Sitting of 23 March 1977

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

    Council House Sales
    Mr. Fairgrieveasked the Secretary of State for Scotland if he has any plans to encourage local authorities to sell more houses to sitting tenants.
    The Under-Secretary of State for Scotland (Mr. Hugh D. Brown): The sale of council houses is an aspect of housing policy which must await the outcome of the current review.
    Mr. Fairgrieve: Does the Minister appreciate that in survey after survey a substantial proportion of council tenants want the chance to own their homes and are becoming increasingly dissatisfied with a system that allows the State to interfere more and more in their daily lives, including owning the very roofs over their heads?
    Mr. Brown: The present policy is working adequately, in the sense that we take into account waiting lists and unmet demands for rented accommodation in the council sector. Therefore, we have no reason to change the situation, but as I have said we are reviewing it. In the recent survey in Glasgow, 80 per cent. of the council tenants said that they did not want to buy the house in which they were living at present.
    Mr. Welsh: Will the Government consider further mortgage schemes to allow first-time buyers to buy private and council houses? What steps have been taken to introduce mortgage schemes, such as the half-and-half mortgage and rental purchase schemes?
    Mr. Brown: All these matters are contained in the current housing review.
    Mr. Carmichael: Will my hon. Friend make sure that in any survey carried out more attention will be paid to the fact that we do not want council houses sold or bought only by sitting tenants in the so-called good areas? We want them spread throughout the city including, if necessary, the so-called bad areas, where the price will be more attractive to the tenants.
    Mr. Brown: That presupposes that we are going to embark on a policy of selling council houses. I have not said that, and we do not intend to do it. But I take into account that it would be completely disastrous if council houses were to be sold only in the so-called good areas.
    Mr. Teddy Taylor: Will the Minister at least give us an assurance that if a considerable number of councils are elected with Conservative majorities, on a clear and specific mandate to offer council tenants the right to buy their own homes, he will not frustrate that policy?
    Mr. Brown: That raises wide issues about the extent to which the Government have the right to dictate or lay down policy to local authorities. We have encouraged local authorities and given them the maximum amount of freedom, but there is a matter of serious principle involved here because of public investment, and I can give the hon. Gentleman no such assurance.
    Mr. Teddy Taylorasked the Secretary of State for Scotland how many council houses were sold to sitting tenants by district councils in the most recent annual period for which figures are available; and if he will make a statement.
    Mr. Galbraithasked the Secretary of State for Scotland how many council houses have been sold by local authorities in each of the past five years to the latest available date.
    Mr. Fairbairnasked the Secretary of State for Scotland what sales of council houses he has authorised; and how many he has refused to authorise in each of the past three years.
    Mr. Hugh D. Brown: The information requested involves a number of figures, which I am publishing in the Official Report.
    Mr. Taylor: Will the Minister explain why, although the Question was tabled a fortnight ago, he is not prepared or, apparently, able to give the answer at Question Time today? Are not the figures absurdly low, given that more than half the people of Scotland live in council homes and that many council tenants will never have the right to become owner-occupiers unless the Government are prepared to encourage a scheme whereby they can buy their own homes at favourable prices?
    Mr. Brown: I am merely carrying out the normal function of the House when there are a number of figures to be given.
    Mr. Taylor: There is only one figure to be given.
    Mr. Brown: If the hon. Gentleman reads the Question he will find that more than one figure is involved, because the Question refers to the past five years. Therefore, I am carrying out the normal convention.
    As for the wider issue, I have already answered that point. It will be looked at in the context of the housing finance review and the Green Paper that we shall ultimately produce.
    Mr. Galbraith: If the Minister were carrying out the normal conventions of the House he could surely answer the Question, because it refers to only one year. Would not that answer give an indication of the numbers involved? Are not the figures deplorably low, and a mere drop in the bucket compared with the total of council houses? Is it not true that the existence of owner-occupiers—where they could be created—would bring about a new social mix that would be extremely valuable in council estates and would save much money from maintenance on the rates? According to—
    Mr. Donald Stewart: Too long.
    Mr. Galbraith: The right hon. Member will have his opportunity later, but I have the Floor now. According to the Glasgow Herald, 78 per cent. of Scottish people want council houses to be sold,
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    so will the Minister, speaking on behalf of the Government, show a little more enthusiasm for this movement, which is in accordance with what the people want?
    Mr. Brown: I am well aware that the hon. Gentleman regards all council tenants as second-class citizens. He is on record as having said that. I repeat that we are not against owner-occupation to the extent that it will help solve housing problems and achieve a better social mix. We shall look at the matter in a wider context.
    Mr. Fairbairn: If the Minister is not against the sale of council houses, will he say why he is not able to give me the number of applications that he has refused? If he is in favour of selling council houses, why has he refused any applications? If 80 per cent. of people want to buy their own houses, why does the hon. Gentleman not let them do so?
    Mr. Brown: I am not refusing to give the figures. There is no secret. They will be published in the Official Report. The figures are consistent with the policy that we are now trying to operate—a policy of giving consent provided there are no lengthy waiting lists of people wanting accommodation.
    Mr. Robin F. Cook: As today's Press carries a report that Edinburgh District Council is putting a proposed sale to the Minister as a test case, will my hon. Friend confirm that he will regard the proposal on its own merits rather than as setting a precedent?
    Mr. Brown: I know about this matter. If Edinburgh District Council is trying to be clever in putting up a test case in the hope that it will open the door, I say categorically that I shall not wear it. Obviously, if there are special circumstances regarding an individual house I shall look at the matter sympathetically.
    Mr. Taylor: On a point of order, Mr. Speaker. In view of the hon. Gentleman's refusal to answer a simple Question I beg leave to give notice that I shall seek to raise the matter on the Adjournment.
    Mr. Brown: This big audience is going to the hon. Gentleman's head.
    The following is the information:

    Sales Authorised

    1972

    —

    1973

    —

    1974

    28

    1975

    51

    1976

    195

    Sales Refused

    1972

    —

    1973

    —

    1974

    30

    1975

    105

    1976

    83

    Sales Completed

    1972

    645

    1973

    744

    1974

    171

    1975

    30*

    1976

    80*

    * estimated

    List D Schools
    Mr. Dempseyasked the Secretary of State for Scotland what further representations he has had concerning the future of List D schools; and if he will make a statement.
    The Under-Secretary of State for Scotland (Mr. Frank McElhone): A consultative paper on the future of the List D schools was issued on 9th December. Comments are still awaited from a number of bodies, and it will be some time yet before the consultations can be completed.
    Mr. Dempsey: Is my hon. Friend aware that there is growing apprehension that a changeover from the education administration that is at present in operation may well result in the expertise of the educational provision built up over a period of years being lost, to the detriment of these disturbed young persons? Will my hon. Friend take further steps to avoid that sort of possibility ever happening?
    Mr. McElhone: This is one of the most important questions that we have in the consultative paper. My right hon. Friend is disposed to favour the recommendations of the Advisory Committee on Social Work that responsibility for the List D schools should be with social work committees and that responsibility for education within those schools should remain with education committees. He will be considering the representations of interested bolies in this respect.
    Mr. Russell Johnston: Is the Minister in any position to indicate any progress on making List D provision in the Highland Region, where there is none at present:?
    Mr. McElhone: Some months ago I met a representative group from the Highland Region who put the case to me. I pointed out that under the present financial constraints it was not possible to meet their objectives, although we discussed the question of phasing. I am prepared to have fuller discussions with them if they wish to come back.
    Mr. Buchanan: Will my hon. Friend take cognisance of the fact that elimination of voluntary effort within the National Health Service resulted in a lessening of the efficiency of the service, and will he seek to ensure that voluntary effort in List D schools is able to continue?
    Mr. McElhone: I could not agree more with my hon. Friend. In the consultative document my right hon. Friend has mentioned this matter and has said that the voluntary aspect for List D schools is welcome, especially in respect of the Churches.
    Miss Harvie Anderson: Does the Minister accept the overcrowding in List D schools throughout Scotland, particularly in the central belt? Does he recognise the problem that this poses for parents and for the local populace, and will he do something urgently to increase the number of places in List D schools?
    Mr. McElhone: I am sorry to correct the right hon. Lady, but the reverse is the case. There is no crowding in List D schools. [Interruption.] All the comments that I have received are to the effect that there is under-occupancy. Up to 28th February last, in fact, the average rate of occupancy was 87 per cent.

    Perth
    Mr. Crawfordasked the Secretary of State for Scotland when he next intends to visit Perth.
    The Secretary of State for Scotland (Mr. Bruce Millan): I was in Perth recently and have no present plans for a further visit.
    Mr. Crawford: Is the right hon. Gentleman aware that Perth has been a graveyard following several declarations of intent by both Labour and Conservative spokesmen about the future of self-government in Scotland? Does he agree that the only way in which self-government for Scotland can be obtained is via the SNP and no other group of whatever kind?
    Mr. Millan: I do not agree with the hon. Gentleman. I think that meaningful devolution for Scotland can come only from a Labour Government.
    Mr. Alexander Wilson: Does my right hon. Friend not remember that on the last occasion he visited Perth to attend a Scottish Labour Party conference he gave sustenance and considerable help to the people of Scotland, to the tune of £35 million in assistance to the coal industry? Is he aware that the SNP has at no time displayed any interest in the coal industry or in the working class in Scotland?
    Mr. Millan: I was glad to make that statement in Perth because it was the means of saving several thousand jobs for Scottish coal miners.
    Mr. Teddy Taylor: When the Secretary of State visits Perth, will he call in at the headquarters of the outstanding Scottish insurance company, the General Accident Company, and also at the offices of the chamber of comercc and ask representatives of industry and commerce in Perth whether jobs—[Interruption.]
    Mr. Speaker: Order. The House is getting excited too early.
    Mr. Teddy Taylor: Will he ask representatives of industry and commerce whether they feel that jobs will be more or less secure for their employees if Scotland breaks away from England?
    Mr. Millan: I do not think that I need answer that question. We all know the answer. Clearly a Government in Scotland composed of the SNP would be disastrous for the Scottish economy.

    Scottish Development Agency
    Mr. Hendersonasked the Secretary of State for Scotland how many new
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    jobs have been created by the Scottish Development Agency since its inception.
    The Minister of State, Scottish Office (Mr. Gregor MacKenzie): I would refer the hon. Member to the reply I gave him on 10th November. The proposals subsequently announced by the agency in the factory and industrial investment fields will of course contribute further to the creation of new jobs.
    Mr. Henderson: Is that not a complacent reply from the Minister, in view of yesterday's unemployment figures? Is he satisfied with the progress made by the Scottish Development Agency? If not, what plans has he to improve performance?
    Mr. MacKenzie: Everybody is concerned about the unemployment figures. However, I must point out that in just over a year the SDA has announced three substantial advance factory programmes. There has been a great shot in the arm to engineering as a result of the agency's investment in Cummins Engineering, to the tune of £8 ½ million. The agency has joined with local authorities and others in important environmental schemes. I am sure that the hon. Gentleman will be the first to acknowledge the fact that the agency has helped small firms engaged in oil activities in his constituency.
    Mr. Sillars: Is the Minister aware that we are grateful for the work undertaken by the SDA, but that additional resources would make it a much more effective instrument for the redevelopment of the Scottish economy? Does he recall Mr. Lewis Robertson's statement that at a snap of his fingers an extra £100 million in resources could be obtained? Have those fingers yet snapped?
    Mr. MacKenzie: I am sure that the hon. Gentleman would also wish to acknowledge his indebtedness to the SDA in respect of developments at Stonefield. That is one of the measures adopted by the Government, in addition to the announcement made by my right hon. Friend about coal burn, which will create additional help for miners.
    Mr. Monro: Is the Minister aware that 80 per cent. more people are now unemployed than in the period three years ago when the Labour Government came

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    to office? Is that not a condemnation of Government policy? When will those policies be reversed, so that we may see an upturn in confidence in commerce and industry?
    Mr. MacKenzie: There has been a recent announcement by Scottish companies that a figure of £2,500 million has been invested in Scotland. That figure embraces investments by BP, Cummins and other companies. The hon. Gentleman will wish to acknowledge his indebtedness to the agency for the advance factory programme in his constituency, in Newton Stewart, Stranraer and Kirkcudbright, and in respect of other developments.

    Argyll
    Mr. MacCormickasked the Secretary of State for Scotland what plans he has to tour the islands of Argyll in the coming summer.
    Mr. Gregor MacKenzie: My right hon. Friend has no plans for such a tour at present.
    Mr. MacCormick: Does the Minister appreciate that this decision will be regarded by the people in the islands and in Argyll as a tremendous let-down, because the increase in charges amounting to 25 per cent. this summer is aimed directly at the tourist industry? Does he agree that the only way in which we can solve this problem is by having a Scottish Government, and is it not disgraceful that conversations are taking place with Scottish Liberals to bring about some kind of deal tonight?
    Mr. MacKenzie: I am grateful to learn that the hon. Gentleman is anxious that my right hon. Friend the Secretary of State should make a tour during this summer. If my right hon. Friend has an opportunity to do so on any visit he makes, I am sure that he will wish to discuss various problems with those concerned.

    Scottish TUC
    Mr. Sillarsasked the Secretary of State for Scotland what discussions he has had with Scottish trade unionists concerning Government policies on devolution, unemployment and the Scottish economy.
    Mr. Millan: I frequently meet Scottish trade unionists to discuss various matters affecting Scotland. For example, my right hon. Friend the Lord President of the Council and I met the STUC on 11th March, when devolution was the main topic.
    Mr. Sillars: Did the Scottish TUC ever ask the Government to make devolution an issue of confidence among Labour Members of Parliament?
    Mr. Millan: No, it did not. However, I hope that the hon. Gentleman has read the interesting statement issued by the STUC yesterday on devolution.
    Mr. Younger: When the right hon. Gentleman meets the STUC, will he discuss with it the fact that the Labour Government's economic and industrial policies have created 80 per cent. more unemployment and will reduce the level of Scottish production by nine points? In that case, what is meant by the phrase "Back to work with Labour"?
    Mr. Millan: I shall be meeting the STUC again next month, when I shall address its annual conference. I am sure that if STUC members want to put any point to me they will do so on that occasion.
    Mr. Buchan: Will my right hon. Friend underline the fact that the STUC, in its statement yesterday, stressed the fact that because of unemployment problems all minority parties should support the Government this evening?
    Mr. Millan: Yes, I can confirm that. I hope that the message will have been read and understood, and perhaps will even be acted upon.
    Mr. Crawford: In view of the interesting statement made by the STUC, is the Secretary of State aware of what that body said in December last in respect of further Government proposals leading to public expenditure cuts?
    Mr. Millan: I have met the STUC on that matter. There is considerable understanding among STUC representatives of the problems facing the Government.
    Mr. Canavanasked the Secretary of State for Scotland when he next plans to meet the STUC.
    Mr. Millan: I will be addressing the 1977 annual congress of the STUC on 19th April.
    Mr. Canavan: Does my right hon. Friend agree with the statement issued yesterday by the STUC warning the SNP that if it has the political stupidity and naivety to walk into the Lobby with the Tories tonight it will readily be classified by the people of Scotland as aiding and abetting the Tories in their efforts to return the most reactionary Right-wing Government since the 1920s, with no prospects of Socialism for Scotland and even fewer prospects of devolution?
    Mr. Millan: I agree with my hon. Friend and congratulate him on putting that question in his characteristically moderate way.
    Mr. Reid: When the Secretary of State next meets the STUC will he explain why, when the guillotine on the Scotland and Wales Bill failed, the Government did not immediately make that the subject of a vote of confidence in the House and so ensure that those Labour Members who betrayed Scotland so honour their manifesto commitment?
    Mr. Millan: As I made clear in answer to an earlier Question, that matter is already being discussed with the STUC, which fully shares the Government's view. We also take the view that, as was pointed out in the statement yesterday, if a Tory Government were to be returned at any time it would shut the door on any possibility of meaningful devolution for a long time to come. I hope that the SNP, with its peculiar friends in the Lobby this evening, will weigh those words very carefully.
    Mr. Alexander Wilson: Does my right hon. Friend accept, as the House accepts, that the SNP wants not devolution but complete separation from the United Kingdom? Does he also accept that his recent announcement about the fuel industry and his giving of sustenance to the Scottish coal-mining industry is welcomed by the STUC, the miners, and everybody who has the Scottish working class at heart? Is he aware that if the Government are defeated tonight, the hon. Member for South Ayrshire (Mr. Sillars), plus the SNP, must go to the Scottish people and accept blame for the loss of that money?
    Mr. Millan: I do not think that at this time of the day I should speculate on the consciences of individual Members tomorrow morning.
    Mr. Younger: Does the Secretary of State agree that the STUC has in general agreed with and supported the Government on their economic policies over the past three years? As that has resulted in an extra 80,000 members of the STUC being put out of work, does he not think that it is time that he and the General Secretary of the STUC got together and decided to change the policy before more people are thrown out of work?
    Mr. Millan: The General Secretary of the STUC is far more knowledgeable about the real needs of the Scottish economy than the hon. Gentleman and his hon. Friends will ever be, and that is why he supports the Government.

    Prison Population
    Mr. Robin F. Cookasked the Secretary of State for Scotland what is the latest figure for the prison population in Scotland; and if he will make a statement.
    The Under-Secretary of State for Scotland (Mr. Harry Ewing): On 8th March 1977 the population of Scottish penal establishments was 4,940. Subject to the limitations on public expenditure, my right hon. Friend is considering whether any measures can be taken to avoid unnecessary detention, particularly in the areas of remand in custody and imprisonment in default of payment of fine.
    Mr. Cook: Does my hon. Friend accept that Members of all parties who visited Edinburgh Prison earlier this month very much appreciated the arrangements made for the visit? Is he aware that we were all impressed by how much more difficult the task of staff is made in caring for those who are necessarily in prison by the large number of those whose imprisonment may not be necessary? Surely my hon. Friend now accepts that community service orders have been adequately proved in England and Wales and do not require a separate pilot scheme in Scotland.
    Mr. Ewing: I place on record my thanks to my hon. Friend and members of the all-party group on penal reform

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    for the interest that they are taking in the subject. If there is one good way to educate the public it is through all-party interest in what is a difficult and complex subject. I accept the latter point of my hon. Friend's supplementary question. I agree that it is unfortunate that there are people in prison who in other circumstances need not be there. As my hon. Friend knows, we are arranging for community service orders to be introduced in four of the regions of Scotland. We look forward with keen anticipation to that experiment.
    Mr. Rifkind: Is the Minister aware that he has not answered his hon. Friend's question? The hon. Gentleman asked why it was necessary to carry out an experiment in respect of community service orders in Scotland rather than take the experience of the community service experiment successfully carried out south of the border. Will the Minister agree to drop the new experiment in Scotland and go ahead with implementing community service orders?
    Mr. Ewing: Community service orders in England are still at an experimental stage. We are examining what is happening in England. We shall apply any good results to Scotland. I believe that even the hon. Gentleman will agree that it is not always desirable to superimpose in Scotland something that happens elsewhere in the United Kingdom, whether it be England, Wales or any other part.
    Mr. Henderson: Does the Minister have any views on the future of Peterhead Prison? Does he have any plans to visit the prison—[Interruption.] This is a serious matter. Does he have any plans to visit the prison to discuss the situation with prison officers?
    Mr. Ewing: During last summer I took the opportunity to visit Peterhead Prison. I agree that the hon. Gentleman is making a serious point. There are difficult circumstances surrounding Peterhead Prison, especially in respect of the recruitment of prison officers, on account of its isolated situation. There are other related problems. As a result of the situation in penal establishments, Peterhead will remain a top security prison.

    Scottish Assembly
    Mr. Tim Rentonasked the Secretary of State for Scotland what sums have been
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    spent to date on adapting the Royal High School for the purposes of a Scottish Assembly; and what further sums the Government propose to spend, and when.
    Mr. Harry Ewing: Expenditure in the current financial year is expected to be about £900,000, of which £650,000 represents the purchase price of the Royal High School buildings. As regards the constructional works now going on there, I have nothing to add to the reply to the hon. Member for Aberdeen, South (Mr. Sproat) on 1st March.
    Mr. Renton: For how many more months are the Government to continue to pour money—I calculate at the rate of about £60,000 a month—into the Royal High School to house an Assembly that does not exist? Is there an intention to continue until the whole of the £4 million originally mentioned by the Lord President has been spent? Are the Government not in the position of someone pouring water into an empty vessel in the hope that one day it will turn into wine?
    Mr. Harry Ewing: I am not an authority on empty vessels. I shall take the hon. Gentleman's word on anything about them. I am surprised by the hon. Gentleman's approach, because he knows that there are discussions and that the Government have a commitment to devolution. The hon. Gentleman knows that discussions are taking place between the Government and all the parties in the House. Against that background, it is incompatible for the hon. Gentleman to suggest that we should abandon the Royal High School project. The Government will go ahead with their commitment.
    Mr. Carmichael: I fully believe that we shall have devolution and a devolved Assembly in Scotland, but will my hon. Friend be careful not to become too involved with the Royal High School? Does he agree that the Scottish Assembly should have the final word on the location of the Assembly buildings? We do not want another juggernaut grouping in Edinburgh, creating the need to start a dispersal policy.
    Mr. Harry Ewing: One of the reasons for the modernisation and rebuilding scheme that we have undertaken at the Royal High School is based precisely on the point that my hon. Friend is making,

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    namely, to leave the Assembly free to decide its permanent home. We have decided deliberately to go in for this rather modest scheme rather than the lavish scheme that some people thought we would go in for earlier.
    Mrs. Winifred Ewing: Will the Minister accept the congratulations of the SNP Bench on the Government's initiative in finding this building and carrying out works to improve it to make it suitable for an Assembly? Will he ensure that the works are finished and that the building is kept well heated and in good order, as it will be necessary for a Parliament and not an Assembly after the next election, which we hope will be announced tomorrow?
    Mr. Harry Ewing: If I were to begin to speculate about the results of the next election, which I do not intend to do, I should say that the hon. Lady will not remain a Member of Parliament—of any Parliament—after the next election. However, I accept the hon. Lady's congratulations, which would be all the more pleasant if translated into votes in the Government Lobby tonight.
    Mr. Alexander Fletcher: Does the Minister appreciate that at a time of severe financial cuts in education, health and other essential services it seems somewhat extravagant to continue to spend money on the Assembly before any agreement has been reached or any legislation has been passed in this place? Does he realise that what Scotland needs is not more government but a change of Government?
    Mr. Harry Ewing: I detect from that supplementary question that the hon. Gentleman has been infected by the same disease that affects his hon. Friend the Member for Glasgow, Cathcart (Mr. Taylor). Having been an ardent devolutionist not so many months ago, the hon. Gentleman has changed his mind and seems to have become a bitter anti-devolutionist.
    As for cuts in public expenditure, if the hon. Gentleman is to be any time in a Shadow position—I expect him to be a very long time in such a position—he must get his facts right. There is no cut in direct expenditure on the Health Service. The service will continue to grow, but at a reduced rate. We shall be
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    spending more money on the service next year than we spent last year or in any other year. The hon. Gentleman should get his facts right.

    Fishery Protection
    Mr. Grimondasked the Secretary of State for Scotland how many fishing protection vessels and aircraft are currently available for Scottish waters; and what types they are.
    Mr. Hugh D. Brown: For fishery protection duties in waters off Scotland, my Department operates six vessels, three of them inshore, and the Royal Navy deploys, on average, three ships, which may be of the Ton Class, the Island Class, or frigates. Aerial surveillance is provided by RAF Nimrods, which fly two or three patrols each week off Scotland. Additional support can be provided by the Royal Navy and by the Royal Air Force, as the occasion demands and as availability permits.
    Mr. Grimond: Will the hon. Gentleman consider stepping up surveillance, especially by aircraft? Is he aware that there appears to be widespread poaching off Shetland and that large quantities of white fish are being slaughtered as pout? Has he any comment to make on the criticism that I have seen that the new generation of fishery protection vessels may not be satisfactory?
    Mr. Brown: If the right hon. Gentleman has any evidence of widespread poaching, I should like to have it. However, that is not my information. There is continuing examination of the effectiveness of the existing fishery protection fleet. The possibility of having to introduce new ideas within the framework of the CFP, the 200-mile limit, and all the other duties of enforcement that fall on the Fisheries Protection Service has been well advertised by the Government.
    Mr. Robert Hughes: Does my hon. Friend agree with the generally held belief that more fishery protection vessels of a new design will be required? As I understand that a new design has been commissioned in the shipyard of Hall Russell and Company, in Aberdeen, I urge whoever is responsible to make a decision for the building of these craft as soon as possible.
    Mr. Brown: I agree that my hon. Friend looks after the interests of Hall Russell and Company. I shall not go so far as to commit myself to any particular design. There will be more fishermen watching each other in the new set-up than ever before. That will be the most effective way of preserving law and order in respect of limits and quotas.
    Mr. Watt: Does the Minister agree that the only way in which he can enlist the help of Scottish fishermen is by creating a 50-mile conservation zone in which only British boats are allowed?
    Hon. Members: British boats?
    Mr. Brown: I think that the hon. Gentleman should rephrase that question. As far as I know, the SNP is talking of a 50-mile exclusive limit for Scottish boats. That typical gross oversimplification is regularly made by the SNP. The situation is far too complex for that. Exclusive coastal belts are only one part of our strategy on fishing.
    Sir John Gilmour: Does the hon. Gentleman agree that better use could be made of surface vessels if there were an aerial flight every day of the week rather than two or three times?
    Mr. Brown: Again, there is no evidence that existing arrangements are other than satisfactory. Indeed, the Select Committee and all other interested parties who have visited the area have been most impressed by the effectiveness of the present surveillance arrangements. If there should be any need for further flights, the matter can be reconsidered.
    Mr. Teddy Taylor: Despite what the Minister said to the hon. Member for Banff (Mr. Watt), may we take it that it is still the Government's intention, in spite of all the difficulties, to negotiate and aim for a substantial exclusive zone for British fishermen?
    Mr. Brown: Yes, it is. I welcome the hon. Gentleman's interest in fishing matters, because I think that, like me, he will soon be convinced of their complexity. It is unwise to sloganise about 50-mile exclusive limits.

    Alloa
    Mr. Reidasked the Secretary of State for Scotland when he next intends to pay an official visit to Alloa.
    Mr. MacCormick: On a point of order, Mr. Speaker. Is it not disgraceful that the Leader of the Liberal Party should not be here to ask Question No. 10?
    Mr. Speaker: Order. The only point of order that the hon. Gentleman can raise is in connection with raising the matter on the Adjournment.
    Mr. Gregor MacKenzie: My right hon. Friend has no immediate plans for a visit.
    Mr. Reid: In the town of Alloa there are two secondary schools—Alloa Academy and St. Mungo's Academy—which are split schools, the latter having no fewer than 12 separate teaching units. Is the Minister of State aware of the difficulties facing teachers in dilapidated classrooms and the anger of parents that promised extensions will not now take place? Will he investigate the situation and make his investigations known to the parent-teacher associations of both schools?
    Mr. MacKenzie: My right hon. Friend is aware of the position at Alloa Academy and will have noted the hon. Gentleman's comments about St. Mungo's Academy. No doubt he will get in touch with the hon. Gentleman direct.
    Mr. Fairbairn: When the Minister has finished looking at Alloa Academy, will he go on to Pitlochry and see the secondary school there, where the children have been taught in huts since the school was burned down in 1974? If the local authority is not required to insure the building, will the Government make funds available to put one up in its place?
    Mr. MacKenzie: I am gratified that the hon. and learned Gentleman should anticipate my right hon. Friend's visit. I have no doubt that if he cares to raise these matters with him direct my right hon. Friend will be able to satisfy him, as he often can.

    Teachers (Superannuation)
    Mr. Buchananasked the Secretary of State for Scotland if the Scottish teachers' superannuation scheme will require to be amended to take account of the situation of teachers and lecturers in colleges of education who may be made redundant before the age of retirement; and if he will make a statement on his

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    intentions in the matter of redundancy and compensation payments.
    Mr. Millan: No, Sir. Payments under the Redundancy Payments Act 1965 are payable by employers. Compensation payments will be made under the Crombie Code and will be reduced on account of any redundancy payments.
    Mr. Buchanan: Is my right hon. Friend aware that his reply will occasion some disappointment among the people who, in reply to advertisements only two years ago, came to our aid when we required teachers and lecturers in colleges of education? They are in a considerably exposed position, in view of the redundancy payments to be paid by the employers—the governors of various colleges. Will he have another look at this matter and take it as a matter of honour to treat them in as benevolent a way as possible?
    Mr. Millan: I think that my hon. Friend must have misunderstood the position. The compensation payments under the Crombie Code are more generous than the normal redundancy payments.
    Mrs. Bain: Is it not ridiculous that we should be discussing redundancy payments for lecturers in colleges of education in Scotland? Does the Secretary of State accept that the people of Scotland would have more faith in the Scottish Office if it looked at ways of employing lecturers in Scottish colleges of education to make sure that Scottish education returned to the vanguard of education in Europe, where it was before the Labour Government took over?
    Mr. Millan: There may be certain opportunities for extending the work of individual lecturers. I have already made it clear that there is no prospect of employing in colleges of education anything approaching the numbers that we have at present.
    Mr. Dalyell: In relation to redundancy, what numerical estimate is the Secretary of State now working on?
    Mr. Millan: The estimate was included in the consultative document.
    Mr. Alexander Fletcher: How can the Secretary of State justify such a callous attitude to education and the teaching profession in Scotland when, in another
    1274
    act of appeasement to the Scottish NUM, he grants it an additional subsidy of £7 million a year and yet sets out to save £750,000 by closing four colleges of education?
    Mr. Millan: I do not know whether the hon. Gentleman is against the subsidy arrangements that I have announced. If so, I hope that he will say so explicitly. It is not my wish that any particular employees in any part of Scottish industry or the Scottish educational system should be made redundant, but the fact is that there will be a contraction in the Scottish education system. That is unavoidable. I hope to make arrangements for dealing with that situation as humanly as possble. The payments under the Crombie Code are extremely generous by normal standards and I have taken steps to see that those generous payments will apply.

    Marine Exercise Area (St. Andrews-Tay)
    Mr. Gordon Wilsonasked the Secretary of State for Scotland what representations have been made to him regarding the proposed marine exercise area between St. Andrews and the Tay upon which he has sought observations.
    Mr. Hugh D. Brown: No observations have been sought by my Department on the use of this area. I have, however, received two letters indicating opposition to any proposal to use it for such a purpose.
    Mr. Wilson: Is the Minister aware that part of the area that is likely to be demarcated as an exercise area cuts across the approach route to Dundee Harbour? Will the hon. Gentleman give an undertaking that before a final decision is taken on the extent of the area he will ensure that the right of access to the harbour is not infringed?
    Mr. Brown: Yes, certainly. The Department of Trade has sought the view of the Dundee port authorities. The basic purpose behind the examination is to help the fishing industry and to see whether there are any alternative areas that would cause less inconvenience to the industry.
    Sir John Gilmour: Was there not a lack of consultation with the interests concerned before these proposals were put forward, and has not that caused much unnecessary alarm?
    Mr. Brown: There has been no lack of consultation. No specific proposal has been put to the Scottish Office, as a fishing department, so far. The exercise has just started. I can assure the hon. Member that there will be wide consultations. If he has any particular local interest I shall ensure that it is heard.

    Land Register
    Mr. Donald Stewartasked the Secretary of State for Scotland if he will now set up a land register for Scotland.
    Mr. Harry Ewing: I am sure that the right hon. Gentleman is waiting impatiently for me to say "No, Sir".
    Mr. Stewart: That is a disappointing reply. Is the hon. Gentleman aware that estates are changing hands in the Western Isles and other parts of the Highlands without the tenants having any knowledge of who their landlords are? Does the Minister realise that landlords are holding up housing development and impending developments generally? Is it not about time that people knew who owns the land upon which they live, in order that a start may be made on abolishing the whole rotten medieval system?
    Mr. Ewing: I sympathise with the problem and the point that the right hon. Gentleman has made, but a report is published each year that lists in alphabetical order all the land transactions for each county area. It is relatively easy for anyone interested to find out about the land transactions and to discover who is the landlord of any piece of land.
    Mr. Robert Hughes: Is the hon. Gentleman aware that 100 years ago it was possible to publish a land register of ownership? That information has been kept up to date since that time and is available to the Scottish Office, so cannot this Government do as well as Governments did 100 years ago and publish a list of those who own land in Scotland?
    Mr. Ewing: I do not know whether my hon. Friend is suggesting that we should compile a register of land title. If so, this is one of the aspects of land tenure reform that the Government are presently considering and I cannot make any commitment today.
    Mr. Fairbairn: Can the Minister confirm that since the sixteenth century there
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    has been registration of land titles in Scotland in the Register of Sasines? Is it not about time that the members of the Scottish National Party got some more Scottish history into their heads?
    Mr. Ewing: I was explaining how we go about discovering who owns a particular piece of land.

    Dunfermline (Hospital)
    Mr. Adam Hunterasked the Secretary of State for Scotland if he will make a statement on the progress made with the plans to build a new general hospital in Dunfermline and district.
    Mr. Harry Ewing: Since approval in principle to phase I of the West Fife District General Hospital was given in March 1976, the Fife Health Board has completed the relevant schedules of accommodation and a brief for the scheme. A development control plan for the site and the pre-design cost limit are now in course of preparation as the next stage in planning.
    Mr. Hunter: Does the Minister realise that there is continuing doubt in my area about whether the hospital will ever be started? Will he say whether the list of capital projects has been completed and whether the hospital is to be given priority?
    Mr. Ewing: The Government will publish in the next week or two the major building programme for hospitals in Scotland. I advise my hon. Friend to wait until it is published.

    Kessock (Bridge)
    Mr. Grayasked the Secretary of State for Scotland if he will make a statement on the tenders received for the construction of the new bridge at Kessock.
    Mr. McElhone: Tenders from the six firms which were invited to tender for the design and construction of the bridge were received on 21st March. They are being given detailed technical examination, and my right hon. Friend will make a statement when this is complete.
    Mr. Gray: Does the Minister appreciate that this is a matter of utmost urgency and that the oil discovery by the Mesa Petroleum Company in the Moray Firth basin adds to the urgency? Will he assure us that since the decision

    1277
    was originally taken in 1971 there will be no further delays?
    Mr. McElhone: I can assure the hon. Gentleman that the tenders that have just been received will be examined as quickly as possible.

    Colleges of Education
    Mrs. Bainasked the Secretary of State for Scotland how many responses he has had to his Consultative Document on Teacher Training.
    Mr. Alexander Fletcherasked the Secretary of State for Scotland if he will make a statement regarding the future of the 10 colleges of education in Scotland.
    Mr. Rifkindasked the Secretary of State for Scotland whether he will make a statement on the future of the Scottish colleges of education in the light of further representations he has received during the consultative period.
    Lord James Douglas-Hamiltonasked the Secretary of State for Scotland if he will make a statement on the progress of the consultations with the teacher training colleges; and when the Government are likely to produce a feasibility study in this connection.
    Mr. Millan: Of the 63 organisations invited to comment on the consultative paper, 50 have so far replied. My hon. Friend and I have had meetings with a number of interested bodies, and meetings are also being held between my Department and the colleges of education mainly affected by the proposals. I am considering all the views expressed and hope to be able to make a further statement reasonably soon.
    Mrs. Bain: It was extremely difficult to hear the right hon. Gentleman's reply. Will he indicate how many of the responses have supported the Government's proposals, because we suspect that none of the colleges accepts the proposals? When can we expect a final decision on the Government's plans on which colleges are to stay open?
    Mr. Millan: There are some aspects of our proposals that are generally accepted, including, for example, the immediate question of the number of students to be admitted into colleges this year. It is no secret that many other aspects of the proposals have been criticised. One of
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    the reasons why I want to produce final answers fairly quickly is to reduce the period of uncertainty.
    Mr. Fletcher: Are we to have a revised consultation document laid before the House, with costings? When shall we be able to debate the consultation document, so that the House may vote and show its disapproval of the Government's proposals?
    Mr. Millan: There will not be a consultation document, but I hope to give my conclusions on the matter in the next month or two.
    Mr. Rifkind: Since the Secretary of State has suffered a humiliating rejection of his proposals by the House, in Committee, and by his own party conference in Perth last month, will he now remove the real concern that is felt by indicating that he will withdraw the proposals?
    Mr. Millan: I do not accept what the hon. Member has said.
    Lord James Douglas-Hamilton: Does the Secretary of State accept that if he continues to refuse to do costings or to carry out a flexibility study on the measures affecting colleges in Scotland, no one in Scotland will believe that his consultations are anything other than a fraud?
    Mr. Millan: I have not refused to do costings. I have said that I shall present the figures.
    Mr. Henderson: On a point of order, Mr. Speaker. I thank the House for such a large turn-out for Scottish Question Time, but I assure hon. Members that it is quite belated and that it will have no effect on the way in which the Scottish people will vote.
    Mr. Speaker: The hon. Member knows that he should not use a point of order even to make a joke.

  SCOTTISH LAW COMMISSION (LEGISLATIVE PROPOSALS)
  Mr. Rifkindasked the Lord Advocate concerning which further proposals of the Scottish Law Commission the Government intend to introduce legislation during the present Session.
  The Lord Advocate (Mr. Ronald King Murray): Appendix III to the Eleventh

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  Annual Report of the Scottish Law Commission, published on 1st February 1977, shows that only four of the 32 reports mentioned still await implementation. Bills to implement two of these four—dealing with presumption of death and avoidance of liability—are at present before Parliament. Furthermore, a Bill implementing the Eighth Report on Statute Law Revision of both Law Commissions, which is not included in Appendix III, is at present under consideration in another place. The Government do not intend to introduce legislation this Session to implement the two remaining reports relating to interpretation of statutes and liability for antenatal injury.
  Mr. Rifkind: Does the right hon. and learned Gentleman agree that much useful legal reform is still required in Scotland? In the present climate, could he not collaborate with other parties to see whether agreed measures might be brought forward?
  The Lord Advocate: I accept that there are still useful measures of law reform in the pipeline, particularly in respect of the studies that the Scottish Law Commission is making on aliment and financial provision, corporeal moveables and products liability.
  It is also working on the law affecting minors and pupils, the law of evidence, bankruptcies and liquidations, diligence, private international law and the law of incest. Work on these subjects is continuing, but we are not yet in a position in which legislation could usefully be introduced.
  Mr. Henderson: Does the right hon. and learned Gentleman realise that there will be considerable disappointment in the North-East of Scotland that there are no proposals in the list to which the right hon. and learned Gentleman referred to deal with tenants at will? [Interruption.]
  Mr. Speaker: Order. Right hon. and hon. Members who come in to listen to Scottish Questions want to hear what is being said.
  Mr. Henderson: I am grateful for that warm reception for my question. Does the right hon. and learned Gentleman agree that it would be more to the point to bring in legislation to deal with tenants
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  at will than to introduce amendments to the law on incest and the other matters to which he referred?
  The Lord Advocate: I do not agree with the last point made by the hon. Gentleman. It is highly desirable that there should be a reform of the law of incest, but I have very much at heart the interests to which the hon. Gentleman referred. I have had correspondence and conversations with him on this subject. I hope that he will be a little patient, because the Government are endeavouring to meet this point, which, as the hon. Gentleman knows, is not without its complexities.

  VIOLENT CRIME (STRATHCLYDE)
  Mr. Fairbairnasked the Lord Advocate what additional staff he has had to recruit to the Crown Office and Procurator Fiscal Service in order to deal with the increase in crimes of violence in the Strathclyde Region.
  The Lord Advocate: The complement of the Crown Office has increased by four since 1976. It is not possible to quantify the extent to which this is due to the increase of crimes of violence in the Strathclyde Region. The complement of the Procurator Fiscal Service in the Strathclyde Region has increased by 45 since 1976. The main reason for this increase is the fact that procurators fiscal were given the additional task of prosecuting in the district courts.
  Mr. Fairbairn: As there were more violent deaths in the Strathclyde Region in the first few months of this year than there were in the whole Province of Northern Ireland, will the Lord Advocate urgently introduce the recommendations of the Thompson Committee and give the police in Scotland powers in respect of six-hour detention, search for offensive weapons, and any other activity that may assist in preventing crimes of violence?
  The Lord Advocate: The last part of the hon. and learned Gentleman's question is being considered by my right hon. Friend the Secretary of State and myself, as are all the recommendations of the Thompson Committee. In approaching these matters we have to weigh carefully the balance between individual

  1281
  rights and the liberty of the subject, on the one hand, and the very great need to prevent crime, on the other. In regard to the hon. and learned Gentleman's earlier observation, the information that he has repeated to the House came from a former convener of the police committee in Glasgow, who is now chairman of the criminal committee of the hon. Member for Glasgow, Cathcart (Mr. Taylor). In examining deaths due to violence in the Strathclyde Region and comparing them with Northern Ireland, it is important to take into account the relative populations. The population of Northern Ireland is only about 60 per cent. of that of the Strathclyde Region, and I should stress that, although there are some indications that there will be an increase in the number of violent deaths in the Strathclyde Region, the trend in criminal violence generally appears to be downward.
  Mr. Canavan: Does my right hon. and learned Friend agree that there will be an increase in public expenditure caused by the increase in the prison population that will inevitably come about after the next General Election when the hon. and learned Member for Kinross and West Perthshire (Mr. Fairbairn) has to return to his former profession as Scotland's worst criminal lawyer?
  The Lord Advocate: As the Public Prosecutor, I ought, perhaps, to declare my interest. More seriously, the prison
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  population is a matter of very great concern. As the Public Prosecutor and, therefore, the agent through whom a large number of people end up in prison, I am bound to recognise that we need to look at methods other than prison for the treatment of offenders.
  Mr. Teddy Taylor: Has the right hon. and learned Gentleman seen the report of the Strathclyde police, published this morning, which shows that despite a disturbing increase in crimes of violence the number of police in post in the Strathclyde Region in 1976 fell and that the force was 614 below strength at the end of the year? What are the Minister and his colleagues going to do about this deplorable state of affairs?
  The Lord Advocate: I have not seen the report, but I shall, of course, read it. My right hon. Friend the Secretary of State for Scotland, within whose jurisdiction this matter lies, will no doubt take note of what the hon. Gentleman has said.

BILL PRESENTED
  SHOPS (AMENDMENT)
  Sir John Langford-Holt, supported by Mr. Geoffrey Rippon, Sir John Rodgers and Mr. Anthony Fell, presented a Bill to amend the Shops Acts 1950 to 1965: And the same was read the First time; and ordered to be read a Second time upon Friday 1st April and to be printed. [Bill 92.]

PENAL REFORM
Mr. Speaker: Before we take the Ten Minutes' Rule Bill, may I tell the hon. Member for Lichfield and Tamworth (Mr. Grocott) that there is nothing in the rules of the House requiring him to take ten minutes?
3.33 p.m.
Mr. Bruce Grocott: I beg to move,
That leave be given to bring in a Bill to reduce the size of the prison population by providing for alternatives to custodial sentences and by limiting the offences for which custodial sentences may be awarded; and for connected purposes.
When I put down the motion three weeks ago I had no idea of the enormous interest that this House had in penal reform. I am delighted by the attendance today. I hope that, in fairness to subsequent speakers, hon. Members will be quiet when they leave the Chamber after I have finished speaking.
I shall make this Ten Minutes' Rule Bill a three minute rule Bill. The objectives of the Bill are simple and long standing for many bodies associated with penal reform. The objectives are simply to remove minor offences from the punishment of imprisonment.
First, the Bill will remove from the punishment of imprisonment offences under the Vagrancy Acts, which concern people who sleep rough or act as tramps. Most people will agree that imprisonment is not an appropriate way of dealing with such offences. Although only a few people are sent to prison for those offences, my Bill will help to reduce the prison population in a small way.
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The second objective concerns acts of simple drunkenness—if that is the right word. It does not include offences that connect drunkenness with any other form of criminal behaviour. About 50,000 people appear before the courts each year for being drunk. I submit that the public at large does not consider that alcoholism is a criminal offence. It should be the subject of other forms of treatment. I commend that objective to the House.
The third proposal in the Bill concerns people who are imprisoned for the non-payment of fines when the original decision of the court was that a non-custodial sentence should be imposed. It is wrong that such people should be sent to prison for the non-payment of fines unless there is overwhelming evidence of an unwillingness to pay the fine. I commend this short Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Bruce Grocott, Mr. Ivor Clemitson, Mr. Joseph Dean, Mr. Geoff Edge, Mr. John Garrett, Mr. Bruce George, Dr. Colin Phipps, Mr. George Rodgers, Mr. Brian Sedgemore, Mr. John Watkinson, Mr. Phillip Whitehead, and Mr. Ian Wriggles-worth.

PENAL REFORM
  PENAL REFORM
  Mr. Bruce Grocott accordingly presented a Bill to reduce the size of the prison population by providing for alternatives to custodial sentences and by limiting the offences for which custodial sentences may be awarded; and for connected purposes; and the same was read the First time; and ordered to be read a Second time upon Friday 20th May and to be printed. [Bill 91.]

