessment of the Co-operative movement in relation to industrial democracy.
The directors over whom I presided in those five years were all ordinary workers—some directly employed by the enter-prise, but others from other forms of employment—and they proved themselves wholly capable of tackling the important
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range of business decisions which it fell to us to deal with at that time: mobilisation of new capital, the redeployment of existing capital resources, recruitment of top level staff and the expansion of the enterprise through a wide geographical area. We overcame many difficult problems with great success, and therefore if in what I am about to say I betray a certain enthusiasm for industrial democracy with workers on the board I do so because I have seen it work.
Many of today's speakers have acknowledged that this problem of industrial democracy is indeed a complex one and goes far beyond the issue of worker-directors on boards, which is the proposition with which the Bullock Committee was mainly concerned. The debate has revealed that complexity, and during the course of the debate so many separate and inter-connected issues have been raised that it is clear that in trying to comment on the debate from the Government's point of view I shall not be able to deal with them all; but I hope by grouping them to do justice at least to the main threads of the arguments to which we have listened.
First, I will deal with certain themes which have characterised many of the speeches and upon which there seems to be a large measure of agreement, even among those who on certain issues are passionately at variance. I wish to stress this common ground at the outset because, as has been mentioned, the Prime Minister, when he met the CBI last week—and the noble Viscount, Lord Watkinson, in his speech acknowledged this—urged that we should start by concentrating on agreed propositions. But lest your Lordships should be misled by something said by the noble Viscount, Lord Caldecote, when he asked whether the Prime Minister had rejected the proposition of workers on the board, I should say that the Prime Minister did not, as I understand it, go that far. What he said was that the Government would begin the process of consultation with the CBI on participation below board level, but that would not be the end of the consultations. At a later stage in the consultations, the Government would wish to discuss with the CBI the question of employee representation on boards. I see the noble Viscount, Lord Watkinson, nodding in agreement that that is a fair statement of the position.

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I was glad that the noble Lord, Lord Carr, in opening the debate, brought the second part of his speech to more emphasis upon a constructive approach to this whole question, and I was very glad that he brought forward those constructive suggestions in view of the rather—I will not say destructive, but rather open condemnation of the Bullock proposals in the opening stages of his speech.
The first area of agreement to which I wish to call attention arising out of the debate is the proposition that company law at present vests ultimately legal control in shareholders alone and that this is not in line with today's wide-spread acknowledgment that there are other interests deeply involved in the operation of a company, notably the workers, the consumers and the community at large. I agree with the noble Baroness, Lady Seear, in indicating that those are elements which are equally concerned with the shareholders. I think that is one area of agreement, even though we may disagree about the methods and the changes in law which are necessary to give recognition to the interests and rights of those other elements.
We would agree with the need for partnership, which was the word the noble Viscount, Lord Watkinson, emphasised, but we might disagree about the form of that partnership and the path towards it. What we need to ensure, in my view, is that the partnership is a real one, a real sharing of decision making and of power, not a shadowy substitute for that. Here I very much agreed with several parts of the notable speech of the noble Lord, Lord George-Brown, who emphasised the need to involve workers in decision-making and in the acceptance of responsibility.
The second thing upon which I believe there is a good consensus of agreement is that industrial democracy must be established at all levels in an enterprise. It is not just a question of what is the right structure at board level; there should be consultation and participation below the board level; works councils have been mentioned, participation agreements are being particularly put forward by the CBI, and similar means. But some argue that this participation at these lower levels is necessary before we can implement the system of worker-directors. Others,
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on the other hand, including myself, agree with the majority of Bullock that if the law established the right to worker-directors that would be the quicker way to the development of the democratic infrastructure. But, whatever approach we make to that question, we can, I think, at least agree that the provision for worker participation below board level is itself an important necessity.
Thirdly, my Lords, I believe there is a wide measure of agreement that whatever methods are adopted they should be flexible—many noble Lords have used that word "flexibility"—so as to enable different companies to adopt those methods of participation which are most suited to their particular needs. I would draw your Lordships' attention to the fact that the Bullock Report itself provides for this flexibility, as will be seen if noble Lords will look at the beginning of the section proposing a legal framework at page 102. There is provision for flexibility in the proposals put forward by the Bullock Report. I believe that we should approach the consultations with this need for flexibility very much in our minds, and it will not be the intention of the Government that legislation should prevent companies and their employees from reaching agreement on arrangements which they both consider best suited for their particular needs.
My Lords, there is a further proposition on which I hope there is general consensus, and that is that worker's representatives are capable of reaching sound business decisions for their firms. Some have cast some doubt on this, implying that workers are not qualified; I think reference was made to "amateurs". But does this mean that they cannot become qualified given the opportunity and the training? I noted that the noble Viscount, Lord Watkinson, and the noble Lord, Lord Byers, made this point. They feared that the Bullock proposals would create an atmosphere of confrontation in the boardroom; delays would ensue and business opportunities might be lost through those confrontations. My own experience, limited though I admit it to be, is that that is not the case. It is not the case that the kind of worker representation that we envisage will lead to a wasteful confrontation. I agree that whatever machinery one has, it depends