HER MAJESTY'S GOVERNMENT (OPPOSITION MOTION)
3.35 p.m.
Mrs. Margaret Thatcher: I beg to move,
That this House has no confidence in Her Majesty's Government.
The Prime Minister made it inevitable that this motion would be moved, first, when he dodged the vote on his own party's proposals last Thursday and secondly, when, unlike his predecessor, he refused to put down a motion in his own name to confirm confidence in his own Government. We have not necessarily thought of his predecessor as having high standards before but we think more highly of them now.
Then, on Friday we watched with great interest the performance of the right hon. Gentleman on television. He came out with a very good polished veneer. He came out with some very interesting phrases. He said that legislating is not necessarily governing and he went on to say:
"We govern as of right".
By what right? The right of a minority Government; the right of a supposed mandate based on 38 per cent. of the votes cast or 29 per cent. of the electorate? They govern by no right except the arrogant right of Socialism. The fact is that the Government have no credibility left. We know why the Prime Minister would not let his party vote last Thursday. He was afraid that he might be seen to lose, so he feared even to fight. Better to have voted and to have lost than never to have voted at all. But of course there was another reason—not only would he have lost, he could not have got all his party in the Lobby with him. It is true that the right hon. Gentleman has the support of the IMF. But having got the support of the IMF, he has lost the support of a large wing of his own party. He cannot have both simultaneously.
I ask hon. Members what the Prime Minister meant last night when he said,
"It is no use being a general of an army which does not follow you, is it?"
Sheep do not usually need generals.
Unless there is a General Election following, we shall go into a period of very great uncertainty. Whatever negotiations
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the right hon. Gentleman has, he can never be sure that he will get through either his legislation or his economic proposals. He can never be sure that any package would stick, because some of the people below the Gangway would unpack the package. Then it loses its balance, exactly as happened on the IMF bargain and exactly as happened when they tried to get more cuts on the capital side than on the revenue side because that is what suited them better.
The right hon. Gentleman could not even be certain of getting a Budget through because he would have to wheel and deal through the party and some things would be acceptable and others would not. Indeed, be admitted last night that if he carried on it would be a very uncertain Government, and he said,
"I think every vote is a cliff-hanger and bound to be as long as you have got this parliamentary situation."
Some way of governing—and very damaging to the interests of Britain as a whole.
The Prime Minister would go off to international conferences, perhaps held in London, in the morning. We are to have three Summit conferences soon—the economic conference in May, the Commonwealth Conference and the economic European Council. There might be negotiations on Rhodesia. He would speak for Britain in the morning and then come back in the afternoon to haggle for a few more votes to see whether he could get any of his policies through.
The fact is that this is a broken-backed Government, and that is highly damaging to our foreign relations policy.
Of course, the wheeling and dealing is not unusual for the right hon. Gentleman. That seems to be the way in which the ordinary business of the present Government has been conducted. We remember the resignation speech of the right hon. Member for Newham, North-East (Mr. Prentice), when he said,
"too often we have made key decisions as a reaction to pressure rather than on the merits of the decisions."—[Official Report, 21st December 1976; Vol. 923, c. 517]
What an epitaph for the Prime Minister. He never made decisions on merits but only in response to pressure and wheeling and dealing.
Now we find the Prime Minister creeping cravenly around putting both wings

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of his party up for auction at any price. We ask whether he still believes in the Labour Party manifesto. Let us see what the Labour Party manifesto actually said about negotiations with other parties. It said:
"Why can't we accept the idea of a coalition to meet the nation's crisis? Because what our country needs in this crisis is a government with a clear-cut understanding of the nation's problems and the ability to decide quickly and effectively how to deal with them."
The Labour Party manifesto went on to say,
"A coalition government, by its very nature, tends to trim its policies and fudge its decisions; and in present circumstances that just won't do. If we believe, as we must, in our own independent political philosophies, there is no meeting point between us and those with quite different philosophies."
The manifesto went on to say,
"it would be a cruel farce to suggest that the future of the country would be helped by shuffling, compromising administration".
Mr. Neil Kinnock: In early March 1974 when the right hon. Member for Sidcup (Mr. Heath) was thinking of forming a coalition Administration, would the right hon. Lady have joined the Cabinet or would she have stayed out of it?
Mrs. Thatcher: Perhaps the hon. Gentleman would like me to read a little bit of our manifesto on the same subject. [HON. MEMBERS: "Answer."] My right hon. Friend the Member for Sidcup (Mr. Heath), unlike the right hon. Gentleman the Prime Minister, who goes against his manifesto, acted exactly in accordance with our manifesto when he said,
"After the election we will consult and confer with the leaders of other parties and with the leaders of the great interests in the nation, in order to secure for the government's policies the consent and support of all men and women of good will."
The difference is that my right hon. Friend was acting in accordance with his manifesto. The right hon. Gentleman has been acting flatly in the face of everything that he said. He has been going around all parties, a sort of Jim of all parties and master of none.
The truth about the present Government is that no make do and mend, no patchwork quilt of bargains, can cover their shabby, devious manipulations.
Not only are the Government in a minority. I am glad that the Prime
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Minister admits that they are in a minority and that he no longer has a majority to govern. We all know that the Labour Party itself is a meaningless coalition in which the deeply divided and mutually distrustful factions prevent each other from governing. We read in the newspapers great big dissertations from the two wings of the Labour Party, one in favour of Marxism as the basis for Socialism and one rejecting it completely. Therefore, we ask the Prime Minister where he stands. As usual, he does not stand anywhere.
The fact is that one of the wings, as the right hon. Gentleman and the whole House know, believes in the mixed economy and tries to make it work, albeit there might be some arguments about the mix. The other of the wings wants to destroy the capitalist system completely. Therefore, we do not know, and nor does anyone else, whether the basis of the Government's strategy is to restore capitalism to health or whether the basis of their economic and industrial strategy is an irreversible shift to the Marxist society by way of Clause 4. The two wings do not agree.
If one really cannot agree about one's economic objective, it is not surprising that one has a completely inconsistent and incompatible economic policy. If the objective is to restore capitalism to health, the right hon. Gentleman must have a policy to restore profits and profitability, because one cannot plough back into investment if one has not got the profits. Not only must the right hon. Gentleman have profits in order to plough back—he wants investment without the investors being able to get the benefit—he must also have profits able to be distributed. However, he put that policy to his party conference and it did not meet with overwhelming excitement or success.
If the policy is to restore capitalism, then the right hon. Gentleman must have a policy that restores incentives. But every time he tries to reduce taxation, someone will get up from his own Back Benches and say "Would it not be better if instead of cutting public expenditure and cutting taxes, the Government kept taxes up and increased or kept up the level of public expenditure?"
If the right hon. Gentleman is to have a policy of restoring capitalism to health,

1289
he must cut away many regulations and restrictions beloved of Socialism. But none of these things will suit the Left wing of his party. The Prime Minister knows it and everyone else knows it.
The Tribune Group may be quiet today. It may have gone on its annual holiday because the Government have gone for a survival strategy for the time being. But the problems are still there and they are unlikely to go away. The Tribune Group wants the Labour Party programme for 1976 and the Manifesto Group wants something as totally different from that as a free society is from a Marxist society. It is not surprising, when the Government cannot agree on their objectives, that their economic strategy makes very little sense and that their industrial strategy is full of contradictions and has never worked from the day that it was enunciated.
We cannot get a policy to back success—of course, success mostly backs itself and does rather better without Government than it ever does with it—by just switching from grandiose plans, by just switching off differentials and by disconnecting reward from effort. The right hon. Gentleman knows the trouble that one gets when one does, because he is having it now. One cannot ignore the morale of management if one is to get a successful industrial strategy and one cannot ignore the market.
But the right hon. Gentleman's strategy is a strategy in name only and it is failing in every particular. The economic indictment against the Government goes very far indeed. After three years—[Interruption.] The Government have hardly speeded up production, which is exactly what I was coming to. After three years of Labour we are nearly back to where we started. After three years the level of production is nearly back to where it was in February 1974, and that in spite of having nearly doubled public expenditure and in spite of having increased direct taxation to try to finance the level of public expenditure.
Perhaps the right hon. Gentleman would like me to go on with the catalogue? Perhaps he would like me to remind him—[Interruption.] I do not think hon. Members would. Perhaps they would like me to remind them that prices
1290
are up 70 per cent. although they claimed at the time that the social contract would beat inflation. Unemployment has rather more than doubled. One economic factor after another has testified to the total failure of Socialist economic policy in practice.
I know that the Prime Minister will read out a whole series of statistics, but I shall not do SO. [HON. MEMBERS: "Why not?"] I would have plenty to read out. Any hack lawyer or statistician on either side can cook up a whole lot just depending on the premises on which he started. I would make it quite clear that every improvement is welcome but that every setback is a cause for concern. Whatever statistics we read out, they will not mean very much to the ordinary people because they have already felt the effect in their pocket and in their daily lives.
We know that the Prime Minister will be full of easy and comforting phrases rather like "Steady as she goes". But the soothing syrup will inevitably come out rather like the family doctor whose reputation miraculously survives the death of whichever patient he is in charge of. But apart from the economic indictment of the Government, we have not been all that impressed with the Prime Minister's respect for the small print of democracy. We remember the way in which he deferred the Boundary Commission's proposals in 1969 for party advantage. We remember the devices on the Aircraft and Shipbuilding Industries Bill. We remember the refusal on the Scotland and Wales Bill to consider an agenda for the Speaker's conference to include under-representation of Members of Parliament in England and grievous under-representation in Ulster. [HON. MEMBERS: "Ah!"] We anticipate with no sympathy the manipulations to get some Socialists elected to the European Parliament. What will the excuse be? Too late for the Boundary Commission to start to work?
Nor would we fall into the trap of judging the Prime Minister's policy by what he says about them. We remember vividly his speech in the education debate, but equally I remember, having been at the Department of Education for quite some time—that there was very little concern on the opposite side of the House for keeping up standards then. Even while

1291
the right hon. Gentleman talks of the debate to raise educational standards, we remember that he never provided parliamentary time to debate the report on "A Language for Life", the first Bullock Report, which was directly connected with educational standards.
Even while he said that, he was busy trying to demolish grammar schools based on selection by ability—wholly free schools open to all regardless of background. Perhaps one of the reasons why so many of our constituents have left support of the Socialist Government was put very well in an article called "Maligning Merit" in The Sunday Telegraph Magazine a few weeks ago by Mrs. J. B. Priestley, the author Jacquitta Hawkes, when she said:
"for me Labour showed that it had gone astray when it used meritocracy as a dirty word. My utter conviction that egalitarianism is wrong in theory and positively evil in practice has grown mainly from observing what is being done in its name today."
Her views are shared by many people.
But whether we regard Socialism by its economic record or by its other record, we find that in practice it has totally failed. It has been brought to a satisfactory conclusion. The only thing is that the Prime Minister now refuses to put it openly to the verdict of the people. If the right hon. Gentleman is now to say openly and publicly that he has abandoned his Socialism and his manifesto, what possible point can there be in a Socialist Government? If he does not say that, Socialism is in a minority and has no authority whatever to govern. But then the Prime Minister's next ploy is to start to attack the next Conservative Government. He represents it as somehing to be feared and with a notion almost akin to fear. How we would get in if we were feared is something of a mystery. We would get in only if we were wanted.
Mr. Russell Kerr: You would not.
Mrs. Thatcher: If the hon. Gentleman thinks that we would not get in, why does his Prime Minister not put it to the test? The reason he will not put it to the test is that he thinks that we would get in, and with a big majority. He knows from the opinion poll published in the Daily Mirror this morning that the majority of people want an election. It is because they want
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it and because he might lose it that he is unwilling to put it to the test.
It is not surprising that the Prime Minister takes months to screw up courage to have a by-election. We cannot have a Budget two days after every by-election—even on the Socialist record. Or perhaps it is very nearly possible.
The choice next time will be on the published documents between the Labour Party's programme published in 1976 and "The Right Approach" to which the Prime Minister seems to be thoroughly addicted. Both documents have been to party conferences.
Perhaps I might spell out a few points from "The Right Approach" as approved by the people of Workington and Walsall. [Interruption.] We shall wait for one or two other examples, and we shall be delighted when the Prime Minister moves the issue of the writs for some of the other outstanding by-elections, unless he is to move the writs for the whole of the 635. That would be the greatest test of all.
"The Right Approach", approved by the people of Workington and Walsall, spelt out our basic philosophy. If we are allowed to have a manifesto in time for an election, hon. Members could read it in even greater detail. In the meantime—we Conservatives believe in capitalism and democracy. There cannot be democracy, and there will not be democracy, unless there is a capitalist system. Hon. Members below the Gangway do not approve of it. They disagree with it. They would like to do away with capitalism.
However, we are very pleased that we have in fact got some support from hon. Members opposite who are not below the Gangway and who believe that, if individual freedom is to be safeguarded, economic as well as political power must be dispersed. They say:
"The only practicable alternative to a mixed economy of the Western kind"—
the capitalist system; that is my inter-polation—
"is a command economy on the Soviet or Eastern European model."
[HON. MEMBERS: "Read on."] I am quite happy to quote the lot; it is nearly all on my side.
We would also, unlike right hon. Members opposite, believe in maximum choice

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because with no choice there will never be a responsible society, and choice is being progressively diminished.
We would of course reduce the burden of direct tax. It would be too much to expect this Government to reduce it to where we left it. That would mean reducing direct taxation by some £4,000 million if people were to be left in the same position as they were when my right hon. Friend Lord Barber was Chancellor of the Exchequer.
We would of course expect hard work to be rewarded. This is what the people want. We would of course give more people a chance to own their own homes. This is what the people want. We would of course uphold standards and values, and the rule of law. That is what the people want. We would of course not carry out further schemes of nationalisation. People do not want those either. We of course would want the reduction of inflation to be our first economic priority, unlike in particular the first year of this Government which did so much damage to the economy as a whole.
We would reject utterly the divisive nonsense of class division upon which Marxism thrives. We have no class enemies. We do not think in those vindictive or outmoded terms. One of the commentaries when "The Right Approach" was published was very interesting. We had not quite expected the comment at the time. It was just automatic that we did not put anything in "The Right Approach" which is against anyone. Our philosophy is not against anyone. Our philosophy thrives on success, on improving housing, on raising the standard of living and on having it more widely distributed. Our philosophy thrives on believing that Governments are the servants of the people and not their masters.
Whether it be in factories, on farms or in offices, there is a widespread desire to see this Government go. The Prime Minister intends to try to cling to office by political cunning. Of course, I know that he likes power. He would hardly have put his name to a political ballot of he had not wanted the job, if he had not got an ambition for the job. There would be something very strange about any political leader who did not want to be leader or Prime Minister.
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The Prime Minister is an expert—[HON. MEMBERS: "Hear, hear.'"]—in political wheeling and dealing, I was about to say. It is no substitute for political courage. Perhaps he should face the people's verdict and like a statesman face it now.
4.7 p.m.
The Prime Minister (Mr. James Callaghan): I listened to the right hon. Lady's essay with considerable interest. It was a series of generalisations which, while certainly interesting, were perhaps not altogether novel. As her complaint against me and the bill of indictment built up minute after minute, until I was almost overwhelmed, I felt like repeating the immortal words of Adlai Stevenson" If the right hon. Lady will stop telling untruths about me, I promise not to tell the truth about her."
However, in the series of generalisations to which the House was treated I did not find any particular thread that led me to discover how the Conservative Party would deal with the issues of the day. At the end of the right hon. Lady's speech I was still not clear whether it was the policy of the right hon. Member for Leeds, North-East (Sir K. Joseph) that would prevail on public expenditure. I was still not quite clear, on the matter of incomes policy, whether it was the good sense of the right hon. Member for Lowestoft (Mr. Prior) or the attitude of the right hon. Member for Leeds, North-East that would prevail.
I have no idea what they would do about industrial strategy or securing industrial regeneration. Nor was there any indication of how they would see Britain's social progress. There was none of that. I say to those who are not just blind followers of the right hon. Lady that before they vote tonight they should consider what they are voting for as well as what they are voting against.
The truth is that since the events of last autumn there has been a new stability in the financial and monetary affairs of this country. It is true—reserves have risen by $3·7 billion in the last two months. We have successfully negotiated a safety net that has given stability to sterling. This is together with the $1·5 billion medium-term credit negotiated from the commercial banks on

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favourable terms, which indicates confidence in this country's future and in the Labour Government's policies.
In the last four months there have been more than £6 billion worth of sales of gilts to help finance our borrowing requirements. Interest rates are now down, with the minimum lending rate at a full two points less than it was when the Opposition left office of 1974.
Our domestic credit expansion is well within the target of £9 billion in a full year. Within the last year, the sterling money supply has increased by a little over 6 per cent. compared with 28 per cent. and 24 per cent. in the last two years that the Opposition were in office. If this situation continues, the home buyer can look forward to a reduction in building society rates of interest.
The growth of industrial output of 2 per cent. and of gross domestic product of 1 per cent. in the fourth quarter shows that the economy is now turning upwards. In the most recent three months exports are up and imports are holding level, with the current deficit reduced to £288 million compared with £518 million in the preceding three months.
Business confidence is on the upturn. The percentage of firms working below capacity is the lowest for two years and new orders for exports of engineering industries are up by 46 per cent. It was welcome news yesterday that unemployment has fallen again, as it has in each of the last two months. The fall last month, seasonally adjusted, was the biggest for four years.
The most welcome news is the fall in the number of unemployed school-leavers, from 208,000 in July to 42,000 in February and 34,000 in March. There are more vacancies for jobs—these are up by a third on a year ago. Our industrial relations record, due to the work of ACAS and the industrial relations legislation which was passed on the basis of conciliation and consent and not on confrontation, is the best for 10 years.
I will come to the matter of unemployment again in a moment. I cannot guarantee that this decline of the last two months will be continued in the next few months. [HON. MEMBERS: "Oh."] I see no reason for hon. Members to mock that statement, unless they are seeking
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only to make party points. The immensity of the task on unemployment is added to by the fact that at the present time the number of additional new entrants to the work force is about 150,000 a year. That makes the problem all the more formidable.
The world economy is still in a precarious state and the wrong decisions internationally could have serious effects on our economy and on those more vulnerable economies in the less developed countries. It is my hope that the Downing Street summit will achieve a unity of Western leaders in purpose and action. We must ensure a unity of action to prevent a trade war that will plunge the world back into an even deeper recession. We must ensure that there is unity of action to counteract unemployment, which is running at a rate of 15 million in the industrialised Western world. What kind of future are we offering to young people in the various industrialised countries if we tolerate these levels of unemployment as a permanent feature of Western industrialised society?
It will be vital in May to seek a new initiative for the Western world to help the less developed countries overcome their balance of payments problems caused by the increase in oil prices.
Mr. Nicholas Ridley: Does the Prime Minister think that it really helps less developed countries if we borrow $20 billion that would otherwise be available for development by them?
The Prime Minister: The two matters are not totally related. The future of the credit facilities for the less developed countries is something that is concerning the International Monetary Fund at the moment. Such calls as are being made upon it by Westeren industrialised countries will be offset by the creation of new facilities. We have a formidable agenda in front of us and this is something in which the whole future of society—whether it be capitalist, mixed, Socialist, or Marxist is at stake. Did hon. Members hear anything about this from the Leader of the Opposition today?
Britain is not isolated or insulated from the rest of the world economically. But, especially with North Sea oil coming in at a rate of 30 million tons a year—one-third

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of our requirements—our economy presents a picture of some encouragement for the future—I emphasise "some encouragement". That view is receiving endorsement by authoritative commentators throughout the world.
Last week, the OECD, in its annual review of the United Kingdom economy, said:
"Britain could achieve a rapid rate of economic growth compared with past levels and a steady rise in living standards over the next few years."
About this Administration it went on to say:
"As a result of the relatively novel approach"—
adopted by this Government—
"less heavily orientated than previously towards the short term, the economy could—for the first time since the 1967 devaluation—be able to break away from the vicious circle of the past."
That is the judgment of those who consider where the country has got to today, and it is a picture of some encouragement to the British people.
There are many problems ahead. Our position is baseed, as the right hon. Lady said, on the industrial strategy. That strategy is not just the strategy of the Government, as she always seems to think. It is a strategy that has the full backing of the TUC and of the CBI. So when the right hon. Lady attacks the industrial strategy she is not just attacking the Government, as she seems to think; she is attacking a policy agreed among these three major elements. It is recognised
"that sustained recovery is needed. For the troubles of our economy are by now long-standing and deep-seated. 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. The foundations of economic health will not be relaid in less than a decade."
Yes, that is from "The Right Approach". I have been quoting from it for some time, and right hon. and hon. Members opposite did not even notice.
Our policy is based not just on words but on a co-operative effort by Government, trade unions and management. So what can be done to regenerate our industry, since it is industry that will provide the basis for our future prosperity? I have described before what industrial
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sectors and firms are doing, and it is upon our industrial performance that the future of our standard of life and, indeed, the nature of our society will depend.
But that is not all. We recognise that our greatest national asset is the skill of our own people. That is why we have devoted over £180 million for training and retraining, created over 86,000 extra training places, and applied special measures to keep people in work. The £202 million spent in the last 20 months on the temporary employment subsidy has helped to preserve against the world blizzard 214,000 jobs, and we have also provided £130 million for the job creation programme, and introduced many other measures besides.
All round, the industrial strategy is blessed by representatives of both labour and management in industry. What would the Opposition do, for example, about the 40 sector working parties now going through their own industries, firm by firm to see how industrial efficiency can be increased? What would the Opposition do about the selective aids which are now going to vital industries such as machine tools, machinery, foundries and electronic components, where thousands of jobs are involved? We know what the right hon. Member for Leeds, North-East would do: he would have them out on the stones next week.
Sir Keith Joseph: Will the Prime Minister tell us where the money that the Government are spending to sustain some industries is coming from except by destroying other jobs by over-taxing, over-borrowing and printing money?
The Prime Minister: Did I hear the right hon. Gentleman say "printing money"? I have always known him to be an honest man, even if it costs him a great deal, but, really, he knows better than that. What has he to say for himself? "Printing money"? I shall answer him. I would sooner that taxation was a little higher and 200,000 people were kept in work than pursue the policy of abolishing all the subsidies and putting those people on the dole.
I hoped that the Leader of the Opposittion would spell out, as her leading spokesman is opposed to this policy, what

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she would do. What would she put in place of our policy? What would she do to regenerate industry? How would she create the jobs? Would she get rid of the temporary employment subsidy? These are questions that people will be asking the Conservative Party, and we have no idea of what the Conservative policy is in any of these areas.
I turn now to the question of prices because prices are one of the key issues. Last year, with the co-operation of the trade unions, we had good success, and inflation came down to under 13 per cent. There have been set-backs since then, and it is right that the country should know the reasons and what the Government are doing to try to ensure that these set-backs do not recur.
Last summer, when the pound came under heavy pressure in the currency markets of the world, the sterling prices of our imports rose, and we are still seeing the effects, although, as I have said, the value of the pound is now stabilised. It will still be a few months before the benefits of the more stable pound are seen in the shops, but already the benefits are coming through for our wholesale prices.
In the last three months input prices rose by only 2¼ per cent.—a very low figure. In a few months' time we shall be seeing the effect on the prices of goods in the shops, and the latest forecasts indicate a good prospect that by the end of this year inflation will be below the 15 per cent. estimated last December. Indeed, the latest forecast by the OECD, published last week, predicted a rise below 12 per cent. at an annual rate in the second half of the year.
But no Government could guarantee that, because the prices of many of the goods in our shops are dependent on factors right outside any Government's control. Last summer's drought put up food prices by 6 per cent. or more, and, as the House knows, world commodity prices are outside the Government's control. Indeed, world prices in dollar terms are currently more than 50 per cent. up on 12 months ago, and there have been particularly steep increases in the price of coffee, which has trebled, and that of tea, which has increased by two and a half times on the commodity markets.
1300
We have seen some glimpses of what the Opposition's policy is on these matters. I shall take the House into my confidence in case they have not caught everyone's attention. The hon. Member for Derbyshire, West (Mr. Scott-Hopkins) told my right hon. Friend the Minister of Agriculture on 16th March that he failed to understand why my right hon. Friend was unwilling to accept the package of the Commission in Brussels and devalue the green pound by 5·9 per cent. The effect of that would be to increase food prices in this country by 1¼ per cent. at a stroke—immediately—if my right hon. Friend accepted that misguided advice.
What about the hon. Member for Cleveland and Whitby (Mr. Brittan), who I am glad to see has now been promoted to the Front Bench? His view is that there is a powerful case to be made against price controls altogether. Is that the policy of the Opposition? Is it?
The Opposition seem to be a little confused. They are not quite sure whether their policy is to get rid of price control or to maintain price control. We shall give them the opportunity of making up their minds. They can vote for our new prices Bill when it is brought to the House in a week or two's time. Let us see where they stand. Let them give us a clear indication.
We cannot achieve success—[HON. MEMBERS: "Hear, hear."]—Conservative Members are very sharp today—we cannot achieve success without ensuring other policy considerations and unless we take into account four elements. The Opposition should have told us where they stand on these elements.
First, we need a stable currency. Secondly, we need a new incomes agreement. Thirdly, we need increased competitiveness and efficiency in British industry. Fourthly, we need Government intervention against unjustifiable price increases and profit margins.
The Opposition will soon have the chance to stand up and be counted. The Government will be introducing a new prices Bill. The new policy will be based on profit margin control, subject to safeguards, for firms in manufacturing, services, and distribution. This will replace the detailed, over-restrictive and outdated cost controls written into the Price Code

1301
that we inherited from the last Conservative Government.
The Price Commission will be given new powers to investigate and, if necessary, to disallow specific price increases anywhere in the economy. These changes will greatly increase the flexibility and efficiency of our system of price control. Are the Opposition in favour of this or are they against?
I pass now to the future of this Parliament.
Mr. William Whitelaw: Before the Prime Minister leaves the subject of prices, is it not really time that the Chancellor of the Exchequer had the courage and the decency to admit to the British people that his claim that inflation was running at 8·4 per cent. at the October 1974 election was utterly and totally fraudulent? If the Chancellor will not do that, what can his credibility be for the future?
The Prime Minister: The right hon. Gentleman will have the pleasure of hearing my right hon. Friend the Chancellor of the Exchequer introduce his Budget next week.
I turn for a moment to the future for us sitting in this House. First and foremost, the Government intend to use the time ahead to carry through our economic and industrial strategy. The various indicators to which I referred earlier all point perhaps for the first time for a generation, to the possibility of at last securing steady and sustainable economic growth in this country, with a stable currency, a surplus on the balance of payments, strict control of monetary policy, falling rates of interest, declining price inflation, a rising rate of investment in manufacturing industry, continuing industrial peace, tax reforms and a lower burden of personal taxation. On these foundations we shall build the growing prosperity of our people.
We shall use the time of this Parliament to plan how best to distribute the fruits of success of our economic policy and to maintain a proper balance between the needs of the public services and the wish of the private individual to have more real income in his pocket to spend. It will require planning. I tell the right hon. Lady the Leader of the Opposition that this cannot be left to the brutal
1302
dictates of the laissez-faire market; nor can it be frittered away in current consumption. The future strength of our industry must be secured through investment in our industrial strategy. We shall plan not only the regeneration of our industry but that of our great cities, to eliminate ghettos of poverty and racial tension. We shall see these policies through.
It will need the co-operation of all our people. The social cohesion that we have maintained through these last few difficult years was possible only because we were able to win and hold the trust of the working people of this country.
We do not know where the Opposition stand on any of these major issues. We do not even know where they stand or whether they would try to get another voluntary incomes policy. But we know that without the voluntary co-operation of the British working people the whole of our recovery and the fight against inflation would be entirely jeopardised. There is only one way, that of conciliation and consultation, preserving the cohesion and consensus in our society, of which the Opposition were once rightly proud but which in recent years they seem to have deserted.
This Government follow these objectives and have pursued them successfully during the past three years and will continue to do so in the remaining years of this Parliament.
Mr. Eldon Griffiths rose—
The Prime Minister: Much else—
Mr. Eldon Griffiths rose—
Mr. SpeakerOrder. If the Prime Minister is not giving way, the hon. Member for Bury St. Edmunds (Mr. Griffiths) must sit down.
The Prime Minister: Much else remains to be done. I have already referred to the need to co-ordinate the responsibilities of industrialised countries to our global economic problems, and I gladly welcome contributions here.
I shall say one other thing about the vote tonight and the attitude of the Opposition. There are hon. Members on both sides of the House who have a deep and genuine concern about the problems

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of East-West relations. Perhaps the biggest fear that we have is over whether we shall maintain peace or drift into war. The problems are those of nuclear proliferation, of who holds nuclear weapons, and of whether we endeavour to live in relative amity with those who hold an entirely different philosophic view about the organisation of society.
If we cannot learn to live with them, we shall certainly die with them.
Against that background I ask the House to consider whether the right hon. Lady, the Leader of the Opposition, contributes to detente and relations with the Soviet Union. The Opposition's domestic policies are mirrored in their international policy which, where it is specific, is dangerous, and on many major issues and crucial areas of international economic co-operation it is totally non-existent. It is against this background that we have been conducting conversations to see on what basis these general policies should be continued.
The conversations have taken place with many people. We have been anxious to discover whether there is sufficient identity of interest to enable the general policies that I have outlined to be continued. There is no doubt that the Government, half way through the life of this Parliament, wish to see that the policies which are being followed—they are not pleasant policies, and they are not intended to be pleasant—shall be followed through resolutely.
We have had discussions with the leaders of the Ulster Unionist Party. It is not my intention to go into any detail on this except to say that I am impressed by the case that has been made by the hon. Member for Antrim, South (Mr. Molyneaux) and by the right hon. Member for Down, South (Mr. Powell) who accompanied him on the matter of the number of seats and the under-representation of Northern Ireland in this House. I indicated to the hon. Gentleman—and I hope that he will not mind my saying this—that, irrespective of the way in which he and his colleagues vote tonight, it is my intention, with the consent of my colleagues, to refer to a Speaker's Conference, if you will care to preside, Mr. Speaker, the question of the representation of Northern Ireland.
The hon. Member for Antrim, South has made no bargain with me about
1304
that. I have no idea how he intends to vote, but I told him and I repeat here publicly what I intend to do.
Mr. James Kilfedder: If the right hon. Gentleman feels that these are changes that should be granted to the Ulster people now why did he not grant them years ago when we were pressing for them in this House?
The Prime Minister: There has been considerable debate about that—[HON. MEMBERS: "Bribery."]—but the latest reason is that the House was genuinely waiting for the result of the devolution discussions and for what would happen—[Interruption.] The Conservatives may not like it, but it happens to be the simple truth.
Mr. Michael Mates rose—
The Prime Minister: The Lord President and I have also had talks with the Leader of the Liberal Party.
Mr. Mates rose—
Mr. Speaker: Order. The Prime Minister is clearly not going to give way.
Mr. Mates rose—
Hon. Members: Name him!
Mr. Speaker: Order. I have no intention of naming anyone if I can help it.
The Prime Minister: Very well, Mr. Speaker, I shall give way to the hon. Gentleman.
Mr. Mates: I am grateful to the Prime Minister. His talk of bargaining over seats in Ulster is a part, albeit an unattractive part, of the political deals that go on. Will the right hon. Gentleman take this opportunity categorically to deny that any deal was offered or mentioned concerning the movement of two battalions of troops to Ulster as part of a political settlement? Will he confirm that this was no part of his discussions, because to use British troops as a political pawn in this chess game would be utterly disgusting?
The Prime Minister: It only goes to show that second or third thoughts are best, and I am glad that I gave way to the hon. Gentleman. I am sure that the hon. Member for Antrim, South will not

1305
mind my saying that at no time in our discussions did any questions of this sort come up and that the hon. Gentleman and myself would have regarded it as insulting if we had endeavoured to bargain on that basis.
Mr. James Molyneaux: I am grateful to the Prime Minister for giving me this opportunity for denying that any such point was raised at any time. I think that we would both view any such report with contempt. May I also say in fairness to the Prime Minister that all our discussions were conducted on the basis that there could be no concession or sacrifice of principle on the part of either of us?
The Prime Minister: I was saying that my right hon. Friend the Lord President and I had discussions with the Leader of the Liberal Party and with the hon. Member for Cornwall, North (Mr. Pardoe). It is our view that there is a sufficient identity of interest between us at present to establish some machinery that will enable us to consult each other about future developments in this Parliament—[HON. MEMBERS: "Oh."] We therefore—[An HON. MEMBER: "Sing it again."]
Mr. William Molloy: Chuck him out.
Mr. Speaker: Order. The House knows that I cannot see behind me, but I can hear. I hope that whoever has been shouting at my left ear will stop doing it and go away.
The Prime Minister: You have no idea how much you have relieved my mind, Mr. Speaker. I thought that it was you shouting at me.
We have therefore agreed to establish some machinery to keep our positions under review and we intend to try an experiment that will last until the end of the present parliamentary Session, when both the Liberal Party and ourselves can consider whether it has been of sufficient benefit to the country to be continued—[Interruption.] I am very happy to see the Opposition applaud this new-found stability in Parliament. It will give this Administration the stability it needs to carry on with the task of regenerating British industry and of securing our programme.
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We therefore intend to set up a joint consultative committee under the chairmanship of my right hon. Friend the Leader of the House. This committee will examine policy and other issues that arise before they come to the House, and of course, we shall examine the Liberal Party's proposals. [Interruption.] I think that Conservative Members should listen to this, because their fate may depend upon it.
The existence of this committee will not commit the Government to accepting the views of the Liberal Party, nor the Liberal Party to supporting the Government on any issue. There will, however, be regular meetings between Ministers and spokesmen of the Liberal Party including meetings, for example—which have already begun—between the Chancellor of the Exchequer and the Liberal Party's economic spokesman.
Mr. Cranley Onslow: On a point of order, Mr. Speaker. Is it not a well-established practice that Budget proposals are not divulged to anybody in advance? May we be assured that that practice will not be set aside in this relationship between the Government and the Liberal Party?
Mr. Speaker: That is not a point of order. I suggest to the House that we shall not know more unless we listen.
Mr. Kenneth Lewis: On a point of order, Mr. Speaker. In view of what the Prime Minister has lust said, may we take it that the next Liberal Party spokesman will be speaking from the other side of the House?
Mr. Speaker: Order.
Mr. Kenneth Lewis rose—
Mr. Speaker: Order.
Mr. Kenneth Lewis rose—
Mr. Speaker: Order. I warn the hon. Gentleman that he has been extremely discourteous to me. I warn hon. Members that unless they resume their seats when I stand up and call for order, I shall order them out of the Chamber. I know the importance of the vote tonight to both sides, but the House must treat its Speaker with courtesy.
Mr. Timothy Raison: Will the Prime Minister give way?
The Prime Minister: No. I know that there were complaints about the reception that the right hon. Lady received, but it has been repaid a thousand fold by the Opposition during the last half hour.
In addition, the Prime Minister and the Leader of the Liberal Party will meet whenever necessary to discuss these matters. [An HON. MEMBER: "What does that mean?"] It means exactly what it says—that we shall meet for discussions.
The issue of direct elections is a difficult one. I have already indicated that the Government will be presenting legislation on direct elections to Parliament in this Session, for direct elections next year. The Liberal Party has reaffirmed to me its strong conviction that a proportional system should be used as the method of election.
Next week the Government propose to publish their White Paper on direct elections. As hon. Members will find, that will set out a choice among different electoral systems, but it will make no recommendation. The purpose of doing that is to enable the Government to hear the views of the House on these matters, but, in view of the arrangement that I now propose to enter into with the Leader of the Liberal Party, there will be consultation between us on the method to be adopted, and the Government's final recommendation will take full account of the Liberal Party's commitment. [Interruption.] I do not know whether Conservative Members think they are disturbing me, but I promise them that they are not. I could go on for a long time.
To come back to the White Paper, whatever the final recommendation on these matters, it will be subject to a free vote of both Houses of Parliament. As far as the Government are concerned, all hon. Members will be entitled to vote in any way that they think fit.
The Leader of the Liberal Party put to us very strongly, though it was hardly necessary to do so because we are agreed about this, that progress should be made on legislation for devolution, and to this end the Liberal Party has today submitted a detailed memorandum to us. Consideration will be given to that document and consultations will begin on it,
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and in any future debate on the devolved Assemblies and the method of representation—for example, proportional representation—there will be a free vote.
The House has no doubt forgotten, but there was the Housing (Homeless Persons) Bill which I recommended to the House during the Queen's Speech, but for which time was not able to be found, so the hon. Member for the Isle of Wight (Mr. Ross) took over the Bill and with some Government assistance has been endeavouring to put it through. We shall provide extra time to secure the passage of that Bill.
The Local Authorities (Works) Bill will be confined to the provisions that are required to protect the existing activities of direct labour organisations, in the light of local government reorganisation.
That, together with the fact that we agree that this should be made public, represents the contents of the discussions that have gone on between us. They will give the Government the opportunity of maintaining a stable position while they carry through their economic and social policies. It will enable us to take away what the right hon. Lady thought was a weakness, and that is the instability of the Government not knowing from day to day what will be the position of the Opposition. We shall now be able to overcome that, and for that reason I am certain that this is in the national interest.
Mr. Dennis Skinner: It seems that my right hon. Friend and other members of the Cabinet will spend a great deal of their time and energy in future consulting the 13 Members of the Liberal Party. Will my right hon. Friend give a categoric assurance that there will be equal and if necessary better consultation with Back Bench Members of his own Parliamentary Labour Party, because we carry more weight in this Parliament than do the Liberals?
The Prime Minister: My hon. Friend is quite correct. As he will know and as the Opposition do not know, in recent weeks there has been correspondence between the Liaison Committee and the Chairman of the Parliamentary Labour Party and myself and my right hon. Friend the Leader of the House in which we have overhauled the whole process of consultation with the Parliamentary

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Labour Party. As my hon. Friend knows, this was not to be published, but the new machinery was reported to the Parliamentary Labour Party meeting two or three weeks ago when I was present, I believe that my hon. Friend was there, too. It was unanimously accepted as being appropriate and suitable to enable the views and opinions of the Parliamentary Labour Party to be borne in upon the Government before legislation was introduced. I thank my hon. Friend for enabling me to make that clear.
Mr. James Sillars: I am grateful to the Prime Minister for giving way; he has given way a great deal this afternoon. I come back to the Liberal Party memorandum on devolution. Would not my right hon. Friend agree that the main problem about devolution has been and always will be the timetable motion? If the Liberal Party suggests that that should be a vote of confidence issue, we all know that the problem about the future of a timetable motion, as with the one on 22nd February, is the Labour Party's own Members of Parilament.
The Prime Minister: I regret to say that I have not yet studied the Liberal Party's memorandum. It has only just reached us.
Hon. Members: Oh!
Mr. Speaker: Order.
The Prime Minister: I see that the Opposition are in a giggly mood, and I suppose that it is a measure of their discomfiture.
As far as the future of the Bill is concerned, I would have no hesitation in discussing by what method we can ensure that there is progress on the Bill to bring it to a conclusion on as agreed a basis as possible. I can go no further than that. My view on this matter has always been clear. It has always seemed to me that it is vital in the interests of Scotland that there should be a Bill on devolution, and the more we can get it agreed, the better it will be. I can go no further than that.
Mr. Eldon Griffiths rose—
The Prime Minister: I will not give way.
Mr. Eldon Griffiths rose—
Mr. Speaker: Order. It is quite clear that the Prime Minister has said that he will not give way.
Mr. Eldon Griffiths rose—
The Prime Minister: I have given way much more to the Opposition, but that, Mr. Speaker, concludes my report to the House.
Hon. Members: Oh!
The Prime Minister: My report was set against a barrage of interruption. But I must say that I have a feeling that at the end of the day I shall not feel as worried as will hon. Gentlemen opposite.
5.3 p.m.
Mr. David Steel rose—
Mr. Ridley: On a point of order, Mr. Speaker. With respect, is it not normal practice to call an Opposition speaker?
Mr. Speaker: Order. If I were awarding marks, I would award the hon. Gentleman high marks.
Mr. John Gorst: Further to that point of order, Mr. Speaker. Again, with the utmost respect, may I put it to you that there are important matters affecting the House of Commons involved in my hon. Friend's remark concerning the Opposition representation on Standing Committee's and the majority in this House. I wonder whether it would be possible for you to give us guidance as to the propriety of the Liberal Party sitting on this side of the House.
Mr. Speaker: Order. May I say that the House has vested complete discretion in the Speaker about who catches his eye and when he calls hon. Members to speak. Despite the high feeling that there is, I hope that the House will give an opportunity to those addressing it to be heard in reasonable silence.
Mr. Steel: My hon. Friends and I will support the Government in the Lobby tonight. [Interruption.] if there were any lingering doubts, which there were not, they would have been dispelled by the lack of any constructive alternative to such a course of action tonight in the speech of the Leader of the Opposition. [Interruption.] For some

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time my hon. Friends and I have been arguing, both in the House and outside, that the lack of stable continuity in the planning of our economy is one of the deeply destructive factors in our economy—I do not say that it is the most important or the sole factor—and is contrary to the national interest. One has only to look back over the past few years at the record under this Government and the previous Government on matters such as the encouragement of industrial development and prices and incomes policy.
It was the Labour Government in 1966 who set up the Industrial Reorganisation Corporation, which was dissolved by the Conservative Government in 1971. The National Enterprise Board was established in 1975, and the ink was hardly dry on the paper when the Conservatives gave a pledge that if they came to office they would abolish that, too. On prices and incomes, one can look back to find that in 1965 the National Board for Prices and Incomes was established by the Labour Government and abolished in 1971 by the Conservative Government. [Interruption.]
Mr. Jeremy Thorpe: Order, you rabble.
Mr. Steel: Then we had the creation, in 1973, of the Price Commission and the Pay Board under the Conservative Government. The incoming Labour Government abolished that, and with that we lost the opportunity that we might have had in recent weeks to refer the question of differentials to the Relativities Board.
I look back even further than that to, for example, the record of the British steel industry and the changes that it has had to suffer under nationalisation, denationalisation and renationalisation. When one looks at the Land Commission, set up one year and abolished the next by another Government, the remnants of which commission are still to be found lurking somewhere in Whitehall, one can make a reasonably convincing argument that we have not been conspicuously successful in the continuous planning of our economy.
It was not just the Liberal Party that has been saying this in recent months; more and more authorities are making the same argument. Some months ago Sir Ronald McIntosh, the Director-General
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of NEDC, when he talked about the future of British industrial strategy and speaking of the reasons for Britain's economic failure, said:
"it may also stem from our party political structure with its obsessive concern with short-term pressures and its destructive concepts of adversary politics."
I believe that he is right, and that industry requires a much longer period of stability and not a series of alternating policies wielded like virility symbols by different political parties.
It is against that background—and that view is not a new one because we have expressed it in the House many times—that we had to consider this motion of no confidence.
The first point that we had to consider was whether anybody seriously argues for a third General Election in three years and whether that could be described as being in the national interest. I do not believe that any objective commentator overseas would argue that three elections in three years is a sign of a mature, stable political democracy that is able to make its way in the world.
I ask those who say "Yes" to stop to consider the situation. There are only three realistic possible outcomes of a General Election, if one were held. The first is that a Labour Government—I agree that it is not likely—might be returned with an increased majority. Is it seriously argued on the Opposition Benches that the flow of material and policy reports from various Labour Party committees would increase international confidence? Is that the argument that is being advanced? I do not think it is.
The second possibility is that neither major party would secure a majority in the Commons following an election. That is more likely because of the growing balance of hon. Members in the House who do not belong to either of the major parties—the Liberals, the nationalists from Scotland and Wales, the Ulster Members and others. If that were the outcome of a General Election, some kind of arrangement between the parties would be necessary in any case. In those circumstances we could have saved ourselves the bother of an election if we were to go in for haggling after it any way.
The third possibility is that there would be a Conservative Government with a

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working majority. Is it seriously argued that that would restore international confidence? If the stock market and the pound trembled at the merest prospect of the right hon. Lady the Leader of the Opposition entering No. 10, God knows what It would do if she ever got there.
We are coming up to a period—the Prime Minister stressed this in his speech—when, in the national interest, we must secure agreement on pay and price restraints. Would that agreement be more competently secured under the right hon. Lady? [Interruption.] Is that the argument on this side of the House? [Interruption.] Is that what is being suggested when half the Conservative Party does not believe in such a policy in the first place?
I heard Lord Thorneycroft in a broadcast the other day suggesting that the Conservative Party was ready for an election and about to publish a manifesto. Will that manifesto be published in any case? It would certainly enlighten us on Tory policies.
Leaving aside the question of a manifesto, what about the Conservative commitment on devolution? [HON. MEMBERS: "Wait and see."] No doubt "Wait and see" is an appropriate answer to that question. Others may say that there are more Conservatives interested in proportional representation than there are Socialists. That is quite true. But are we, as a party, to trust the Tory Party which, in its manifesto, made a stirring commitment to refer the matter to a Speaker's Conference but felt unable to press the matter when the opportunity arose?
Mr. Robin Maxwell-Hyslop: Has the right hon. Gentleman an assurance on that matter?
Mr. Steel: No. I did not seek one. I argue that an election in itself cannot be described as being in the national interest. Furthermore, it is not in the national interest when a Government are forced to stagger from vote to vote, by-election to by-election or influenza to pneumonia. Indeed, it is the view of my colleagues that it would be better to have a General Election than to carry on with a Government of that kind. That is why, when I first went to see the Prime Minister to see whether there was any basis for agreement, there was never any question
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of reaching any kind of bargain, any deal, any price simply to secure Liberal votes in the Government Lobby tonight. [Interruption.] That was never discussed. Indeed we never even discussed the possibility. My colleagues and I would rather have had a General Election than see the country carry on with a Government who might survive tonight but face the same problems in a week or so.
Mr. Robert Adley: Who is the right hon. Gentleman kidding?
Mr. Steel: The basis on which I approached the Prime Minister related to whether there could be agreement between us for a period of stability. If there were to be that stability, we were interested in continuing discussions to find the basis of an agreement.
The idea that the Liberal Party will support a Government on an agreed programme in the national interest is not a new one. The same proposal was put put the right hon. Member for Sidcup (Mr. Heath) when he was Prime Minister in February 1974. It is important to put this on the record, because I have no doubt that the Conservative Party Central Office propaganda machine will be churning out leaflets lining up the Liberal Party with Socialism and all its policies.
I wish to remind the House that ever since the first election in 1974 my predecessor and I, as leaders of the Liberal Party, have argued that we were prepared to support any Government in the national interest so long as we believe that that was the general desire, and so long as we could sufficiently identify the areas of policy on which we were agreed. The former Conservative Prime Minister replied in a letter, which has been published, as follows:
"We do not think that, on its own, an arrangement for Liberal support would be sufficient to provide the stability and command the confidence necessary in present circumstances."
The right hon. Gentleman wanted us to enter a coalition. I do not criticise the right hon. Gentleman for that statement because, if one added the then Conservative members to the number of Liberal Members, one still reached a total of only 309. There was not a majority for such an arrangements. The right hon. Gentleman might well have been justified in rejecting that proposition—but reject it the Conservative Party did.
Mr. F. A. Burden: The Liberals did.
Mr. Steel: No, we did not. The Conservative Party rejected the arrangement that we are now reaching with the present Government. Coalition was never on then, and it is not on now. That word was never mentioned between the Prime Minister and myself. This is not a coalition arrangement. We all know that a biography of Ramsay Macdonald has recently been published, and we know what happened then and the strong feelings in the Labour Party. The Liberal Party would find it difficult to enter a coalition so long as our numbers do not adequately reflect our vote in the country. With the small group that we now have, that would not be a balanced coalition. Therefore, we were not interested in a coalition; and we were not interested in any kind of deal for this evening. We are interested in an open, agreed and above board agreement for a definite period. That is what we have secured [An HON. MEMBER: "For how long?"] If Opposition Members had listened to the Prime Minister's speech, they would have heard him say that this will last until the end of the present parliamentary Session.
The Prime Minister said on television last night-and he said this to me during our discussions—that it was important, in coming to an agreement, that each of us, as leaders of our parties, would be able to maintain our self-respect. That is what we have done. The terms have been agreed to work together, and we have both retained the total independence of our parties from each other in electoral terms and in terms of the House of Commons.
I pay tribute to my colleagues who have sustained this agreement with collective responsibility in a mature way, knowing the effect that it may have on our followers in the country. I also pay tribute to the Prime Minister, because there are many men who have occupied his position who might have been a little too vain or above these matters to discuss them with a relatively small group. It is a tribute to him that he was willing to work for an agreement and that he persuaded his Cabinet colleagues about its value.
Mr. Terence Higgins: Is the right hon. Gentleman aware that in my constituency at the last election many Liberal supporters objected to people who said that a vote for the Liberals was a vote for Labour? Does he think that they were right so to object, in the light of today's events?
Mr. Steel: Yes, they were right to object to that assertion. A vote for the Liberals is a vote to help the nation in its economic problems. It cannot be said to be a vote for Labour if we were willing to do exactly the same with a Conservative Government in a similar position. It was a vote for the national interest. That is the truth, and it is on the record.
The object of the exercise, as the first paragraph of our agreed statement says, is to secure the country's economic recovery. My hon. Friend the Member for Cornwall, North (Mr. Pardoe), as chairman of our party's distinguished economics panel, has a record over the years of rather greater accuracy, both in forecasting and in consistant diagnosis, than many of the so-called economic experts who are available to either the Conservative Party or to the Labour Party.
We intend to work with the Government to support the attempt to secure agreement on pay and prices and also to argue the case that there is a definite need to shift the burden of taxation from personal incomes to other areas that we have specified in a detailed document.
There is even some gain for the House of Commons and the country as a whole in the negative parts of the agreement. I do not expect the Prime Minister to stress these matters, but in a House where the Government are a minority the fact that the direct labour proposal outlined in the Queen's Speech is not to come before the House is, I think, in the national interest. The fact that the banks and insurance companies can look at a certain passage in the Labour manifesto but sleep easily at night is also in the national interest. The Prime Minister has said before in the House that no proposals of that sort were coming forward. Nor could they, because the Government are in a minority.
Mr. Michael Heseltine: Is the right hon. Gentleman seriously suggesting that the Liberals would have supported either direct labour legislation or the nationalisation of the banks and insurance companies before today's arrangements?
Mr. Steel: That intervention was a bit of a waste of time. [HON. MEMBERS: "Answer."] No. I am arguing that the idea that a minority Government having to seek support from other parties is detrimental to the national interest is nonsense. [HON. MEMBERS: "Answer."] If Conservative Members had been making less noise the House would know that I said "No" as a direct answer to the hon. Gentleman.
The Prime Minister said that the committee that is being set up will consider Liberal Party policy proposals as well as policy proposals from the Government. The Press has made much play of the so-called shopping list. There was no attempt to include a shopping list in the agreed statement. However, we know that machinery is to be established so that we can bring forward our own views on industrial relations policy, housing policy, matters such as the attention required to be given to the self-employed and small businesses, our views on the future of British Leyland and even on esoteric topics that do not get much attention in the House, and no sympathy from the Opposition, such as the necessary review of the provisions of the Immigration Act 1971 and its deportation procedures. We shall be bringing these issues before the Consultative Committee. The trouble is not that we have too few policy proposals but too many. We shall have to be selective.
Before the agreement was ever made talks on devolution were taking place among all parties. I hope that the Government will not take offence if I repeat my view that the devolution Bill, as constituted, was a thoroughly bad Bill. It was widely held to be so by Members on both sides of the House. We are now arguing with the Government that there are either fundamental improvements to the Bill or we proceed afresh with new legislation.
I have suggested that there should be one Bill for Scotland, separately, closely followed by one for Wales. I do not
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blame the Prime Minister for not having read the detailed document, consisting of 30 pages, that he received only yesterday. The right hon. Gentleman had other things to do. However, he will see that it contains proposals that the Assembly shall have powers of taxation. It tries to sort out the unsatisfactory definitions in the Bill on the balance of powers between the Assembly, the House of Commons and the Secretaries of State.
I believe that to be a constructive approach. If the Government consider these matters seriously, we can get an improved devolution Bill on the way. I make an appeal to those sitting behind me from the Scottish and Welsh national parties to pause for a second to consider whether they will vote tonight so that the right hon. Member for Finchley (Mrs. Thatcher) may have her opportunity to "wait and see" on devolution as an alternative to these proposals.
Mr. Dafydd Wigley: The right hon. Gentleman has said that he would like to see separate Bills for Wales and Scotland. Will he tell the House whether the priority would be for Scotland and whether, on his proposals, it would be possible for a Welsh Bill to go through Parliament before the next election?
Mr. Steel: On the second part, "Yes", On the first part. I hope that the hon. Gentleman will forgive me if I do not start a devolution speech. I shall happily send the hon. Gentleman a copy of the document. I hope that that will keep him happy.
This afternoon we have had for the first time a specific commitment to introduce a direct elections Bill this Session. There was also the specific commitment that there will be a free vote as a whole on the proportional representation issue.
I do not think that the degree of anger that is felt by the 5 million to 6 million Liberals who voted in two successive elections, about the limited representation that would have ensued, is sufficiently appreciated in the House. It would have added insult to injury if we had adopted an election system for Europe that risked the result that the Liberal Party, had had no seats.
There are arguments for treating the European Assembly in a totally different

1319
way from the consideration of Westminster elections. No Government is to be formed, as it is an Assembly. It is a new experience. There are no seats to be redistributed or Members to be decamped from existing seats. The real danger of a fixed-term Assembly is to have elections occurring at times of Government unpopularity. All Governments in this country are unpopular—usually in their mid-term—whatever their party composition. Having European Assembly elections at such times would produce a totally distorted imbalance in the delegations that we send to Strasbourg.
Lastly, there is the argument that it is very much easier to introduce a proportional representation system within the deadline of 1978 than it is to construct 81 separate constituencies. These are arguments that have nothing to do with unfairness to the Liberal Party and that bring proportional representation to the fore. It is a matter that will automatically be brought to the fore in the White Paper.
Mr. Peter Rees: Will the right hon. Gentleman now let the House know whether the Liberal Party will withdraw its candidates at Grimsby and Stechford?
Mr. Steel: I shall treat that intervention with the contempt that it deserves.
The agreement lapses at the end of the present Session. It will get the country through the difficult period ahead, especially the pay negotiations. It may well be that, come the autumn, either the Labour Party or ourselves, or both, will deem it right to bring the agreement to an end, to abandon it and urge the people to take their opportunity to elect a new House of Commons. If that is so, I shall not regret the period of the experiment. It is my belief that it is possible that people will get to like the taste of co-operation and want more. It may well be that they find the artificial party battle in this place a little irrelevant to many of the ordinary problems that they face.
I do not know whether the agreement will succeed, but I trust that it will. Trust between us on these matters is very important. It requires very much of the political parties. In a newspaper this morning—I forget which one—it was said that the Liberals might have to carry the can for the Labour Government. I accept
1320
that. There is a tendency always to blame others. Not enough of us carry the can. There is a tendency to say that everything is the fault of the Labour Government, of the previous Tory Government, of the unions, of bad management, or even, sadly, in some places, the fault of the immigrants. The latter introduces a particularly dangerous and unsavoury note.
All of us have to carry the can if we are to pull through, and we are not prepared to shirk our share of the burden.
Mr. Speaker: In calling right hon. and hon. Members I intend to ensure as best I can that every minority opinion has a chance to express itself. That will mean that some may have to wait.
5.30 p.m.
Mr. Michael Stewart: I do not think that I am one of those who are benefiting from your ruling in favour of minorities, Mr. Speaker. However, I have always thought that although minorities ought to be heard, there should be some chance for those who express a view with which most people agree to get it in edgeways between the voices of the minorities.
Whatever Government we have in this country, there will be certain awkward problems. They have been with us for some time and will go on being with us for a good deal longer.
I want to refer briefly to a few of those problems and to consider what light they throw on the question before us tonight regarding who enjoys the confidence of the House and of the country. I have in mind how the wealth produced in this country should be shared among different groups and individuals, how the production of wealth can be made more efficient, for without it there is no realisation of any of our hopes, how we are to achieve a civilised relationship both in this country and on the world scene between those who have white skins and those who have not, and the problems of defence, and war and peace.
My right hon. Friend the Prime Minister gave us some solid evidence for the view that on these matters, although the problems remain immense, we are proceeding in the right direction. All the economic indicators suggest that we are getting nearer to the answers on the first

1321
two problems. On the world scene there is no doubt that the Government are in cordial relationship with our partners in the Community and with our transatlantic allies and are making a steady and realistic approach towards relations with Eastern Europe.
As the problems are there and as we are moving in the right direction towards their solution, we must ask what contribution could be made by the Opposition if they came into power. Although in heaven somewhere there may be better solutions to these problems than the Government have attempted, in this imperfect world we are obliged to ask what would happen if the right hon. Member for Finchley (Mrs. Thatcher) and her colleagues were tackling them.
As to the right hon. Lady's personal fitness to tackle them, we cannot be left in any doubt after the speech with which she opened the debate. When I say that it was a tragic speech, I use the word "tragic" in its classical sense, because Aristotle defined tragedy as that which arouses both pity and terror. The right hon. Lady's speech certainly managed to arouse pity on the Government side and manifest terror on the Opposition side. [AN HON. MEMBER: "Rubbish".] It is comforting to think that the Opposition had a few things later to cheer them up a bit. They certainly needed them. Indeed, it is generous to say that they deserved them.
Let us consider the Opposition's position on the four problems that I have outlined. My right hon. Friend the Prime Minister pointed out the extent to which the Opposition are uncertain on various matters. I want to add to the picture by pointing out certain attitudes on which they are quite definite.
I instance how the wealth produced in this country should be shared among the competing claims of different kinds of producer—worker, investor, worker by hand, worker by brain, more skilled worker, less skilled worker. What solution would be offered by the Opposition? It is no exaggeration to say that we do not know. If we reproach them with wishing to tear up the social contract, there are indignant denials, but they never refer to the social contract except in terms of contempt. They give encouragement
1322
to any goup of people who want to beak the arrangements between the Government and the trade unions.
It is not even clear whether the Opposition believe in an incomes policy. I say, from deep conviction and much experience, that for any Government to say that they do not believe in an incomes policy is to deceive themselves. If they start to act on that belief, they will end up by bashing people in the public service because, in the absence of an incomes policy, all the others will have got in first and those in the public service will be the only ones left to bash. That is what not having an incomes policy means. However, we do not even know whether the Opposition believe in an incomes policy.
On the distribution of wealth, the Opposition are clear about one thing! they have told us with real gusto that they will repeal the Community Land Act. The opportunity to get large chunks of income for doing nothing at all will be rapidly expanded under a Tory Government.
On the vital question of how those who help to produce the wealth should be rewarded, the Opposition are uncertain and vague. However, they are determined that it ought to be easier for a limited number of people to do very well by making no contribution to the wealth of the country at all.
As regards the production of wealth, I am convinced of one thing to which no Government have paid sufficient attention—namely, the need for much greater emphasis on industrial retraining. We must make it easier and more normal for a man during his working life to learn a new skill and to go into a new industry. We cannot raise our standard of life unless productivity goes up. By that I mean the amount of wealth that one man produces in an hour or a week.
If we improve productivity and do nothing else, many people see themselves being worked out of jobs. We can only justify to the trade union movement and get its help on measures to increase productivity if it becomes easier for men to learn new skills.
The records of successive Governments on industrial retraining are not encouraging. I made a particular study of this

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subject some years ago when I was at the Department of Economic Affairs. I discovered that that Labour Government and the present one had a decidedly better record on this matter than Tory Governments.
In order to get anywhere with industrial retraining we must have the good will of the trade union movement, whether we like trade unionists or not. It is apparent that many hon. Gentlemen opposite do not like trade unionists. Indeed, certain hon. Gentlemen have made contemptuous and hostile references to them. But a subject so delicate as getting men to learn new skills and of getting others to accept into their industries those who have recently been retrained requires the genuine good will of the trade union movement.
The one thing about which the Conservative Party is sure is its dislike of the trade union movement. No opportunity is lost in this House, either at Question Time or in debate, by Conservative Members to say or do whatever they can to try to weaken the power of organised labour and to encourage every kind of movement—breakaway unions—which will make the lives of leading trade unionists more difficult. Again, on things that matter the Opposition have nothing to say, but on anything that is wrong they are wholehearted and enthusiastic.
The third problem that I mentioned was race relations. We all know how important to the peace of the world is the civilised relationship between white and non-white. We know that part of Britain's job in contributing to the solution of that problem is to ensure an harmonious relationship in this country.
When the Tory Opposition are pressed on what they would do about immigration, they return, as always, a hesitating reply. But now, at a by-election, they have come out with a programme. Their candidate's approach is substantially the same as that of the National Front, and he is not disowned by the leaders of the Conservative Party.
Their policy would mean that a black man living in this country whose wife has not yet been able to join him will be told that she never will be able to join him. No decent person could defend that policy But that, for electoral
1324
reasons, is what the Conservative candidate is doing, and the Opposition Front Bench will not or dare not disown him.
Mr. John Stokes: I come from near that area. May I ask the right hon. Gentleman a question that the people of this country would like to put to him, to his party and to the Liberal Party? What constructive suggestions do the Government have for limiting immigration, which is continuing at the rate of 75,000 people a year?
Mr. Stewart: The Government recently put forward suggestions, and there has been a report on this subject. There has been discussion about whether there should be a register and there are stricter controls against illegal immigration, but I am concentrating on the point that the one thing to which the Conservative Party is now apparently committed—according to what has been said during the Stechford by-election—is that there should be no further immigration, with the results that I have just described. The wife of a black man living in this country who has not yet been able to join him would never be able to do so.
Do Conservative Members ever consider what the results of some of their attitudes may be on opinion all over the world. These affairs are watched in Asia and Africa. Once again this point demonstrates Conservative uncertainty about any constructive policy but their certainty on the one policy that is certainly wrong.
There is also the matter of East-West relations and the related topic of national defence. If "trade unionist" is one term of contempt among the Conservatives, the word "Helsinki" is another.
Mr. Ridley: Hear, hear.
Mr. Stewart: I think I heard an echo. The hon. Member is mistaken and I shall ask him to consider that remarkable proposition for a moment. The decision to hold the Helsinki conference was not made by the British Government alone. Also participating were our partners in the EEC, our transatlantic allies and a large number of non-aligned countries, as well as the countries of the Communist world. It is difficult to believe that they were all wrong and that a smattering of

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Conservative Members—sometimes including the Leader of the Opposition herself—were right.
We ought to know whether the Conservative Party thinks that it was wrong to hold the Helsinki conference. Would any future Conservative Government explain that to our allies, or go further and say that they would not attend the forthcoming Belgrade conference?
Mr. Ridley: The right hon. Gentleman may recall that part of the Helsinki Agreement was that the Russians should improve their treatment of human beings and afford them some human rights in their own country. Various organisations, such as Charter 77, have been set up in Russia and satellite countries to monitor this, but they in turn have been suppressed. Does the right hon. Gentleman still believe that the agreement was a good thing or that the right hon. Member for Huyton (Sir H. Wilson) did not have the wool pulled over his eyes?
Mr. Stewart: I still think that the Helsinki Agreement is a good thing. It gives us some opportunity to focus the attention of the whole world on these matters. Although the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) may not have noticed it, such activity has made it possible to extract from the grim large prison of Eastern Europe a number of people who have been glad to leave.
The question at issue is whether a future Conservative Government would go to the Belgrade conference. I imagine that the hon. Member for Cirencester and Tewkesbury would not, although the question is not likely to arise in his case. We do not know what view the Leader of the Opposition would take. We know that she will make a crack at Helsinki and the Russians if she thinks that she can obtain electoral advantage in this country by doing so. That is an extremely dangerous and irresponsible thing to do, and it is linked with demands that this country should be more heavily armed.
Mr. Julian Amery: Is the right hon. Gentleman aware that the bulk of our preparatory work for the Helsinki conference was carried out by Lord Home when he was Foreign Secretary, although the conclusion of the
1326
conference and the signing of the agreement took place during the period in office of the right hon. Member for Huyton (Sir H. Wilson)? The Conservative Party took its fair share in preparing for the conference and I have always thought that if the Soviet Union stuck to the agreement there would be much to be said for it. We Conservatives have tried to warn the House and the public that the Soviet Union's signature might not be as valid as it appears.
Mr. Stewart: I hope that the hon. Member will talk that point over with his hon. Friend the Member for Cirencester and Tewkesbury who seems to think that the Helsinki conference should never have taken place. I pay tribute to what was done by that Conservative Government in helping to prepare for Helsinki, but we should remember that the first steps on the road to Helsinki were taken by the Labour Government of 1964–70.
This is by the way, because we are talking about matters that concern us whatever party is in power. It worries me that the Conservative Party has—as we have just heard—two voices on Helsinki. One finds some certainty in the Conservative Party because its members agree that this country should be more heavily armed. That is Conservative doctrine, but it is curious, because the Conservative Party's record in looking after our defences has never been particularly good. It is interesting that during the last war, with one exception, if he could, Sir Winston Churchill always avoided putting the Armed Forces or anything to do with national security under the charge of Conservative Ministers.
We now have the Conservative proposition that the country ought to spend more on armaments, but the Conservatives have also said that they must not be paid for through increased taxation. To put it bluntly, the cost will have to be paid by reducing social services. I should have thought that if the case could be made out that we should spend more on defence in the national interest, there should be a call to the nation as a whole and a demand that everyone should help bear the cost according to his means. The Conservatives are a little vague as to exactly how much more money would

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be needed, but they are sure that the more fortunate and well-off should not be put to any inconvenience.
On all these issues the Conservative Party remains opposed to trade unionism and good race relations and deeply committed to a class approach to all our problems. In every case the Conservatives are uncertain on matters that might be constructive and helpful. When they are certain, it is always on something that is wrong. The Conservatives have an unerring grasp of the wrong end of the stick, and that is why a change of Government in their favour would be a national disaster.
5.48 p.m.
Mr. Donald Stewart: The right hon. Member for Fulham (Mr. Stewart) has dealt with a range of the problems that may or may not arise after tonight. I ask his forgiveness, and the forgiveness of other hon. Members who wish to speak, if I do not follow his speech in detail.
I am not entirely happy with the social contract. The received wisdom is that Mr. Jack Jones is dictating to the Government. In fact, the boot is on the other foot. He delivered the trade union movement to the Government without sufficient guarantees that prices would be held.
The right hon. Lady the Leader of the Opposition referred, among other things, to the fact that this Government are a minority Government and that the House is made up of minority parties. I am with her on that point 100 per cent., but having diagnosed that sore on the body politic I waited for her to give a prescription. I am still waiting.
I have one good word to say for the Liberal Party. It is with my party in being in favour of some form of proportional representation—but if hon. Members find fault with the Government for being a minority Government they should have the honesty to do something about it.
The Prime Minister read out the usual list of jam tomorrow and better times ahead, but we have had that time and again from Governments of both parties since the war. He said that there would be more money to spend, but to quote the words of Aneurin Bevan, which the Prime Minister himself used yesterday,
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"Why peer into the crystal ball when we can read the book?"
We know what has happened. The value of money has gone down and prices have gone up.
The Labour Party's manifesto in 1974 said:
"The first and over-riding priority facing Scotland in the next 5 years will be to create more and better jobs."
At that time, unemployment stood at 4 per cent. Yesterday's figures indicate that it has doubled to 8·3 per cent. The Government have also kicked the self-employed in the teeth by refusing to raise the VAT threshold from £5,000 to £15,000. In many areas the self-employed account for 25 per cent. of the working population, and if that threshold had been raised, many more jobs would have been created.
The manifesto also said:
"The next Labour Government will give a high priority to the fight against rising prices."
In a recent parliamentary answer to my hon. Friend the Member for Perth and East Perthshire (Mr. Crawford), the Government admitted that the pound, which was worth 100 pence in 1971, was worth 51 pence in 1976. We know that food prices have risen by 231 per cent. in the past 12 months.
The manifesto also said:
"Labour will seek to create greater economic justice."
Yet we hear of dental charges being raised to £5, opticians' charges to be increased and so on.
The manifesto said:
"Labour will give high priority to improving our system of education."
The Secretary of State for Scotland heard a good deal about that today in the debate in the Scottish Grand Committee where hon. Members in all parties, including his own, denounced the proposals in his consultative document.
Another part of the manifesto read:
"We shall carry through a radical programme of industrial change."
The Scottish Development Agency was set up with a paltry budget. It will never get anywhere near clearing up the appalling industrial mess in Scotland.
All these charges are on the indictment against the Labour Party. They are proved, and they are sufficient reason

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for us to have no confidence in the Government.
For my hon. Friends and myself, the most important promise in the manifesto was:
"We shall set up a Scottish Assembly and Labour does not make promises it won't keep."
The Leader of the Liberal Party said that the Scotland and Wales Bill was a bad Bill. My hon. Friends and I all said that it was a bad Bill, but at least it was a start along the road. When the Liberal Party did not vote for the guillotine we lost any chance of getting the Bill through in this Session. It is interesting to note that among the arrangements cobbled up between the Prime Minister and the Leader of the Liberal Party on devolution, no obligation is spelled out on a timetable, and without such a motion the Bill will not pass. The Leader of the Liberal Party tells us to wait and see, but we saw what he and his colleagues did when it came to the crunch.
That was the first time for a generation that we had the chance to start decision making in Scotland. I have never had any doubt about the good faith of the Prime Minister and the Leader of the House in putting through the Bill, even though their motives are different from mine. They wanted to put the Bill through, but were frustrated by members of their own party. If the "no confidence" vote succeeds, the hon. Members who voted against the Government on the guillotine will have dug the Government's grave.
Mr. Dennis Canavan: I thank the right hon. Gentleman for giving way. He is right to castigate the Liberals for their mistake in voting against the devolution guillotine, but how on earth can he and his party justify going into the Lobby tonight with the arch-unionists, anti-devolutionists and anti-Socialists in the Conservative party? That is how the Scottish people will see it.
Mr. Donald Stewart: The unionists are not confined to this side of the House; they are on the Benches opposite as well. We saw that in the vote on the guillotine.
I am shocked to learn that Wales is to be taken out of the devolution Bill.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): May I correct the right hon. Gentleman at once? There is no deal to remove Wales from the Bill. Nothing of the sort has been accepted, or even proposed from either side.
Mr. Donald Stewart: I gathered from what the Prime Minister said that the Bill was to be brought in as a Scottish Bill only. I am pleased to accept the right hon. Gentleman's assurance that this is not so. We served notice on the Government weeks ago that the Bill should go through.
What the Liberals do tonight is their business, and the Conservatives must get away from the idea that other parties in this House are their playthings, but, as a result of their action on the guillotine, the Liberals have ceased to have any credibility as a home rule party.
I would not give a vote of confidence to the Labour Party, the Tory Party or the Liberal Party. I want that vote to be available to the Scottish people, and we shall vote against the Government.
5.57 p.m.
Dr. M. S. Miller: What a bitter disappointment it must be for the Leader of the Scottish National Party that he will not have the opportunity that he thought he would have to bring down the Government! Much as I admire and like the right hon. Gentleman, I am not struck by the arrogant posturing which the SNP Members adopt in the House, as though they were the repositories of all that is good in Scotland and no one else knows anything. It must be put on record that the Scottish trade union movement has said categorically to the SNP Members that if they carry out their stated intention and vote against the Government, they will bring about the possibility of a return to the most reactionary Tory Government since the 1920s and will shut the door on the possibility of any form of devolution.
The public could be excused for being rather puzzled about the way in which we conduct the business of the House. It appears to them that hon. Members opposite, either en bloc or individually, are vociferous in denouncing Ministers every day and are constanly expressing a lack of confidence in the Government.

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The same could be said about some of my hon. Friends.
It is pertinent to ask
"Why is this evening different from all other evenings?"
The answer is probably that the Leader of the Opposition tabled the motion in a fit of pique, and now feels that she must go through the formalities.
Even the remote possibility of a Tory Government causes shudders of horror throughout the country—as the Leader of the Liberal Party clearly indicated in his admirable speech. There was the amazing picture only a couple of days ago in the Stock Exchange when there was a £1,000 million drop in the value of shares on the mere improbable possibility of a Tory Government.
The Opposition say that they have no confidence in this Government, but what alternatives do their policies portend? I suggest that there would be massive cuts in public expenditure, as my right hon. Friend the Member for Fulham (Mr. Stewart) spelled out. Those cuts would fall hardest on the National Health Service, with prescription charges being increased, and on education. Higher rents would be a certainty. The cuts would fall on the welfare services. There would be increased expenditure on defence. Even a 1 per cent. increase in defence expenditure would amount to about £1,000 million extra being spent. The Tories have not reconciled themselves to Britain's changed rôle in world affairs. Certainly we play a different part now from that which we played in the nineteenth century.
I now turn to détente and the Helsinki Agreement. A total of 35 countries in Europe, including two from outside—the United States and Canada—are involved. The Select Committee on Defence and External Affairs is dealing with the Helsinki Agreement at present—I am not in contempt because our deliberations today were in public. We went in considerable detail into many aspects of the Helsinki Agreement. The hon. Member for Cirencester and Tewkesbury (Mr. Ridley) cannot expect change to occur overnight. We are asking many pertinent questions about the Helsinki Agreement. Probing deeply.
Under a Tory Government unemployment is bound to rise, because there would
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be a savage increase in the rate of factory closures. The Tories do not want to temper the search for efficiency with a humane approach. Under a Tory Government there will be a shift from direct to indirect taxation, with the consequent injurious effect on those least able to bear the burden. There is bound to be conflict with the trade union movement. As has been pointed out by two speakers today, there will also be the problem of immigration policy.
I promised to make a brief intervention. In my experience it always seems that the Labour Party comes into office when the country is in great difficulty after a period of Tory administration. That is what happened in 1974. For two-and-a-half years the people of this country, led by a Labour Government, have made sacrifices that are showing unmistakable signs of paying off. The balance of payments situation has improved, the pound is more stable, exports have increased, resources have increased, unemployment is decreasing, and inflation is falling.
The Leader of the Opposition was obsessed with Marxism. She referred to it many times in her speech. She must face the truth that the capitalist system is creaking at the joints. The capitalist system has not solved the unemployment problem. For example, it is 52 per cent. in West Germany and would be higher if 650,000 guest workers had not been returned to Yugoslavia and Turkey. It stands at 4·7 per cent. in France and would be higher but for 300,000 people who are in the armed services as a result of conscription. Unemployment is 6·3 per cent. in Italy, 7·3 per cent. in the United States, and 5·1 per cent. in the United Kingdom.
Technological advance means that fewer operatives are necessary. That is a problem that we must face and solve. My right hon. Friend talked of the necessity of acquiring new skills, but I suggest that it might be a good idea if the work force regained some of the old skills that are dying out. We shall need a shorter working week.
The country simply cannot afford a Tory Government, because only a Labour Government is relevant to the needs of the United Kingdom. The Prime Minister is right to want to continue to

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do everything that he can to carry on with the good work of the past two or three years.
The Tories and the nationalists are enraged at the consultations with the Liberal Party, but the Prime Minister is facing the reality of the situation. He is acting in the national interest. I look forward to this Government continuing with their important legislation for a further two years or more and to their being returned with a large majority at the next General Election, in 1979.
6.5 p.m.
Mr. Reginald Maudling: I am grateful for the opportunity to intervene and I undertake to be brief. My right hon. Friend moved a motion expressing no confidence in the Government. I see no reason at all why the House should have confidence in the Government, since the country clearly has not, according to recent polls and by-elections.
The familiarity to us here of the Government's arguments does not add any enchantment to their qualities in Government. The Government have made a hash of it. On prices, taxes, unemployment, the value of sterling—all the things that matter—the record of this Government has been lamentable. As for the conduct of the business of the House, I have never known anything to match it for incompetence. That, too, has been lamentable.
The Government say that they are changing their minds. They are talking of reducing Government expenditure and taxation, and about the importance of profits. The prospect of being hanged certainly concentrates the mind. If this is the path that we are to follow, if we are to have reduced Government expenditure, lower taxation and to show some respect for profits, is it not better to do it under a Government of a party that believes in those things? The last things that the Government believed in a few months ago were the things that they say that they believe in today. On their record we have no confidence in the Government and we have even less confidence in their ability to carry through policies in which they totally disbelieved a few months ago. I shall regret it very much if the motion is not carried. I fear,
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from what has been said today that it seems unlikely to be carried.
I listened with fascination to the Prime Minister and the Leader of the Liberal Party about the understanding between them—I must not say "deal". I have seldom heard anything so bogus in my life. I have an increasing conviction that someone has been sold a pup. I think that the Liberals have been sold a pup, but whether the Prime Minister sold it to them or they sold it to themselves is still to be discovered.
Let us examine what they have said. They are to have consultations. The Labour Party has given one or two details of concessions on particular measures, but the basis of the Liberal Party's argument is the need for stability. How long is that stability to last—for a Session or a Parliament? The Prime Minister said it was to be for the rest of this Parliament, although I am not sure of that.
What stability is there in a few months? The whole point of the Liberal Party's argument was that it should be for a few years. The Leader of the Liberal Party has destroyed his own argument. If there is to be stability, it must be for some time. If the Government are to have an assurance of continued support for their policies over an extended period, the Liberals cannot possibly vote against the Government in circumstances that would defeat them for a long period of time.
Mr. David Steel: The right hon. Gentleman cannot say that we have been sold a pup, because at the end of the Session we shall review the agreement. If it works, we shall continue it and we shall get long-term policies.
Mr. Maudling: Stability for a few months or stability until the end of the Session—that does not make any sense. What have the Government given in exchange? There is to be a machinery of consultation. How splendid! There is to be an examination of proposals and policies, including economic policies. Does that include the Budget? After all, the Budget is central to a Government's economic proposals and policies. If the Liberal Party is not to be told the contents of the Budget, what is the point of consulting? If it is to be told the contents, that is a disgrace. Which is the answer?
Mr. Thorpe: The right hon. Gentleman will acknowledge that he has been a Chancellor of the Exchequer and is, therefore, able to tell us that no Minister of any Administration is told the Budget details until probably the morning of Budget day or the day before when the Budget is to be agreed by the Cabinet. It therefore follows that it would be just as improper for the Chancellor to tell Liberal Members the details as it would be to tell his colleagues. What we have done is to make very detailed submissions. We did that some three weeks ago.
Mr. Maudling: Liberal Members give everything away. Everyone has made submissions. We all do that. As I remember it, the rule is that details of the Budget are disclosed in advance only to the Prime Minister and certain members of the Cabinet. Therefore, the details of the Budget will not be disclosed to the Liberal Party, so the details of the Government's policy will not be disclosed. What is the point of all this talk?
The other thing is that the Government are to examine the ideas of the Liberal Party. There is no commitment to accept anything whatever, but only to examine. I should have thought that any rational Government, even the present Government, would examine any serious proposal put forward by any party in the House. What is the difference? Are we all equal, or are the Liberals more equal than others?
If in the future the Liberals are to be more equal than others, to what extent and in what way, and will the Government accept Liberal proposals because they come from the Liberal Party and not because they think that they are good proposals? If the Government are to accept only proposals that they think are good, that is what happens already, without the machinery of consultation.
This understanding is the most bogus nonsense that I have ever heard.
6.12 p.m.
Mr. Reg Prentice: For the benefit of those interested in the arithmetic rather than the argument, perhaps I should say that I shall be voting with the Government tonight. That is a decision that I reached at about 3 o'clock this afternoon, after a good deal of agonising doubt.
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It seems to me that we are engaged in two debates that are interwoven with each other. One is a debate following the usual form on a motion of no confidence, which is, in fact, a mutual slanging match and is just as boring as these slanging matches always are. The other is a debate on the significance—or lack of significance, according to the right hon. Member for Chipping Barnet (Mr. Maudling)—of the understanding between the Government and the Liberal Party.
I do not share the cynicism of the right hon. Member for Chipping Barnet, although I think that we would all agree that at present we do not know what will become of this understanding and whether its results will be short term or long term. Certainly in the short term there is an agreement to have what the Leader of the Liberal Party described as a period of stability.
There is an agreement to establish machinery under the chairmanship of my right hon. Friend the Lord President. Those of us who have known him for a long time will look forward with fascination to his progress as a promoter of stability. There seem to be a number of understandings on the legislative programme on matters on which the views of the Government and the views of the Liberal Party may already have overlapped to some degree.
However, the question that I want to examine—I examine it optimistically; this is why I shall be voting with the Government tonight—is whether this can lead on to a new style of parliamentary politics and a new kind of relationship between parties in the House. Another phrase that was used by the Leader of the Liberal Party was that he hoped that there might be—I hope that I remember his words correctly—a taste for co-operation emerging from these new procedures. I hope that there will be, and I believe that there should be.
The background to the debate is that during the last three years—I refer particularly to the period since the General Election in October 1974—the Government have grossly exceeded their mandate and have been allowed to do so. They have been allowed to do so because of the disunity of the Opposition parties—partly because of their genuine differences of opinion with each other and

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partly because of their different views about parliamentary tactics. They have allowed the Government to get away with more than a Government should have been allowed to get away with.
I say that against the background that the present Government are a minority Government in the sense of their support in the country. The Labour Party is a minority party in the country. So is every other party that is represented in the House. However, it has often been said, and it is worth repeating, that we got less than 40 per cent. of the votes of those who voted at the last General Election and the votes of less than 30 per cent. of those who were entitled to vote.
Also, in this House the Labour membership has constituted only about 50 per cent. of the membership. It was marginally above 50 per cent. following the October 1974 General Election, and then that margin disappeared and it is now marginally less than 50 per cent.
Yet the Government have successfully pursued a very intensive programme of long, complex and controversial legislation, often badly drafted, often costing much more to taxpayers and ratepayers than was ever anticipated, and they have rushed it through at a rate that has never been seen previously. It is no secret that some members of the Cabinet—I was one of them—at times tried to warn their colleagues against both the volume and the pace of this legislation. But when we did so, we were answered with the arguments that these were manifesto commitments, that the Labour movement expected us to do these things and, in particular, that the TUC expected us to do these things as part of the price of the social contract. Those arguments were considered to be overriding arguments, whatever the merits of a particular case and despite the developing minority situation of the Government in the House.
A few days ago the Prime Minister referred to this debate, and particularly the vote at the end of it, as a moment of truth. So it is. It is a moment of truth for every hon. Member, particularly for the Prime Minister and his Cabinet colleagues, because the fact is that the Government can no longer go on governing in that way. The fact is that the parliamentary
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arithmetic no longer allows it. The Prime Minister was conceding that fact in his speech this afternoon. With his usual flair as a parliamentary speaker, it did not sound as though he was making concessions, but he was making concessions, and in my view they were overdue concessions.
The question is whether this new organisation—the agreement with the Liberal Party is only part of this, but it is the most obvious example—will be a more permanent feature of our politics. I would want it to be a feature of our politics whichever side is in office. In other words, so long as there is a Labour Government, is their first loyalty to what is usually called the Labour movement—which is, in fact, a very few thousand activists throughout the country—or, instead of that, is it their duty, as I believe it to be, to seek out the national interest and to seek the greatest degree of consensus and to get as much support as possible in the middle ground of politics?
Mr. Arthur Lewis: My right hon. Friend knows, as I know, that in Newham, part of which he represents, we have had a grave problem with regard to housing and education during the period when we have had several Secretaries of State for Education and Science and when we had a majority. Manifesto or no manifesto, can my right hon. Friend tell me, during any of that period, when those Ministers—I emphasise the plural—did anything to overcome the awful problems of the nation? Does he think that this shabby deal with the Liberals will help, when he knows that only this week the Government have announced further cuts in the building of schools in Newham?
Mr. Prentice: I shall not answer on behalf of Secretaries of State for Education and Science, in the plural.
Mr. Lewis: You were a member of the Administration.
Mr. Prentice: I can help by answering on behalf of one Secretary of State for Education and Science, and that was myself. [Interruption.] I shall tell my hon. Friend what he ought to know—and as he does not know, he would do much better to shut up and listen. I shall tell my hon. Friend what he ought

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to know. It is that I discriminated in favour of the deprived urban areas in this country in respect of school building. I discriminated in favour of boroughs such as Newham in terms of the London allowance. During that period of great economic stringency, I did everything within my power to improve the opportunities for children in Newham and areas like Newham. My hon. Friend might do better to study these matters rather than making the sort of foolish intervention that he has just made.
My hon. Friend diverted me from my main theme. The point I was on was that it has become a condition of this Government continuing in office for the Government themselves, at least for the time being, and I hope for longer, to take this new stance and direction towards the centre of politics at the risk of offending their own Left wing. That is something which many of us have wanted to see happen for a long time.
I believe that the benefits that can flow from that are much greater than simply the survival of the Government. I mention just two. It seems to me that it is good for Parliament. It re-establishes the basic point that no Government of this country can govern except with the consent of Parliament and that every Government must accept the limitations which that imposes on their freedom of action. It would be a timely reminder to activists in all political parties, and to party conferences of all political parties, that Parliament does not exist just to rubber stamp their decisions. It would underline the fact that MPs have a duty to the country, and to their constituents that transcends their duty to their parties. It is a duty that was defined by Edmund Burke about 200 years ago and I believe it is as true today as it was when he sent his letter to the electors of Bristol.
The other reason is that at the moment I believe the needs of our country, particularly the needs imposed by our economic situation, make it imperative for us for some years ahead to have a Government who aim at the widest possible measure of agreement. Ideally, I should like to see the kind of arrangement and understanding arrived at between the Government and the Liberal Party extended to the Conservative Party, or, if not to the whole Conservative
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Party, at least to the more progressive Members of the Conservative Party.
I have believed for some years that within this Parliament and without a General Election it would be possible to have an agreed policy and an agreed programme of measures that would command the consent of about 400 or 450 hon. Members, although they would be strongly opposed by extremists both of the Left and of the Right. There have been periods in the history of this country when the forcing through of a drastic and controversial programme has been in the national interest. I think of the programme carried out by the Liberal Government from 1906 onwards and the programme carried out by the Labour Government from 1945 onwards. These were periods when drastic and controversial change was badly needed in the national interest.
But we are not in such a situation now. We are in a situation where we need the maximum unity in politics and the maximum common endeavour in industry in order to overcome our chronic economic weaknesses. Hon. Members on both sides of the House should bear in mind that in the 32 years since the end of the Second World War the Labour and Conservative Parties have been in office for periods which are approximately equal. For most of that time one party or the other has had a majority in this House. It has been a one-party Government throughout this period, and always with an Opposition waiting to pounce.
The same 32 years have seen Britain's economic performance and her performance in terms of social progress falling behind the performances of other Western industrialised nations. There must be some relationship between that failure and the way in which we run our political affairs.
Mr. Ronald Bell: Does the right hon. Gentleman agree that during the 100 years between 1800 and 1900 there was the same opposition between the two great parties—the Whigs and the Tories—and yet that was a time of immense economic, political and scientific advance?
Mr. Prentice: It would be historically true to say that those advances were in

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spite of the Government of the day rather than because of it.
I have no sympathy with those of my hon. Friends who talk about the prospect of a Conservative Government with such horror. I wish they would not exaggerate such matters. Our need now, whichever party occupies the Treasury Bench, is a Government who seek to be a Government of national unity. We need an Opposition, or Opposition parties, which pursue a course conducive to national unity. We need a wider consensus in the conduct of our affairs than any one party has seemed able to provide in recent years. We need a Government who are touch enough to face up to the vested interest of both big business and the TUC. We need a period in which we are not tearing ourselves apart with doctrinaire arguments and not competing with each other to promise social benefits for the British people based on resources that the country has not yet earned.
If we are to enter such a period, it need not be a negative period. There is a great deal to be done. There were examples of this among the measures discussed this afternoon. There is the form of legislation for elections to the European Parliament, the terms of the Budget, the terms of industrial democracy and many other matters. But these must be matters that command consensus across party lines rather than proposals imposed by the domination of one single party.
I welcome the agreement reached between the Government and the Liberals because I believe that it could lead to a new and better style of politics in our country that would be more relevant to the needs of the country in the 1970s and 1980s.
6.28 p.m.
Mr. Dafydd Wigley: I shall not follow the right hon. Member for Newham, North-East (Mr. Prentice) in detail, but it must be pleasing for the right hon. Gentleman to see the Labour Government moving in the direction of a Social Democratic Government. That is not an attitude which may be shared by everyone. What surprises me more is the equanimity of some Labour Members during this transition. I wonder whether their confidence in the Government is now dented by such a movement.
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We are asked whether we have confidence in the present Government, not whether we have confidence in the Conservatives as a Conservative Government. If the motion is successful that will be a matter for the people to decide in a General Election. But if the Queen sent for the Leader of the Opposition and invited her to form a Government without an election, my colleagues and I would certainly show the same lack of confidence in the possibility of a Conservative form of Government, and their present policies, as we have in the present policies of the existing Government.
Indeed, the speeches from both Front Benches lead us to feel a lack of confidence in the future of Parliament. I suspect that the Prime Minister showed a total lack of strategy. Indeed, when referring to his industrial strategy, he missed out one vital element, and that was the parameter of unemployment. It it true that he referred to unemployment several times, but not within the parameters of trying to get stability. I suspect that stability could be reached with 1,500,000 unemployed, but that is not the sort of stability that I like.
The Leader of the Opposition did not put forward any positive alternatives which would give us any hope of this problem being overcome. If there were doubts about confidence before this debate started, our doubts are now even greater, particularly now that we are dealing with a Lib-Lab alliance rather than a Labour Government per se.
There was one matter to which the Prime Minister referred in relation to devolution. The Leader of the Liberal Party also referred to this. The Prime Minister said that devolution was vital to Scotland. We are very worried about the direction in which the Government are moving and the possible exclusion of Wales. We are also worried about the comments of the Leader of the Liberal Party, who pressed for two separate Bills. We know, as Members of the Liberal Party have said, that this could mean that the Bill dealing with devolution for Scotland could get through whereas the Bill dealing with devolution for Wales could be left out.
The motion asks whether we have confidence in the Government. On the Government's record over the past two and a

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half years, how can we, in all seriousness, say that we have confidence? We have seen the Government living with massive unemployment. I would go so far as to say that the Government have used unemployment as an economic regulator. Unemployment in Wales rose from 3·2 per cent. in the summer of 1974 to 8·1 per cent. last summer. That does not inspire confidence.
We have a chronic housing situation. Sixty thousand families in Wales are on the council house waiting list. The list is lengthening. When the Government came into office the Minister of State, Welsh Office said that Welsh local councils should bust the bank to solve the housing problems. Yet within a matter of months that policy was reversed. The number of unfit houses has risen from 90,000 to 150,000. The amount of spending on housing in Wales has decreased from £146 million in 1973–74 to £63 million in 1978–79. How can that give us any cause for confidence?
We have seen the lip service that the Government have paid to economic planning. We have seen the introduction of the National Enterprise Board, but it has failed dismally to make any mark on the scene. We have seen a policy of switching resources from the old development areas to inner city areas. That policy causes us concern.
We have seen the abandonment of regional employment premium, which has lost Wales £32 million a year and is now threatening many companies, including one specific company in my constituency. How can I have confidence in a Government that pursue such measures?
Whereas expenditure on social services, education and housing has been cut, we have seen expenditure on defence for the United Kingdom stay at 5·1 per cent. of the gross national product compared with 3·6 per cent. of the gross national product in the European NATO countries. How can we have confidence in a Government who pursue such priorities?
Our teachers have been left unemployed in great numbers, while classes of 40 to 50 pupils continue. The Child Benefit Bill suffered the fate we all know about. Quarrymen in my constituency have suffered severely from pneumoconiosis and silicosis but have looked in vain for help to this Government. We have
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seen the abandonment of the promise of a fourth television channel for the Welsh language. How can we have confidence in a Government who behave consistently in this manner?
The 1974 Labour manifesto contained a clear-cut commitment to grant devolution to Wales. There were delays from 1974 to 1976—White Papers, discussion papers, and so on. This is happening again—more discussion documents are being issued and no doubt we shall be presented with more dummy Bills. There was also a commitment in the Labour manifesto that the Welsh Assembly would have economic planning powers. That was dropped when the Labour Party actually became the Government. How can we have confidence in such a record?
The Scotland and Wales Bill was lost because English Labour MPs were not able to support it, although a majority of Welsh Members were in favour of it. The Government were unwilling to make the Bill an issue of confidence. How, in turn, can we have confidence in such a Government? We are not even to get a referendum on this issue, although the Government had become persuaded, after a long argument, that a referendum was necessary. We pressed for one, as did hon. Members of other parties. How ever, we are not to have one; so the people of Wales and Scotland will not be able to vote on the issue of devolution. How is it possible for us to have any confidence at all in a Government who behave in such a fashion?
Mr. Martin Flannery: Is the hon. Gentleman arguing that if there were a Conservative Government in power any of these things that he says are wrong would be set right? Does not the hon. Gentleman realise that the problems of the Welsh people would be massively intensified under a Conservative Government?
Mr. Wigley: What I know is this: for the past two and a half years we have had a Labour Government who have followed the policies of pink Tories, and as a result we believe that there is very little to choose in practice between the effects of the policies of a Labour Government and those of a Conservative Government. The Conservatives are against devolution for Wales. The Labour

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Party, although it promised things to Wales, could not deliver the goods because of its own shortcomings. So we have the choice between getting nothing from the Conservative Government and the probability of getting nothing from the Labour Government too.
The only thing that will deliver the goods for Wales and Scotland is an upsurge in the two nationalist parties and an increase in the number of their representatives in the House of Commons and that needs a General Election. That is the historic lesson to be learned from the betrayal of the people of Wales and Scotland by the dropping of the Scotland and Wales Bill. It is exactly what happened at the end of the last century when the Liberal Party gave much the same sort of pledges. What happened over the Scotland and Wales Bill was an action replay. If the people of Wales did not understand the position before, they do now. The only thing that will get them their rights is for them to support independent political action and vote for Plaid Cymru.
Confidence should be a matter for the future. Can we have any hope for some improvement in the future? Is there any confidence that under this Government production will move to a greater level than it was at the time of the three-day week? Have this Government a policy forthcoming which will tackle inflation and the problem of the sinking pound? We have seen the mess that they made of handling the Aircraft and Shipbuilding Industries Bill. Then there have been the delays to which the steel industry has been subjected and the farce over the Water Charges Equalisation Bill. Is there any indication that such incompetence will be reversed?
There has been a failure to introduce any control of imports, which would have had a direct beneficial effect on the economy. There is no indication that there is to be a change from the policy of the use of high interest rates. It must be acknowledged that interest rates have dropped somewhat in recent weeks, but they are still desperately high and are causing a fundamental problem with the economy.
There is no indication that the Government intend to give a fair deal to agriculture that will really bring "Food from Our Own Resources".
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Because of the Government's policy on all these matters we have no cause to have confidence in the future. There is bound to be uncertainty over the next two years about how inflation will go and whether investment will be encouraged. There is uncertainty about phase 3 and the effect that it will have on the economy. There is uncertainty about the Government attitude towards direct elections for the European Parliament. There is uncertainty about their commitment to radical employee control in industry, which we have looked for. I suspect that the deal with the Liberals that we heard about this afternoon will dilute the move that has been made in this direction. All this gives us no basis for confidence.
We have seen no new vision for getting the 80,000 people in Wales and the 1. ½ million people in the United Kingdom as a whole back to work. We see no cutting of bureaucracy and red tape. None of these things gives us inspiration.
If there were to be an election now, it would provide opportunities. It would provide the Labour Party internally with the opportunity to discuss the policies it should be following and that it should be putting forward instead of the two years of vacuum that we are likely to have as a result of the failure of the vote tonight.
An election now would provide an opportunity for the electors to decide the course they want to follow, particularly in Wales and Scotland where there is an alternative. It would provide an opportunity for whichever party were returned to power to face up to a greater number—perhaps 30 or 40—of nationalist Members. We should have a new House of Commons, a new balance, new faces, a new Cabinet, and a new start.
None of this is to happen, however. We have instead a shabby deal which will keep the same moribund Government in office for two years with no new policy. The same old faces will continue to govern us in a wishy washy way. Our people will suffer as a result. We have seen on the constitutional issue that this Government are not to be relied upon. Nor are they to be relied upon to deal with economic matters.
I say nothing other than that we have no confidence in this Government. For us to vote for them tonight would be a lie.