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upon the way in which it is operated. I agree that we have to have the utmost of good will in operating whatever machinery is set up. However, I do not believe that in principle there is anything which suggests that an atmosphere of confrontation is inevitable.
Therefore, whatever our disagreements on any particular proposal in the Bullock Report, and whatever we may think of the report as a whole—and one has gathered during the debate that quite a number of noble Lords do not think very much of it—it behoves us in the interests of our country's economic well-being to strive towards as much agreement as possible so that when legislation comes, as I believe it must, it will have a unifying rather than a divisive effect.
It is in that spirit that I now approach a number of issues upon which widely different views have been expressed today. I take, first, the question of the Bullock recommendation that worker-directors should be elected through the established trade union machinery. Many speakers in this debate have taken strong exception to that particular recommendation. My noble friend Lord Kirkhill in his opening remarks dealt with this point at some length. Therefore, I need only summarise what he said in putting before your Lordships the Bullock majority argument in favour of trade union involvement in the process of appointing worker-directors.
In the larger companies, trade union membership is high and, moreover, the functions of unions are already considerably wider than collective bargaining. My noble friend Lord Cooper of Stockton Heath spelt out—significantly I thought—the ways in which the role of unions has developed beyond that of collective bar-gaining. The Bullock argument is that trade unions are, therefore, the natural vehicle for expressing employees' views at board level. These, in my view, are strong arguments, as is also the point asserted by the majority report that, far from creating conflict between worker-representation on the board and collective bargaining, its proposals would ensure that the two processes operate in a mutually helpful way. My noble friend Lord McCarthy expressed the same essential point in a forceful and realistic way. I was very
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glad to hear the right reverend Prelate utter words on this subject which were particularly welcome and, in my view, significant. As my noble friend Lord Kirkhill has said, on this subject of the trade union role, the Government recognise the many anxieties which have been so forcefully expressed today. In the consultations we shall seek to reach a solution which will command widespread support.
The noble Lord, Lord Gore-Booth, asked whether I could give him some guidance about the Bullock proposal as to how the trade union channel would come into operation. The noble Lord will realise that, first, the initial ballot—the triggering off proposal—is for all employees. Beyond that, the Bullock majority suggest that the Joint Representation Committee should decide selection arrangements. The noble Lord will find set out on page 118 at paragraph 28 of the Bullock Report various examples of the way in which the trade union machinery would be involved, including, I would stress, holding a secret ballot of all employees in the company, as one of the alternatives to which it directs attention.
The second point of disagreement is the principal one which separates the majority report from the minority report. This is the issue as to whether there should be a unitary board with worker and share-holder directors, or whether there should be a two-tier board structure. It was the judgment of the majority report that the unitary board would be best for this country and that too close a comparison with, say, Germany, is not useful because historically the two-tier system has been operated in Germany for many years before worker-directors were introduced.
Their main argument in favour of the unitary board must, I believe, be given all due weight when consultations take place. This main argument is that the two-tier structure would very much restrict the influence of worker representatives in decision-making. Obviously the argument on this issue is not clear cut, because at one time the TUC favoured a two-tier system and the CBI opposed it, and now their positions, as I understand it, are reversed. Therefore, I believe that the Government are right in stressing, as I do now, that this too is a matter for consultation, although I should make it clear, as I have on an