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Unlike others, we are not prepared to indulge in that lie. We shall vote for the motion.
6.39 p.m.
Mr. Frank Tourney: I cannot follow the hon. Member for Caernarvon (Mr. Wigley) in detail. He seems to disregard the whole history of the Labour Government and previous Governments in relation to Welsh affairs. Up to, and including the advent of the 1945 Labour Government, investment in Wales by previous Governments was almost nil. But Labour has, through various avenues of legislation and special grants, set up factory after factory in South Wales.
Recently we voted an enormous amount of money to two steelworks in Wales. Against all industrial logic—because the iron ore was not available on the site—the late Aneurin Bevan agreed to put a steel mill at Ebbw Vale in order to generate industry. Therefore the charge the hon. Member is making is quite fatuous.
Mr. Ioan Evans: As my hon. Friend has said, the Government recently made a statement to the effect that over £800 million investment will be put into Shotton to keep it going and into Port Talbot. By voting against the Government tonight the hon. Gentleman and his colleagues are putting that at peril. I think that they would find that at the next election not one member of Plaid Cymru would come back to this House.
Mr. Tomney: I agree. Along with the non-investment from 1900 to 1945 there was a change in demand and technology which left a wasteland behind in South Wales. This is what we had to deal with in 1945.
I come to the motion tabled by the right hon. Lady the Leader of the Opposition. It is the wrong motion at the wrong time for the wrong purpose. She has jumped on the bandwagon that resulted from last Thursday's events when the Scottish nationalists put in the Tellers. Her decision is against the judgment of any political historian who knows the House of Commons. Confidence motions are usually tabled by the Government of the day, and only very rarely are they sponsored by the Opposition. The right
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hon. Lady has jumped on the bandwagon because she thought it would be profitable, but it has bounded back in her face. She made a miserable, tragic speech today which contained no philosophy and no political direction. If that is all she has to offer we might as well all go home and ask her to withdraw the motion because there was nothing in what she said.
In terms of our economic situation this country has to deal with the same problems time and time again. One of the main problems is, of course, lack of investment. One gets befuddled trying to remember the investment policies that were in operation under Harold Macmillan and before that. At that time there was a flow of money from the banks, export markets were available, there was no contraction of confidence, and everyone was buying goods. Profits were being made, but they were not reinvested.
With the advent of the Heath Government, the then Prime Minister made a plea to the City to invest, but that investment was never forthcoming. It was not even forthcoming in capital industries which needed investment so badly. One remembers the case of Rolls-Royce where the Conservative Government had to step in at the eleventh hour, mainly because the technical expertise of British craftsmen would have been lost. When we talk about investment we should do all we can to alleviate the general distress felt in small industries and we should gear them to a higher rate of production.
Our problems were not helped when out of the blue the Arabian oil kings put up the price of oil to astronomical heights. A shudder was felt throughout the whole industrialised world and also in the under-developed world. This problem is still with us. As a result of it we have had a contraction of markets and a contraction of credit. There has been a low return on capital as a consequence and we are now in a virtually static position.
We have had in this country more investment and more people employed in non-productive industries. That is something that must be changed quickly. We cannot maintain a nation of 53 million people on non-productive industry no

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matter how attractive our social legislation. We need money to operate that legislation. This is the situation in which we found ourselves when this Prime Minister came to office. I do not think that anyone in this House could complain that the Prime Minister has not tried to do a proper job within the confines of what this very volatile party has allowed him to do. He has had to control the various factions of our party and he has done so, and at the same time he has restored to the office of Prime Minister the dignity it should have. This is why this vote of confidence is absolutely idiotic and should never have been tabled.
Economically this country seems to move from crisis to crisis and its difficulties get greater and greater. I served for three months in the European Parliament, and over the years I have attended many international trade union conferences. I have also listened to many seminars. I have come to the conclusion that an army of occupation in any country concentrates the mind wonderfully, and that is just what has happened in Germany. That country had to pull itself up by the bootlaces and start from scratch. As a result the Germans have the best industrial economic base in the world, including the United States.
Also the operation of the German democracy is on a proportional representation basis. After watching the way our system works one is driven to the conclusion that there must be a better way out of the nation's difficulties.
We cannot continue in the way we have been going. When money is made available by Government to industry it does not always get there. We had pleas from the Conservatives for money for investment, and, as I have already pointed out, this was not forthcoming. Where did it go? It went into property. In 1954 Lord Duncan-Sandys took off the building controls and look what happened then. The price of land rocketed. After that we had the activities of the secondary banks because no one bothered to check them throughly, not even the staid, solid Bank of England. When they went broke the Government and the taxpayer had to pick up the bill.
We have now arrived at a situation in British industry where long-term decisions
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must be taken. I hope that the social contract will be renewed and extended. It is asking a frightful lot but it is necessary. This nation has an industrial history which has developed slowly over 150 years, and which has been based on an ideological struggle between man and master. The working classes' claim for recognition goes back as far as 1902 when they saw political representation as a means of remedying ills and achieving their just demands. This has built into people's philosophy the idea that one achieves through organisation. When there is a run of full employment and the generation of a consumer society, people come to accept that. It is part of their life. It is one of the dilemmas with which we are confronted, and if it is to continue we have to make provision for its just demands and desires.
In the 25 years that I have served in this House, I have always believed that delegates rather than Members of Parliament should speak at the Labour Party Conference, but last year, because of the situation in my constituency, I had to speak at the conference. One can only take the British public with one so far, as I pointed out then. Higher prices, increasing rents and the rest have up to now being absorbed by the people with a willingness and stoicism which have staggered me. They know instinctively when the country is in difficulties, however, and they prefer to dig it out of them, but, as is shown by the lowering percentages of votes cast in elections, many of them are demoralised and dispirited by our electoral system. They do not know precisely where they stand or where they are going.
It is the job of Parliament to tell the people where they are going and to assist them to get there. If the action of the Liberal Party today helps us in that direction, it will have served its purpose. Whatever the future may hold for political life in this country, it will not remain in the same pattern after today. This is indeed an historic day. We now have for the first time an inkling of political will for a common public purpose which we have never had before, and we must not lose it.
I shall not speak for long, Mr. Speaker, as I know that many others wish to

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speak, but I thought that on this occasion I had to speak. The nationalisation of banks and insurance is in our programme, and I beg my right hon. and hon. Friends to be careful. A man in Great Britain, who has been brought up with a history of industrial struggle, will not put his weekly wage at risk for anyone, not even the Government. We must be careful about the nationalisation of banks. In such institutions as the banks, the Stock Exchange and Lloyds, this country has the greatest invisible earners in the world. Other nations, chiefly Germany, are anxious to take over that business. German, Japanese and American bankers are powerful people. Up to now, they have come to our rescue through the International Monetary Fund, and we should not disappoint them by slapping their philosophy in their faces.
A policy of nationalisation of banks and insurance will be awfully dangerous, and I ask the Labour Party to consider that point. For making this kind of speech, one pays a penalty, and I have paid. I repeat that confrontation by an army of invasion wonderfully concentrates the mind. Germany's stability continues. The Italian miracle has run itself out. Something may have run itself out on this side of the House.
I am a tolerant person, although some people, especially some of my Left-wing friends, think that I am not. It is one thing to put down a motion criticising the Government and then to say, as one hon. Member once said to me, "Of course, although I have signed the motion I shall support the Government in the Lobby", thereby buying a pleasant time in one's constituency, keeping Left-wing delegates at bay, and quite another to have a consistent philosophy. There has to be a philosophy. There has to be a progression.
This is the job we have to do. It has been and is a slow job, and my right hon. Friend the Prime Minister has done wonderfully well. We must get that message across, not only here but in the world at large. In Germany, industry and workers alike are fearful of unemployment and they wish that they had an agreed incomes policy. The Americans have had a kind of incomes policy because there they renew contracts between industry and labour every three or four years. We
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do not. We have a day in, day out procedure. But we have to operate this new pattern if we are to get anywhere.
Now we are coming to elections for the European Parliament. One of the reasons why I have been sacked by my constituency party is that I went into the Lobby for something I believed in—the Common Market—against the wishes of that party. Why do I believe in the Common Market? For one thing, I believe that food prices would have risen even more had we not been in the Common Market. The present situation has been generated to a large extent by the oil situation. In addition, Britain had previously relied on colonial preferences which no longer exist. But we found ourselves having to maintain a large population in benefits which it had come to expect as of right. We still have to earn those benefits, however, and we can do it only if we are part of the bigger industrial scene in Europe. That is one of the reasons I went in, and one of the reasons that I am out.
Now we come to the Liberals and the question of direct elections to the European Parliament. I am in favour of these elections taking place as quickly as possible. I hope that they will not be delayed beyond 1978. There is a job to be done, not only for Europe but for the Lome Convention countries, which now have certain privileges. It will be a long-term job. There is the question of what is to happen to India—and that nation defies organisation. There is danger of nuclear war. We should be fostering Japanese-Chinese co-operation as fast as possible. I know where the real challenge is coming from—from Africa—and the purpose is to continue British industry's crisis, denying raw materials to us except on terms that we cannot meet. This is the ultimate industrial, political and military challenge, so we had better get organised before it is too late.
Several Hon. Members rose—
Mr. Speaker: Order. May I make an appeal to right hon. and hon. Members before I leave the Chair for a short while? There are 15 right hon. and hon. Members still seeking to catch my eye, and there are two hours left before the winding-up of the debate.
7.0 p.m.
Mr. Hugh Fraser: I congratulate the hon. Member for Hammersmith, North (Mr. Tomney), as always, on his speech. But I want to turn to the more optimistic speech of the right hon. Member for Newham, North-East (Mr. Prentice). He takes the optimistic view that there is a changed situation in the House of Commons.
This is a perfectly proper vote of censure, and I shall not rehearse the arguments for it except to say that politically, and regionally—as the hon. Member for Caernarvon (Mr. Wigley) said—and industrially and economically there is an overwhelming argument for defeating the Government tonight.
But people are more interested in the deals or non-deals that have been done. This is where optimists like the hon. Member for Hammersmith, North say that a new page is being turned in political history in the House. I believe that to be an entirely wrong and over-simplistic view. Northern Ireland Members are to be congratulated on the concessions that the Government have offered them—which I know would have been given by the Conservative Party—and on thereby reinforcing their position.
The situation of the Liberals is one of great interest. I congratulate the Prime Minister on what he has done for the Liberal Party. The crude fact is that this is not a great advance in the unification of political thought and the achievement of a consensus.
My father happened to know Lloyd George, and I am the great-nephew of Prime Minister Asquith, so I say, with almost filial respect to the Liberal Party, that the Liberal Party was desperately looking for a way in which to avoid voting tonight. The Prime Minister, being a good negotiator, was good enough to offer them a way of escaping that obligation. It is no more than that. The realities of this so-called pact are totally negligible.
The Leader of the Liberal Party spoke about stability, but when one looks at the Left wing of the Labour Party, one wonders whether this pact will bring much stability into the coalition of the Labour Party. That is something that they must work out themselves. It is not for us to do so.
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Devoted as I am to various political causes, first of all the cause of the Conservative Party, and with the respect that I have for other parties in the House of Commons and all parties, I say that this has done nothing to change the face of British politics. All it has meant is that an excuse has been found by an extremely capable Prime Minister for the Liberals to avoid a vote which would have been disastrous for them.
I promised to speak for only five minutes, so I have one and a quarter minutes left. I say to the Liberal Party that, although this deal has been done by the Liberal Party in the House of Commons, there will be many Liberal supporters outside the House who will feel that their interests have been betrayed.
Many people will feel that the claim made by Conservative candidates throughout the country that a vote for the Liberals is a vote for Socialism is true. I see that the hon. Member for Isle of Ely (Mr. Freud) has returned, so I say to him, with his canine experience, that the Liberals are proving the running dogs of Labour.
7.4 p.m.
Mr. Eric S. Heffer: I think that most hon. Members who are honest with themselves, including Conservative Members, will agree that there has been a great sigh of relief that there does not now seem to be an immediate prospect of a General Election.
The number of hon. Members from various political parties who have said to me "I hope that it does not come to an election" is legion. A Welsh nationalist Member, who was on the same television programme as myself, said "My party will vote wholeheartedly and decisively against the Government, and we hope that the Government go down", or words to that effect. A little later the same hon. Member was asked by the television interviewer "Do you want to see the defeat of the Government on Wednesday night?" and he replied "No". The television interviewer then asked, perfectly justifiably, "Why are you voting against the Government?"
Many people have expressed this view, saying that a General Election at the

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moment would not be good for the country, quite apart from the likelihood that it would have returned the most reactionary Conservative Government that we have had this century. Everyone knows that it is not good for the political and economic stability of the country to have an election every two years. We were attempting to get a good majority in order to get political and economic stability. It has not been good for the country to have a minority Government and it is not good for the country even now to have a minority Government.
I wish to talk about the agreement that has been reached. Since I have been in the House, there have been many agreements, understandings and discussions, particularly since February 1974. They have gone on the whole time, and I have no objection to understandings between various political groups on different subjects at any given moment. But I am not happy that we have to enter into a concrete agreement of this kind. I should be untrue to myself and untrue to my Socialist convictions if I said that I was happy with the situation. I shall look at this agreement with the greatest suspicion and put it under the microscope.
Opposition Members may laugh if they like, but if there had been a General Election they might not have laughed. I know that the right hon. Lady the Leader of the Opposition believes that she would have walked it, but I tell her that that is a myth. She could easily have found herself in a position similar to that of the Government. Would not the Opposition have reached an agreement with other parties with a nod and a wink? Of course they would. If they would not, the face of the Conservative Party has radically changed, and I do not think that it has changed.
I am not against political agreements and understandings. As I have said, I am a Socialist. The people in my constituency had the opportunity to vote for a Liberal, and a small minority of them did so, but well over half of those who voted in fact voted for me, for my party. We are talking about General Elections—
Mr. David Penhaligon: What about local elections?
Mr. Heffer: The Liberals won a number of seats on the local council that
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normally go to the Tories when we have our backs to the wall, but that will not last for ever.
If there is any question of the Labour Party entering into a long-term arrangement which will manoeuvre it into accepting Liberal concepts, that will not be agreeable to us. This arrangement can operate only for a very short term. Conservative Members should not feel that I fear a General Election. I still think that any Labour Government, even a minority one, will protect working people and their families much better than could any Conservative Government, and history proves that to be so.
The Conservative Front Bench has shown its hypocrisy on this issue. It attacks the Government and seeks to take advantage of the discontent which has arisen because of the wages policy and the public expenditure cuts. The Conservatives know that this is the best possible time to take advantage of that discontent, but if they were in power they, too, would cut public expenditure. The cuts that they would impose would clearly put at risk the benefits paid to the unemployed, the disabled, the sick and pensioners. Would the Conservatives have saved the jobs of workers who were thrown out of work because of the collapse of private industry? They have made clear that their total market philosophy would not provide assistance to industry for saving jobs. I am not prepared to see working people suffer like that.
I heard the right hon. Member for Lowestoft (Mr. Prior) saying on the radio the other morning what the Conservatives would do for Stage 3 of the pay policy. He said "We would sit down and discuss the matter with the trade unions." That is just what my hon. and right hon. Friends have been doing. He said "There would have to be greater flexibility". Every one of my hon. Friends who speaks on this question has referred to the need for greater flexibility. What hypocrisy there is on the Conservative Benches about this matter.
The Conservatives know that the oil will flow more freely, that the balance of payments position will improve, and that unemployment will gradually fall, and they want to bring the Government down so that they can profit from the situation

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largely created by the Labour Government. It is true that I have criticised my Government for the public expenditure cuts, but they have handled the cuts much better than any Tory Government could have done.
Mr. David Crouch: Why did the hon. Gentleman resign?
Mr. Heffer: That was obvious from what I said at the time. If the hon. Gentleman did not hear that, he must need a hearing aid.
I wish to direct a few remarks to my right hon. Friend the Member for Newham, North-East (Mr. Prentice). He made a remarkable speech. He argued that we ought to work slowly and steadily towards a Government of national unity. The logic of his argument was that we ought not to discuss politics at all, that there should be no political debate or discussion. My right hon. Friend was with me in Chile. He knows that the Chilean Government has just banned politics. People there are not allowed to talk politics. Logic demands that democracy means discussion, argument, vote and clash of opinion, and politicians putting their ideas before the people. That is the point about democracy.
It is a good thing that my right hon. Friend has now discovered the right to take independent action. However, some of us over the years have taken independent action on many issues, and we have been accused by my right hon. Friend and his colleagues of rocking the boat. He cannot have it both ways. He cannot suddenly find this new freedom and forget that for years he has been telling us that we should not do these things.
I dismiss my right hon. Friend because there is little logic in his argument. Undoubtedly at some stage he will find himself in some other political party. We shall not have put him there. He will probably have put himself there, but that is his problem, not ours.
I wish now to consider the significance of what has happened today. As I said earlier. I am worried. We are in a minority, however, and we have to recognise that. But I warn my Front Bench colleagues not to allow the immediate situation to jockey them into the position
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in which the dog is being wagged by the Liberal tail.
If we are to have consultative machinery of the type outlined for the discussion of legislation, the other committees referred to by my right hon. Friend the Prime Minister must also be consulted. So must the National Executive Committee of the Labour Party, acting on behalf of the party in the country. If it is not consulted, we could be heading into dangerous waters. I do not want that to happen, for the reasons that I have put forward. I want to see the Government succeed.
Mr. Foot: I am sure that my hon. Friend is well aware of what my right hon. Friend the Prime Minister said earlier. He said that we had had discussions over the last month or two in the parliamentary party to try greatly to improve the machinery which exists within the party for discussing these matters. One of the undertakings we have quite properly given is that we should set up on a much more formal basis—this was decided long before any discussion arose with the Liberal Party—procedures whereby we could have discussion about legislation within our party committees.
Mr. Heffer: I do not for one moment deny that that happened, because I was at the party meeting when it was agreed. I am merely saying that the arrangement had better work, and it had better work effectively. The Labour Party membership in the country had also better know what is happening. We are a different and separate party from the Liberal Party.
Hon. Members: Not any more.
Mr. John Biffen: In view of the improved communications which we now understand exist within the Labour Party, does the hon. Gentleman know whether the National Executive Committee was happy about this deal with the Liberals?
Mr. Heffer: The hon. Gentleman will discover that when he reads the newspapers. There was a National Executive meeting this morning. No facts were revealed from the meeting, and therefore I can imagine that there will be a full report about it in tomorrow's newspapers.
Mr. Foot: Since the House is so interested in these matters, I am sure that my hon. Friend would like to confirm that there was also a discussion in the Labour Party's Liaison Committee on Monday, and the unity expressed there about what should be done was so strong that the matter was not reported in the newspapers.
Mr. Heffer: I confess that I have often had the experience of making a speech defending my Government and not finding a word about it in the Press. But there have been other occasions when I have said a few uncomplimentary things about my Government that have made headlines. I do not know why that is. I can only assume that the newspapers take a peculiar view of what is and what is not worth reporting.
I and most of my hon. Friends will give this agreement the benefit of the doubt. We shall look at it very carefully. We shall see how it operates. But that is all that we shall do, and I think that the Government cannot expect any more than that from their Back Benchers. It is qualified support that we are giving this agreement because we want to see a Labour Government succeed and to keep out the Tories so that the British people do not again have to suffer the injustices and difficulties that they have suffered in the past by having Tory Governments.
7.21 p.m.
Mr. Nicholas Ridley: I shall follow some of the remarks of the hon. Member for Liverpool, Walton (Mr. Heffer) in what I have to say later. Let me first remind the House that the reason for this political crisis, for this debate, and for this strange compact about which we have been told is that the Labour Party was elected with a very small majority, by a very small proportion of the electorate, and that it has since suffered considerable defections.
The Labour Party is, as it were, breaking up at the edges. Not only has it lost by-elections, but it has lost the right hon. Member for Newham, North-East (Mr. Prentice), to whose extremely green speech we listened, and on the other side it has lost the hon. Members for South Ayrshire (Mr. Sillars) and Paisley (Mr. Robertson). It has also lost Mr. Roy Jenkins, who was green at the gills about the direction in which the Labour Party
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was going, and the hon. Member for Ashfield (Mr. Marquand).
The Labour Party is running scared, and it is breaking up at the edges. Indeed, it is a white party with green edges, if I may coin a phrase, and it is this party that the Liberal Bench has chosen to support. I have heard of rats leaving a sinking ship, but I have never heard of mice joining one.
I am concerned to ask myself what it is that the Liberals have gained or lost by this afternoon's work. They have lost a benefactor, we are told, but clearly it would be wrong to put that in the forefront of their considerations, although I dare say it might tell when it comes to financing elections. The Liberal Party has gained very little. I note what was said by the Prime Minister. Liberal Members have gained a promise of discussions with the Government about direct elections to the European Parliament, with the possibility of a Bill, and the possibility that proportional representation will be the method of election, on a free vote. It is not an earth-shaking concession that the Prime Minister has made, especially as it was part of his manifesto.
Secondly, Liberal Members have gained further talks on the devolution Bill. I thought that such talks were taking place already. I thought that we were in touch about the devolution Bill.
We have been told about this 30-page memorandum. Incidentally, I thought that it was normal for papers of this sort to be laid before the House before we discussed such matters, but I shall let that pass. There is no great concession there, and tacked on the end is a special sop to the hon. Member for the Isle of Wight (Mr. Ross). He is to get help with his little Bill about homelessness, which is by no means a very helpful measure for many of the homeless.
For those small concessions the Liberal Party has delivered its soul and vote to Labour.
I admire much more the hon. Member for Antrim, South (Mr. Molyneaux), the Leader of the Ulster Unionists. He has gained much more. He has gained proper representation for Ulster, yet he will not vote with the Government and has no compact with them. That is the way in which to do business. The right hon.

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Member for Roxburgh, Selkirk and Peebles (Mr. Steel) should take a lesson from the hon. Member for Antrim, South on how to do a deal.
The reason for the agreement is not that these are major concessions that the Liberals can chalk up. Nor is the reason that given by the right hon. Member for Roxburgh, Selkirk and Peebles, namely political stability. My right hon. Friend the Member for Chipping Barnet (Mr. Maudling) destroyed that argument by asking why it is that the compact is to last only until the end of the Session. There is not much stability involved there
I ask a further question of the Leader of the Liberal Party. Is it always right that there should be granted a period of stability to a Government who have consistently done the wrong thing, who are stinkingly unpopular in the country, and who are severely damaging the economy?
Mr. John Pardoe: Is the hon. Gentleman aware that his party and his leader, whom he loyally followed at the time, tried desperately to secure the support of the Liberal Party in 1974 to keep the Conservatives going in a far worse situation than that in which the Labour Government now find themselves? Would the hon. Gentleman have used similar strictures about any such deal?
Mr. Ridley: I confess that I informed my right hon. Friend the Member for Sidcup (Mr. Heath) that if the hon. Gentleman came in, I went out.
The Liberal Party must think about its new-found friends. The Prime Minister talked about what is to happen during the future life of this Parliament, and then by a slip perhaps because he got the page wrong, he talked about East-West relations. I thought that he was talking about the two halves of the Labour Party. The Liberal Party now has some new friends in this "East-West" relationship, and Liberal Members will find some strange bedfellows at the eastern end.
When a Liberal fights my seat, which one did on the last occasion, he will have to explain how it is that Liberal Members have though it right to keep this Government in office, because many people voted Liberal at the last General Election not because of the importance of the homelessness
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Bill, or the devolution Bill, or PR in direct elections, but because they thought the Liberals might do better than the Tories in some circumstances, and because they were not happy with what the Tory Government had done. They did not cast their votes in the way that they did because they wanted Left-wing Labour policies.
I can tell the hon. Member for Walton that in my constituency the Labour Party chalked up 21 per cent. of the vote. If the people there had wanted to vote for Socialist policies such as those advocated by Labour Members, I do not think that 80 per cent. of them would have voted for a non-Socialist candidate. The Leader of the Liberal Party has now betrayed his supporters. Those famous 6 million who did not think that they were voting for a Left-wing party are now being told that it is in the interests of political stability for this Left-wing Government to be kept in office. What a shabby thing to do.
Mr. Clement Freud: Will the hon. Gentleman give way?
Mr. Ridley: I give way to all the Liberals.
Mr. Freud: Does the hon. Gentleman really believe that it would have been a lot less shabby to have committed the 6 million Liberals to support a Conservative Government?
Mr. Ridley: I think that those 6 million people were voting for a miscellany of reasons. [HON. MEMBERS: "Answer the question."] I shall answer it in my own time.
The twin pillars of the Government's policies are the industrial strategy and the social compact. We are constantly told this by the Leader of the Liberal Party. But the right hon. Gentleman has it wrong; it is the social strategy and the industrial compact. These two are what we are suffering from.
The social strategy is to take from the workers and to give to the unemployed, to take from the investors and to give to the consumers, and to take from the triers to give to the non-triers and to level out. The result is that it is becoming abundantly clear that the incentive for people to invest, to earn, to try and to work has been destroyed. The effect

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of the social strategy has been disastrous towards the creation of wealth and therefore has made the less fortunate groups in this country much poorer than they would otherwise be.
Mr. Penhaligon: Obviously the hon. Gentleman is talking about differentials. While I was walking from the Norman Shaw building, I saw a Conservative Member of Parliament getting into his chauffeur-driven Rolls-Royce. At the same time I saw a woman of about 40 from the cardboard city walking around the Rolls-Royce. What sort of differentials does the hon. Gentleman want?
Mr. Ridley: I have some sympathy with the hon. Gentleman on that point, but how is it that we have a tax system that makes it more likely to be a good investment to buy a Rolls-Royce than to invest in a commercial or industrial company? Those who believe that by clobbering the investors we shall get jobs are wrong. All we shall get is a Rolls-Royce situation.
As I have said, it is the industrial compact and it is the social strategy. The industrial compact is between the Government and the trade union leaders. The people who are disadvantaged by the industrial compact are the members of trade unions and those who do not belong to either. We are seeing the revolt of members of trade unions against their unions enforcing the pay policy and against the total lack of differentials throughout the rigid pay code. This is illustrated by the recent strike at The Times, the British Leyland toolroom strike, and the pressures found by management everywhere.
The explosive nature of the feeling in the factories is everywhere evident and it manifests itself as it did in Walsall and Workington. It might be of interest to the House to note that the one constituency in the country where there are not so many manual workers, whether in farms or factories, is the City of London and Westminster, South, where the swing was not so big. That is interesting.
We are seeing the destruction of the social compact and the industrial strategy. What the right hon. Member for Newham, North-East, the Liberals and the centre of the Labour Party are trying to
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do is to stitch together one last ditch coalition to defend social democracy and all its works long after it has failed and long after it has been rejected by the people. This is what we have been told.
It is no good arguing, as has been argued so often today, that if only certain things would happen, if only we could get stage 3, if only all good men and true could be put together in the Government to run the country, we could have our economical miracle, which has so frequently been paraded by the Chancellor and the Prime Minister. To coin a phrase, the management of the economy under the Chancellor can best be described as Titanic. There is no future this way.
That is why we should have a General Election and let the hon. Member for Walton and those who think like him fight it out with those who believe that the only way we can help the poor and bring prosperity, get industrial investment, get people humming, working, trying, caring and fighting again is by the system of incentive and reward which is at the heart of free enterprise.
7.36 p.m.
Mr. James Sillars: The only thing on which I find myself in agreement with the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) is that those who stand in the centre of the road may get knocked over. He was arguing for fundamental changes from a Right-wing position. I would argue them from a Left-wing position. It gives me no pleasure to speak this afternoon. I should like to be in a position, as would my hon. Friend the Member for Paisley (Mr. Robertson), to vote with the Labour Government tonight.
The Labour Government are part of the Labour movement. The significance of the Labour movement was implanted in my mind when I was a young boy, as I watched my father, in an uncharacteristic manner, jigging and dancing with delight when the Labour Government of 1945 were elected. We would obviously wish to be able to vote for the Government, and that probably goes more for my hon. Friend the Member for Paisley than for me, because man and boy he has been in the Labour movement, a trade unionist, a member of the Labour Party, a member of the ILP, and later a Labour Member of Parliament. The simple fact is

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that unless the Government can bring themselves to meet our reasonable requests on devolution, we shall have no alternative but to vote against them.
If this were a Socialist Government with the full significance of that term, despite our objections vis-à-vis the Government's stand on devolution, we would not hesitate to vote with them tonight. But the debate on public expenditure showed that this was the first Tory-Labour Government in our history, and I stick by that assertion. I was interested to hear the hon. Member for East Kilbride (Dr. Miller) boasting of the fact that the possible change of Government from Labour to Conservative sent the Stock Exchange into a fit of the jitters. I always thought the situation was that if there were to be a possible change of Government from Labour to Tory, the people in the Stock Exchange danced with delight because things were looking well for them. We have had a reversal of this process simply because the people in the Stock Exchange, and in the Establishment, know full well that the Labour Government are doing things to the working class that no Conservative Administration could ever get away with.
I can remember that in Labour Weekly in July 1974, in a special edition leading up to the election, the back page was all about unemployment under the Tories. It appeared under the heading "One million unemployed. Never let it happen again", and added that we should support the Labour Party. We have gone well beyond that figure. We have made the trade union movement accept the unacceptable and tolerate the intolerable. We have engaged in cuts in working-class housing accommodation. In the part of Scotland that I come from, 19 out of the 21 deprived areas in the United Kingdom are to be found there, on Clydeside.
The last by-election in Scotland was in Govan in 1973. I went canvassing in Govan for the Labour Party and found myself more and more acutely embarrassed, as I went from one housing area to another, because of the poverty and deprivation to be found there. Basically, nothing has changed in many of those areas in Clydeside since 1973, yet we are cutting housing and education.
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On the subject of housing, we have become a Government of money lenders. In my constituency in the next two years district council rents and grants will take £6 million of the housing revenue account, and £4 million of the total will be paid in interest to the money lender. Furthermore, we have a wages policy that has been deliberately constructed and designed to cut the standard of living of the working people.
Mr. Jim Marshall: I sympathise with a great deal of my hon. Friend's speech, and I understand his point of view, but since he presumes to speak on behalf of the Labour movement in Scotland, and particularly that in his area, how does he reconcile his view with the recommendation of the STUC yesterday urging people to support the Labour Government because of the harsh alternative to the present Labour Government—namely, a Tory Government under the right hon. Member for Finchley (Mrs. Thatcher)?
Mr. Sillars: I shall answer my hon. Friend in a more substantive fashion in a moment. I certainly do not presume to speak for the whole of the Scottish Labour movement. However, I am a member of the trade union movement, I am a member of the Transport and General Workers Union, I am an individual affiliate of the Scottish TUC, and I am as entitled to my point of view as is the General Secretary of the STUC, who happens to be a personal friend of mine, although we differ on this matter.
Dr. M. S. Miller: The hon. Gentleman may not be right.
Mr. Sillars: I may be wrong, but the hon. Gentleman may also be wrong. The net effect of the Government's social contract, public expenditure cuts and relationships with the trade union movement has put the trade unions in a cage whose bars consist of the social contract. That prevents the trade unions from doing what they are supposed to do for the industrial worker.
Everybody anticipated the crisis which we faced earlier this afternoon. That was an inevitable consequence of the fact that 22 Labour Members voted with the Tories to kill the devolution Bill. Everybody knew that from that moment the Government were in extreme peril. We

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have explained to the Leader of the House in a letter delivered by hand, and we also made clear in conversation afterwards, that all that we sought was the reintroduction of devolution this session. We require a firm guarantee from the Government that the timetable motion will be treated as a vote of confidence by the Parliamentary Labour Party.
Mr. Tam Dalyell: Is the hon. Gentleman saying that there should be a free vote?
Mr. Sillars: I shall come to that when I am dealing with the scenario involving the Leader of the Opposition and the rôle of Scotland in the present situation. We have been prepared to bend over backwards, but not to turn somersaults, in our commitment to a Scottish Assembly. The Government would much prefer to do a deal with the Ulster Unionists, who happen to include the right hon. Member for Down, South (Mr. Powell), whose views on racial matters and economic policy every Labour Party member outside abhors. But Labour is prepared to consider doing a deal with him and his colleagues. Labour is also prepared to consider a deal with the Liberal Party before it honours the election pledge to Scotland.
The hon. Member for Liverpool, Walton (Mr. Heffer) is right to be concerned about this deal and its effects on Labour Party policy and the Government's performance.
Mr. Molyneaux: I thought that earlier in the debate the Prime Minister and I made it abundantly clear that there had been no deal.
Mr. Sillars: I never said that there was a deal. I said that Labour would have been prepared to do a deal if it could have been negotiated. My hon. Friend would do well to become a regular reader of the Glasgow Herald on a Friday, because the Leader of the Liberal Party writes a regular column for that journal once every three weeks. Last Friday in that column the right hon. Gentleman said:
'The Labour Left will not wish to commit suicide by being seen to force an election. So we may be able to take the first step towards blocking the domination of Government by the lunatic Left and Right."
I do not need to give my hon. Friend the Member for Liverpool, Walton any
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guesses in realising in which direction the Liberal Party is looking when it talks about the "lunatic left". I imagine that the right hon. Gentleman was referring to the Tribune Group. One of the significant developments in the last 24 hours is that the Liberal Party has been able to extract from the Government more than the Tribune Group has managed to extract from them since October 1974.
Let me now answer the point put to me by the hon. Member for West Lothian (Mr. Dalyell) about the scenario to which I referred which has taken place in the Tea Room and elsewhere. Would we permit a situation in which the Conservatives, having been returned to power with a majority, once the oil began to flow would remain in power for 15 to 20 years? That has been the scenario presented by various people. However, if that is such a devastating position for Members of the Parliamentary Labour Party to contemplate, why are they prepared to consider that possibility instead of honouring their devolution pledge to the Scottish people? It is they who are putting the Government in jeopardy.
The Prime Minister should have adopted the same procedure on the timetable motion on devolution as that followed by the right hon. Member for Sidcup (Mr. Heath) on the European Communities Bill. Two or three minutes before the close of that debate on Second Reading, he told the Tory rebels that Parliament could not sensibly continue unless the Bill passed. That gave a clear choice.
Mr. George Cunningham: The Government cannot make a commitment which is not a vote of confidence into a vote of confidence by saying so. If a Bill does not pass, a Prime Minister can resign. One cannot convert a vote on an issue on a substantive matter such as devolution into a vote of confidence simply on the say-so of the Front Bench.
Mr. Sillars: We know that the Prime Minister is an honourable man. In those circumstances we can assume that he would call a General Election.
Mr. Heffer: If the hon. Gentleman persists in this argument. I shudder to think what would happen if he and his

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colleagues got a majority in Parliament anywhere in the world. Surely that would be a Stalinist or Fascist State?
Mr. Sillars: My hon. Friend betrays an odd attitude towards Scotland.
Mr. Heffer: It has nothing to do with Scotland.
Mr. Sillars: It has everything to do with the Scottish situation. The fact is that without a pledge on a Scottish Assembly with powers there would not be a Labour Government today, and everybody knows that. If the hon. Member for Liverpool, Walton does not know that, certainly the rest of the Members of the Scottish Labour Party know it. We are talking about a pledge that was given by the Government to a nation. I stress that it was given to a nation and not to a region. If that is not a matter that merits a vote of confidence, I should not like to hazard a guess about the fate of Labour candidates in Scottish constituencies at the next election. The Scottish people have been treated like electoral donkeys, with a carrot having been dangled before them in October 1974 labelled "devolution". They were told "Vote for us, and you will get a bite of a carrot". Only a year later the Government did not regard that pledge as being worth a political shilling. If I may speak on behalf of my hon. Friend the Member for Paisley, I must say that that is not acceptable.
In October 1974 Labour asked Scottish Labour voters to align themselves with a Labour Government and they did so. We are asking the Labour Government to line up on the side of the Scottish people. If they cannot do so, we shall not support them.
7.50 p.m.
Mr. Ronald Bell: The speeches of the hon. Members for South Ayrshire (Mr. Sillars) and Liverpool, Walton (Mr. Heffer) show the future of the arrangement that we have been discussing. Indeed, the Prime Minister skated lightly over the problems of his party. This is a motion of no confidence in Her Majesty's Government but the speech of the hon. Member for Scuth Ayrshire was not radiant with confidence in Her Majesty's Government. The speech of the hon. Member for Walton
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was to the effect that he would give them the benefit of the doubt tonight, but not necessarily thereafter. The hon. Gentleman intends to examine the working of the arrangement under a microscope.
The background is that the Labour Party was returned at the last election with a minority of votes and a balanced position in the House of Commons. That is not an unprecedented situation, except that in the Labour Party manifesto and in its profession to carry it through there was the intention to effect a fundamental and irreversible change in our society. In that context that intention was a fraud on the parliamentary democratic system that we operate.
There is no safeguard in our constitution against a bare majority being used in such a way. Our parliamentary life depends upon conventions that are not written but are felt by those who live inside it. The Labour Party's intention represented a breach of the conventions.
Last Thursday the Government decided not to vote. They came to that decision because they knew from their calculations that they would be defeated by four or five votes. They knew that they would be defeated by those votes because their attempt to change society fundamentally and irreversibly had led them to a situation in which they were having to go into reverse.
The potential rebels were not prepared to accept such a reversal. They were not prepared to accept the cuts in public expenditure which, inadequate though they may be, underly the whole of the strategy described today by the Prime Minister. The right hon. Gentleman said that they would bring their fruit in the Budget that we shall hear on 29th March. The right hon. Gentleman was referring to the cut in the Government's borrowing requirement and the cuts in taxation that will be so attractive to the electorate. All that is based upon the policy that his party was not prepared to support in the Government Lobby last Thursday.
The Conservative Party has no confidence in Her Majesty's Government. The national parties have no confidence in Her Majesty's Government. I do not know about the Liberal group. We shall never know what it thinks about Her Majesty's Government. However, the

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Tribune Group has no confidence in Her Majesty's Government. If we all voted tonight according to our opinions, the motion would be carried whatever the Liberals did. However, as the Prime Minister rightly said, there is a community of interest that holds them together and binds them to those who sit behind me—namely, the Liberal group.
The right hon. Gentleman's version is correct. He is right to say that there is a community of interest. When the right hon. Gentleman made his speech to those tremendous cheers, he was hearing the cheers, primarily, of those Labour and Liberal Members who have majorities of less than 5,000. That is the community of interest that binds them together. They were grateful to the Prime Minister for spaying the Liberals. That is what I think he has done, although I suspect that he has spayed the Labour Party in the process: that we shall see when the autumn comes.
Let it be borne in mind that it is not only the arrangement or the accommodation that has been reached with the Liberals that lapses at the end of the Session. I strongly suspect that the Parliament will lapse as well, and, perhaps most of all, the Liberal Party.
Mr. Cyril Smith: I bet that this is not the first time that the hon. and learned Gentleman has made this speech.
Mr. Bell: The hon. Gentleman is wrong, but in any event it is probably the last time that I shall need to make it.
Mr. Cyril Smith: The hon. and learned Gentleman will reach the stage when everyone knows that it is not true.
Mr. Bell: We have heard a great deal from both sides of the House about this open and above-board bargain. Unless there are some secret clauses, it will all be spelled out in Hansard. Presumably it is virtually as it is written down. It amounts to a letter of intent from the Government to the Liberal Group. We now have three letters of intent. There is the letter of intent to the Liberals, to the IMF and, most pervasive of all, what is called the social contract with the trade unions.
The Government are held against the quay wall by three ropes to which no
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Government should ever agree. The Prime Minister has promised the Liberals not to go to sea again. He said that he has been a good sea rover in the past. He has collected four-fifths of the booty that he wanted and he is now content to stay in harbour. As a fellow ex-naval person—to use that expression—he should be warned by the old naval saying that in harbour ships rot and men go to the devil.
Reference to that dignitary leads me straight to the Prime Minister's new friends, whose unswerving devotion to condescending sanctimony always earns them a place in our political history. They have been very conscious of a special bilateral relationship with the Almighty whom they have been serving in an advisory capacity. Their long experience of trimming should serve them well in their new situation.
I foresee certain practical difficulties after listening to the Prime Minister. There will be what might be called drafting difficulties when it comes to policy. When dealing with a consensus stretching from the Orkneys to Bolsover one is obviously engaging in a complicated and protracted process.
The Liberals are not the only trimmers that we have seen in politics. However, when it is all put down on paper, we virtually institutionalise trimming. And they may so discredit themselves by the evidence that they have offered to history that they may find themselves—possibly sooner than the autumn—in the position of trimmers in Dante's "Divina Corn-media" who, as they will remember because they are learned people, were spewed out by heaven and hell and tossed round in a circle for ever by stormy winds.
The public may well take that view of this strange bargain between these two equally objectionable but somewhat disparate partners. This is the most remarkable example of twinning since Sodom and Gomorrah.
Mr. Cyril Smith: It is better than the Palladium.
Mr. Bell: We have heard of the benefits that will be conferred upon us by the bargain. We heard them from the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel). For instance, there is proportional representation. That is a cause that the Liberal Party feels

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strongly about, although it never had the slightest interest in it when it was one of the major parties. It is most remarkable.
In the last few days, the Liberals have been engaged with the Prime Minister in this wheeling and dealing, which has not been very creditable to our politics because such bargaining induces cynicism on the part of the public. But this proportional representation that the Liberals are so anxious to have will make this kind of wheeling and dealing a permanent feature of our political life. It will turn politics in this country into what we see in Italy, or what we saw par excellence in the Fourth Republic in France. That gratifies the thoughts of those who are unable to secure the support of enough of the electorate to give them a substantial representation in this House.
Mr. Richard Wainwright: The hon. and learned Gentleman has pointed to certain alleged Continental analogies. Does he agree that West Germany is a conspicuous example of a country that enjoys the benefits of proportional representation and has achieved, from a rock bottom start, a prosperity that now far exceeds our own?
Mr. Bell: Yes indeed, but the hon. Gentleman's perspective of history is surprisingly short. I remember several editions of German democracy. Though they have understandably taken a different course from Gallic democracies, they have, in the past at any rate, had almost equally short histories and led to much worse results. However, we shall see.
I am not suggesting that the experiment with the Liberals will ever be of such gravity in our political development that we need take it seriously. However, I thought it right to make these animadversions.
The right hon. Member for Roxburgh. Selkirk and Peebles said that his first point in the bargaining was no more Socialism. That was publicly stated in the broadcast. I should like to ask the Government whether he got that agreement. If so, has that fact been communicated to the National Executive Committee or Labour Members below the Gangway? If not, it would seem that the first and principal request has not been obtained.
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The Prime Minister said that he did not mind that request, because he had already got four-fifths of his programme through. So he has. Britain is now the most Socialist country in the free world.
Is the Liberal Party now proposing to give this Government, who have done that—with that degree of popular support which I described in the parliamentary situation which we know has existed for the last two and a half years the opportunity of digesting and absorbing what, in two and a half predatory years, it has swallowed? Is that the intention? If so it is rather like the Liberal Party saying "You have eaten my mother and my father, my brothers and my sisters, but I shall support you if you do not eat my aunt".
For that, the Liberal Party is proposing to give the Government a period of stability. Therefore, we find the Liberal Party, like Harcourt, saying "We are all Socialists now" and the Prime Minister saying "We are all Liberals now".
I suggest that it will be a very interesting joint committee that will be chaired by the Leader of the House. My memory goes back to the days when we were at Oxford together. The right hon. Gentleman was chairman of the Liberal Club. What he used to say about Socialism was really quite remarkable. The right hon. Gentleman would quote Lloyd George about sand in the wheels and all the rest of it. Socialism was a terrible thing. But the right hon. Member for Ebbw Vale (Mr. Foot) is now a Socialist. Indeed, he is not just a Member of the Labour Party. At one time he was the shining light of the Left wing of the Labour Party—the Tribune Group. I warn Liberal Members that they are treading on a dangerous slope when they go in company with the right hon. Member for Ebbw Vale.
I must be short, Mr. Deputy Speaker, in the interests of other Members who wish to address the House. I wonder whether Liberal Members will give the stability that they think they are going to give to the Government. I suggest that the Government that they are proposing to support at 10 o'clock tonight are a very strange Government. They are a ruinous Government, dilapidated beyond repair. They remind me of the hut in Grimm's Fairy Tales which

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remained standing because it was so ruinous that it could not decide which way to fall. The Liberal Party is telling the hut which way to fall—and doing it with a fine irony in the name of accommodation.
My closing words of warning to Liberal Members must be that at the end of the day, which is not many months distant, they will find themselves without accommodation, without friends, without reputation, and without a future.
8.7 p.m.
Mr. Laurie Pavitt: I assure the hon. and learned Member for Beaconsfield (Mr. Bell) that the House enjoyed his performance almost as much as he enjoyed himself. The hon. and learned Gentleman took us along many byways. I know that he will forgive me if I do not follow him too seriously on his recent and Biblical analogies.
This confidence debate concentrates our minds, in the same way as they were concentrated last Thursday, on one of the most repugnant and obscene affairs of our Parliamentary deliberations. As my right hon. Friend the Prime Minister said, we have a minority Government. The result of a vote of confidence in such circumstances can rest entirely upon which side has the most Members sick at one moment and how many are in hospital beds rather than on the Floor of the Chamber.
My hon. Friend the Member for East Kilbride (Dr. Miller), who is the doctor in the House, has spent his time during the course of the debate looking at the sick downstairs. It must be incomprehensible to the public outside that the Mother of Parliaments, on a matter of supreme importance—a vote of confidence in the Government and whether to have a General Election—should have ambulances coming into New Palace Yard bringing in among others, a Member with a coronary thrombosis, and that decision has to be made in order to ascertain whether he can be brought in to vote. I hope that, having reached that situation, yet again the usual channels will now consider it for future occasions, because inevitably with a minority Government there will be a repetition.
The statement at the weekend by a Conservative Whip urging his colleagues
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not to go hunting in case they broke their necks, because he could not afford to lose their votes, bordered on the ludicrous. I do not know whether he felt that they should not go shooting or fishing in case they fell in the water and caught colds.
Much of the debate has hinged on the arrangements made and being made between my right hon. Friend the Prime Minister and the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel). I think that most people in politics would like to be pure white and not have to enter into compromises about anything, but rarely do we get 100 per cent. of what we want.
There were obvious political motivations at work for my right hon. Friends in the Cabinet and the Liberal Party. I congratulate the Leader of the Liberal Party on his political considerations. I believe that he made the arrangement in the interests not only of his party but of the country. I hope that he will not consider me patronising when I say that in my experience in this House over many years colleagues who reach the leadership of the party or become Ministers have two options. Some grow and some swell. The Leader of the Liberal Party has grown considerably since he has held that office in his party. Of course, we shall argue and fight with him when our politics diverge and there will be differences of opinion. Nevertheless, as a result of his taking a commonsense approach, what has happened in the House today and what will happen in the Division tonight will mean that for a few months arrangements will be discussed with which he will be able to agree or disagree.
Most of the argument in today's debate has concentrated on the Government's problems, its economic and industrial strategy, its social strategy and the handling of public expenditure. Together with many of my hon. Friends, I have had differences with the Government over some aspects of the public expenditure cuts, but I hope to put this into perspective.
Let us look at the balance between the nation's spending in the public and private sectors. I often recall walking down Oxford Street at Christmas and looking for the poverty of the workers as they went in and out of the shops on

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a huge spending spree. We have just received figures which show that—and I make no complaint about this because workers are entitled to spend their money as they choose—we spent £2,237 million on cigarettes and tobacco, £3,927 million on alcoholic drink and £2,600 million on bingo and gambling in 1974. That is twice as much as we spend on the whole of the hospital service. There is no reason why we should not choose to spend our money in that way, but I cannot believe that my Government are causing intense poverty to ordinary people when so much money can be spent in the private sector.
The Opposition speak—as they used to say in the boys' comics of years ago—with forked tongues. In every area of need, they are prepared to attack the Government and to call on them to give or do more. This applies to spending on the elderly, the sick, the disabled and cars instead of tricycles. Yet the Opposition also call at the same time for cuts in public expenditure. I must defend the Government's record since we came into office in 1974.
I support my Government for the way in which, when the going has been tough, the financial climate has been difficult and there has been no easy option, they have invariably chosen to give the best possible deal to the poor, the sick and the disabled. That is the basis of my support for the Government and my condemnation of the Opposition motion.
In the few minutes that are left to me, I wish to speak about my confidence in the Government and lack of confidence in the Opposition. The area of public concern with which I have most contact is that of the National Health Service. The House will not be surprised that I look to that Department in seeking an example of my Government's record.
Following customary practice, I dropped a line to the right hon. Member for Leeds, North-East (Sir K. Joseph) to inform him that I intended to talk tonight about his track record on National Health Service expenditure. The right hon. Gentleman, who has considerable influence on Opposition benches on economic policy, recommended that an American consultant company, McKinsey, should compile a report to restructure
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the administration of the National Health Service. That report cost the taxpayers £22,000. It was intended to reorganise the National Health Service on more efficient lines, but it led to one of the greatest bureaucratic administrative monstrosities of all time. Having delivered the report and received the money, that same company said only a few weeks ago that it was sorry but it had got things wrong. But it was up to the Conservative Government to reject the advice—the decision was theirs—but they did not do so.
Every hon. Member will be able to recognise the example that I shall give relating to my own constituency, and no doubt every hon. Member has similar figures. My local area health authority employs 196 administrators at a total cost of £829,443 a year. The Royal College of Nursing made the point admirably today when it said that it was time that we took a scalpel to the administration and put more effort into the treatment, care and prevention of disease instead of building up larger amounts of paper, committees, consultations and the liaisons that go on as a result of the way in which the reorganisation Act of 1973 has decided to run the Health Service.
Since my Government took office, the amount spent on hospital administration has risen from £51 million in 1973 –74 to £121 million in 1974 –75. This is the direct result of the 1973 Act. If the Opposition win the vote tonight, there could be an election and, Lord forbid, there could be a Conservative Government, so I intend to compare Opposition policies with what my Government have been able to do in difficult circumstances.
When this Government came into office, the amount that was being spent on the National Health Service was about 4·9 per cent. of the gross national product. As a result of the Labour Government's administration, in which I have the greatest confidence, we are now spending 6·7 per cent. of our gross national product on the National Health Service for the first time. We are spending £6,800 million every year on looking after the sick.
Nurses who for generations have been underpaid and overworked, for the first time, received a fair deal in April 1974. The Government have also given a fair deal to junior doctors that they were not getting before.

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When I hear the way in which my Scottish colleagues argue about devolution, I feel that I must remind them that although we spend £4 per head of population on health in England, we spend £5 per head in Scotland. The Scots should appreciate this benefit of the United Kingdom when they go into the devolution talks. I could give the House details of the situation in the United States where £12 is spent per head of population on health services compared with £4 per head in this country. I could go on, but I shall not do so.
The Government have done a good job of work here—even though they are not perfect. When you, Mr. Deputy Speaker, and I are perfect, I shall expect my Government to be perfect. Perfection cannot exist this side of paradise. My Government do and will make mistakes, but they have achieved an enormous amount in spite of the difficulties.
The Opposition should remember that when there are quarrels inside a family—and every family has quarrels—if the neighbours try to interfere the family will immediately unite. The Treasury Bench need have no fear. If we are attacked by the Opposition, our family will stand together, will have every confidence in the Government, and support them, especially when under attack from their opponents.
8.18 p.m.
Mr. Robin Hodgson: The hon. Member for Hammersmith, North (Mr. Tomney) said that in putting down this motion the Tory Party was out of touch with the electorate. Since I and two or three of my hon. Friends have recently been in the closest possible touch with the electorate in the way that counts—by looking for their support—I am particularly pleased to be able to say a few things in this debate.
Any Government obtains their authority from three separate but overlapping sources. They receive authority from the constituency—the people and the popularity of their policies—from parliamentary solidarity and strength, and from a moral sense, which is a feeling that the country at large—not necessarily just politicians—believes that the Government are not abusing their supreme authority, but are using it in the long-term best interests
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of the nation, that they are not putting it at the disposal of some special specific faction. I shall look briefly at each of these three.
First, at constituency level: there are 72,000 electors in Walsall, North. Prior to the by-election in November, the Labour Party held the seat with a majority of almost 16,000. It is now a Conservative seat with a majority of more than 4,000—there has been a swing of about 20,000. The hon. Member for Liverpool, Walton (Mr. Heffer) may claim that this massive turn-round was caused by the effects of the incomes policy. That policy was an important factor, but the hon. Gentleman is mistaken if he thinks that it was the only one. There were other equally important factors at play in the campaign and in the country.
These factors included the importance to the average working man of seeing his hard-earned money being taken away in taxes and wasted by the Government in poor administration and in schemes, such as nationalisation, that are irrelevant to the nation's needs. The people of Walsall, North also changed their voting habits because they were frightened by increases in crime and by the actions of a Government who condoned law-breaking and thereby undermined respect for authority.
Voting habits were changed because of restrictions on the freedom of choice. If there is one thing that the English people dislike above all others it is a busybody. Interfering petty officials have had a field day under this Government.
Those were the reasons for the choice made by the people of Walsall, and a similar choice was being made at the same time in other parts of the country, including Workington. It is clear, therefore, that the part of the Government's authority that comes from the electoral popularity of its policies has withered away.
The Government's parliamentary authority is no more satisfactory, and not just in the immediate issue that we are facing, although spending is at least as important as revenue raising and if there is a similar result following the Budget proposals, there will be even more of a storm than we have witnessed in the past few days.

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It is not just a question of the approval of specific policies. There is also the Government's failure to carry crucial and important legislation—the devolution Bill is the centrepiece of their legislative programme for this Session. In fact, it is not even only their failure to carry that legislation. They have failed to bring forward legislation because they know that it will be lost. They have not brought in the Bill to provide for direct elections to the European Parliament, and that takes us into an even more serious default.
Direct elections to the European Parliament concern not only this country but our allies and friends abroad. The Government have jeopardised not only the position of this country, but our prestige and reputation around the world. For these reasons it can be said that the Government's parliamentary authority has been chipped away.
Finally, I turn to moral authority, which is possibly the most important, if least tangible, source of the Government's strength. The Government must face the fact that it is widely considered that they have given sectional claims priority over the needs of the nation as a whole. As a result, many policies have been adopted that are, at best, irrelevant to the nation's needs, and, at worst, downright harmful to our long-term prospects.
Hon. Members opposite will claim that nothing has been done that was not in the Labour Party's manifesto at the last General Election, but, as was pointed out earlier, there was no mention in that manifesto of deals with the Liberal Party.
The Government have lost and forfeited their authority and right to govern. No doubt hon. Members opposite will disagree. They may be right; they certainly have more parliamentary experience than I, but they must admit that there is at least a possibility that they are wrong. The one thing on which we can all agree is the value of the democratic franchise. If hon. Members opposite are right, why should they be frightened to put it to the test? Let us put it to the test by putting it to the people. Anyone who is a democrat will be supporting the motion in the Division.
8.25 p.m.
Mr. William Hamilton: In reply to the hon. Member for Walsall,
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North (Mr. Hodgson), the plain unvarnished truth is that we believe that if we put it to the people now, we would lose. It is also the plain unvarnished truth that the Leader of the Opposition wants to put it to the electorate because she thinks that she will win. However, it is interesting to note that in the past week, the Press, which is not altogether friendly to my party, has been almost unanimous in agreeing that this is not the time, in the national interest, to have a General Election. Apart from the Tory hack papers such as the Daily Mail and the Daily Telegraph, most of the papers have resisted the claim of the Leader of the Opposition that the country and the Tory Party are thirsting for a General Election.
One of my hon. Friends mentioned earlier the surprising difference between the statements made by Conservative Members in the House, when they know they will be widely reported, and what they say privately. There are 600 vested interests in this House who do not want a General Election. The Observer summed it up well on Sunday when it said:
"The case against a Thatcher Government coming to power … is that too little is known of Conservative anti-inflation policies."
We have heard some witty speeches from hon. Members opposite, but they have been entirely barren of the policies that the public have a right to know about before putting their crosses on the ballot paper. The Leader of the Opposition spent a good deal of time saying precisely nothing about these policies.
Mr. Norman Tebbit: Will the hon. Gentleman give way?
Mr. Hamilton: I have whacked the hon. Gentleman so many times that it would be a waste of time for me to give way to him again.
I apologise for taking up the time of the House by quoting from respectable newspapers. I would not do so but for the fact that they support my case. The Times said last week about the Government:
"for the moment it does not appear to be prevented by the weakness of its parliamentary position from doing anything that is essential in the national interest."
The same editorial said that there was not
"sufficient cause to precipitate an election next week"

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One may therefore ask who honestly and passionately wants an election before another glorious summer is upon us. Whatever hon. Members opposite may say publicly, the vast majority admit in private that they do not want an election. No more and no less than my party, the Conservatives are a series of minority parties. We have seen the petty type of tactic being operated this evening with Conservative hon. Members occupying the Liberal Benches. When I look at the Liberal Bench I do not suppose that that bunch of Tories could muster an 1Q of 103 between them.
The person who passionately wants to take the plunge in a General Election is the Leader of the Opposition.
Mrs. Elaine Kellett-Bowman: So do we.
Mr. Hamilton: I shall examine the right hon. Lady's motivation. It is completely honourable. With the demise of one lady Prime Minister in the world she desperately wants to go down in history as the first female Prime Minister in the British calendar. That all-consuming passion has warped her judgment and whetted her fancy as surely as if she had become a drug addict. She may have no policies
Mr. Victor Goodhew: On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member to suggest that my right hon. Friend the Leader of the Opposition is comparable with a drug addict? I suspect that you would not agree to that.
Mr. Deputy Speaker (Sir Myer Galpern): I do not understand what the hon. Member's point of order is. What is it?
Sir Bernard Brain: It is disgraceful expression.
Mr. Goodhew: It is not in order and it is uparliamentary for the hon. Member to suggest that the Leader of the Opposition is comparable with a drug addict.
Sir Benard Braine: Disgraceful Withdraw.
Mr. Deputy Speaker: I do not know whether the hon. Member For Fife, Central (Mr. Hamilton) will save me the
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trouble of ruling by withdrawing the words. As I understand it, he is only making a comparison. He is not suggesting that the right hon. Lady is a drug addict.
Mr. Hamilton: Hon. Members misheard what I said. I shall repeat my words and then you, Mr. Deputy Speaker, can rule upon them. I said that the all-consuming passion that the right hon. Lady has—I wanted to be in order because I am very much a parliamentarian—
Mr. Tebbit: On a point of order, Mr. Deputy Speaker. The hon. Member for Fife, Central (Mr. Hamilton) is clearly reading his speech. He has said that he is. Can you stop that nonsense? It is not in order to read a speech.
Mr. Deputy Speaker: I did not expect that we should get into this mood this evening on such serious business. The debate has been well conducted so far. I suggest that we get on with it so that we can hear the final speeches from the Front Benches and reach the all-important vote.
Mr. Hamilton: Hon. Members have been labouring under a misunderstanding. I was saying—
Hon. Members: Withdraw.
Mr. Deputy Speaker: Order. It would help the hon. Member if he addressed himself to the Chair. He would then get a smoother ride.
Mr. Hamilton: I was making a comparison. The warping of the right hon. Lady's judgment, in her anxiety to become the first female Prime Minister, makes her like a drug addict. That is a perfectly proper comparison to make.
Mr. Godhew: On a point of order, Mr. Deputy Speaker. Is it parliamentary language and is it in order for the hon. Member to say that my right hon. Friend the Leader of the Opposition is behaving like a drug addict? I do not think that it is.
Mr. Deputy Speaker: So far as I can judge, the hon. Member for Fife, Central is trying to compare the right hon. Lady's actions with those of a drug addict. He is not suggesting that the Leader of the Opposition is a drug addict.
Mr. Hamilton: Hon. Members are consuming the time of the House. The next speaker is a Tory hon. Member and I do not wish to prevent any hon. Member from speaking. However, as a result of these interventions my speech will be that much longer.
I was remarking that the right hon. Lady and all those who purport to support her in the debate may have no policies. Her team on the Front Bench makes Dad's Army look like a crack regiment. That which is lacking in policies and personalities the right hon. Lady seeks to make up by using her polished phrases and her blue rinsed coiffure.
The right hon. Lady knows that the time factor is now not on her side. The trends in the economy, which were spelt out by the Prime Minister this afternoon, are all in the right direction. The pound is stable, the rate of increase in inflation has been slowed down and unemployment may have passed its highest peak. Next week we shall get a very favourable Budget, and next year will see North Sea oil getting rid of our overseas borrowings and we shall see a healthy balance of payments surplus within a period of 12 to 18 months.
What the national interest requires now, it seems to me—and, apparently, to most of the newspapers—is a period of steady, unspectacular government, working in co-operation with organised labour in the form of the TUC and with capital in the form of the CBI—
Mrs. Kellett-Bowman: With the Liberals.
Mr. Hamilton:—and with our people as a whole, in terms of the social contract, towards the goals of prosperity and peace both at home and abroad. That seems to be the broad policy at which we must aim.
I come now to the deal, the agreement or the understanding—call it what one will—that has been arrived at by the Government and the Liberal Party. I believe that at present the country prefers government by affable Uncle Jim to government by the excitable, unpredictable, aggressive Iron Lady.
Mrs. Kellett-Bowman: Put it to the test.
Mr. Hamilton: We shall put it to the test, but not at a time of the Conservative Party's choosing.
The realities of the present Parliament demand accommodations
Mr. Nicholas Winterton: The Labour Party will be out lock, stock and barrel.
Mr. Hamilton:—with such minority interests as are reasonable in their demands. The Liberals in this House are a nice bunch of lads requiring special treatment, and we shall give it to them. Their demands were not unreasonable. I can happily go along with most of them. My colleagues in the Tribune Group may be nice as well—though not quite as nice, perhaps. They are more numerous, for sure, and a large number of them represent marginal seats, so they need just that little bit of coaxing to vote for the continued survival of old uncle at No. 10. The more troublesome of them can always be accommodated within the Government.
Scottish National Party Members can be written off as Tories, anyway. They will be going into the Lobby with the Opposition tonight. Many of them would bridle at any concessions made to them. I have often talked about the Scottish economy. In the context of this debate and in this connection, my hon. Friends should know that there is now a project in hand worth £200 million in oil investment by Shell-Esso in Fife. My SNP opponent condemned that outright as soon as it was announced. That was a £200 million investment in the county of Fife. We can write off the SNP in that context.
I say to my right hon. Friends, however, that there are other minority groups in the Labour Party who need to be considered. I was a bit concerned when my right hon. Friend the Prime Minister referred this afternoon to a document that none of us has yet seen. That is the long document presented by the Liberal Party on the devolution Bill. Some of us would like to see that document. I hope that we shall see it in full in good time, and before my right hon. Friends take action on it I hope that they will consider the views of minorities such as myself in these matters. We are just as important as the Liberal Party. We shall have something to say about the

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Bill and about its process through the House. I do not believe that the proposition presented by the hon. Member for South Ayrshire (Mr. Sillars) is practical because the Government cannot link a motion on the guillotine to a motion of confidence. The two are completely unrelated.
Mr. Raphael Tuck: On a point of order, Mr. Deputy Speaker. The recent Conservative converts to the Liberal Party, who are sitting on the opposite side of the House in the Liberal seats are making an awful racket. Could you do somethting to keep the children quiet?
Mr. Deputy Speaker: I think that the hon. Members who have moved into the second row below the Gangway have not yet become acclimatised to their new surroundings. I think that some allowance needs to be made for that. I call Mr. Maurice Macmillan.
Mr. Maurice Macmillan rose—
Mr. Foot rose—
Mr. William Hamilton rose—
Mr. Deputy Speaker: I am sorry. I thought the hon. Member for Fife, Central (Mr. Hamilton) had concluded his speech.
Mr. Hamilton: No, Mr. Deputy Speaker, I was asking a question of the Front Bench and I think my right hon. Friend the Leader of the House is about to reply to it.
Mr. Foot: I would say to my hon. Friend that we have already initiated discussions with regard to consultation among different sections of the Labour Party and, of course, there will be consultation with all sections of the Labour Party about the devolution Bill and the method on which we should proceed. This was already initiated even before we had discussions with the hon. Member for South Ayrshire (Mr. Sillars).
Mr. Hamilton: I would immediately accept that. The point I wanted to get clear was that the proposition put forward by the hon. Member for South Ayrshire is not a practical proposition. I do not think the Government should regard a motion on a guillotine as a
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motion of confidence in themselves. I might have one view about the guillotine but quite another view about a motion of confidence. It would be grossly unfair and improper if the two were linked together.
The House will behave very sensibly tonight by voting for the continuation of an unabrasive and cool-headed Government. If it does so it will behave in the national interest. I am glad to see those capable Liberal faces newly on the Opposition Front Bench.
8.43 p.m.
Mr. Maurice Macmillan: I want to refer briefly to one major reason why neither the House nor the country can or should have any confidence in the Government. It is the total failure to make any real effort to secure the proper defence of this country and to protect its essential trading and sea routes. Indeed, the Government have allowed our defences to run down to a level which even Labour Members on the Select Committee have declared to be already dangerously low.
Defence is the first duty of any Government of any kind, but it is in this, the first ad most important duty, that the Government have failed worst. It is particularly important to our survival as a trading nation since we are wholly dependent for our economy and our very existence on our capacity freely to import essential goods and raw materials.
We have heard from the Prime Minister a little bit about foreign affairs, detente, disarmament, and human rights throughout the world. Of course these are important matters, but they are not matters which by themselves constitute a positive foreign policy that can be of any help in protecting the weaker countries and in helping emergent territories to reach safe and secure government.
It is all very well to talk rather glibly about human rights and to ignore the effect of Communist-inspired dictatorships imposed by Cuban-led guerrillas in Africa. We have seen the extinguishing of human rights in Angola. There is the invasion of Zaire, which can only be a threat to all the people of that country.
In Africa it is not a question of black against white: it is a question of black dictatorship inspired from outside as opposed to internal rule by the Africans

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independently and democratically. Even in Rhodesia Her Majesty's Government's policies have turned away from the whole concept of majority rule in favour of encouraging rule imposed by a minority in guerrilla dictatorship.
Apart from the protection of emergent countries from this sort of tyranny there is one other aspect of this pattern in which the Government have failed. I refer to its consequences for the West. Soviet domination of Africa, however achieved—Soviet control, however achieved, of the sea routes round the Cape—can lead only to a threat to the essential raw materials and the oil on which we all depend. It is Japan as well as Western Europe as a whole that is likely to be affected unless something is done.
The United Kingdom, however, is the most dependent of all, for we rely not only on the Cape route and the Southern Atlantic route but on the North Atlantic route, too. Here, again, the Government have failed to secure a naval building programme, an aircraft building programme, and a defence programme, which, incidentally, could bring a great deal of work to areas of high unemployment and in industries requiring a high degree of skill and technology.
I know that we are not a great Power, but Europe could be. Only yesterday I tabled a Question for Written Answer to the Prime Minister. In reply the right hon. Gentleman told me, in effect, that he had no intention of raising the whole subject of the defence of Western Europe and the securing of supplies to Western Europe in his discussions in the Council of Ministers and in Europe generally. He said, in effect, that defence had no part in the framing of a European foreign policy.
Perhaps it has no part officially, but no move towards a European foreign policy can be practical or sensible unless it considers the defence implications. It is surely up to the United Kingdom to take a lead in this. It is for their failure to take this lead, and for their failure in foreign policy and defence policy, that the Government should stand condemned. That alone is enough to justify the motion—that the House and the country have no confidence in the present Government.
8.49 p.m.
Mr. Ioan Evans: There has been great anticipation of this debate—it is supposed to be a great parliamentary occasion. It was all to be a big drama, but I am afraid that the Conservatives are reducing it to a farce. It is a pity that the House of Commons proceedings are not televised, because then the public would be able to see the antics of Conservative old Etonians and Harrovians occupying the Liberal Benches like a bunch of members of St. Trinians. This sort of behaviour brings the Conservatives into disrepute. [Interruption.]
Mr. Deputy Speaker: Order. I appeal to hon. Members to finish this debate peacefully.
Mr. Evans: When I heard the Leader of the Opposition moving the motion this afternoon I wondered whether the Tory Party really deserved her. But looking at Conservatives tonight, I have come to the conclusion that they do. We understood that she was going to visit China soon. After tonight members of her party probably will suggest that she goes on a slow boat. Her contribution today did not live up to the occasion.
Events have proved that there has been a massive political miscalculation by the Leader of the Opposition. Let us look at her timing. We all know that there will be a Budget within the next few days. One would have thought that before putting down a motion such as this the Tories would have heard the contents of that Budget and the deliberations on the Finance Bill. Then, if they were not satisfied, they could have decided to try to create a situation that would have forced this Government out of office. The timing was bad.
Again, there are the discussions with the trade union movement about phase 3. Whatever we may think about the Government—and some of us have quarrels with some aspects of Government policy—there is no doubt that they have been really successful in negotiating with the trade union movement over the past two years. It is sad that now that we are entering the third phase the Opposition should try to provoke a political crisis.
The Prime Minister has been successful in bringing a summit conference to

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Downing Street of some of the leading industrial nations of the world. The problems confronting us as a country are faced by the whole of the Western world at the moment. When we look back at the last two and a half to three years, we see that the Government, who inherited a hopeless economic situation from the Conservatives, have brought about a quiet transformation. All the economic indicators point to the fact that our economic recovery is under way.
Why are the Tories so desperate? They realise that if they do not seize the initiative now all will be lost for them. That is why we are getting the political high jinks tonight and the nonsensical performance of Tories and the Liberal Member for Cornwall, North (Mr. Pardoe) over the seating arrangements.
I believe that nobody wants a General Election now. Reference has been made to the Stock Exchange. When the news reached the Stock Exchange about the confidence vote and there was a whisper that there might be a Tory Government, the stocks dropped by more than £1,000 million in a day. Of course they recovered when the news spread that we would hold on to power.
I must admit that that causes me some anxiety as there is little in common between the Stock Exchange and the Labour Party. However, it is an indication that industrialists and investors realise that the return of the Tory Government would mean going back to where we were three years ago—back to chaos. Those were the days when we had Ministers on the Tory Front Bench telling the country to shave in the dark. I give way to the hon. Member, who is sitting on the Opposition Front Bench.
Mr. Pardoe rose—
Hon. Members: What is going on?
Mr. Speaker: Order. I have only just come back to the debate and I find this very interesting. Hon. Members normally address the House from the seat they are occupying and that is what the hon. Member for Cornwall, North (Mr. Pardoe) is doing. However, I hope that hon. Members will realise that the windup speeches begin at 9 p.m.
Mr. Pardoe: Will the hon. Gentleman accept that it was not only that matter
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that indicated the lack of confidence of business in the last Tory Government, but that it was the failure of the City and industry to invest that indicated the lack of confidence of the business community in the—
Mr. Speaker: Order. That is more than an intervention.
Mr. Evans: I agree with my hon. Friend. [HON. MEMBERS:" Oh."] I think that the hon. Gentleman is quite right in saying that the Tory Party has lost the confidence of business. What we should be discussing today is the direction that the Government should take. They have been confronted by a world recession, the quadrupling of oil prices, and many other difficulties. My right hon. Friend the Prime Minister has told us, and my right hon. Friend the Leader of the House will no doubt tell us more, of how much has been achieved already. The Tory Opposition are dismayed. They want to sit back and let the Labour Government do all the difficult tasks, including persuading the working people to make the sacrifices that they have made, and then they thought they would come along and do again what they did between 1970 and 1974—transform a surplus into a deficit once more.
The Government can put forward a good record. The Leader of the Opposition has failed to spell out what the Tory Party would do in office. It is reported that in the last few days the Tory Central Office has hurriedly prepared a manifesto on which the Tory Party intends to fight the next General Election. I hope that that manifesto will be published. I hope that at long last we shall find out where the Tory Party stands on the many issues with which the Government have had to deal.
I believe that we all know the results of the drama to be enacted tonight. I believe that the Tory Party has made a serious miscalculation. I believe that what will be decided in the next year or so is whether there is to be a change not of Government but in the leadership of the Tory Party.
8.58 p.m.
Mr. Francis Pym: I am certain that the House in no way underestimates the importance of the decision that it is to make at 10 o'clock.

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It will make it in rather bizarre circumstances in which the Prime Minister has announced some kind of political shot-gun wedding. In the first few hours he has cause for some anxiety. There are some signs of physical desertion—certainly a reluctance to join him. He may find that the partnership will turn out to be of a rather curious nature.
But there is more at stake today than just any ordinary clash between Government and Opposition. We have a minority Government whose record and whose intentions are on trial. We have had minority Governments before in this country, and it is central to our case that this minority Government have not conducted themselves either in the manner or in the spirit of such a Government.
The Government have had ample time and ample incentive to do so, but they have refused. As their original overall majority has been reduced, then erased and then turned into a minority, they have given the impression of becoming more and more intransigent—until the reality of an actual defeat had some effect.
In moving this motion we are not simply expressing our opposition to Socialism, which is a mutual difference between the two sides of the House which, I am sure, will outlast the whole lot of us. We are saying that the results of the last three years' stewardship of the Government's responsibilities are so unsatisfactory that the prospect of the Government's continuance in office is unacceptable.
We are saying that the useful life of this Parliament is ended and that it must be renewed in the only proper way that it can be renewed—by the people who sent us here. The Government have only themselves to blame for the fact that they are facing this censure motion tonight. They have been behaving like a suicide squad. If by contortions they escape a defeat tonight, that will be a verdict that the country does not deserve, and I predict that the Liberals will live to regret it, because they have paid a price that they cannot afford for the life of this Government. That price is that the Liberals will keep the Socialists in power.
Both the Government and the Liberals have come to a political bargain the terms of which I believe must contravene the
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Trade Descriptions Act. We have there a party still dedicated to State monopolisation of all means of production, distribution and exchange. There is not much room for the Liberals there, or for the mixed economy either. That party is trying desperately to prolong its own life by trying to arrange a marriage of temporary convenience with partners of a very different political philosophy—a one-night stand if ever there was one.
I should like to remind the Prime Minister of what he had to say about the possibility of forming a coalition three years ago. He said:
"It has no pride of ancestry and no hope of posterity. On what policies would this unfortunate hybrid animal be expected to graze?"
Of course this is not a coalition that the Prime Minister announced today. No one knows what it is, but it is not a coalition. We have yet to hear what he thinks of the arrangement.
At any rate, the Prime Minister had no difficulty in burying those words and those anxieties about making arrangements with another party. I think that he has infinitely the best of the bargain. I have to tell him—although he is not back in his place yet—that what he announced this afternoon has not exactly been received as a triumph among Labour Members, although, as far as we can tell, no criticism went as far as saying that support for the Government would be withheld.
I believe that my right hon. Friend the Member for Stafford and Stone (Mr. Fraser) was correct in saying that the Prime Minister undoubtedly got the better of the bargain. He is the tiger who has temporarily swallowed the lady of Riga. When the time comes, we all look forward to the animal being violently sick. We do not mind too much about the animal, but we mind a bit more about the lady.
Most of the manifesto on which the Labour Party was elected and its most Socialist proposals have now gone through the House, despite the opposition that we have put up against them. What the Prime Minister wants is a deal to see him through to the next manifesto of red-blooded Socialist proposals.
This arrangement has been designed to provide a breathing space between the last dose of Socialism and the next that

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they hope to be able to introduce. It is a device for the survival of Socialism. Let me remind the House of what Lloyd George said after the first occasion on which the Liberal Party joined the Labour Party in forming a coalition over 50 years ago. He said that if the Liberals dared to criticise the Labour Government, they were visited with "peevish resentment". The Liberals, he said, were expected to be
"the oxen to drag Labour over the rough roads of Parliament for two or three years, and at the end of the journey, when there is no further use for them, they are to be slaughtered."
That is the deal that has been done in the course of the last three days.
The Labour leopard does not change its spots just because it temporarily covers them up. The Parliamentary Liberal Party has neither responsibility nor power. How bankable does anybody in this House think is the undertaking by the Government to bring forward proportional representation for direct elections to Europe on a free vote? I do not think that the words of the Prime Minister or the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) on this subject were in any way significant. I saw nothing significant in what they said about devolution, because, as we know, the Government have gone ahead with the talks on an inter-party basis anyway. The two sides have therefore got themselves into an extraordinary deal, and one cannot avoid a certain amount of mild amusement at the idea of this joint consultative committee operating under the chairmanship of the Lord President of the Council.
We heard the right hon. Gentleman this afternoon when he tried to explain how the Labour Party had refurbished all its internal political communication arrangments and how it will consult all the various groups. There will be an immense complex of discussions, and it remains to be seen whether anything at all will happen.
At any rate, the Liberal Party has come away with nothing that it can put in the bank. I agree with my right hon. Friend the Member for Chipping Barnet (Mr. Maudling) that the Liberals have been sold a pup. This new and strange shotgun wedding is their own business, however.
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I welcome what the Prime Minister said about Northern Ireland. As he knows very well, we have been pressing for some time that this matter should be looked at under a conference convened under your chairmanship, Mr. Speaker. We have accepted for a long time that the representation of the Northern Ireland constituencies is not fair or reasonable, and so we welcome that aspect.
There always has been respect for a party that has advocated radical change, even among those who disagreed with whatever was proposed. But there is little respect for a party that suddenly finds it convenient to sell its principles to borrow time in order just to survive.
This arrangement will enable the Labour Party to survive in impotence. Whatever else the Liberal Party will do to the Labour Party, it will not bring it potency. Impotence is not government, and today Britain wants government which is inherently strong and responsive to the people's wishes.
The Government are neither of these things, and therefore we have no confidence in them. If the Government expect or want us to have confidence in them, we for our part expect them to be able to count on their own supporters. In recent months they have often not been able to command consent among their own ranks, which is a position of great weakness, particularly for a minority Government.
When the Prime Minister repeats and reasserts, with that bland, disarming smile of his, that, given time, all will be well and that better days are ahead, nobody believes him. There is no evidence to support him. He spoke this afternoon about the "growing prosperity of our people", but for the first time in a long while the standard of living is going down. If it is not, why not have an election? I think that the Prime Minister has altered that comforting phrase that he liked to use in the 1960s and has used once or twice during the last two or three years; he has adjusted his message to "Steady as she is supposed to go".
In proposing this motion we are not just criticising the Government for their failed policies; failed because they have brought us to the bottom of the European tables in economic growth and output and to the top of the tables, unhappily, in

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unemployment, inflation, taxation and borrowing. Even if they win tonight, we do not believe that their future policies or future decisions will be any better. Nor are we just criticising the Government for the nature of their legislation, with which we have often disagreed root and branch.
Both of those are good reasons why we think that the Government should go, but there is more to it than that. Our experience of them over three years, but especially during the last nine months, gives us no confidence in the way in which they have handled their decisions or managed their business, particularly in Parliament. To judge from their behaviour in the House, anyone would imagine that they had been elected with an overwhelming majority, that they commanded the support of most of the British people. They have bludgeoned their way, or lime tried to bludgeon their way, through the House with their measures regardless of the arguments and regardless of what other people thought. The evidence of the Scotland and Wales Bill is completely conclusive of the Government's attitude.
If challenged they rely on their little red book. They rely on their manifesto, on which they place such tremendous importance and which has been a menace to this country during the last three years. They wave it in the air self-righteously as though the British people had elected them to carry it out to the letter.
They were not elected on that basis. They were elected on a different basis. It was on a basis that required them to have regard for the fact that less than 40 per cent. of the voters supported them and the other 60 per cent. had the right to be considered, and yet, through by-election after by-election, although they lost their overall majority they continued to act in the same high-handed manner until it was too late.
Mr. Heffer: In view of what the right hon. Gentleman said about the little red book, the manifesto, and the fact that we are fully committed to it, are we to assume that any future Tory Party manifesto should be ignored from the word "go"?
Mr. Pym: That is a rather facile interpretation of what I said. All I know is that too few of the voters perhaps read
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or were able to read all the small print in that manifesto.
Our principal indictment is that the Government have not acted first and foremost in the national interest. They have been motivated primarily and preeminently by their own party interests. Of course they are entitled to work to stay in office and they have come to a new arrangement today to try to achieve that, but to stay in office is not the top priority. It is the national interest that comes first.
I do not believe that there has ever been a Government as brazen as this, and I hope that there will never be another. They have flouted the law. No fewer than three Cabinet Ministers have acted in a way that the courts have declared invalid. They went beyond their powers, challenging the courts in each case, and it was found that they had acted beyond their powers. There was no sign of remorse or apology.
Worse than that, they have bent the law to their own political advantage. Obvious examples of this are Clay Cross, the surcharging of councillors in Scotland and the attempt to repay vast sums of money to trade unions that had refused to register. They tried to bend the law to save Labour Party Members from the consequences of their own actions.
That is utterly wrong and a disastrous example to set. They were not content even with that. The Government have started to abuse both the spirit and the functions of this House. The first example of this was the Aircraft and Shipbuilding Industries Bill. When the Bill was found to be hybrid, the House was asked to set aside the Standing Order so as to set aside the hybridity. What an error of judgment that was on the part of the Leader of the House! We know that it led to the cheated vote and we know that the Prime Minister agreed in the end to re-run it. But he did not hurry to do so. He did not do it at once. He took some time to consider whether he could get away with it in some other way. The Government were wrong-footed on that Bill, and it was ultimately disqualified due to the satisfactory working of our procedures, which are designed to protect the interests of individuals.
Then there was the shabby incident of trying to maintain a majority in Standing

1399
Committees, even though the Government lost their overall majority. I find it difficult to imagine any Leader of the House worthy of that name recommending such a course. Again, in the end, the Prime Minister agreed to do what was right, but why did he ever think what was done right in the first place?
Then there was last Thursday's fiasco, which may yet, although it is unlikely now, turn out to be a boomerang of a lethal kind, because it was a schizophrenic notion, that by not putting the motion to the House in some way the House would not have disagreed. That is an extraordinary proposition.
The right hon. Member for Down, South (Mr. Powell) in a recent article about Parliament and parliamentary responsibility wrote:
"Our liberties are literally at issue every day on the floor of the House of Commons, assailed, defended, impaired, renewed. That, more than anything else, is what the House of Commons is for."
How right that is! The Government's new ploy is not to put their policy to the vote so that the House can assail, reject and criticise without coming to any conclusion and with impunity for the Government. The Government want to continue as though nothing has happened. What a farce, what a travesty of parliamentary democracy!
This time the Prime Minister did not volunteer to do the right thing himself. He did not table a vote of confidence in himself—perhaps he does not have any. Certainly he did not seem to know what advice to give to his hon. Friends the other night about whether to adjourn the House. I do not think that behaviour about that incident was at all right, correct, or proper. At a time when politicians are talking about upholding the rule of law, those are awful examples of what the Government are doing. That is the principal reason for our motion of censure tonight.
We also had the little incident of the Scotland and Wales Bill. The Government say that their purpose was to improve the government of the United Kingdom, particularly that in Scotland and Wales. I am sorry, but I do not believe that. The purpose behind the Bill was to try to appease the nationalists and save Labour seats. When they found before the Second Reading vote that they were not doing the trick, they began amending
1400
it and they continued to amend it to try to placate a rebel here and to save a Labour vote there.
In the end their purpose was so transparent, so unacceptable and so wrong that they achieved the amazing feat of turning a majority in favour of the Bill on Second Reading into a majority against it three months later on a timetable motion. They preferred to try to pass the Bill as a party measure. They lost the argument and lost the Bill.
Mr. Douglas Henderson: Will the right hon. Gentleman say why, when the Bill got such a majority on Second Reading, Conservative Members acted so obstructively towards that Bill thereafter? What does the Conservative Party offer as an alternative to devolution?
Mr. Pym: Nobody in this party—indeed nobody in the House—obstructed the Bill in any way, and the Lord President knows that. The argument on the Bill was won by the House of Commons.
On the second part of the hon. Gentleman's intervention, I wish to tell him that there is no point in going ahead with a measure of this kind unless it would generally benefit the people of Scotland or Wales. The only way to do that is to negotiate across the party lines and try to obtain an agreed solution.
The fact is that all parties for one reason or another are dissatisfied with the Government and their disastrous policies. All parties want to see a change—and that goes for the Liberals as for the nationalists, and the Scottish Labour Party. Certainly the Opposition want to see a change, and many Labour Members too, would like to see a change of policy. Every party and many Labour Members have different reasons and varying objectives, but change is thought by most to be necessary. The Gangway on the Government side of the House is a far deeper chasm in the Labour Party than has ever existed before in the party.
The first change that is needed relates to defence. I agreed with my right hon. Friend the Member for Farnham (Mr. Macmillan) that, although we are faced with increased strength among potential enemies, we are suffering increasing weakness in our defences under the Labour

1401
Government. We recently had the shabby incident involving gratuities. I was grateful that the Government put that right yesterday, but they should not have contemplated changing the situation in the first place.
There is then the important matter of food supplies. Only two years ago the Government published a White Paper entitled "Food from our own resources". That called for increased agricultural production, but the Government have taken no action whatever to implement it. They have taken stop-gap measures. They have no policy, but merely hope for the best.
What is most important in that connection, as in others, is the standing, authority and respect commanded by the British Government in the councils of Europe within the EEC. I regret to say that the Labour Government have brought the reputation of Britain in those councils to a new low level. One of the most powerful reasons for changing the Government is to restore our standing and respect in those councils.
I turn to industrial strategy, pay and price controls and the social contract, described by the right hon. Member for Huyton (Sir H. Wilson) as the boldest experiment of civilised government Britain has ever seen. What has it produced? It has brought about the highest inflation we have ever experienced, bringing unemployment levels to the highest levels in our history. The social contract is coming under more and more criticism and seems to be cracking because one partner is demanding more and more and the other partner is giving less and less.
Industrial strategy is not working, because price controls are too severe and profits too low for business to be able to thrive. If we want expansion and new jobs, as we all do, we must replace that policy and see that there is less interference, less taxation and less public spending, and we must create more profit, more investment and more job creation.
The Government's present economic strategy is not working. It cannot work and it will not work. Last month the Prime Minister said:
"We need more jobs, but I do not know the answer."
That is not very encouraging.
1402
We have heard much about the myth of the so-called economic miracle that is so often mentioned by the Chancellor of the Exchequer. He mentioned that miracle in his Budget last year, and said in April last year:
"All that is required is a marginal improvement in industrial performance. That will suffice to produce the economic miracle."
Then, having said in July that the economic miracle was within our grasp, he said in December:
"What I have always said is that no Government can produce the economic miracle."
The Prime Minister, with his great attention to "The Right Approach" has commented upon the passage that states that the economic miracle is not round the corner. That is correct. That is what we have been saying consistently to the country, not what the Government have been saying.
There are other areas of policy where we want a change and a fresh start. Housing is one such area. There is not time to go into the details, but everyone knows of the disastrous state that our housing has reached under the policies pursued by the Government. Too many houses are empty. Lettings have dried up. Too few new houses are being built, and there are masses of unsatisfied demands from those who want to own their own houses.
We want to replace the prejudices of the Labour Party with better opportunities for people who want to own their own houses. We want to make better use of our housing stock.
We want a big change in taxation. Present taxation is far too high. It is unacceptably high. It has given rise to resentment. That is unhealthy for our society, because it has induced and encouraged people to fiddle. I regret to have to say so, but the Labour Party of all parties has turned this country, and is turning it, into something that might be described as an expense account society. That is a very bad idea.
We think we know that the Chancellor will make a substantial reduction in taxation, but we are certain that the Liberal Party, the Government's newfound partner, will have no influence on the Budget or economic policy. I repeat that taxation is at far too high a level.