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earlier occasion, that the Government's starting point will undoubtedly be that of the Bullock majority report.
Another issue that was raised by a number of noble Lords, particularly the noble Lords, Lord George-Brown and Lord Brown, and also by the noble Baroness, Lady Seear, and the noble Viscount, Lord Rochdale, was the position of middle managers within a more democratic system of control in companies. We recognise this as a most important issue. In my personal view it is one on which we should all take an open-minded attitude until our discussions have proceeded a good deal further.
The Bullock majority made no special recommendations for middle management except that where they are unionised they will have an opportunity to take part in the process of adopting employee-directors. The Bullock minority, within the context of their preference for a two-tier system, suggested that, as in Germany, a seat on the supervisory board should be reserved for an employee-director representing management. Other countries have adopted other solutions. It is a matter which we shall have to take a close look at in the course of the consultations.
Finally, there is the question of whether industrial democracy can or should be brought about by legislative requirement or whether, as some have argued, it is a desirable objective which we should reach by a process of voluntary agreement. As I said in reply to the noble Lord, Lord Harmar-Nicholls, on the 26th January, I do not think that it is a matter of a choice between legislation on the one hand and voluntary development in these matters on the other. Both are necessary and both are possible. Legislation does not imply rigidity. It need not repress natural growth. But what it can do, and what it should do, is to establish the fundamental right of employee representation. Without it we can be sure that there would be many companies that would fail to act, however progressive and far-sighted others may be. I listened with particular interest to my noble friend Lord Lee of Newton on this matter. He spoke, as it seemed to me, some very wise words about the need both for proper grass roots progress and for ensuring that what he called the dinosaurs do not lag behind.
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As the noble Lord, Lord Elibank, rightly said, we do not have time to await slow voluntary development; the spur of legislation is needed as well. In my view, legislation is necessary to provide a minimal structure on which and within which a whole range of voluntary growth of democracy can take place, and for these reasons the Government are committed to legislation. Every country in Europe where worker participation at board level has been brought about has felt the need to legislate, and I am sure that Britain cannot be the exception. Without basic legislation, industrial democracy will not be achieved and, without industrial democracy, economic revival will not be achieved. Therefore, after due consultation—we hope fruitful and constructive consultation—we intend to put on the Statute Book an Act which I believe will be a notable milestone in the course of this country's industrial development.
11.37 p.m.
Lord CARR of HADLEY: My Lords, my wife is inclined to complain, or perhaps I should say comment with a certain fatalistic resignation, once I get involved in a subject, because I cannot stop talking about it, and what is worse I am inclined to provoke many other people to join in. When she realises how many noble Lords have participated in this debate she will think her complaints are well-founded. I assure noble Lords that at this late hour I shall be very brief and not take advantage of the privilege of my right to reply, and therefore I do not intend to take up any points, however tempted I may be to do so, or try to sum up, however briefly, the themes of this long debate.
I believe this has been a valuable debate in which we have had strongly argued opinions, often differing ones, but opinions which have been based on real experience and hard thinking and not on fixed positions of a partisan and prejudiced nature. What we have heard today has, in my view, been worth listening to and should be taken notice of seriously by Government and everybody else involved. Today has provided an example of where your Lordships' House can make a special and worthwhile contribution; Parliament as a whole is very fortunate to be able to call on such a wide range of

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real experience as we have seen and heard deployed today, and I hope the Government will indeed take seriously what has been said.
I hope they will take very seriously both the warnings which have come from all sides about many of the dangers and difficulties inherent in the Bullock majority report and the encouragement which has come from the House about the need and the will to proceed to develop broad, wide, deep participation at every level in industry. I wish to express my gratitude to all noble Lords who have taken part in the debate and in particular to offer my congratulations to the two noble Lords who both made notable speeches; they came to the House and gave us in real depth their experience of the matters about which they spoke. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.

ST. PAUL'S PLAYING FIELD (TRUST) BILL
Report from the Standing Orders Committee, That the Standing Orders not complied with in respect of the Petition for the St. Paul's Playing Field (Trust) Bill ought to be dispensed with, and leave given to introduce the Bill; read, and agreed to.
AIRCRAFT AND SHIPBUILDING INDUSTRIES BILL
Report from the Standing Orders Committee, That the Standing Orders not complied with in respect of the Aircraft and Shipbuilding Industries Bill should be dispensed with and the Bill be allowed to proceed on the following condition, namely, that a notice should be published in appropriate national newspapers in the week beginning Monday, 28th February 1977 giving details of the procedure for objecting to the Bill in accordance with the usual practice relating to private Bills, but without giving a summary of the purposes of the Bill as required by Standing Order 4; the said Report to be printed. Ordered, That any Petition praying to be heard upon the merits against the said Bill be deposited not later than Friday the 18th of March next.
  CHARTERIS ROAD, ISLINGTON
  CHARTERIS ROAD, ISLINGTON
  CHIEF CONSTABLES: FUTURE APPOINTMENTS
  CHIEF CONSTABLES: FUTURE APPOINTMENTS
  NATIONALISED INDUSTRIES: BOARD MEMBERS' SALARIES
  NATIONALISED INDUSTRIES: BOARD MEMBERS' SALARIES