1403
I return to the parliamentary situation because it is the Government's behaviour and conduct of parliamentary matters that I find most offensive. The malady from which the Government suffer has not occurred suddenly. The patient has a long list of ailments. His medical history, if I may use that analogy, began with the public expenditure debate a year ago. The stricken patient was revived by a vote of confidence and warned that that dangerous drug was never to be taken again.
The next incident was the procedure motion on hybridity. The patient paid no attention and collapsed again over the Dock Work Regulation Bill. Sirens blew and the ambulance came. The patient was taken to the intensive care unit. He recovered and then recklessly went out on the tiles with the Scotland and Wales Bill.
The patient insisted on pulling one limb here and wrenching another there until something approaching complete dislocation was reached. So much had gone wrong by then that the patient looked round for relief. He saw a bottle labelled "Public Expenditure". He remembered the warning, but felt a sense of compulsion. He thought no one was looking, he took a swig and that was it. Everyone except the patient realised then and realises now that the Government were in their death-throes.
We are asking the House to take the kinder course, although that seems unlikely now because the Government have discovered a new drug called "Liberal". That will not last much longer than the last drug. We are asking that the British people be given the opportunity to put a big notice at the foot of the patient's bed that will state "Not to be resuscitated". The liberties of the British people can be sustained only if the laws of the land and the privileges, rights and duties of this Parliament and the House of Commons, which have been fought for, won and preserved over so many years, are respected, upheld and maintained inviolate.
It is the responsibility of every hon. Member to have full regard to the protection of the House, but it is the prime responsibility of the Government of the day to safeguard and nurture the wellbeing of Parliament. However, it is the Government's arrogance towards the
1404
House and towards the laws of the land that threatens to undermine the very institutions on which the continued freedom and liberties of the British people rest. That is why we condemn them and challenge them tonight.
9.30 p.m.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Sandwiched between some of his remarks, which I took to be critical of the Government in some senses, the right hon. Member for Cambrideshire (Mr. Pym) welcomed the comments made by my right hon. Friend the Prime Minister about Northern Ireland. I should like to take a few minutes to refer to some of the conversations that we had on that subject and to emphasise some of the points made by my right hon. Friend.
My right hon. Friend and I have on a number of occasions made clear that we accept that Northern Ireland is underrepresented in this House, whether some acceptable devolution settlement for the Province is achieved or not. Having considered that matter further, we are now prepared to propose, as we have indicated, that this should be one of the matters to be considered by a Speaker's Conference as soon as agreement can be reached between the parties that such a conference should be established.
Mr. Kevin McNamara: Will my right hon. Friend give way?
Mr. Foot: I shall give way to my hon. Friend later.
We have also had discussions on the question of local government in Northern Ireland. We are prepared to consider those discussions in association with all concerned. We made it clear to the hon. Member for Antrim, South (Mr. Molyneaux) in the discussions that we had with him. In the course of those discussions, as he will recall, certain matters concerning security were raised. I think that the hon. Gentleman understood and accepted that, while we were eager that he and his colleagues should make representations to us at any time that they wished, as they did to the Prime Minister a week ago, none the less we believed that it would be improper to make the question of security part of any such understanding.
Mr. McNamara: Will the Leader of the House tell us whether in these discussions, in return for the concession of a Speaker's Conference, he received any undertaking from right hon. and hon. Members representing Ulster constituencies that they were prepared to concede the principle of power-sharing at all levels in local government and devolution?
Mr. Foot: We emphasised our own commitment to those principles. We made it clear to the hon. Member for Antrim, South that we would be prepared to agree to the reference to a Speaker's Conference irrespective of any other consideration. I think that was the right way to proceed and the right way for the whole matter to be clarified in the country. It would have been wrong for us to deal with the matter otherwise. I hope that right hon. and hon. Members on both sides of the House will agree that that was the proper way for us to proceed.
I turn now to some of the other discussions which have been held with and to speeches which have been made by representatives of other parties. I shall come to some of the more controversial questions posed by the right hon. Member for Western Isles (Mr. Stewart) later. No one could say that the Leader of the Scottish National Party was not controversial in his remarks. I should certainly acquit him of being non-controversial. None the less, I hope that he and all those hon. Members who have sought a devolution settlement for Scotland and Wales—and we are committed to a devolution measure for both countries—will understand that we wish to proceed as fast as possible with such a proposal. We know that there are some obstacles but we want to try to get satisfactory legislation on the statute book.
We have had discussions with the Leader of the Liberal Party on this as well as with some of my hon. Friends. As the Prime Minister indicated today, we are of course, quite prepared for further discussion on those matters but we believe that it is fully possible to get a satisfactory measure for devolution on the statute book within this Parliament. That is the determination of the Government and only this Government can carry that into effect.
Mr. Gordon Wilson: Is the Leader of the House not deluding
1406
himself about the Government being able to deliver a devolution Bill? The Government introduced a Bill into the House, as I recollect, and it was put to a timetable motion, but the Government's own supporters stabbed it in the back. Does the right hon. Gentleman not realise that we in Scotland can no longer trust the English Labour Party and that we want an election in Scotland now?
Mr. Foot: The hon. Gentleman speaks for some people in Scotland, but many of my hon. Friends speak for more people there. The great majority for whom they speak wish to see a proper devolution settlement coupled with the maintenance of the unity of the United Kingdom. This party represents that policy and we seek to carry it into full effect.
I now turn to some of the other discussions that have given rise to interest in the debate, particularly the discussions that we have had with the leaders of the Liberal Party. [HON. MEMBERS: "Where are they?"] It is a little hard for the Liberal Party to be criticised in that way because it appears that some of the great Conservative defenders of the House of Commons now sitting on the Liberal Bench want to turn the House into the fifth form at St. Dominic. Nothing that they have done tonight is likely to contribute to the dignity of the House. The Leader of the Liberal Party is now sitting on the Opposition Front Bench. It is agreeable to be able to deal with him at close quarters. If the fifth form at St. Dominic would keep quiet we should like to get on with the debate.
I wish to make clear to the House—and I am sure that the Leader of the Liberal Party will confirm this—that right at the beginning of our discussions it was clearly agreed that whatever conclusion was reached would be made public in every particular, and that is what we have done. In order to remove any misapprehensions that any of my hon. Friends may have, let me make it clear—although it is clear from the text that has been published—that there is no question of any coalition. Nothing of the sort was ever suggested by the right hon. Gentleman or by my right hon. and hon. Friends on that subject. Nor is there any question of any Lib-Lab pact as has been discussed in previous years. It is

1407
an agreement between us, made in good faith on both sides, to try to make this Session of Parliament workable in the interests of the nation and the people.
Several Hon. Members rose—
Mr. Speaker: Order. We can have only one hon. Member on his feet at any one time and I cannot resist reminding the House that there was reasonable quiet for the right hon. Member for Cambridgeshire (Mr. Pym), who wound up for the Opposition.
Mr. Foot: We are seeking by this agreement to make this Session workable in the interests of Parliament and of the two parties concerned with us. If, at the end of the Session, we discover that it has been a successful experiment, we can have discussions on whether it should be continued.
I know that there are some who would prefer to make Parliament unworkable. The Leader of the Opposition and her Friends are among them, and it appears from the statements of the leaders of the nationalist parties that they would like to make Parliament unworkable. One thing that will be made perfectly clear by tonight's vote is that the majority of hon. Members want to make Parliament workable and that we are not prepared to have it sabotaged by those who talk of their allegiance to parliamentary government but who seek to sabotage it.
Mrs. Winifred Ewing: I am grateful to the right hon. Gentleman for giving way and I shall wait a while until hon. Members opposite have shut up. The right hon. Gentleman referred to "the nation". The whole point about his Front Bench's programme is that it is pledged to talk about the "nations" of the British Isles and not the "nation". The right hon. Gentleman's tongue slipped in the usual old arch-imperialist way. Would he care to reflect on what the people of Scotland will think about that?
Mr. Foot: I shall think about it. I do not know whether it deserves much more than that at the moment.
I listened with care as, I am sure, did the whole House when it was allowed to, while my right hon. Friend the Prime Minister was speaking earlier. It was a
1408
very good speech, but in one sentence he was a little unfair to the Conservatives. He said that the country had no idea what the Opposition's policy was on a large number of subjects. I think that there are some subjects on which their policy is perfectly clear.—[HON. MEMBERS: "Get on with it."] I am filling in the gaps.
The Leader of the Opposition and the right hon. Member for Cambridgeshire did not tell us what their policies were. It is clear that the Leader of the Opposition and her Front Bench repudiate any kind of incomes policy such as was operated by the right hon. Member for Sidcup (Mr. Heath). There is no doubt about that. It is also true that the right hon. Lady, her hon. Friends and the right hon. Member for Cambridgeshire repudiate any policy on devolution such as was advocated by the right hon. Member for Sidcup. It is true that they have repudiated any return to the kind of industrial legislation put through by the right hon. Member for Sidcup.
There is therefore a large range of matters on which their policy is absolutely clear. Indeed, it seems to me that sometimes the right hon. Lady has worked on the principle of people approaching her and saying "See what Ted did and do thou otherwise." I thought that that was not a bad prescription with which to start off.
Opposition hon. Members cannot say that they come to the House and the country as a united party. There has been some talk of an election, but when I look at the right hon. Member for Sidcup I see that there is not much of an election fever there. The right hon. Gentleman has been keeping himself well under control.
The right hon. Member for Leeds, North-East (Sir K. Joseph) is not in the same position—and here I approach the essential matter. There is a gulf of difference between them, even if I have not got the actual area right. The right hon. Member for Leeds, North-East will not contest anything that I have said about the sharp distinction between his policies and those of his right hon. Friend the Member for Sidcup because, when he addressed the Young Conservatives the other day and referred to the Leader of

1409
the Opposition's policy to fight inflation, he said:
"I was one of the villains as Social Services Secretary because I spent your money. But I am a reformed character now."
Here, before me, are the reformed characters and over there are the old lags.
It is not only that. The right hon. Member for Leeds, North-East said "I was an inflationeer". He need not tell us that. We had to come in and take it over when we got into power in February and March 1974. At that time there was already over 20 per cent. inflation in the pipeline, as the right hon. Gentleman knows.
The right hon. Member for Leeds, North-East says that he is reformed character. Presumably all his right hon. and hon. Friends are reformed characters—except the hon. Member for Oswestry (Mr. Biffen), who went into the reformatory camp but could not stand it any more. He returned to the fresh breezes of the Tory Back Benches where they did not have reform at all. We have now got the matter clearly sorted out.
There is another matter upon which the Conservative Party has declared its policy. I am gratified that it has been made clear to us all. I would have thought that instead of criticising me they would have been most grateful, because I am the first person in the debate who has tried to indicate the meaning of their policy. I always try to assist the right hon. Lady the Leader of the Opposition. Her recent performances have not interfered with my fondness for her in any way. I have often told her—and I tell her now—that if I had had a vote in her leadership contest I would have voted for her. That is more than I can say about my right hon. Friend the Prime Minister. Ah, well—both parties got what they deserved.
The right hon. Lady fully lived up to my expectations today. She is performing very satisfactorily from the point of view of all of us. Her only mistake was when she over-reached herself slightly last Thursday, when I thought that she hoped that she would be able to entice into the Division Lobby—[HON. MEMBERS: "Enticed?"] I know that some hon. Members do not like this very much,
1410
but this was the origin of this supposed motion of censure, which has not yet been resolved. The origin of it was that the right hon. Lady thought that she would be able to entice into the Lobby to defeat us last Thursday all the waifs and strays, if I may describe them in that way. [HON. MEMBERS: "Oh"] If hon. Members do not like associating with them, they need not follow them into the Lobby. There is no compulsion on them. I am sure that some hon. Members who have been thinking out these matters will be thinking them out afresh before they go into the Lobby with the right hon. Lady.
Mr. Douglas Crawford: The right hon. Gentleman will be as well aware as are we on the SNP Bench that the Conservatives did not put in Tellers on that occasion. They relied upon us to do so. I think that he would agree that by doing so we not only embarrassed his Government but the Conservatives also.
Mr. Foot: I hope that the hon. Gentleman will work out carefully what he has said. He admits to the House that the Conservative Front Bench relied upon him to assist the Conservatives on that occasion. I hope that they will be very careful before they do that again. In fact, they must watch these matters very carefully.
There has been some talk of arrangements and opportunist positions. The most opportunist thing that will happen tonight—if it happens—is that Conservative Members will go into the Aye Lobby in their party interests and SNP Members, according to their present indications, will troop into the same Lobby in pursuit of their interests. Neither group has the same interests—unless there has been a remarkable conversion on one side or another—and all that will happen if hon. Members of the SNP on the Opposition side of the House decide to do it, is that they will cast aspersions even on their own dedication to the programe of devolution. They should be fully capable of working out, just as everyone else in the country will be able to work it out, that it is only a Labour Government who can carry into legislation the programe for providing the Scottish Assembly and the Welsh Assembly and meeting all the other

1411
promises of that kind that have been made.
Mr. Wigley: In that case, will the right hon. Gentleman answer the question put by the hon. Member for South Ayrshire (Mr. Sillars) and by myself? Why did the Government not make this issue an issue of confidence, if they so believe in devolution?
Mr. Foot: I know what the hon. Gentleman wanted and what some other hon. Members wanted, and what some others want for their own interest. The hon. Member for Moray and Nairn (Mrs. Ewing) wants devolution. We understand her reasons. What other hon. Members wanted was to secure the defeat of the present Government. Of course they are angry, because it will not happen. That is the reason for the exhibition that we have had from the Opposition Benches.
There is a story in the Arabian Nights of a Barmecide feast, when wonderful dishes were spread out in front of the diners and snatched away at the last moment. The feast vanished. That is the reason for the expression on the faces of the Leader of the Opposition and her colleagues. They had hoped to come here tonight and inflict a serious defeat on the Labour Government. They hoped they would interrupt the whole programme that this Labour Government have carried into effect. They hoped that they would be able to seize all the advantages and pretend that they arose from their own actions and deeds. But they have been thwarted and the dish has been snatched away from them.
My hon. Friends in the Tribune Group will be especially interested in the fact that the person who was gesturing at them is the Tory Chief Whip. I am sure that my hon. Friends, and even my hon. Friend the Member for South Ayrshire (Mr. Sillars), will never fall for a trick perpetrated by the hon. Gentleman and his hon. Friends.
Mr. Sillars: Is my right hon. Friend aware that his analogy with the Arabian Nights is an apt one because in October 1974 the Labour Government laid before
the Scottish working people a pledge of a Scottish Assembly and 44 Labour Members of Parliament have snatched that away? The only way that will be restored is by a vote of confidence.
Mr. Foot: My hon. Friend is mistaken. The only way in which that part of our manifesto will be carried into effect is if the Labour Government stays in office and if we secure the votes of sufficient people to carry it through. That is the way in which it will be done. If my hon. Friend effectively votes against us tonight, he will be destroying that possibility and he will help to destroy all the things that he and I, and other hon. Members, have fought for many years to sustain.
We therefore do not propose to be enticed by any of the right hon. Lady's stratagems. We do not propose to allow the Conservative Opposition to dictate what is to be the political scene in the coming months and years. We shall faithfully carry through the agreement that we have made both with the Liberals and with our own party. We shall carry it through openly. The whole country will be able to see what we in this Parliament are doing. And as we make it work and succeed we shall sustain Parliament and we shall show that Parliament, even in the difficult circumstances of a narrow majority, can effectively carry great measures into operation.
We can carry many other great measures, measures which for years to come provide a great constitutional settlement for the whole of the United Kingdom. That is one of the prizes that we have before us in this Parliament. I invite the whole House to throw out with contempt this vote of no confidence tonight and say that this Government shall carry on until the time when a Labour Prime Minister chooses the date for the next election.
Question put,
That this House has no confidence in Her Majesty's Government:—
The House divided: Ayes 298; Noes 322.

Division No. 94]

AYES

[10.00 p.m.

Adley, Robert

Atkins, Rt. Hon. H. (Spelthorne)

Bell, Ronald

Aitken, Jonathan

Awdry, Daniel

Bennett, Sir Frederic (Torbay)

Alison, Michael

Bain, Mrs. Margaret

Bennett, Dr. Reginald (Fareham)

Amery, Rt. Hon. Julian

Baker, Kenneth

Benyon, W.

Arnold, Tom

Banks, Robert

Berry, Hon. Anthony

Biffen, John

Gray, Hamish

Montgomery, Fergus

Biggs-Davison, John

Grieve, Percy

Moore, John (Croydon C)

Blaker, Peter

Griffiths, Eldon

More, Jasper (Ludlow)

Body, Richard

Grist, Ian

Morgan, Geraint

Boscawen, Hon. Robert

Grylls, Michael

Morgan-Giles, Rear-Admiral

Bottomley, Peter

Hall, Sir John

Morris, Michael (Northampton S)

Bowden, A. (Brighton, Kemptown)

Hall-Davis, A. G. F.

Morrison, Charles (Devizes)

Boyson, Dr Rhodes (Brent)

Hamilton, Michael (Salisbury)

Morrison, Hon. Peter (Chester)

Bradford, Rev. Robert

Hampson, Dr. Keith

Mudd, David

Braine, Sir Bernard

Hannam, John

Neave, Airey

Brittan, Leon

Harrison, Col. Sir Harwood (Eye)

Nelson, Anthony

Brocklebank-Fowler, C.

Harvie Anderson, Rt. Hon. Miss

Neubert, Michael

Brooke, Peter

Hastings, Stephen

Newton, Tony

Brotherton, Michael

Havers, Sir Michael

Normanton, Tom

Brown, Sir Edward (Bath)

Hawkins, Paul

Nott, John

Bryan, Sir Paul

Hayhoe, Barney

Onslow, Cranley

Buchanan-Smith, Alick

Heath, Rt. Hon. Edward

Oppenheim, Mrs. Sally

Buck, Antony

Henderson, Douglas

Osborn, John

Budgen, Nick

Heseltine, Michael

Page, John (Harrow West)

Bulmer, Esmond

Hicks, Robert

Page, Rt. Hon. R. Graham (Crosby)

Burden, F. A.

Higgins, Terence L.

Page, Richard (Workington)

Butler, Adam (Bosworth)

Hodgson, Robin

Paisley, Rev Ian

Carlisle, Mark

Holland, Philip

Parkinson, Cecil

Chalker, Mrs. Lynda

Hordern, Peter

Pattie, Geoffrey

Channon, Paul

Howe, Rt. Hon. Sir Geoffrey

Percival, Ian

Churchill, W. S.

Howell, David (Guildford)

Peyton, Rt. Hon. John

Clark, Alan (Plymouth, Sutton)

Howell, Ralph (North Norfolk)

Pink, R. Bonner

Clark, William (Croydon S)

Hunt, David (Wirral)

Price, David (Eastleigh)

Clarke, Kenneth (Rushcliffe)

Hunt, John (Bromley)

Prior, Rt. Hon. James

Clegg, Walter

Hurd, Douglas

Pym, Rt. Hon. Francis

Cockcroft, John

Hutchison, Michael Clark

Raison, Timothy

Cooke, Robert (Bristol W)

Irving, Charles (Cheltenham)

Rathbone, Tim

Cope, John

James, David

Rawlinson, Rt. Hon. Sir Peter

Cordle, John H.

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

Rees, Peter (Dover & Deal)

Cormack, Patrick

Jessel, Toby

Rees-Davies, W. R.

Corrie, John

Johnson Smith, G. (E Grinstead)

Reid, George

Costain, A. P.

Jones, Arthur (Daventry)

Renton, Rt. Hon. Sir D. (Hunts)

Craig, Rt. Hon. W. (Belfast E)

Jopling, Michael

Renton, Tim (Mid-Sussex)

Crawford, Douglas

Joseph, Rt. Hon. Sir Keith

Rhodes James, R.

Critchley, Julian

Kaberry, Sir Donald

Rhys Williams, Sir Brandon

Crouch, David

Kellett-Bowman, Mrs. Elaine

Ridley, Hon. Nicholas

Crowder, F. P.

Kershaw, Anthony

Ridsdale, Julian

Davies, Rt. Hon. J. (Knutsford)

Kilfedder, James

Rifkind, Malcolm

Dean, Paul (N Somerset)

Kimball, Marcus

Rippon, Rt. Hon. Geoffrey

Dodsworth, Geoffrey

King, Evelyn (South Dorset)

Roberts, Wyn (Conway)

Douglas-Hamilton, Lord James

King, Tom (Bridgwater)

Robertson, John (Paisley)

Drayson, Burnaby

Kirk, Sir Peter

Rodgers, Sir John (Sevenoaks)

du Cann, Rt. Hon. Edward

Kitson, Sir Timothy

Ross, William (Londonderry)

Dunlop, John

Knight, Mrs. Jill

Rossi, Hugh (Hornsey)

Durant, Tony

Knox, David

Rost, Peter (SE Derbyshire)

Dykes, Hugh

Lamont, Norman

Royle, Sir Anthony

Eden, Rt. Hon. Sir John

Langford-Holt, Sir John

Sainsbury, Tim

Edwards, Nicholas (Pembroke)

Latham, Michael (Melton)

St. John-Stevas, Norman

Elliott, Sir William

Lawrence, Ivan

Scott, Nicholas

Emery, Peter

Lawson, Nigel

Scott-Hopkins, James

Evans, Gwynfor (Carmarthen)

Lester, Jim (Beeston)

Shaw, Giles (Pudsey)

Ewing, Mrs. Winifred (Moray)

Lewis, Kenneth (Rutland)

Shaw, Michael (Scarborough)

Eyre, Reginald

Lloyd, Ian

Shelton, William (Streatham)

Fairbairn, Nicholas

Loveridge, John

Shepherd, Colin

Fairgrieve, Russell

Luce, Richard

Shersby, Michael

Farr, John

McAdden, Sir Stephen

Sillars, James

Fell, Anthony

MacCormick, Iain

Silvester, Fred

Finsberg, Geoffrey

McCrindle, Robert

Sims, Roger

Fisher, Sir Nigel

Macfarlane, Neil

Sinclair, Sir George

Fletcher, Alex (Edinburgh N)

MacGregor, John

Skeet, T. H. H.

Fletcher-Cooke, Charles

Macmillan, Rt. Hon. M. (Farnham)

Smith, Dudley (Warwick)

Fookes, Miss Janet

McNair-Wilson, M. (Newbury)

Speed, Keith

Forman, Nigel

McNair-Wilson, P. (New Forest)

Spence, John

Fowler, Norman (Sutton C'f'd)

Madel, David

Spicer, Jim (W Dorset)

Fox, Marcus

Marshall, Michael (Arundel)

Spicer, Michael (S Worcester)

Fraser, Rt. Hon. H. (Stafford & St)

Marten, Neil

Sproat, Iain

Fry, Peter

Mates, Michael

Stainton, Keith

Galbraith, Hon. T. G. D.

Mather, Carol

Stanbrook, Ivor

Gardiner, George (Reigate)

Maude, Angus

Stanley, John

Gardner, Edward (S. Fylde)

Maudling, Rt. Hon. Reginald

Stewart, Rt. Hon. Donald

Gilmour, Rt. Hon. Sir Ian (Chesham)

Mawby, Ray

Stewart, Ian (Hitchin)

Gilmour, Sir John (East Fife)

Maxwell-Hyslop, Robin

Stokes, John

Glyn, Dr Alan

Mayhew, Patrick

Stradling Thomas, J.

Godber, Rt. Hon. Joseph

Meyer, Sir Anthony

Tapsell, Peter

Goodhart, Philip

Miller, Hal (Bromsgrove)

Taylor, R. (Croydon NW)

Goodhew, Victor

Mills, Peter

Taylor, Teddy (Cathcart)

Goodlad, Alastair

Miscampbell, Norman

Tebbit, Norman

Gorst, John

Mitchell, David (Basingstoke)

Temple-Morris, Peter

Gow, Ian (Eastbourne)

Moate, Roger

Thatcher, Rt. Hon. Margaret

Gower, Sir Raymond (Barry)

Molyneaux, James

Thomas, Dafydd (Merioneth)

Grant, Anthony (Harrow C)

Monro, Hector

Thomas, Rt. Hon. P. (Hendon S)

Thompson, George

Wall, Patrick

Wilson, Gordon (Dundee E.)

Townsend, Cyril D.

Walters, Dennis

Winterton, Nicholas

Trotter, Neville

Warren, Kenneth

Wood, Rt. Hon. Richard

van Straubenzee, W. R.

Watt, Hamish

Young, Sir G. (Ealing, Acton)

Vaughan, Dr. Gerard

Weatherill, Bernard

Younger, Hon. George

Viggers, Peter

Wells, John

Wakeham, John

Welsh, Andrew

TELLERS FOR THE AYES:

Walder, David (Clitheroe)

Whitelaw, Rt. Hon. William

Mr. Spencer Le Merchant and

Walker, Rt. Hon. P. (Worcester)

Wiggin, Jerry

Mr. Michael Roberts.

Walker-Smith, Rt. Hon. Sir Derek

Wigley, Dafydd

NOES

Abse, Leo

Dempsey, James

Jay, Rt. Hon. Douglas

Allaun, Frank

Doig, Peter

Jeger, Mrs. Lena

Anderson, Donald

Dormand, J. D.

Jenkins, Hugh (Putney)

Archer, Peter

Douglas-Mann, Bruce

John, Brynmor

Armstrong, Ernest

Duffy, A. E. P.

Johnson, James (Hull West)

Ashley, Jack

Dunn, James A.

Johnson, Walter (Derby S.)

Ashton, Joe

Dunnett, Jack

Johnston, Russell (Inverness)

Atkins, Ronald (Preston N.)

Dunwoody, Mrs. Gwyneth

Jones, Alec (Rhondda)

Atkinson, Norman

Eadie, Alex

Jones, Barry (East Flint)

Bagier, Gordon A. T.

Edge, Geoff

Jones, Dan (Burnley)

Barnett, Guy (Greenwich)

Edwards, Robert, (Wolv SE)

Judd, Frank

Barnett, Rt. Hon. Joel (Heywood)

Ellis, John (Bragg & Scun)

Kaufman, Gerald

Bates, Alf

Ellis, Tom (Wrexham)

Kelley, Richard

Bean, R. E.

English, Michael

Kerr, Russell

Beith, A. J.

Ennals, David

Kilroy-Silk, Robert

Benn, Rt. Hon. Anthony Wedgwood

Evans, Fred (Caerphilly)

Kinnock, Neil

Bennett, Andrew (Stockport N.)

Evans, Ioan (Aberdare)

Lambie, David

Bidwell, Sydney

Evans, John (Newton)

Lamborn, Harry

Bishop, E. S.

Ewing, Harry (Stirling)

Lamond, James

Blenkinsop, Arthur

Faulds, Andrew

Latham, Arthur (Paddington)

Boardman, H.

Fernyhough, Rt. Hon. E.

Leadbitter, Ted

Booth, Rt. Hon. Albert

Fitch, Alan (Wigan)

Lee, John

Boothroyd, Miss Betty

Fitt, Gerard (Belfast, W.)

Lestor, Miss Joan (Eton & Slough)

Bottomley, Rt. Hon. Arthur

Flannery, Martin

Lever, Rt. Hon. Harold

Boyden, James (Bish Auck)

Fletcher, L. R. (Ilkeston)

Lewis, Arthur (Newham, N.)

Bradley, Tom

Fletcher, Ted (Darlington)

Lewis, Ron (Carlisle)

Bray, Dr. Jeremy

Foot, Rt. Hon. Michael

Lipton, Marcus

Broughton, Sir Alfred

Ford, Ben

Lomas, Kenneth

Brown, Hugh D. (Provan)

Forrester, John

Loyden, Eddie

Brown, Robert, C. (Newcastle, W.)

Fowler, Gerald (The Wrekin)

Luard, Evan

Brown, Ronald (Hackney, S.)

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

Lyon, Alexander (York)

Buchan, Norman

Freeson, Reginald

Lyons, Edward (Bradford W.)

Buchanan, Richard

Freud, Clement

Mabon, Rt. Hon. Dr. J. Dickson

Butler, Mrs. Joyce (Wood Green)

Garrett, John (Norwich, S.)

McCartney, Hugh

Callaghan, Rt. Hon. J. (Cardiff SE)

Garrett, W. E. (Wallsend)

McDonald, Dr. Oonagh

Callaghan, Jim (Middleton & P.)

George, Bruce

McElhone, Frank

Campbell, Ian

Gilbert, Dr. John

MacFarquhar, Roderick

Canavan, Dennis

Ginsburg, David

McGuire, Michael (Ince)

Cant, R. B.

Golding, John

MacKenzie, Gregor

Carmichael, Neil

Gould, Bryan

Mackintosh, John P.

Carter, Ray

Gourlay, Harry

Maclennan, Robert

Carter-Jones, Lewis

Graham, Ted

McMillan, Tom (Glasgow C.)

Cartwright, John

Grant, George (Morpeth)

McNamara, Kevin

Castle, Rt. Hon. Barbara

Grant, John (Islington C.)

Madden, Max

Clemitson, Ivor

Grimond, Rt. Hon. J.

Magee, Bryan

Cocks, Rt. Hon. Michael

Grocott, Bruce

Maguire, Frank (Fermanagh)

Cohen, Stanley

Hamilton, W. W. (Central Fife)

Mahon, Simon

Coleman, Donald

Hardy, Peter

Mallalieu, J. P. W.

Colquhoun, Ms Maureen

Harrison, Walter (Wakefield)

Marks, Kenneth

Concannon, J. D.

Hart, Rt. Hon. Judith

Marquand, David

Conlan, Bernard

Hattersley, Rt. Hon. Roy

Marshall, Dr Edmund (Goole)

Cook, Robin F. (Edin C.)

Hatton, Frank

Marshall, Jim (Leicester S.)

Corbett, Robin

Hayman, Mrs. Helene

Mason, Rt. Hon. Roy

Cowans, Harry

Healey, Rt. Hon. Denis

Maynard, Miss Joan

Cox, Thomas (Tooting)

Heffer, Eric S.

Meacher, Michael

Craigen, Jim (Maryhill)

Hooley, Frank

Mellish, Rt. Hon. Robert

Crawshaw, Richard

Hooson, Emlyn

Mendelson, John

Cronin, John

Horam, John

Mikardo, Ian

Crowther, Stan (Rotherham)

Howell, Rt. Hon. Denis (B'ham, Sm H.)

Millan, Rt. Hon. Bruce

Cryer, Bob

Howells, Geraint (Cardigan)

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

Cunningham, G. (Islington S.)

Hoyle, Doug (Nelson)

Miller, Mrs. Millie (Ilford N.)

Cunningham, Dr. J. (Whiteh)

Huckfield, Les

Mitchell, R. C. (Soton, Itchen)

Dalyell, Tam

Hughes, Rt. Hon. C. (Anglesey)

Molloy, William

Davidson, Arthur

Hughes, Mark (Durham)

Moonman, Eric

Davies, Bryan (Enfield N.)

Hughes, Robert, (Aberdeen N.)

Morris, Alfred (Wythenshawe)

Davies, Denzil (Llanelli)

Hughes, Roy (Newport)

Morris, Charles R. (Openshaw)

Davies, Ifor (Gower)

Hunter, Adam

Morris, Rt. Hon. J. (Aberavon)

Davis, Clinton (Hackney C.)

Irvine, Rt. Hon. Sir A. (Edge Hill)

Moyle, Roland

Deakins, Eric

Irving, Rt. Hon. S. (Dartford)

Mulley, Rt. Hon. Frederick

Dean, Joseph (Leeds West)

Jackson, Colin (Brighouse)

Murray, Rt. Hon. Ronald King

de Freitas, Rt. Hon. Sir Geoffrey

Jackson, Miss Margaret (Lincoln)

Newens, Stanley

Dell, Rt. Hon. Edmund

Janner, Greville

Noble, Mike

Oakes, Gordon

Ryman, John

Torney, Tom

Ogden, Eric

Sandelson, Neville

Tuck, Raphael

O'Halloran, Michael

Sedgemore, Brian

Urwin, T. W.

Orbach, Maurice

Selby, Harry

Varley, Rt. Hon. Eric G.

Orme, Rt. Hon. Stanley

Shaw, Arnold (Ilford South)

Wainwright, Edwin (Dearne V.)

Ovenden, John

Sheldon, Rt. Hon. Robert

Wainwright, Richard (Colne V.)

Owen, Rt. Hon. Dr. David

Shore, Rt. Hon. Peter

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

Padley, Walter

Short, Mrs. Ren·e (Wolv NE)

Walker, Harold (Doncaster)

Palmer, Arthur

Silkin, Rt. Hon. John (Deptford)

Walker, Terry (Kingswood)

Pardoe, John

Silkin, Rt. Hon. S. C. (Dulwich)

Ward, Michael

Park, George

Silverman, Julius

Watkins, David

Parker, John

Skinner, Dennis

Watkinson, John

Parry, Robert

Small, William

Weetch, Ken

Pavitt, Laurie

Smith, Cyril (Rochdale)

Weitzman, David

Pendry, Tom

Smith, John (N Lanarkshire)

Wellbeloved, James

Penhaligon, David

Snape, Peter

White, Frank R. (Bury)

Perry, Ernest

Spearing, Nigel

White, James (Pollok)

Phipps, Dr. Colin

Spriggs, Leslie

Whitehead, Phillip

Prentice, Rt. Hon. Reg

Stallard, A. W.

Whitlock, William

Prescott, John

Steel, Rt. Hon. David

Willey, Rt. Hon. Frederick

Price, C. (Lewisham W.)

Stewart, Rt. Hon. M. (Fulham)

Williams, Rt. Hon. Alan (Swansea W.)

Price, William (Rugby)

Stoddart, David

Williams, Alan Lee (Hornch'ch)

Radice, Giles

Stott, Roger

Williams, Rt. Hon. Shirley (Hertford)

Rees, Rt. Hon. Merlyn (Leeds S.)

Strang, Gavin

Williams, Sir Thomas (Warrington)

Richardson, Miss Jo

Strauss, Rt. Hon. G. R.

Wilson, Alexander (Hamilton)

Roberts, Albert (Normanton)

Summerskill, Hon. Dr. Shirley

Wilson, Rt. Hon. Sir Harold (Huyton)

Roberts, Gwilym (Cannock)

Swain, Thomas

Wilson, William (Coventry SE)

Robinson, Geoffrey

Taylor, Mrs. Ann (Bolton W.)

Wise, Mrs. Audrey

Roderick, Caerwyn

Thomas, Jeffrey (Abertillery)

Woodall, Alec

Rodgers, George (Chorley)

Thomas, Mike (Newcastle E.)

Woof, Robert

Rodgers, Rt. Hon. William (Stockton)

Thomas, Ron (Bristol NW)

Wrigglesworth, Ian

Rooker, J. W.

Thorne, Stan (Preston South)

Young, David (Bolton E.)

Roper, John

Thorpe, Rt. Hon. Jeremy (N Devon)

Rose, Paul B.

Tierney, Sydney

TELLERS FOR THE NOES:

Ross, Stephen (Isle of Wight)

Tinn, James

Mr. Joseph Harper and

Ross, Rt. Hon. W. (Kilmarnock)

Tomlinson, John

Mr. James Hamilton

Rowlands, Ted

Tomney, Frank

Question accordingly negatived

ST. WULSTAN'S HOSPITAL, MALVERN
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Stoddart.]
10.14 p.m.
Mr. Michael Spicer rose—[Interruption.]
Mr. Speaker: Order. After that interruption caused by hon. Members leaving the Chamber following the Division, I must tell the House that I think it only fair to the hon. Member for Worcestershire, South (Mr. Spicer), who has the Adjournment debate, that I shall time the Adjournment from now.
10.17 p.m.
Mr. Spicer: It is very good of you, Mr. Speaker, to stop the clock on this matter, because we are moving from the absurd through the ridiculous up to the sublime to discuss the threatened closure of St. Wulstan's Hospital in Malvern, in my constituency.
I begin by comforting the Government with the thought that Early-Day Motion No. 35 has been signed by the Leader of the Liberal Party, so it will be OK in the view of the joint consultative committee when it no doubt comes before them. The motion has also been signed by the Leader of the Ulster Unionists and 82 other hon. Members of all parties.
I am sure that the Minister will be completely familiar with the background to the St. Wulstan's case. I understand that he has been discussing it this afternoon with the Labour Mental Health Committee, to which I shall refer later. St. Wulstan's Hospital is one of the world's leading hospitals in developing methods for rehabilitating very bad cases of mental illness. The attempt is made by the hospital to give mental patients the widest possible opportunities to engage in normal daily life, and especially to engage in the widest range of work situations, from secretarial to light industrial jobs.
The record of the hospital has been extremely good. Of the 1,200 patients admitted to St. Wulstan's since 1961, 40 per cent. of these very difficult cases have been returned to normal life outside, and
1420
90 per cent. enjoy a reasonably normal life working in the hospital. These numbers explain why parent hospitals in the West Midlands Region and other parts of the country have been referring a growing number of so-called hopeless cases to St. Wulstan's from all over the country.
In an Adjournment debate on 3rd March 1975 I said:
"The tragedy of this story so far is not the threat of closure itself—one assumes that the Minister will dismiss that out of hand—but the damage which has already been done to the morale and retention of good staff and the recruitment of new staff."—[Official Report. 3rd March 1975; Vol. 887, c. 1233.]
More than two years ago I was pleading for the Government to resolve the miserable uncertainty surrounding this great and unique hospital. Since that date there has been only one major development. The West Midlands Regional Health Authority has published a paper recommending the closure of St. Wulstan's. This so-called consultation document has created so much anger among doctors, patients, medical professional bodies, and, I understand, the Labour Mental Health Group, that it has been felt necessary to produce a detailed response. This will be published next week. A copy will be sent to the Minister of State and to the 82 hon. Members, from all political parties, who signed Early-Day Motion No. 35.
As to the unique international reputation which St. Wulstan's has gained in the field of mental rehabilitation, there is no doubt. Ever since I have represented Worcestershire, South in Parliament I have received a continuing stream of letters from formal organisations at home and abroad concerned with mental health, but also—and perhaps even more poignantly—from patients and relatives of patients all over the country who have benefited from the hospital's unique care and rehabilitation. From this mass of correspondence, I shall read out extracts from just two recent letters.
A patient writes:
"I have had just over twenty years in hospital and came here just over two years ago. Now, thanks to St. Wulstan's, I lead a very normal life. I have had 5 nervous breakdowns in my life (the first when I was 17) and very severe nervous trouble. I was at another hospital for over 13 years, and was never able to face going on holiday from there, but I have been away both years since being here and am going to Ilfracombe this year. I am now preparing to go

1421
out as a day patient eventually, and to getting a job when I am fit enough. Now I hardly know myself, I have changed so much these last two years."
Another patient says:
"What I wish to explain to you is how I myself have made excellent progress while I have been at St. Wulstan's, to such an extent that I am practically cured of my illness, which has pervaded me for so many years. I owe all this to the excellent work of the doctors, whose work is really worth admiring. I first started off as a very good domestic worker in one of the wards and after a short while one of the doctors found me a part-time job outside in Malvern and I am now doing very well. And after I have done another two months at the hostel, I will be found somewhere to live in Malvern. And better still, my boy friend and I will get married about August, as we are carefully saving most of our money between us. It is simply shocking to think that St. Wulstan's, which turns out such excellent work and does such excellent work for its patients, might have to close down. But for the benefit of all those who are not so lucky as to be housed outside, not only myself, but all of us most sincerely hope that the hospital will stay open."
The Government—in the person of two Ministers—the Foreign Secretary when he was Minister of State, and the present Minister of State—have, to be fair, consistently taken the line—and more recently given the impression of increasing commitment to it—that any recommendation from the regional health authority to close St. Wulstan's would not be accepted unless the Minister was thoroughly convinced that comparable rehabilitation facilities were available elsewhere for the present patients. On 14th March this year the Minister of State concluded a letter to me on this subject with the sentence:
"I can assure you that we will need to be thoroughly convinced that there are comparable facilities in other hospitals in the region before agreeing closure."
The argument has thus rightly focused on the question of comparable rehabilitation facilities. It is on this issue where the regional health authority document has been most misleading.
In its consultation document the RHA says:
"The reduction in overcrowding in psychiatric hospitals, improvements in staffing, and different methods of treatment, have radically increased the potential of other hospitals to undertake rehabilitation of the kind at present carried out by St. Wulstan's."
If, however, one looks rather more carefully at the document and turns, for instance, to the small print of Appendix E,
1422
which deals in detail with the capability of alternative hospitals to receive any patients if they have to leave St. Wulstan's, one finds immediately that the picture is very different from that foreseen by the large print at the beginning of the document.
For instance, if one takes Burton Road Hospital at Dudley, one finds the extraordinary statement that a
"complete rehabilitation service will be available providing the new Ridge Hill Hospital now being completed is fully funded and staffing levels are not restricted."
If one looks at more objective evidence than that provided by the regional health authority, the promises made by that authority about what will happen to the patients from St. Wulstan's begin to take on an appearance of total irresponsibility. So far as hospital services are concerned, a survey by MIND, published in June 1976, confirmed that
"psychiatric illness, affecting 600,000 people every year, is scandalously neglected in the health service"
and that
"rehabilitation schemes vary widely from hospital to hospital and many only pay lip-service to the idea of rehabilitation (possibly because of limited resources)."
I do not want to go on boring the House by quoting, but in a recent memorandum on St. Wulstan's the National Schizophrenia Fellowship said:
"The rehabilitation facilities which would be scattered throughout many hospitals, with lower priorities and without any expert team accustomed to work together, could in no way be regarded as adequate substitutes, individually or collectively, for St. Wulstan's."
Turning briefly to the other fundamental suggestion presented by the regional health authority, that St. Wulstan's patients could to a greater extent in future be treated within the community, this really does indicate that the authority is living in a fantasy world. All of us—and I am sure the Minister will accept this—who have had direct experience of the problems of mental rehabilitation, particularly in the West Midlands, know that the provision of so-called "community care" as a substitute for the work being undertaken, for instance in hospitals such as St Wulstan's, is, in practice, and in the present circumstances of scarce public resources, nothing more than a euphemism for throwing people back on to the streets.

1423
As the National Schizophrenia Fellowship says:
"It is wholly untrue to state (as the RHA's Consultation Document does) that as a matter of ' practical, professional experience ', the present ' emphasis is on treatment within the community ', since it is precisely in this field that the greatest failures, indeed disasters, are at present occurring."
The same point was made most effectively in a letter that I received only last week from the Mothers' Union in the Diocese of Worcester. It said:
"In the present situation of spending cuts, it seems likely that more patients will be returned by mental hospitals to their families, and the RHA's Consultation Document presupposes that all these patients have ' super families ' who can carry out the same work as the hospitals.
What happens in most families is started by the patient's refusal to take the necessary tablets, etc. when away from hospital care. Ageing and perhaps widowed parents struggle hopelessly on; brothers and sisters, sometimes married, are not prepared to shoulder the burden. Broken marriages and broken families are not unusual, especially in the case of schizophrenic patients. Then follows a gradual sad drift into lonely lodgings and eventually into vagrancy, Social workers are not always as successful as they sound on paper, and they now increasingly call for voluntary help. The ex-mental patient vagrant dies in a derelict building, or he finds himself at last in a geriatric ward of a mental hospital and the wheel comes full circle. Does the DHSS understand that this sorry picture is, for many patients, what a 'return to the home environment' means?"
That point has been confirmed by many other pieces of evidence, and certainly by most practical experience.
In his response to the Adjournment debate on 3rd March 1975 the then Under-Secretary of State accepted much of the case for St Wulstan's but said that the main argument against its continuance was that of cost. As I understand it, that may well be a continued argument. The present maximum estimate that I have come across on capital account for the continuance of St. Wulstan's is £618,000, of which £250,000 has already been allocated for a new nursing home, which anyone involved with the hospital thinks is not necessary. Indeed, £40,000 has already been allocated for immediate engineering works required. Therefore, we are talking of a maximum of just above £300,000. I am sure that the Minister will accept that the main point about St. Wulstan's is that it is not a lavish hospital but a collection of Second World War American Army huts in which a thriving
1424
community exists at relatively low cost to the community.
I cannot resist quoting again from the National Schizophrenia Fellowship, which states:
"The alternative costs of providing comparable rehabilitation facilities at parent hospitals are not quoted in the RHA document at all. The omission is unlikely to be accidental. In fact, it may well be less expensive to retain St. Wulstan's.'
Tragically the issue today is precisely the same as when I spoke on the subject in the House two years ago. The Government have rightly said that they will not close the hospital unless comparable facilities can be found. The regional health authority claims, without producing any evidence to this effect, that comparable facilities are available. Meanwhile the weeks of uncertainty turn into months, and the months into years. There is now a danger of the years turning into decades.
It is entirely due to the courage of the staff and the patients that the morale of St. Wulstan's has not been shattered in the past five years. It continues to carry out its unique role in the rehabilitation of mental patients and, extraordinarily and ironically, it has taken an increasing share of the serious mentally ill cases in the West Midlands.
The Government's role has been largely to wash their hands of the problem until the moment when the specific recommendation arrives from the regional health authority. I gather that tonight the Minister said to the Labour Mental Health Group that community health councils should be encouraged to prevent the recommendation ever reaching him. That is not good enough. The Government must start playing their role. They know quite well what the recommendation will be. At the very least there should have been officials from the Department already visiting the hospital.
The Minister now has a duty to set a time limit. The consultation ends on 23rd April. The hon. Gentleman should say that by the end of May he will take a decision. I cannot foresee any circumstances in which his decision can be anything other than to keep this great hospital open. There are no comparable facilities. It is a sham to pretend that there are. It brings the authorities concerned into disrepute that they are producing a document pretending, given

1425
current available resources, that they can create out of magic, or thin air, resources that do not exist. My priorities are to spend money on those who cannot help themselves, and above all that principle must be applied to the mentally ill.
10.34 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I congratulate the hon. Member for Worcestershire, South (Mr. Spicer) on securing the Adjournment debate and on the thoughtful way in which he has presented his argument in opposition to the proposed closure of St. Wulstan's Hospital. The hon. Gentleman has been tenacious in his defence of St. Wulstan's. He has written many letters to Ministers. He has asked several Questions and this is the second Adjournment debate that he has initiated on the issue.
As the hon. Gentleman emphasised, St. Wulstan's has a proud international record of achievement in the rehabilitation of the mentally ill. In the early 1960s, at a time when rehabilitation facilities were not as widespread or as fully developed as they are today, St. Wulstan's did pioneering work. It remained unique in the region and nationally. I know from the letters that the Department receives from former patients and the relatives of existing patients that the hospital is providing a good service and has many friends. In this context it seems paradoxical that we should now be discussing its closure.
Decisions on closure or change of use rest primarily with the appropriate health authority. In this case, where a hospital providing a regional service is involved, the appropriate authority is the regional health authority. After a great deal of consultation and consideration the West Midlands RHA asked the former Minister for Health, my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen), for agreement to proceed to formal consultations on closure. It did so because it was convinced that facilities for the rehabilitation of the mentally ill had developed in many psychiatric hospitals in the region, and that it was now no longer necessary to have a specialist psychiatric rehabilitation unit. It was also only too aware that, if St. Wulstan's was
1426
to continue, a considerable amount of money would have to be spent there in maintaining what, by all accounts, are pretty poor buildings.
The Government's long-term aim is the development of locally based services for the mentally ill. I stress "long-term". We believe that locally based services make it easier for the health and social services to co-operate, make services more accessible for the patients, and enable patients to stay in touch with their families. It therefore seemed reasonable to my right hon. Friend to allow the West Midlands Regional Health Authority to consult on closure, but he made it absolutely clear that the Secretary of State would want to take the final decision and that he would not agree closure unless it could be clearly demonstrated that the patients now at St. Wulstan's would not be disadvantaged.
I think it would be to the benefit of the House if I quoted from the letter that my right hon. Friend the Member for Devonport wrote to the hon. Gentleman on 12th April 1976 announcing that he had authorised the RHA to begin formal consultations. I quote:
"I have today authorised the Authority to begin formal consultations on closure, making it clear that this in no way prejudices the Secretary of State's eventual decision on closure. I have made it quite clear that the Secretary of State would only be prepared to consider closure if it can be demonstrated in detail that the St. Wulstan's in-patients could be transferred to other psychiatric hospitals with comparable rehabilitation facilities, and that adequate arrangements could be made for the St. Wulstan's day patients who now lodge in and around Malvern."
When the hon. Gentleman wrote to my hon. Friend the Member for Lewisham, East (Mr. Moyle) last December about the arrangements for day patients he told him that he would not support closure unless the day care facilities available to the St. Wulstan's day patients were broadly comparable with those that they now enjoy. Further, in answer to the hon. Gentleman's Parliamentary Question on 8th March this year, when he sought a firm assurance that St. Wulstan's would remain open unless comparable facilities for the rehabilitation of the mentally ill could be found elsewhere, my hon. Friend the Member for Lewisham, East gave an unequivocal answer "yes".

1427
Against this background of a belief that rehabilitation facilities for the mentally ill had developed within the region to such an extent that a specialised hospital for rehabilitation was no longer required, and in the full knowledge of the very tough criteria that my right hon. Friend has indicated would need to be satisfied, the regional health authority issued a detailed consultation document in January. This is in accordance with procedure that we have laid down and covers such matters as the reasons for the proposal, an evaluation of the possibilities of using the facilities for other purposes or the disposal of the site, implications for staff—of course their interests must be taken into account fully —the relationship between the closure or change of use and other developments and plans, and of course, the effect on patients who might be affected by the proposal.
In this case—the proposed closure of a regional specialty—comments have been invited within three months from all area health authorities and community health councils in the region, and from such bodies as local authorities, joint staff consultative committees and other staff organisations, family practitioner committees and local advisory committees.
Mr. Michael Spicer: Does the Minister accept that the problem is that people do not trust the regional health authority in this matter? Will he assure the House that he will at least conduct his own survey of comparable facilities?
Mr. Deakins: The hon. Gentleman has anticipated what I am about to say. I shall come to that point if there is time.
Hon. Members whose constituents would be affected have also been informed of the proposal. Those who oppose the proposal will have a number of channels through which to make known their views on all aspects of the proposed closure, including the matters of concern emphasised by the hon. Gentleman.
If the community health councils, which are given the opportunity to study the comments of the other bodies consulted and the regional health authority's views on those comments, object to the proposals, they are entitled to submit to the authority constructive and detailed counter proposals, paying full regard to
1428
the factors, including restraints on resources, which led the authority to make its original proposal. It is, of course, open to the community health councils to submit counter-proposals individually or, it they prefer, as a collective response. If the authority is unable to accept a counterproposal the matter will come to the Secretary of State for decision.
There are some who would say that the closure procedures I have described are too complex. Indeed, I know that in some quarters they are considered over-elaborate and a deterrent to the redeployment of resources with maximum speed. It is, of course, essential, particularly at this time of economic constraint, that there should be no unnecessary barriers to impede the cost-effective use of resources. On the other hand, the NHS must be responsive to the views of both patients and staff, and to hon. Members. Our system seeks to balance the need for speed with that for local and, where relevant, regional and national consultation. At present, therefore, the RHA are in the middle of a very elaborate formal consultation procedure, and we have made it quite clear that if it wishes to proceed with closure after considering the views of all those consulted, it must submit the matter to the Secretary of State for decision. He will, of course, take full account of all objections to the closure, and my hon. Friend the Minister of State for Health has undertaken to visit St. Wulstan's in order to give the Secretary of State his personal view of the situation should the RHA decide on closure. Further, because the matter seems to turn very largely on the issue of whether comparable facilities are available in psychiatric hospitals throughout the region—and this is the core of the argument—a multi-disciplinary team of my professional advisers—doctors, nurses and social workers—will be visiting St. Wulstan's, and most of the other hospitals concerned, to make an appraisal of the comparability of rehabilitation facilities in these hospitals.
As we are in the middle of a consultative process, and if the regional health authority wishes to proceed with closure the final decision will rest with the Secretary of State, it would be wrong at this stage for me to make any comment about the merits or otherwise of the regional health authority's proposal. I

1429
hope, however, that what I have said will make it quite clear to everyone involved that this is a proposal that we shall be looking at rigorously.
I have already referred to the pioneering work of St. Wulstan's and the high regard in which it is held by many who have been patients there, or who have relatives there. The hospital is undoubtedly providing a real service. As a
1430
Government we are anxious to see an improvement in services for the mentally ill, and we shall certainly not agree to close what is by all accounts a valuable facility unless we are sure that the rehabilitation units of other psychiatric hospitals in the region are providing a comparable standard of service.
Question put and agreed to.
Adjourned accordingly at eighteen minutes to Eleven o'clock.

Second Reading Committee
Wednesday 23rd March 1977

The Committee consisted of the following Members:

Mr. Richard Crawshaw (in the Chair)

Bates, Mr. Alf (Bebington and Ellesmere Port)

Havers, Sir Michael (Wimbledon)

Lyons, Mr. Edward (Bradford, West)

Bell, Mr. Ronald (Beaconsfield)

Miscampbell, Mr. Norman (Blackpool, North)

Bennett, Mr. Andrew F. (Stockport, North)

Radice, Mr. Giles (Chester-le-Street)

Budgen, Mr. Nick (Wolverhampton, South-West)

Sandelson, Mr. Neville (Hayes and Harlington)

Crowder, Mr. F. P. (Ruislip-Northwood)

Silkin, Mr. S. C. (Attorney-General)

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

Stradling Thomas, Mr. John (Monmouth)

Wilson, Mr. William (Coventry, South-East)

Fletcher-Cooke, Mr. Charles (Darwen)

Freud, Mr. Clement (Isle of Ely)

TORTS (INTERFERENCE WITH GOODS) BILL [Lords]
10.30 a.m.
The Attorney-General (Mr. S. C. Silkin): I beg to move,
That the Chairman do now report to the House that the Committee recommend that the Torts (Interference with Goods) Bill [Lords] ought to be read a Second time.
This Bill implements a report of the Law Reform Committee on the civil law relating to liability for the conversion, detinue and other interference with goods belonging to or in the possession of another person. Although its report was completed in June 1971, it is not, I hope, too late to thank the members of the Law Reform Committee for the work which they have done to simplify and clarify an important branch of our law which has always been a layman's trap and a law student's nightmare.
I am grateful also to the Opposition, irrespective of party, for their willingness to have the Bill considered in this Committee rather than on the Floor of the
1432
House. The Second Reading Committee procedure is particularly valuable in the case of a Bill of this nature, which has up to now attracted unanimous support from all quarters and which makes some modest and useful changes in the law.
In the other place—if I am in order in mentioning it, Mr. Crawshaw—the Second Reading debate took 32 minutes flat, and may have established a record in that the only speeches, four in all, were delivered by the present Lord Chancellor and two former Lord Chancellors. It may be that no other noble Lord understood the Bill. We cannot hope to emulate that fullness of distinction of speakers here. I say nothing about either the understanding or the time scale.
Steps have been taken to ensure that a sufficient number of copies of the report of the Law Reform Committee were available in the Vote Office, and I hope

1433
that hon. Members have had an opportunity of considering its recommendations. If so, they will find that, for the most part, the Bill implements the recommendations made in the report, although there are one or two respects in which it departs from it. That is, perhaps, only to be expected in a topic of such complexity, particularly as the Law Reform Committee did not have the benefit of the expert assistance of the parliamentary counsel to help it in its deliberations.
In that respect, the Law Reform Committee has not always been as well served as the Law Commission, and that is a read handicap. It also to some extent explains the interval between completion of the report and presentation of the Bill to Parliament. I have done a little calculation, and I have worked out that the interval is almost equally distributed between the present Government and their predecessors, so that on delay, at any rate, no party point can be made, except perhaps by the hon. Member for Isle of Ely (Mr. Freud), who represents the Liberal Party—were he here. Perhaps he is doing other, more important, things.
The law relating to civil liability for wrongful interference with goods in the possession or ownership of another has in practice caused few major problems, bearing in mind its complexity, its ancient origins and the considerable changes which have taken place in our society. The Law Reform Committee found that the old torts relating to goods were still of reasonably merchantable quality but that the law could be simplified and anomalies removed by reducing the number of separate torts and bringing them under a single umbrella.
The Committee thought also that the opportunity should be taken to clear away some relatively limited difficulties which had arisen in the administration of this branch of the law in the courts. Of those, the most important was the procedural law concerning proof of ownership, which lawyers sometimes describe as jus tertii —at any rate for those who have had the benefit of a classical education.
I refer, first, to the reduction in the number of separate torts. The Committee found that there were various overlapping remedies, founded on distinctions for which there is no sufficient warrant in modern circumstances. Paragraph 6 of
1434
the report illustrates some of the absurdities which the present law generates, particularly that different remedies depend on very fine distinctions.
The creation of a new unified tort is therefore suggested, to be described as "interference with goods", or similar words. I am not sure that I like the word "interference" in this context. It might be misunderstood, but it is the best word that we have managed to hit on so far. The intention was that a new unified tort should be created from the raw materials in the present law.
The main tort—which it is thought should not be codified—would be the tort of conversion, which, in essence, is an injury to the plaintiff's right to or title in goods which results in their permanent loss. For that wrong, the sole remedy now available is damages. A plaintiff who wishes to recover the goods themselves now has to sue in the tort of detinue. It does not seem sensible that two separate and distinct torts should be retained in the law merely because one of them enables a different remedy to be obtained. The Committee boldly proposed that detinue should be abolished and that the remedy of specific delivery should be made more generally available, irrespective of the form of action chosen by the plaintiff. The Bill achieves this in Clause 2, which, in the modern idiosyncratic style of parliamentary draftsmanship, in three words abolishes detinue for ever. Clause 3 provides for the wider form of judgment. It is not every day that a Committee of the House is asked to abolish an action in tort, but I hope it is accepted that the tort is not necessary.
Clause 2(2) restates, as a wrong for which an action lies in conversion, the only case known to the law where a plaintiff does not have an option between the two torts. It may interest the Committee to know that the tort of detinue very nearly perished in the eighteenth and early nineteenth centuries, because, until the Civil Procedure Act 1833, a defendant in an action for detinue could succeed by the process of waging his law. In the unlikely event of any hon. Member not knowing what waging one's law means, I should say that it means trial by compurgation. If anyone needs any further explanation, which I think highly unlikely, compurgation means establishing a case by bringing forward a number

1435
of witnesses—usually 12—who could swear to the truth of the defendant's case. The procedure might perhaps be adopted occasionally today, but I cannot recall having done so myself.
The Law Reform Committee suggested also that other torts concerned, principally trespass to goods and the action on a case for damage to a reversionary interest in goods, should be restated as part of the new unified tort. This part of the report has, unhappily, presented a certain number of drafting difficulties, and the Bill now before this Committee does not, abolish these relatively unimportant torts as the Committee proposed. Instead, they are referred to either by name, as in Clause 1(b), or in the compendious phrase in Clause 1(d), with the result that the Bill is able to extend to them the substantial degree; of common treatment which it provides for the various torts now to be grouped together under the collective name of wrongful interference.
I hope that the Committee will accept that the Bill is on the right lines in not attempting to achieve full codification of these rare and, it must be admitted, relatively unimportant torts. One advantage of the approach in the Bill, which provides for common treatment rather than complete unification, is that it has been possible to extend the number of the provisions in the Bill to the tort of negligence as it affects goods. This should help to ensure, as time goes on, that the differences between an action pleaded in negligence and an action pleaded on the basis of the strict liability provided for under the tort of wrongful interference should disappear wherever it is possible for them to do so. I am thinking here particularly of the rules about extinction of title upon satisfaction of a claim, with which Clause 5 deals.
So much for the overlapping remedies. The second main purpose of the Bill is, as I have said, to clear away some limited difficulties which have arisen in relation to the torts covered by the Bill. There is, perhaps, no common strand running through the various clauses, but I ought to mention the most important of the changes. This is to be found in the group of clauses, Clauses 7, 8 and 9, the general effect of which is to make the tort of conversion more apt to suit modern society with its complex system of ownership of personal property and,
1436
in particular, the widespread use of the hire-purchase contract.
The main defect of the present law, as analysed by the Law Reform Committee, is that it does not permit a defendant to lead evidence to show that the goods which are the subject matter of the plaintiff's claim do not belong to him. This rule is a development of the proposition that title to goods is a relative matter, and that a person with a better title to goods than another must be regarded by that other as having the full title to them even if he has not.
The Law Reform Committee showed how this presumption could work injustice and recommended that it should be abolished. The Bill achieves this in Clause 8(1), which provides that a defendant is entitled to show that a third party has a better right than the plaintiff to the goods. The fact that the defendant will be able to bring evidence to show that the plaintiff is not the true owner will mean that the court will have to determine all the respective claims concerning the goods at once. At present, one court may be dealing with an action by the owner of the goods against the wrongdoer for conversion, while another court is dealing with the claim of an intermediate owner, such as a bailee, as against the same wrongdoer—who could, in fact, be made to pay damages twice or more times over.
Clauses 7 and 8 provide the necessary machinery to enable the court to arrive at a result which is fair to all concerned, and Clause 9 enables all the separate proceedings to be joined together by removing any difficulty about jurisdiction.
Clause 10 deals with an isolated problem concerning co-ownership of goods, and Clause 11 makes a number of minor provisions all of which were suggested by the Law Reform Committee. Clauses 12 and 13 provide a new power of sale of goods in cases where the goods have not been collected. These clauses, and Schedule 1, simplify and enlarge the scheme for a power of sale which was conferred by the Disposal of Uncollected Goods Act 1952. That Act would be repealed.
The Bill has been generally welcomed by all concerned, and the Government moved amendments in another place in order to meet points helpfully taken on

1437
the Bill by the Law Society. My noble Friend has recently received representations from the Finance Houses Association, which will, I hope, lead to some minor amendments to meet points which the finance houses, too, have helpfully taken.
I conclude by expressing my appreciation, and that of the Government, to all concerned for the interest they have taken in the Bill, and I hope that the Committee will be willing to agree to the motion.
10.46 a.m.
Sir Michael Havers: I congratulate the Attorney-General on the skilful and remarkably economic manner in which he has introduced his Bill to us. I am sure he will forgive me if I say that at least some members of the Committee were surprised to see him here today. We thought that he might have been elsewhere advising on enforceability of agreements or, perhaps, warning the Cabinet against taking the small print as read. That may be the reason why the Solicitor-General is not here.
The remedy of jus tertii has always been one of my favourite topics in the law. I am not sure what that would be called if one were talking about the right of the fourth party—which again, might be an appropriate matter for consideration at the moment.
Specific delivery also is very apt. Ten o'clock tonight may see an example of specific delivery. Compurgation is

THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:

Crawshaw, Mr. Richard (Chairman)

Davidson, Mr. Arthur

Attorney-General, The

Havers, Sir Michael

Bates, Mr.

Miscampbell

Bennett, Mr. Andrew F.

Stradling Thomas, Mr. John

Budgen, Mr.

certainly appropriate—12 good men and true able to swear to the truth of the matter. If there are 13, does one have to abstain—or what?
I congratulate the Attorney-General on the way that the measure has been prepared. I congratulate the Law Reform Committee on its skilful recommendations. I made my own inquiries of the Law Society and the Bar Council, and I cannot find a suspicion of any criticism.
No doubt, there will be benefit also to law students and the dons, although not quite as much as might seem at first glance, since most of the other remedies will still exist. But students will be able to say that they need not bother with those as Parliament has produced a much more simple measure. I expect that one or two nasty examiners will still keep some of those other remedies up their sleeves in the hope that the students have missed them because Parliament has brought the law up to date. I warn students to have at least a passing knowledge of other remedies when they next sit their examinations.
We on this side welcome the Bill and are happy to support the motion.
Question put and agreed to.
Ordered,
That the Chairman do now report to the House that the Committee recommend that the Torts (Interference with Goods) Bill [Lords] ought to be read a Second time.
Committee rose at thirteen minutes to Eleven o'clock.

FOREIGN AND COMMONWEALTH AFFAIRS
  Cyprus
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  Falkland Islands
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  Conservative "Monthly News"
  Conservative "Monthly News"
  Rhodesia
  Rhodesia
  Greece
  Greece
HOME DEPARTMENT
  Television (Wales)
  Television (Wales)
  Penal Institutions
  Penal Institutions
  Surveillance Devices
  Surveillance Devices
  Parliamentary Electorates (London)
  Parliamentary Electorates (London)
  Privacy (Younger Committee's Recommendations)
  Privacy (Younger Committee's Recommendations)
  Deportation
  Deportation
  Broadcasting (Annan Report)
  Broadcasting (Annan Report)
HOUSE OF COMMONS
  Offices (Star Chamber Court)
  Offices (Star Chamber Court)
CIVIL SERVICE
  Royal Commission on the Environment (Sixth Report)
  Royal Commission on the Environment (Sixth Report)
  Pay Differentials
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DEFENCE
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EMPLOYMENT
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TRANSPORT
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ENVIRONMENT
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AGRICULTURE, FISHERIES AND FOOD
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  COMMONWEALTH PRIME MINISTERS' CONFERENCE
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NATIONAL FINANCE
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Preamble
The House met at half-past two of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Salisbury):
The LORD CHANCELLOR On the Woolsack.

LEGISLATIVE PROGRAMME
The Earl of KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will consider, as a gesture in Jubilee Year, introducing no further Public Bills this Session in the light of the current state of their legislative programme.
The LORD PRIVY SEAL (Lord Peart): No, my Lords.
The Earl of KINNOULL: My Lords, I thank the noble Lord the Leader for that brief but precise reply. Is he aware that, in Her Majesty's Government's zeal for an energetic legislative programme, they have over the last three years inflicted on the community over 6,696 pages on the Statute Book and have averaged over 80 Public Bills in the last two Sessions, while the average for the previous 10 years was barely 50? Does the noble Lord accept that there is general concern about the excessive amount of legislation?
Lord PEART: My Lords, I cannot accept that. Many of these measures are important—for example, those on fishery limits and, if I may say so, that on the aircraft and shipbuilding industry, and others. I think that noble Lords would rather work hard.
Lord CAMPBELL of CROY: My Lords, if the amount of legislation in the last Session is regarded as normal, is the noble Lord aware that, whatever happens in another place tonight, that is a service which we hope will never be resumed?
Lord PEART: My Lords, the noble Lord should not count his chickens before they are hatched.
Lord BOWDEN: My Lords, in view of the enormous amount of legislation that is going on the Statute Book, is it possible that the traditional maxim which noble and learned Lords and Members of this House have always used—that ignorance of the law is no excuse—can for the time being be forgotten?
Baroness FAITHFULL: My Lords, will the noble Lord the Leader of the House consider whether, instead of passing more laws, we could have consolidation of a number of areas of law? In particular I refer to the various Acts relating to children and young persons, of which there are many. It would be very much easier for everyone if those measures were consolidated.
Lord PEART: My Lords, that is a very constructive point and I agree with the noble Baroness. It is sensible to have consolidation where it is possible. Apart from that, it eases the load on the legislative machine.
Lord CARRINGTON: My Lords, would the noble Lord not agree that it would have been more proper for my noble friend to put this Question to the Liberal Party?
Lord PEART: My Lords, I am not aware of the consequences of such a remark but, whatever happens in another place, I believe that the Government will survive.
Lord INGLEWOOD: My Lords, is the noble Lord satisfied that this legislation is not putting an intolerable burden on the police and others in this country whose responsibility it is to ensure that the law is observed?
Lord PEART: My Lords, no, I do not think so. The noble Lord has often, quite rightly, pressed for action in many sections of our society. I do not think that it is a burden on the police.
Viscount MONCK: My Lords, in view of the noble Lord's first reply to this Question, will he consider introducing a

513
Bill today, which will be passed through all its stages, to stop the awfully cold draught that is blowing around my legs?
Lord PEART: My Lords, I shall have a word with the authorities. It is not coming from this side!

NUCLEAR TESTS: UN DISARMAMENT CONFERENCE
2.35 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what was the response of their representative at the Geneva United Nations Disarmament Conference to the draft treaty tabled by the Soviet Union for the banning of all nuclear weapons tests, in view of the statement by the United Nations Mission in their Note to the Secretary-General, Dr. Waldheim, proposing a generally acceptable compromise agreement on the observance of the treaty.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the British representative at the United Nations First Committee said on 29th November last year that the Soviet Union's proposal on on-site inspection should be examined seriously, but we were not convinced that their draft treaty provided the answers to the problems which must be solved before a comprehensive test ban is concluded.
Lord BROCKWAY: My Lords, is this issue not becoming immediately practical? Has not the Soviet Union now agreed to verification and inspection? Has the Minister seen the statement which was issued by Mr. Carter last night, in association with the Prime Minister of Japan, which says that nuclear testing in all environments should be banned promptly?
Lord GORONWY-ROBERTS: My Lords, we are certainly in very close touch with the Administration of the United States on this as on other important matters. We are in full accord with their desire to see an effective ban on tests.
514
The operative word for them, as for us—and indeed for the entire world—is "effective". We are committed, as are other countries, to full disarmament in the nuclear field, including a comprehensive test ban. However, it is essential that before such a ban can be effective, verification and supervision of peaceful nuclear explosions must, in turn, be effective. That is what we are working towards.
Lord BROCKWAY: My Lords, has not the Soviet Union now said three times that it accepts inspection and verification? What is being done in order to ensure that that promise is effective?
Lord GORONWY-ROBERTS: My Lords, what the Soviet Union has said is in its draft treaty on the subject, particularly under Article 1(3). If my noble friend would like to look at this, I can let him have a copy.
Lord BROCKWAY: I have one, my Lords.
Lord GORONWY-ROBERTS: My Lords, if my noble friend has one he will be aware that the provisions for verification in the Soviet proposed treaty rest on an invitation from the challenged State, according to whether it is satisfied that there are appropriate grounds for inspection. Such an inspection:
"shall be carried out according to rules established by the inviting State Party".
We do not think that that is a proper and effective basis for verification. Therefore, when my noble friend says that the Soviet Government have proposed verification a number of times, indeed they have, but it is verification which is dangerously inadequate for the purposes of a genuine comprehensive test ban.

BRITISH LEYLAND: TOOLMAKERS' STRIKE
2.38 p.m.
The Earl of HALSBURY: 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 how many workers at British Leyland

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and their suppliers were laid off as a result of the toolmakers' strike and how many hours of work so lost by this strike will be included in the published statistics of manhours lost through industrial action.
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, Her Majesty's Government do not have precise figures of the number of workers laid off as a result of the toolmakers' dispute at all plants, including those not themselves directly involved in the dispute. However, the number of those laid off at British Leyland plants appear to be approximately 45,000. Statistics to be published by the Department of Employment in due course will include working days lost both directly and indirectly at the British Leyland plants where the toolmakers' dispute occurred but not the resulting losses which occurred outside those British Leyland plants. It is not the Department's practice to publish figures for named individual companies.
The Earl of HALSBURY: My Lords, I thank the Minister for that Answer. Do other countries publish corresponding figures and do these figures justify the often made comment that hours of work lost in Britain compare favourably with those in other countries? If that is the case, why is it that those other countries refer to these losses as "the British disease"?
Lord McCLUSKEY: My Lords, I cannot account for the use of such a term. It may have something to do with the fact that they try to run this country down, as indeed many in this country attempt to do. May I say in the general context of this matter that perhaps too many people do that. I am certainly not suggesting that the noble Earl does. However, there is wide agreement between countries in the OECD that they exclude secondary lay-offs from these statistics, simply because it is virtually impossible to make any accurate and meaningful computation of what are truly attributable to the strike as secondary lay-offs.
Lord LEE of NEWTON: My Lords, can my noble and learned friend make
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any estimate of the amount of man-hours saved by the highly responsible attitude of the executive committee of the AUEW led by its president?
Lord McCLUSKEY: My Lords, I cannot give any estimate of that. What I can say is that my right honourable friend the Secretary of State in another place rightly paid tribute to the considerable efforts that were made by the union leader referred to and other union leaders, and one regrets that here this action has been unofficial and unconstitutional.
Baroness ELLES: My Lords, would the Minister agree that, regardless of the numbers of people who were laid off because of the strike, it is the productivity that has gone down in relation to the productivity of other countries? In fact the productivity in this country is less than it was during the three-day week three years ago.
Lord McCLUSKEY: My Lords, I would not agree with that, and I am answering questions about British Leyland.
Lord LEATHERLAND: My Lords, does my noble and learned friend agree that perhaps one of the reasons why productivity is higher in the other European countries than it is here is because wages there are twice as much as they are here?
Lord McCLUSKEY: My Lords, I feel that that is a much wider question than the one which I am called upon to answer.
Lord THOMAS: My Lords, is the noble and learned Lord aware that the so-called toolmakers of Leyland in fact do not make tools at all, neither do they make jigs, fixtures, or dies? They are a self-appointed, self-named body. Is not this a matter that the TUC ought to look at, and get the proper nomenclature of their constituents?
Lord McCLUSKEY: My Lords, again I cannot feel that that is a matter arising out of the need to publish statistics about man-hours lost through the toolmakers' strike.
Lord HALE: My Lords, could the noble and learned Lord say why we hear

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quite so much about British Leyland and nothing at all about Ferranti, who have made a wonderful recovery under the direction of the same Ryder Committee that has some responsibility for British Leyland, and was able to report quite recently that they have now accumulated sufficient funds to complete their own programme of reinvestment without any call on the national Exchequer? Could this possibly be due to the fact that the headquarters are in Oldham?
Lord McCLUSKEY: My Lords, I am sure that we are obliged to my noble friend for reminding us of one of the successes. We concentrate too often on the apparent failures.

IDENTIFICATION: DEVLIN REPORT WORKING GROUP
2.43 p.m.
Lord DRUMALBYN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have yet received the report of the Working Party on the Devlin Report on Identification.
The MINISTER of STATE, SCOTTISH OFFICE (Lord Kirkhill): My Lords, not yet. The Working Group, which was appointed in August 1976, is still receiving evidence. It is expected that the Group will report later this year.
Lord DRUMALBYN: My Lords, when the Group does report how will the Secretary of State handle the report? Will he publish it in the same way as the Devlin Report was published?
Lord KIRKHILL: My Lords, I have not yet been told by my right honourable friend the Secretary of State for Scotland quite how he intends to handle the report. I will certainly convey the remarks of the noble Lord, Lord Drumalbyn, to him later this afternoon.

A NATIONAL RECOVERY PROGRAMME
2.44 p.m.
Lord HANKEY Lord HANKEY rose to call attention to the need for a national stabilisation and recovery programme around which a political consensus on national recovery can be built; and to move for Papers. The noble Lord said: My Lords, I hope to convince all sides of your Lordships' House on three main points with which I will deal in turn. First, that we cannot recover the economic stability and prosperity which our gifted but ailing country deserves unless we cease living from one stop-go measure to another, from one stopgap to another, and adopt a longer term stabilisation and recovery programme. As in Western Germany, I say "programme", not "plan".
Secondly, I shall show that in spite of all the deep political differences which divide us—and we are particularly conscious of these today—there is in fact a growing measure of agreement about the way we have to go, and therefore about the very broad contents of such a programme. Thirdly, I hope to show that no programme can endure, or work, unless the main political Parties, the CBI and the TUC, all agree its main points and co-operate to ensure its success. There must be the same sort of consensus as we have about Europe, or NATO, or agriculture, or even Northern Ireland. Our deep and abiding common interest in our national recovery makes this, I believe, a much less Utopian ambition than it sounds, but it requires greatness of leadership—I repeat, greatness of leadership.
Now I come to my first point, the absolute need for a longer-term programme. I was the last official chairman of OEEC, and the chairman of the economic policy committee of OEEC and OECD for five and a half years, so I can assure your Lordships from experience that the idea of a national stabilisation and recovery programme is not new. It has been applied many times with success in other countries. We have not hitherto had one. But, as we all know, our economy has for decades past been very slow to recover from cyclical recessions. We have repeatedly tried expanding demand by various measures. We have recovered

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more slowly and suffered more inflation than our main competitors. The pound has in consequence fallen repeatedly, especially in recent years.
Neither of our main Parties can disclaim responsibility, though each, disregarding the mote in its own eye, points to the shocking beam of timber in the eye of the other. So here we are, still slowly losing our share of world trade, the pound propped up with immense foreign loans, with a still unacceptable and indeed alarming degree of inflation and unemployment and, worse still, a deplorably low level of morale among our own people.
In the light of our long-term decline I thought the fascinating economic debate we had here on 26th January showed a considerable degree of euphoria about our real situation. Our debate took place soon after the Government, to their great credit, had arranged the IMF drawing facilities, the mobilisation of funds through the general arrangement to borrow, and through the Central Banks the safety net for the sterling balances.
All that at least gives us just a little time to work out together how we may recover. But history and sad experience show that the pound is most stable when our economy is in recession. As soon as demand expands, artificially or even naturally, imports grow rapidly and there is a great strain on the balance of payments. We have seen this over and over again, yet now we already have a strain on the balance of payments even while we are in recession. It cost us some £900 million between June and December 1976. What will happen to us when world trade recovers and our own trade recovers, as I hope it may soon do? Are we going to use up the IMF loan in the same way? Is it sensible to use our new oil income this way, when successive economic half-measures and palliatives have landed us in this shocking mess?
Look at our real needs more broadly. It is essential, in order to avoid inflation, that our budget should more or less be brought into balance, or at least that any deficit should be most carefully handled. Personally, I think that Professor Friedman has convinced a great many people that this country cannot run a budget deficit of £8,000 million to £11,000 million per
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annum, either for transfer or other payments, and yet avoid inflation.
We must not distribute wealth which we have not created and earned. Eventually we must get the monetary equation right and we have a very long way to go. But economics is not only about money; it is about people, and we cannot escape that. It is not possible to reduce public expenditure quickly without causing more unemployment and more social hardship. It must be done over a period of years and we must foresee how it is going to be done. On the other side of the account, our direct taxes are already so high that incontestably they destroy personal initiative and effort; but to correct this we cannot increase indirect taxes suddenly without raising prices and endangering the Social Contract. These corrections must also come about over a period of years.
The return to financial rectitude must be balanced by the development of productive industry and the creation of much more employment. For that development it is vital that we provide more profits and more incentives for skill, hard work and genius, and we must find the necessary capital. Even with these possible increased incentives, it will take a number of years to increase industrial investment, raise our quite remarkably low productivity and grow out of the bad habits which cause it. In order to face these longer-and medium-term problems, a great many people will now agree that there should be a properly co-ordinated and agreed programme for stabilisation and recovery; an agreed route back to prosperity and proper employment which everybody, including our creditors, can understand and which will give everyone more confidence to work hard and to invest.
This brings me to my second point; that is, what should such a recovery programme contain? On this point, a rather encouraging preliminary approach to a consensus already seems to be emerging. In Cmnd. 6721 we have recently been given forecasts of public expenditure for two or three years ahead—not very encouraging, but at least they exist. The problem of domestic credit expansion and money supply is being tackled, as the Prime Minister explained in another place on 15th December. The Government, the CBI and the TUC are

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more or less agreed on the need for an industrial strategy, on giving priority to the needs of industry for more investment and better productivity, and even for better profits to make all this possible.
Starting from Cmnd. 6315 on industrial strategy, in November 1975, there have been important discussions in the National Economic Development Council involving the CBI and the TUC. I hope the Leader of the House can tell us what it all amounts to. What agreed conclusions and action has the analytical framework led to? There is also a considerable degree of willingness in the TUC to see how we can avoid another bout of wage-induced price rises by discussing some form of renewed Social Contract for the year beginning in August 1977; I need not elaborate on the difficulties, notably over differentials, but that is also very encouraging.
Thus, the present degree of agreement is slightly encouraging, but do not let us be under any illusion; our need is for an agreed programme of at least five years, a programme to be constantly studied, brought up to date and implemented. We must be completely realistic about this. The trade unions will never agree to better profits, higher productivity, fewer industrial disputes, fewer restrictive practices and less waste of employed manpower while there is so much unemployment. This must take some years and much continued persistence and hard work by union leaders, shop stewards and management. The coming expansion of world trade will help, but we must live down the thoroughly bad reputation which we have earned abroad.
The point I am trying to drive home is that trade union co-operation is, in the world in which we live, indispensable to secure the effective recovery of our economy. We must already give the trade unions much credit for beginning to move along this road. It is not easy for them. One reason why it is hard to secure a new Social Contract and to secure a real increase in productivity is that no one—not Parliament, the political Parties, the TUC nor the CBI—can really see at present just where we are going. We stagger from one crisis to another and the Government's present medium-term programme is too short and too obscure.
Surely it would all be less controversial if the present approach to co-operation could be carried forward into an agreed five-year programme. Trade unions and shop stewards could then foresee the effect of allowing new machines to work productively, employers could see the way forward to investing productively, and the rise of British wages, prices and productivity to European levels, which must be, and can only be, achieved over a considerable period of years, could then be seen in long-term perspective. In that case, I am sure the business community would willingly invest much more in this country.
However, it cannot be done at once, now. It cannot be done just with promises by any single political Party. Nobody knows whether any given Party will be in power in a year's time—or in a day's time, for that matter—so that a Social Contract for one Party with one side of industry is only half a step towards what we need. Industry needs to see five or ten years ahead if it is to make the investments our people must have in order to earn modern salaries and wages. It is vital that the politicians take account of this. How, therefore, can politicians build up the trust which is now so signally absent? in my view, the only way that can be done is by drawing up a serious, practical stabilisation and recovery programme agreed upon by the main Parties and by both sides of industry. This means dropping all the inter-Party strife which impresses no one outside Westminster. We must drop all the Tweedledee and Tweedle-dummery, at least in all matters affecting the recovery programme. There should at least be a political consensus about the matter, like we have for NATO, for Europe and for agriculture. I know the Leader of the House understands this; he was feted by both the National Farmers' Union and the Agricultural Workers' Union when he ceased to be Secretary of State for Agriculture. Can he help us now to follow that excellent precedent and achieve a still wider consensus?
With North Sea oil coming, if we squander this additional revenue the way we have used our resources in recent years it will not help us much. North Sea oil gives us an opportunity which is not to be missed. It is a very good reason why it is

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possible to hope for success with a five-year recovery programme such as I have described; only provided we use it the right way in co-operation with each other in industry, the TUC and Parliament. Now—I repeat, now—is the time to be preparing such a stabilisation and recovery programme by carrying forward and expanding the elements of agreement which exist and which encourage us to move forward.
I come to my third point: how do we get the kind of political consensus which we seem to need if we are ever to recover? For the nuts and bolts of this, I believe that the machinery lies more or less ready to hand. We should develop the National Economic Development Council into the necessary organism with additional staff from industry and the Civil Service, especially the Treasury. Neddy combines the Government, the CBI and the TUC. It has Little Neddies for a great many industries. The Government are represented, as indeed they must be, but Neddy would provide a useful barrier between Government and industry. We must at all costs prevent the kind of restrictive delays, short-term interference and general confusion of responsibility which Government control of the nationalised industries has produced. That is a hard thing to say, but I recommend your Lordships to study, if you have not already done so, the report on United Kingdom nationalised industries issued by the National Economic Development Council in November 1976. We shall never get anywhere until we have a better system for the control of these fundamental industries.
If we could have the kind of concensus that I advocate, the Conservatives and the Liberals should, I suggest, be represented on the National Economic Development Council, also. But, of course, it would be no good having all parties represented there if they were more interested in spiking each other in the eye than in helping this country to recover, so naturally, we come back to relations between the political Parties.
I do not agree with those who say that none our great political Parties can now rule Britain. I believe that either of the main Parties can certainly do so, but that, equally, either can prevent the other from ruling Britain successfully. It is
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high time that we recognised that, in the dreadful pass to which this country has been reduced, we really cannot afford to let that continue. Speaking strictly as a Cross-Bencher I just do not believe that Labour alone can possibly get the investment and co-operation needed to set this country up again. It does not matter whether one goes to the middle or top management, to skilled workers on the shopfloor or the boards of nationalised and private companies, hospitals, universities, the professions or the ports. The feeling of our leaders and our men of genius and practical skill seems to be one of bewilderment if not of despair. That has been made worse by the talk in the Labour Party of more nationalisations to come.
But, let us suppose that we have an Election and the Conservatives come to power, what then? As I think I have already shown, the degree of co-operation needed from the unions to get this ailing country to stand on its feet is so great that one cannot conceive that the Conservatives could enjoy it adequately by themselves. This is not altogether the fault of the Conservatives: one reason is that, if there is no political consensus, members of the Labour Party will inevitably make sure that trade union co-operation is not forthcoming either on the big questions like the Social Contract or the incomes policy, or on the shopfloor. The problem of Labour Party finance alone would make this inevitable.
Finally, do not forget that the harder the opposition Parties press the Labour Party, the more the Labour Party and trade unions are forced to rely on the support of their Leftist fringe of Marxists and not so crypto-Communists, who will continue to extort sociologically divisive and economically damaging measures as the price of their support. I am sure that many of these Leftists do not want a mixed economy to succeed.
I apologise for mentioning such delicate Party matters, especially today when there is a vital debate going on in another place. But we can no longer afford to ignore these issues and they can be mentioned only from these Benches. I should like to say that I think that they will continue to be important, whatever the result of the debate in another place tonight. To put it constructively, I believe that the Conservatives and

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Liberals must be in the political consensus and must be parties to the recovery programme, because otherwise our people and institutions will not have confidence to invest nor will they feel sure that the private sector and private rights will not be trampled on. The Labour Party and trade unions must equally be full parties to this, because otherwise a great many people on the shopfloor will not be sure that they are getting a fair deal and that their rights will be respected. I hope that the Liberals will be in it in any case. Both sides of industry will, I think, have to be asked very firmly to respect collective bargains and works agreements if integrated industries like motor cars and shipbuilding are to survive in this country. Who can now successfully ask that of the shopfloor except the TUC? —and, may I say, a TUC with a proper set of teeth and really full information to back up their bite. We have seen only a little of it under British Leyland, and the same will apply to the CBI.
Of course there will be many disagreements within the consensus; many sacred cows will have to be slaughtered. I shall not list them now, but I am very conscious of how extremely political are most questions of economic policy. Some will appear to be insoluble by agreement, but I urge that our political system must move with the times. We now have a very sophisticated public. Everyone is educated, more or less. The television informs everyone about current affairs. It would be easy to use the BBC and ITV for, say, a week to inform everybody about some controversial question, and hold a referendum after a week. I am sure that we should get a sensible answer, as we did over Europe. We do not need weeks of campaigning and expense, but our people do not at present feel that they are properly consulted. One does not have to cross the Scottish Border to discover that. Personally, I think the insistence on carrying out Party Manifestoes years after the Election and in quite different circumstances is insulting to the sophistication and intelligence of our people. I believe that a series of mini-referenda would please our nation, give sensible results and make agreements easier to achieve and carry out both in industry and in Westminster. It would certainly be more democratic. It works quite well in other countries.
To conclude, if my analysis and suggestions have caused your Lordships pain, I am very sorry. Experienced diplomats have long recognised that no argument is more devastating than the truth. I have the greatest respect and regard for the leaders of all our great Parties, but the moment of truth has now arrived. My remarks are intended to be entirely constructive and I earnestly hope that this debate will also be constructive and that we may avoid shallow complacency or just blaming the other side. I hope that your Lordships may be able to suggest how our political leaders may, in spite of past and present clashes, be brought together at least on these issues. Can we create a current of opinion that would bring it about in spite of the harsh words that are exchanged in another place? We narrowly avoided a terrible crisis last November: it may well be much worse next time. I hope that a catalyst can be found. We have to see to that somehow.
We all have a much greater interest in the survival and recovery of our country, with its magnificent history and tradition, its abundant present genius and massive common sense, than in seeing any one side in the political arena just beaten down by the other. Our present predicament requires real greatness of leadership and a firm determination to correct the faults of recent decades. I believe that our leaders, whom I know and admire, have the necessary qualities to achieve together the reconstruction of our country, if only the Parties can mend their ways.
There is an old inscription in the ancient parish church of Rye in Sussex which seems to me to give us all the good advice we require:
"Upon the wreckage of thy yesterday
Design the structure of tomorrow;
Lay strong cornerstones of purpose and prepare
Great blocks of wisdom cut from past despair;
Shape mighty pillars of resolve, to sit
Deep in the tear-wet mortar of regret;
Work on with patience though thy toil be slow,
Yet day by day thy edifice shall grow.
Believe in God, in thine own self believe;
All that thou desirest thou shalt achieve."
My Lords, I beg to move for Papers.
3.10 p.m.
The Earl of GOWRIE: My Lords, it would be naive of us to imagine that the

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eyes and ears of the country are on this House and this debate today. I am sorry that the noble Lord, Lord Hankey, was both timely and unfortunate in drawing for his Motion a day of high drama in another place, because if I may say so, and as I think the long list of speakers attests, the need for a debate a little removed from the heat of political battle is obvious and useful, and the noble Lord has had many interesting and relevant things to say. But one of the ironies of the present political situation—and speaking for myself I have little doubt that the Government will in fact survive the vote of no confidence tonight—is that confrontation between the Opposition Parties and the Government Party has been acutest just at the time that the Government, ineffectively, reluctantly and much too late, have in fact adopted the kind of policies which we on this side have advocated since the autumn of 1973.
We came to the conclusions to which the Government are now coming 3½ years ago. We came to them the hard way, and as the result of bitter experience, and we came to them reluctantly. It is a myth that Governments of any political complexion do not approve of raising and spending public money. There is much in this country that needs public money spent on it. Look at Heathrow Airport, as a gateway to a trading nation, for instance. "Abandon hope all ye who enter here", is what its muddle and mess seems to say. Consider the wasteland of our dockland areas, to take another example drawn from London; and remember, my Lords, that the South of England remains a rich and prosperous country when compared with huge areas of the Midlands, the North country, Scotland and of course Northern Ireland. Senior Ministers of all political persuasions in this country are generally men of experience and good will and well capable of identifying national needs and trying to direct national resources towards them. But as a Labour Minister said, not a Tory Minister—and how much we all regret his passing—"The party is over now."
I make this point because the noble Lord, Lord Hankey, has called for some kind of consensus where the general management of our political economy is concerned. I take it that that is not so
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very different from what my right honourable friend Sir Keith Joseph has called the common ground. Put very briefly, this view asks that our adversary politics in this country take place on the battleground of distributing, and not creating, wealth. Labour would become the Party of apportioning income throughout the nation, whether by wage policies or by high direct taxes, or by a combination of the two. Conservatives would become the Party of high incentives, high earnings, but also of course of higher prices, as they shifted the tax burden from direct to purchase taxes and progressively phased out price restrictions and price subsidies. What the Liberals would do I rather doubt, after this evening, we shall ever get a chance to see. Mr. Pardoe dislikes the Conservatives emotionally, but leans towards us intellectually. Mr. Steel is, in my view, a nice unreconstructed young Keynsian. The common ground would be some agreement between the Parties as to what levels of unemployment were broadly acceptable, or I should say bearable, and absolute agreement between the Parties as to what levels of money supply, including of course what chance for credit expansion, were actually to be possible.
My Lords, I have to say that I do not think that this kind of common ground is at present possible. I think that it could be desirable. I believe that it would go a long way towards creating a sufficiently stable political climate for the industrial investment we all agree that we need. I think that men of good will, like those who are taking part in this debate today, should strain themselves to achieve it. But I do not think that it is at present possible. To say why, and to argue what we should try to achieve in order that a common ground might one day become possible, let me return for a brief moment to the present political situation.
The Labour Government have had three years in which to make a start on achieving —and I quote:
"an irreversible shift in wealth towards work people and their families",
which they promised lay at the core of their politics. In the debate on the Address after the General Election of March 1974, we on these Benches told them that they would actually preside over a significant deterioration in the standard of living of

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all the people. How many of us are now not workers? To adapt a phrase of the noble Lord, Lord Shawcross, we are all workers now.
But even assuming that some workers are more equal than others, there has been in the last three years a significant deterioration in the living standards of the traditional working class. Their earnings have been centrally determined—whether by Statute or under the Social Contract is not relevant. Prices have been subject to compensatory restraint, but few would argue that the net effect has protected the traditional working class, since price controls are of obvious benefit to the better off. The social benefits which workers are said to demand across the board, but which in actuality only the politicised union leadership demands across the board, have combined with price subsidies to inflate the currency. More accurately, I should say that you cannot keep this kind of balloon in the air without inflating the currency.
This domestic inflation has been added to imported inflation and so we have had to watch profitability, investment, and therefore jobs float out of the window. As if that were not enough, the erosion of money values is in itself a form of taxation. So those of the traditional working class who have not lost, or who are not going to lose their jobs, are caught badly by the tax man. When Mr. Healey cuts taxation next Tuesday, if he survives. I hope that all of your Lordships who are in the Gallery will add 15 or 16, or even, to adapt the words of Mr. Roy Hattersley, 21 per cent. to the existing levels of taxation. Are we really so arrogant that we do not expect that workers and their wives cannot do that sum for themselves?
My Lords, the irony of the situation is that the Government know all this. They are this evening asking for a mandate to abandon Socialism. They are reducing, or pretending to reduce, taxation, cutting the public sector borrowing requirement, imposing cash ceilings, lopping £5,000 million off central expenditure. They are behaving like that wicked enemy of the working class, that well-known scourge of the Soviet Union, that creator of industrial chaos and confrontation—Mrs. Thatcher. They are instituting, in short, Tory policies and are enlisting Liberal and Ulster Unionist support to do so. With this mention of Ulster—
Lord LEE of NEWTON: My Lords, in that case, why is there a vote of no confidence in the Government today?
The Earl of GOWRIE: My Lords, the vote of no confidence today arises because the Parliamentary Labour Party refused to vote for the public spending cuts.
With the mention of Ulster I should like to make a short parenthetical point. It has been reported that the Prime Minister and Mr. Foot have promised additional Army men and material to Ulster in return for Unionist support or abstention. I trust that this is a rumour only. We on these Benches utterly reject, whatever the exigencies of minority rule, any involvement of the Army in political horse-trading. One of our greatest national traditions is an apolitical army, and if this kind of thing starts to happen none of us can be certain how long the Army may be content to remain out of politics. I hope that the Lord Privy Seal will reassure us when he comes to wind up the debate.
The Government are not instituting Tory policies because they have been listening to us in the way that they have recently been listening to the Liberals. If they were prepared to listen to us they would be making a controlled and gradual change of direction, not a lurch to the Right which is altogether incompatible with legislation imposed by the Left. They are making the change because the rate of inflation which high State spending helps to generate has infuriated the Government's traditional supporters, and because there has in fact been a shift of wealth away from the individual wage-earner to the State. The individual wage-earner rejects the identification which true Socialists make of his interests with the State's interests. They are not the same thing in a mixed economy. The far Left is quite clear about this. My old friend Mr. Paul Foot is quite clear about it as he campaigns in Stechford. The far Left wishes to achieve a worker-corporation State. That is quite different from, and quite incompatible with, a shift in wealth towards workers achieved by high State taxation and high State spending.
My Lords, it might at this point be said that perhaps the Government are learning their lessons; that perhaps we and the Liberals are teaching them something;

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and that some kind of consensus is therefore emerging. We have some evidence that what the City would like would be a permanently hamstrung Labour Government: too near to the unions for there to be industrial confrontation or disruption, too far from any majority in the House of Commons to be able to interfere with the political equilibrium which a battered private sector now needs.
My Lords, there is a flaw, unfortunately, in the logic underlying this desire. The Government may have learned some lessons, but the Labour Party has not. The confrontation in another place this evening, as I said earlier in response to the noble Lord, Lord Lee of Newton, is not the doing of my right honourable friend Mrs. Thatcher. It came about because the Government could only get the Parliamentary Party to vote to avoid a General Election, not to approve of the Government's policy on spending. I am afraid, therefore, that even if the consequences of Socialism force Labour Governments to change direction, the causes, which is to say the ideology of State control, will be with our political system for a long while to come. Acknowledging this, and the difficulties which will face this Labour Government if they try to sustain any overt or tacit alliance with other Parties for very long, where do we, who favour the establishment of some common ground, go from here?
My Lords, I am going to be very brief as I have said it all before, and even those of your Lordships who agree with me, let alone those who do not, will not want it all again. I believe that we need a Government—and at present it could only be a Conservative Government—prepared to give more say (not absolute say, but much more say) in the choice and control of expenditure to the individual wage-earner. If you like, this is an irreversible shift in the disposal of real resources to workpeople and their families. For this to be possible, the air must be let out, at a controlled and orderly rate, of the inflationary balloon. In West Germany, for instance, responsibility for this is really in the hands of the Bundesbank; that is to say, it is to some degree out of governmental, and therefore out of political, hands. For this shift in wealth to be possible, wages, again in a controlled and orderly way, must be allowed to rise,
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and I would say rise considerably. I have argued before that the problem in this country is not high wages but low wages and high State benefit spending.
The problem also facing our country is that the habits and institutions which grew out of one phase of industrial civilisation are now interfering badly with another phase. What I want to see is a high wage, low benefit economy, rather than a low wage and high benefit economy —and our high benefits, of course, are wastefully administered and applied. I want to see lower taxes and tax ceilings. The net result will be that prices will rise, because we cannot redirect the social wage towards those that need it rather than those that do not without some increases in purchase taxes. But, my Lords, such price rises will not in themselves be inflationary as progressively reduced State spending comes in line with a predetermined and prepublicised lowering of money ceilings.
My Lords, I believe that this shift would be irreversible. It would be irreversible because of the difficulty any political Party would have in campaigning in favour of wage controls and in favour of increased taxes. It would therefore become common ground, and our Party contests, alignments and re-alignments could take place within a new framework of political necessity. We have got so used to high taxes and low wages that we—and I think that by this "we" I mean the professional and educated middle classes—are suspicious of those who seek to make changes. Behind most modern social democratic or liberal attitudes (with a small "1") there still lies a great deal of old-fashioned Victorian or Bloomsbury paternalism and élitism: a refusal to trust the mass of people with their own spending decisions.
I have said before that a programme of this nature is radical and would take more than one Parliament to accomplish. But it does have great political attractions, and I say to the noble Lord, Lord Hankey, that, whether or not we like it, politics will for some time be the context in which economic management decisions are taken in this country. Labour Governments, if not the Party, recognise it as the only alternative to wage control, and would therefore find some political difficulties in opposing it when they, once more,

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were in opposition. It is in line with the Conservative philosophy of greater freedom of choice and greater self-reliance. It would be acceptable, surely, to shop stewards, since it stimulates shop-floor choices by contrasting benefits with cash. It coincides with strong public sentiments, particularly among workers, that the present welfare system attracts those who are capable of working as well as the temporarily deprived or the needy. It might redress the balance, if only a little, between the State and the family. But, my Lords, because this programme is radical it is necessarily political. It can be put into effect only by people who believe in it; and once it is there, it will be politically hard to undo. I agree with the noble Lord, Lord Hankey, that we need a measure of consensus, but we need also the courage of our political convictions to get it.
3.27 p.m.
Lord McNAIR: My Lords, the Motion calls for a consensus, and I am very glad to have found at least one thing on which I can agree with the noble Earl, Lord Gowrie. I agree with him that the noble Lord, Lord Hankey, is to be commiserated with on the coincidence of his Motion with events elsewhere in the building. I think this is a great pity, because inevitably it will mean that less attention will be paid to anything that is said here, despite the fact that Lord Hankey's Motion may well in the long term be more important, just as it is certainly less contentious, than any other Motion being moved in any other part of the Palace today. I suggest that we would do well to resist the temptation to try to take part vicariously in that other debate, and that we should stick as closely as possible to the terms of our Motion and hope to avoid the political double entendre.
It is true that we do not know what may happen tonight. It is true that we could be on the brink of a General Election. My Lords, we have had ten of those since the war; and yet here we are, agreed, I suspect, almost unanimously, on the need for some sort of national recovery programme—a programme for national stabilisation and recovery, to get the wording right. Something must have destabilised us, and there must be something from which we need to recover.
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I doubt very much that an 11th General Election at this moment would make very much difference to that. If I may translate the admirably positive wording of the Motion into negative terms, I suggest that the noble Lord, Lord Hankey, is moving a Motion of no confidence, not in Her Majesty's Government but in our whole machinery of Government, quite regardless of who sits where.
Perhaps there are two positions from which one might have arrived at this Motion, two alternative viewpoints. There is the view that we are facing a quite exceptional crisis almost comparable with a war and that, therefore, we should take quite exceptional measures, a grand coalition, a Government of national union or some such device, for a limited period until the crisis is over and thereafter we can all safely revert to our former ways. That is one view. The other view, I suggest—and this is my own—is that the morbidity in the body politic, which, after all, has been apparent to some of us for at least 20 years, is caused by, or at least seriously aggravated by, the virtual obsolescence of almost every part of the political machinery that we have. I suspect that this has been a large part of our trouble ever since the war; that we have been using the wrong tools for the job, outdated mechanisms and structures; that we failed to note that our political and economic instruments are unsuited to their purposes and that, even when we have noticed, we have failed to agree on what to do about it.
May I remind your Lordships of a few examples. We seldom stop talking about the need to reform your Lordships' House. I hope I am not saying anything that I ought not to say when I suggest that this is not the only House which, in the jargon of the trade, is ripe for modernisation. And our Civil Service—is it still the envy of the world? I doubt it. I think that we still have the best civil servants, the men and women; but are they selected, organised and deployed in the best possible way? I doubt that very much. I pass over our financial institutions and, in general, our industrial structure because I know that my noble friend Lord Rochester is going to speak about this side of the question.
However, I cannot resist a passing mention of what seems to me to be one

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of the most curious ironies of my lifetime. At the end of the war, the British trade union movement played a very notable and commendable part in re-establishing and reorganising the trade unions in West Germany. They had been debauched and destroyed by Hitler and his war and we started them off again. In doing so we gave the West Germans, I suggest, a far more logical, workable union structure than we have ourselves. Here it seems to me that too many of our trade unions are still the prisoners of their own history. I ask this in a friendly way. Could not the Labour Party—and, after all, they have won six out of the 10 General Elections since the war—perhaps have done a little more to encourage the reorganisation and streamlining of our union movement? I say this in no spirit of hostility but because I cannot believe that the multiplicity of unions which we have is in the interests of anybody except a very few officials.
My Lords, among the possibly obsolescent institutions which may be impeding our progress towards Utopia, I have mentioned so far this House, the House of Commons, the Civil Service and, to a certain extent, the trade unions; but what of our political Parties? I am not concerned with our internal machinery, our penny-farthings or, to use a metaphor more appropriate in the case of the Liberal Party, our treadmill. These defects are, in the vernacular, our funeral —they do not affect the average man on the Clapham omnibus who, I should remind your Lordships, has more sense than to belong to any of our Parties. Nor, I think, do these internal defects much affect our national problems. The much more serious criticism of our political Parties is surely that they simply do not reflect the divisions of opinion in the population. The boundaries between Parties are artificial and arbitrary and I think there have been signs in the last few years that they are beginning to break down. There is quite a lot more that I could say on this subject, but there are reasons why I should perhaps leave it at that.
What is more, I have been speaking, I see, for eight minutes and I have not yet mentioned electoral reform. Is that a record? I do not know; but I know that it would be an illogical as well as a
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surprising omission if I did not mention it at all. If we are to have an agreed programme of stabilisation and recovery, we must first get our Parliamentary arithmetic right. We cannot ignore the disciplines of the Division lobbies. May I digress for a brief moment. On these Benches we are frequently rebuked because it is said that our colleagues in another place failed to respond to an invitation from Mr. Heath in early March 1974. Quite apart from the political issues and the details of any offer that may or may not have been made, the arithmetic then was entirely wrong—296 Conservatives plus 14 Liberals came to 310, leaving 325 on the other side. This simple fact seems often to be forgotten.
To return to the present—or, perhaps I should say, to the future—I do not see how we can hope for agreement on any programme lasting the full term of a Parliament, or perhaps longer than that, until we have first ensured that the Parliament, as elected, shall more or less accurately reflect the opinions of the electors. I find it difficult to see how any democrat could strongly disagree with that: one vote, one value. This we shall never achieve so long as we continue to use the deliberately distorting mechanism of the "first past the post" electoral system.
There is always a danger when Liberals speak about electoral reform that we shall give the impression that we regard it as some kind of modern equivalent of the Philosopher's Stone, a magic formula, a panacea for all our ills. Of course, it is nothing of the sort. But many of us, I myself, and I think a growing number of non-Liberals, see electoral reform as an essential pre-condition for any recovery from our chronic political diseases. Given that essential pre-condition, I believe that the concept of the noble Lord, Lord Hankey, of an agreed programme of national recovery becomes a practical, and indeed a most desirable, proposition and I believe it would receive consistent support from these Benches.
3.40 p.m.
Lord HOUGHTON of SOWERBY: My Lords, although it is very early in this debate, I am sure that the noble Lord Lord Hankey, must already have learned a

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bitter lesson. He must surely realise that the moment the Cross-Bench dream is paraded before a political assembly, the moment he uses the word "consensus", political strife breaks out. That is precisely what has happened this afternoon. The noble Earl, Lord Gowrie made a purely political speech. He borrowed the notes that Mrs. Thatcher was going to use in the House of Commons this afternoon. He gave a mild blessing to the Labour Government, half honing that it might survive, because he said that the Labour Government had come nearer to the Conservative policies which they have been advocating since 1973. So the condition of consensus in the Conservative mind is that others should agree with them. Of course when Mr. Heath, in his search for a consensus, was coming nearer to what the Labour Party was thinking his followers deserted him, he lost the Election, and then they threw him out. That was his reward for an attempt to reach a political consensus.
This, I am afraid, is a disheartening quest that the noble Lord, Lord Hankey, has embarked upon. We all seek solutions to problems outside ourselves. We look for some kind of grandiose political pepper-pot that we can sprinkle over all the ills of mankind and all our economic shortcomings and our political mistakes, hoping that somehow it will pep things up and there will be a response to the spice of political inspiration. It is all a dream. I wish it were not so. But if we are going to look at the possibilities of this stabilisation and national recovery programme, we have to consider what are the conditions for it.
I believe that what we need more than a recovery programme—and there are dozens of programmes of various kinds already—is the will to recover. This is something in the minds of all of us and in the activities of all of us. What an enormous difference it would make to our economic prospects if everybody—all of us—did the job in hand more efficiently! What an enormous difference that would make! One does not need a programme or plan; all one needs is the individual resolve to do one's work better than one did it yesterday. This is not beyond the capacity of human beings. There is plenty of room for it, and we know that.
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How does one get this inspiration which will bring people to this new pitch of enthusiasm for the future of the nation? This is what we are really after. We have ourselves the ability, the genius and the experience, for recovery. We are not novices, we have been at it for hundreds of years, surviving, working out new institutions, evolving new modes of life, new aspects of community association, and so on. Yet we appear to have lost this grasp and grip upon our affairs. Why is that? Many reasons for it have been ascribed. I do not think that it helps to go into them too deeply because we have to look to the future. What are we going to do tomorrow? If many people could lose their memories a little more it might help. It is not only the Irish who have good memories; many British people have good memories, too. They harbour grievances which belong to the past.
What we need is a common purpose strong enough to inspire a common effort, and it is not self-evident, as the noble Earl, Lord Gowrie, said, that the conditions for this desirable state of the nation exist at the moment. There are wide differences of political aims and social purposes. We have different political groups in the country thinking very differently about the same things. There are wide differences of opinion even about common aims. Your Lordships have only to look at the Labour Party and the Conservative Party to find that there are wide differences of opinion in those Parties about common aims, let alone the differences of opinion about the aims themselves.
Have we the political and electoral system to provide a satisfactory base, a satisfactory political base, a satisfactory Parliamentary base, for this consensus? Does our electoral system yield to the conditions in Parliamentary and political terms which would enable us to express this common purpose? Where do we begin on electoral reform? What about "first past the post?" What about proportional representation? One has only to mention those two items to find immediately that consensus has gone for a "Burton". There are differences about electoral reform; there are differences on these matters. There are political interests involved and vested interests involved.

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Let us look at the state of the political Parties. Our politics are divided in industrial as well as political terms. In this country our politics follow the management-worker conflict more closely than is done anywhere else in Europe. What is more, that great divide, that partition of the nation—and it is a partition of the nation—is separately financed by those who support that partition and who want to maintain that partition. A committee's report, which tried to moderate the financial support for the political and industrial divide, was met with scorn from the Benches opposite.
Nowhere else in Europe is any political Party tied, as our Labour Party is tied, to the trade union movement. I do not refer only to the Labour Party, because in Western Germany, when State aid for the political Parties was introduced, it was to break the hold of industry upon the Conservative elements in the political system. Are we getting any nearer the consensus, my Lords? Am I going along the right path or am I just "stirring it up", as the noble Earl, Lord Gowrie, did a few minutes ago? I believe there will be more health in our politics when the principal Parties cease to rely to a disproportionate extent, as they do at the moment, upon the money of those who want to maintain the great political and industrial divide in Britain. We shall see what happens.
I come next to the industrial structure of the community, from where the wealth comes. This is the front line. After all, you can sweep up the litter and keep the nation tidy—I am all in favour of doing so—but the wealth is going to come from industry, from drive, from initiative, from export, from ingenuity; all the qualities that go to make up the strength of an industrial nation. Those nations which have not got those qualities will never become great industrial nations until they have them.
What, then, are we doing to make the front line efficient, able to withstand attack, able to carry our export drive and our expansion of the British industrial activity throughout the world? What are we doing about that? Let us first look at industrial relations. Dare I mention the word, "Bullock"? Have we got a consensus on Bullock? Hands up all those who feel there is a consensus on Bullock—and I do not put my own hand
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up, either—because here we obviously have an attempt to find the answer to a most complex situation, and one can only try to move towards it. The difficulty, of course, is that you cannot really get towards a consensus on industrial relations until you have got a better consensus on the condition and structure of our industrial society.
Are we for the mixed economy or are we against it? The noble Earl, Lord Gowrie, repeated the word "Socialism" about half a dozen times, as if we had got it—or even as if the present Labour Government were trying to achieve it. The truth of the matter is that these are relative terms: they are easy words to use for a broad line of thought. But I thought the Labour Government had advanced towards Conservative thinking. The noble Earl, Lord Gowrie, said that a few moments ago.
I think that one of the points on which the Labour Government have advanced towards Conservative thinking is on the desire to promote the prosperity and efficiency of the mixed economy. We want to take away some of the bitterness and some of the divisive nature of the ideological struggle about the future structure of industry. Even Socialists do not want Socialism which would mean the surrender of freedom and the absorption into a fully collectivised State, with all that implies. We see that in operation in other countries, and we have to beware of some of the consequences of collectivisation. Freedom and collective human happiness, a more equal distribution of wealth, the recognition of the dignity of man and the promotion of the health and welfare of families and children; you can call all this Socialism if you like, but these are humanitarian aims and human desires. There is nothing reprehensible, socially, politically or morally in seeking to achieve purposes of that kind.
The truth of the matter is that Socialism, in its ultimate expression, is lofty and noble. It is only when man gets hold of it and applies it politically and endeavours to surround it by all the restrictions of censorship, for example, and the eradication of opposition, that he turns the noble concept into a tyranny. The noble Lord, Lord Mottistone, is going to speak himself in a few moments and I am in full flood—
Lord MOTTISTONE: My Lords, would the noble Lord not agree—
Several noble Lords: Order, order!
Lord HOUGHTON of SOWERBY: I say that it is possible for political divisions to do serious harm to unexceptionable social and political aims. If we are going to look at the mixed economy and the promotion of private industry alongside State enterprise—that is really what we have at the present moment, which is why I call it "mixed"—what are we going to do in practical terms? What about taxation? Are we agreed on taxation? Do we think that taxation is bearing too heavily upon industry or upon individuals? If so, what should be done to provide a remedy? Do we think that the level of direct taxation is too steep or too heavy? If so, are we in favour of a switch to indirect taxation, which of course has entirely different economic effects? Is there any consensus there? Could we even get agreement on my proposition that it is time to consider whether it is worthwhile retaining company taxation at all? Should we convert what is now company taxation into company investment—all of it? Is it worthwhile considering what taxation does to stock valuation and stock appreciation in its mild or its more acute forms? That is where taxation assumes that what you have in stock you have already sold—and you have not—and that after selling it you have made a profit (which you have not) and out of the profits you can pay the tax, but you have not got the money. These fictions go through our taxation system. Could we get an agreement even on that small patch of the taxation system? These are the problems we are up against all the time.
How do we achieve this common purpose? What are the conditions for achieving it? Shall we just take those matters which sow the seed of considerable discontent at the present time and try to remove what may be the most obvious or serious obstacles to getting a consensus? I remember the late Lord Avon when he was Foreign Secretary saying:
"The problems of the world are so numerous and so complex that to try to deal with them all in one grand sweep of foreign policy, pacification and restoration and international confidence is beyond the power of men. Let us then find where the
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sharp corners are. Can we find a limited area of conspicuous problems that we could perhaps find a remedy for?"
The noble Lord, Lord Hankey, did not really detail where these sharp corners are. He provided, so to speak, "the clergyman's introduction" to the great moral and political lesson regarding what we were to do. That was the inspiration; but later on during the service the offertory will go round and we shall be asked to contribute to the great stabilisation and recovery programme. I do not think the response is going to be very generous, because I do not think that many noble Lords will feel that the noble Earl, Lord Halsbury—I beg his pardon, the noble Lord, Lord Hankey—has pointed the way to Heaven. He has not shown us the way, and I believe that he is putting to the House a proposition which is beyond our capacity.
I have mentioned the Party political system and electoral reform. I have mentioned industrial relations and taxation. I would further mention investment in industry. Are we reaching a consensus whereby State investment in industry is not some kind of political delinquency? When the State invests in something, is it to be called, "State intervention "or" State interference"? Is it to be called, "State aid"? What is it to be called? Should it be ruled out or is it to be welcomed? Have we a consensus on that? And so one could go on in this field of economic as well as political difficulty. The formidable nature of the problem and its forbidding prospects lead me to sit down with as inconclusive an observation as the noble Earl, Lord Halsbury—again, I beg his pardon, the noble Lord, Lord Hankey. I can only say that if he is as baffled as I am then we are both in the same boat; but I think I see some of the individual problems more clearly than he does.
Viscount BARRINGTON: My Lords, before the noble Lord sits down, may we have a brief consensus on who is the noble Earl, Lord Halsbury, who is the noble Lord, Lord Hankey, and who is the noble Lord, Lord Houghton, because there seemed to be some slight confusion at the end of the last speech. I feel we can all agree that they have three admirable propositions to put, but they are not the same.
4 p.m.
Lord O'BRIEN of LOTHBURY: My Lords, what an admirable speech your Lordships have just heard! I noticed that it woke up the schoolboys in the Gallery, and in the end it was too strong for them, so they left. It also made me come to the conclusion that there is no substitute for commencing life in the other place, and I therefore grieve over a misused life. But I will do my best.
In opening this debate with a notable speech, the noble Lord, Lord Hankey, conceded that the Motion standing in his name might be held to express somewhat Utopian aspirations. He claimed, however, to see a growing measure of consensus about what we need to do to secure the national recovery which we all so earnestly desire. I, too, see signs of a growing consensus and, like the noble Lord, Lord Hankey, derive some hope from it; and I persist in that notion despite the speeches by the noble Earl, Lord Gowrie, and the noble Lord, Lord Houghton, which made me for a moment think that I was rather a silly billy, and that I had better go home and write my speech again. But, as I say, I still have some hope.
I think it is true that, ever since 1964, at any rate, until fairly recently, it seemed increasingly doubtful whether the essential political support would be forthcoming for the continued successful existence of the private sector of the economy. Politicians repeatedly complained—and I have heard such complaints in your Lordships' House —that the private sector had failed the nation., while they persisted in policies which increasingly undermined that sector's confidence in the prospects of a viable future. At the same time, on all sides, we saw the fruits of past nationalisation and, for the most part, how sour they were—large bureaucratic machines heavily overmanned, for the most part immune from the discipline of the competitive market place, and increasingly insensitive to the needs and convenience of the consumer. Yet the way we were going seemed to lead further down this path, to the satisfaction, no doubt, of the small minority of Left-Wing Socialists, but to the dismay of everyone else. Foreign confidence in us, in our political and economic future, was damagingly impaired.
Today, I think that the climate is a great deal better. This is not because of
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any radical improvement in our economic circumstances; we still have to wait for that. It is because the mixed economy is no longer under the immediate threat that it so recently was. Responsible politicians, and Ministers in particular, have seen the light—or at least some of it. Likewise, so have the trade unions, who realise now that they themselves were helping, through excessive wage demands and low productivity, to create the unemployment which very properly is their greatest enemy. Attitudes all round, it seems to me, have become more responsible, more thoughtful and more realistic. Surely no Prime Minister could have made a more frank and realistic appraisal of our situation and needs than Mr. Callaghan did at the last Labour Party conference. The Government's economic policies have, for the most part, been tailored accordingly. A Conservative Government might do it better, and perhaps with more conviction, but it would have to do very much the same as is being done now.
So I think one may claim that there is now the makings of a consensus. Market opinion recognises this. I believe that such hopeful signs as have been seen in the market arise more from a feeling that there are the makings of a consensus than from the improvement in our economic position. Of course, the debate between the expansionists and the deflationists, the Keynesians and the Friedmanites, still goes on, in both main political Parties and elsewhere. I can understand and sympathise with the impatience of the expansionists with a régime which condemns the economy to a protracted period of stagnation and high unemployment. But previous unwise expansions, in this and other countries, have been largely responsible for producing both the inflation and the unemployment which we now have.
We have, as I see it, no alternative but to submit to restraint until reasonable price stability is restored. The lesson of the postwar years is that the proper control of the money supply is a continuous vital necessity. I do not say, as some do, that provided the supply of money is effectively controlled no other policy action is necessary. But I do say that if money is not controlled all other policies will be rendered futile.

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In this connection, perhaps I may venture an aside and a comment on the claim of the nationalisers that their little game would cause no harm, so far as the money supply was concerned. That it would in a general sense, if, for example, they laid their hands on the banks and the insurance companies, there can to my mind be no doubt. But that is another matter. I want today to examine the argument that, however large the sums involved in an act of nationalisation, the transaction has no effect on the money supply, because only a transfer payment is involved. That there is a transfer payment, in the first instance, is perfectly true. Her Majesty's Government take over the shares of the private holders and give them gilt-edged securities in exchange. This would almost certainly be a reasonably long-term stock. Past experience, even in happier times than today, shows that a large proportion of those forcibly parted from their shares in exchange for gilt-edged securities swiftly dump the latter on the market. The consequences for the gilt-edged market would be highly damaging, not to say demoralising, unless the authorities stepped in to absorb the heavy pressure of sales, as in the past they have always done.
Such action requires cash to pay for the stock. Her Majesty's Government supplies the cash by borrowing it, in the first instance, on Treasury Bills. This increases the public sector borrowing requirement, and thus the problem of keeping the money supply under control. The larger the operation, the bigger the problem involved, and your Lordships can imagine that taking over large banks and insurance companies would be a massive operation. I hope that those who think that it can be done like a conjuring trick will bear this point in mind. For this, and other more important reasons, I hope that we shall hear little or nothing more about further nationalisation in the future. My own experience outside the political field suggests to me that it provides neither efficiency, nor service, nor improved labour relations, and I am sure that the general public is completely disenchanted with it. If we are to move ahead with any confidence, we must have pretty general acceptance of the role of the private sector as the main dynamic element in the economy, and all sections of the community must co-operate to make it so.
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Having reached this point in my remarks, it is hard to go on without mentioning the Bullock Report, though I realise that it has already been debated by your Lordships on two occasions. I have already said that, in my view, the implementation of the majority report would be a disaster of the first magnitude. Happily, that now seems unlikely to come about. But the increased participation and involvement of labour in the running of business and industry is, I am sure, vitally important. I have seen many governmental attempts to improve the efficiency of industry. I have tried to involve institutional shareholders to the same end. Neither has had more than partial success, although I am glad to see that the institutions are becoming more effective than they were.
Clearly, those who work in industry are the most powerful force. I should like to see that power exercised more constructively and less destructively. I was much impressed by the speech of the noble Lord, Lord Douglass of Cleveland, in this House last Thursday. I have long favoured statutory works consultative councils, and was much encouraged to hear a man of his great experience speak so strongly in favour of them. I must say I look forward to the day when a workforce goes on strike because machines or manpower are being used inefficiently. That is the kind of spur which management need and we should really be on our way if they got it.
The only way to achieve a real increase in the prosperity of our people lies in growth in the output of the United Kingdom economy. Growth from expansionary policies would, on past experience, be inflationary, short-lived and lead to the familiar grinding stop. Somehow, without the stimulus of sharp expansion, we must achieve a sharp increase in productivity and, if I may spell it out, that is in output per person employed. In far too many of our important industries, using virtually the same machinery as our competitors abroad, our productivity is dramatically lower than what they achieve. Lack of capital investment is not the trouble but inefficient work practices and a lack of common purpose. I would not put the blame for that on one side; it is shared by everyone. Participation and cooperation between labour and management could produce radical improvement.

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The benefits of this in increased and competitive output and in increased profit should be fairly shared with the labour force. This is the only way in which we can escape from the low wage economy which we now are.
I conclude, therefore, that the British economy is now in less danger of revolutionary change. There still remains the prospect of continuing oscillation of power between political Parties whose central economic philosophies are too far apart to provide the assurance of a sufficiently stable background of industrial and fiscal policy to encourage sensible long-term planning. But even here I see a narrowing of the differences rather than the reverse. To this hopeful conclusion I would only add the cautionary note that industry and commerce cannot operate effectively for very long in the face of rapid rates of inflation if that inflation is treated as a purely temporary aberration best dealt with by suppressing its symptoms. Prices must be allowed to adapt to rising costs if a collapse of employment and investment is not to follow.
4.12 p.m.
Lord HUNT: My Lords, I am not qualified to follow the noble Lord, Lord O'Brien of Lothbury, who has given us his expert views on the economic measures necessary to promote a programme of national economy, nor will I follow other noble Lords who have spoken of the need for administrative changes, for electoral change, and so on. Poised as we are for the moment of truth which is shortly to be revealed in the other place, perhaps it would be unrealistic, tempting fortune and unwise to speak at this moment of a consensus being reached on these matters. What matters to me much more is the programme and the power to enforce a programme for national recovery than the search for this elusive word, "consensus".
I will presume to follow the noble Lord, Lord Houghton of Sowerby, whom I am sorry to see has just left his seat because I so much agreed with a great deal of what he had to say. The noble Lord, Lord Houghton of Sowerby, touched on the matter of industrial relations. We have heard quite a lot about industrial relations in the recent past in the light of
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the strike at British Leyland and the strike at The Times, and also in connection with the Bullock Report. However, there is one point which has not been made in recent times—in this House, at any rate—and which needs to be made and I should like to make it now. I am going to put it in the form not of an assertion but of a question to those Members of this House who, unlike myself, are directly in contact with British industry or who are closely informed about it, which I am not.
I question whether relations between managements and those who are euphemistically called "the workforce" are anything like so bad, in general, as the general impression created in the minds of the great majority of the British public by the news we receive about the industrial scene. Is it not that the focus and emphasis is almost invariably concentrated on the minority of bad examples—important, no doubt, and serious though those examples are?
I should like to quote from a speech made on 27th January by Mr. Edward Pickering, the Chairman of the Mirror Group of newspapers when he was taking part in a discussion organised by the Industrial Society. Mr. Pickering had this to say:
"I meet a large cross-section of people in British industry. I rarely hear a good word about our reporting of it",
and, knowing Mr. Pickering, I am sure that he is speaking not about the reporting by the Mirror Group of Newspapers but about the reporting by the national Press as a whole. He went on to say:
"Directors and managers complain to me bitterly about our treatment of industrial troubles. We concentrate, they say, on conflict—rarely on achievement… Equally trade unions complain to us that the balance of comment, particularly in the Press, is loaded against them".
Mr. Pickering finished by saying:
"That complaint is valid".
I will leave it there. It would be quite improper for me, as a member of a Royal Commission which is shortly to report on the Press, to take it any further. However, it seems to me that that admission, coming from someone who is so highly placed in our newspaper industry, is significant and has a bearing on what we are speaking about today; that is, the

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climate of opinion about our industry both at home and among our friends, our rivals and our enemies abroad. Whether that statement is true or false, it is quite refreshing occasionally to hear the other side of the story.
I listened with great interest and encouragement the other evening to Mr. Peter Griffiths, the Managing Director of Chrysler Motors, who spoke in a Party political broadcast about the really excellent industrial relations which, he said, have obtained in that great motor empire since their troubles of a year or two ago. What a pity that it had to be left to a Party political broadcast, since perhaps they enjoy a rather low credibility rating in the public mind, to convey that good news to the public!
Not having had first-hand industrial experience myself but speaking with some experience of management and human relations in other spheres of activity, I will presume to postulate to your Lordships a few ancient truths which should be seen as the background to any kind of programme for national recovery. They are ancient truths but they bear repetition, because we seem for ever to be forgetting them. The first point is that management—no matter in what context, whether it be industrial, social, political, services and even sport, and about the latter two I have some experience—must manage and be firm. This will continue to be true in whatever kind of society we manage to create in future and, more immediately, in whatever forms of industrial democracy emerge from the debate initiated by Lord Bullock. No matter who the managers are and how the directors arrive at the boardroom table, it is their duty and right to make decisions, to make them promptly and to stick to them. Weakness in that quarter can lead only to anarchy. Weakness will be exploited and it is people who want anarchy who will exploit it.
The second ancient truth is that there must be self-discipline within the workforce. That means by and within the union movement. Legislation in the area of industrial relations has properly and predictably proved to be a disastrous failure, which risked bringing the law itself into disrepute. However, the corollary, the only alternative to that, is that industrial action, indulged in unofficially and
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persisted with in the face of union instructions to the contrary, must be dealt with by the rules of the union, and dealt with firmly. Weakness in that quarter also spells anarchy, and the vast majority of trade unionists in this country do not want that, either.
The third of my ancient truths is that we need to capitalise on youth. This means to rejuvenate industry, to inject fresh life into it from the junior ranks. I cannot speak with authority or knowledge about the application of this principle to the higher echelons of industry, though I get the impression of a slightly more youthful image among some other leading industrial countries, to say nothing of the developing nations. But I take the point made by the noble Lord, Lord Rochester, in a recent debate on unemployment when he suggested that it was better for those who had reached the age of 60 to retire than that there should be unemployment among young people. That goes just as much for the less qualified and the less skilled as it does for the young graduates.
We simply must move towards earlier retirement—perhaps at the age of 55, perhaps lower—as the trend towards labour-saving technology gathers pace and as the developing nations become more industrialised. This creates enormous social problems, to say nothing of the financial implications in terms of pensions, and so on; but if there has to be a choice—and I believe the choice must come—then it is to the young that the older generation should give way. In some industries there are men working on into their late 60s, into their 70s and even, in a few cases, into their 80s. That is no way to promote a virile society; that is no way towards a national recovery. In principle, the miners were absolutely right to demand an earlier retirement.
I recall having made my first speech in your Lordships' House 10 years ago in a debate on industrial relations on a Motion tabled by the late Lord Sieff. This was the point I tried to make then, when I had left after a longish spell in the youth service in close contact with young people at school and at work. This is the really important investment which industry ought to be making for the future, in the 30 years or so of useful life that the

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juniors have to offer. It is the high ratio of unemployment among the under 25s which to me is the most serious aspect of the whole unemployment situation. It is a very dangerous situation because, once one causes dissolution and apathy and the habit of idleness among young people, they may never recover their enthusiasm and their energy, and they tend to turn against society. That is why I deplore the poor response by firms to the work experience programme as reported by Mr. Mark Jackson in the Times Educational Supplement recently, when he reported that of 34,000 teenagers, for whom the Government grant of £19 million was designed to provide work experience, 7,000 places only had been provided to date; namely, one-tenth of the potential of that scheme.
I find the initiative taken by the Department of Education and Science following the Prime Minister's Oxford speech, which set off the current great debate on education, one of the important signposts towards the future national recovery that we are discussing today. There is a great deal of ignorance and indeed prejudice among teachers about what goes on in factories and in offices in our industrial companies, and the converse is certainly no less true. The scheme is entitled, "Understanding British Industry".
Experiments are being launched to encourage teachers to spend time—not just brief visits—in the firms in their locality and for managers to make extended visits to the local secondary schools. This should apply particularly to our local comprehensive schools about which there is so much ignorance and prejudice as to amount almost to an evil myth, and no service was done towards dispelling that myth by the BBC's "Panorama" programme on Monday. I firmly believe that our secondary education should be more industry-oriented. From reports I am receiving from one or two comprehensive schools with which I am connected, it is going very well; they are building up a better understanding, a healthy mutual respect and they are enabling teachers to prepare their pupils more adequately for their working lives.
I have two suggestions to make about young employees which I believe should form part of any programme for national
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recovery which could help to transform the spirit prevailing in some parts of our industry and to develop new attitudes to work. The first point relates to training. I believe that the syllabus and scope of many training programmes needs to be widened from the narrow focus of technical skill, necessary though that is, to develop the perspective of apprentices and junior operatives beyond the bounds of their work to enable them to relate their work to the community in which they live and to our nation at large. They should also be enabled to see that the pay packet, important and necessary though that is, is not the be-all and end-all of work, but that there is a more basic satisfaction to be found in the common effort for the general good, and indeed in the satisfaction of a job well done.
There are some enlightened and effective programmes: to name but one, endeavour training, in which the noble Lord, Lord Drumalbyn, and I have been closely associated and to which the noble Lord, Lord Belstead, gave effective help when he was in Government. A number of firms develop these wider perspectives and attitudes, but I am sorry to say they are by no means in a majority. Industrial training boards do not all seem to appreciate the significance of programmes of this kind to the tone and tempo of industry. I could wish that the trade union movement would acknowledge them, also.
My last point is that I hope that, in evolving models for worker participation in the decision-making process in the aftermath of the Bullock Report, the place and claims of junior employees will not be overlooked. This is a principle which has already been conceded in other spheres, notably in the universities, and I cannot see why it should not be applied in industry. There are already junior works councils in a few firms and these could be developed. The representation of young people, perhaps at all levels in the discussion process and perhaps even in the decision-making process, would have a very important psychological effect on young workers generally. They can bring a fresh approach and—it was the noble Lord, Lord Houghton of Sowerby, who mentioned this—that approach is free of the unhappy memories of the past.
The key words are "more responsibility for young people" and indeed the word.

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"responsibility" has a bearing on both those other ancient truths which I was presumptuous enough to offer your Lordships this afternoon. It applies equally to the need for firm management and it applies no less to the need for self-discipline within the workforce. It applies especially to the granting of more opportunities for young people. My Lords, if I have strayed somewhat widely from the terms of this Motion, I hope your Lordships will forgive me, but I believe—slightly to plagiarise a well-known BBC programme—that what we need is not so much a programme, more a way of life.
4.28 p.m.
Viscount AMORY: My Lords, I always enjoy the chance of following the noble Lord, Lord Hunt, because I have a great admiration for his outlook and his attitude and his achievements. I shall make only two comments on his most interesting speech. First, I agree with him that industrial relations are only bad in three or four industries. In most of the others they are not bad, though in most cases I think we should all agree that they could be more positive and more constructive. The second point is what he said about the elderly. Of course, when there is a limited number of jobs, one agrees that so far as possible preference should be given to the young and not to those who are nearing the end of their careers. I should like to comfort him by saying that in my own case, at the age of 77, I have a marked antipathy to work in any form, so I think he will let me off there!
I believe we should all feel grateful to the noble Lord, Lord Hankey, for tabling this Motion and giving us the chance to have this debate. I propose intervening, I hope only briefly, and I have apologised to the noble Lord, Lord Hankey, that, owing to another commitment which I had before I knew this debate was fixed, I shall have to leave before the end of the debate, a thing I particularly dislike doing; I hope he will forgive me on this occasion. I support the general aims which are described in the Motion. During the past three decades we have been spending, or trying to spend, more than we have been earning. When we have been forced to cut back we have done so late, and, therefore, more sharply than would have been necessary if we had taken action earlier.
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We have devoured some seed corn, I am afraid, and we have mortgaged the future by borrowing for consumption rather heavily over recent years.
My Lords, we have now, two alternative courses of action. The first one is to go on as we have been doing, in which case, at best, our standard of living relative to our international competitors' will continue to decline, and our actual standard of living, too. The other alternative is to take a grip on ourselves and to resolve resolutely to forgo immediate benefits for some years in order to rebuild our national strength and our national assets. This involves a programme of stern priorities to which all others must be subordinated for the time being.
The first priority must be a reduction in the rate of our inflation, at least to the level of our international competitors, preferably below that, because we have much leeway to make up. A second permanent priority must be a general increase in productivity which will put us on a par with our competitors. Thirdly, there must be, too, no general increases in money incomes which go beyond the increases in our national productivity, and no increase in the money supply which goes beyond our national output. A fourth priority is a decrease in the current levels of direct taxation on incomes, even at the cost of higher indirect taxes, if necessary.
I want to emphasise that I am not expecting or asking for an across-the-board consensus on all economic policies, but only on the essential priority tasks. The noble Lord, Lord Houghton, has left, but I am sure he would not mind my saying that I very much enjoyed his speech, as I always do. It did seem to me that at one moment he was defining the new Socialism as "moving closer to the Tories". I think those were his actual words. That left me slightly perplexed, but not completely dissatisfied. I agree with my noble friend Lord Gowrie that our long-term aim should be a high wage, high productivity economy, but as that has got to be earned we cannot presume to a high wage economy without the high production with it. I also found the speech of the noble Lord, Lord O'Brien, a distinguished former Governor of the Bank, wise and encouraging. That sounds a little patronising, and who am Ito patronise the noble Lord; but I know that he will understand

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that all I mean to do is to pay him a compliment for the always wise speeches which he makes to us.
These priorities, I am sure, in present circumstances will mean the continuation of some kind of income restraint policy, but one, I hope, which will leave room for the restoration of some of the differentials, reduction of which has certainly had damaging effects during Phases 1 and 2. What we need, if only we could get it, is a kind of strategic framework of limits within which detailed negotiations can take place—but how difficult to achieve! An essential ingredient of such a policy must be a large measure of agreement between the Government and both sides of industry as to what aggregate increase can be absorbed without further inflation, and hopefully without further aggravation of unemployment, which would result from pricing labour out of the market.
My Lords, I think that over the past year or two there has been developing a wider understanding of the role of profits and the need for them as a source of investment for efficient production, think that is what the noble Lord, Lord O'Brien, felt, too. I hope also there is developing a better understanding of the absolute prerequisite of strict monetary control if the abuses of the money-printing press are to be avoided. If such growing understanding could be openly accepted by the Government and both sides of industry as prerequisites of any successful economic policy, how valuable that would be! Perhaps the best instrument there is the one which has already been referred to, the National Economic Development Council.
We must all agree, I am afraid, that the prospects of a substantial fall in the level of unemployment in the near future are not encouraging. To have to accept a level of unemployment for some years longer of one and a quarter million or more would be a deeply humiliating experience for the whole nation; and what a waste of human resources! The strongest reason of all, therefore, I feel, for an agreed programme of national recovery would be that, if adhered to, it could provide a sound basis, and the only sound basis, for growth with rising employment. The Government and industry and the trade unions must agree
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that these priorities are the only ones which will lay the basis for sustainable growth with increasing employment.
The present Government have set much store by what they have called the Social Contract. My Lords, it has, at a price, of course, brought some valuable short-term benefits which I do not belittle. But the Social Contract does not go beyond the trade unions. What we need is something much wider and more ambitious and something which also goes beyond one annual settlement. We need a kind of national contract—I am not attempting to coin a new phrase, I hasten to say—a contract under which as a nation we commit our loyalties and energies to a national recovery programme, to which all will subordinate immediate benefits, accepting short-term sacrifices so far as is necessary in the interests of rebuilding our strength and our sense of purpose, behind which a spirit of national self-confidence can once again flourish.
I have said several times in this House that our economic recovery cannot be brought about through the efforts of one political Party alone. Our economic priority policies must attract the support and loyalty of all political Parties and the large bulk of the nation at large. A coalition Government is not a necessity to achieve that aim. By costly trial and error, I believe, these essential policies are becoming better understood. As I think Churchill said in the war:
"Do not let us speak of darker days; let us speak of sterner days".
If we can learn these lessons, our feet will be set on the path of national recovery. My Lords, I believe that those are the kind of thoughts, if I may say so, which the noble Lord, Lord Hankey, had in putting down this Motion; and, if so. I, for one, cordially support him.
4.40 p.m.
Lord GORE-BOOTH: My Lords, on a somewhat similar occasion three years ago, I had the privilege of speaking immediately after the noble Viscount, Lord Amory. I have always found that to be encouraging, except in one technical respect. Usually one has the hope that even if one's predecessor may be more knowledgeable on the subject, one might

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possibly win one or two tricks on charm. The difficulty in following the noble Viscount is that one cannot win either way.
Before I say anything substantial, may I make one remark which, for a CrossBencher, is perhaps important. One speaks on a subject of this kind fully conscious that one has never been elected to anything more than the chairmanship of perhaps the tennis club. Therefore, one must speak with great diffidence about politics in the presence of so many noble Lords who have been through the heat and burden of that particular form of life. One must not presume to tell them that they can do things that they think they cannot do. None the less, in a debate such as this one allows oneself a little more freedom.
In that spirit I should like to thank my noble friend Lord Hankey both for the boldness of his attack on this very obstinate question and, if I may say so without sounding patronising, for the enormous amount of thought and exposition which he packed into quite a short time. He gave us a great deal to think about. If any of us are worried about competition from down the passage, perhaps in a modest way we might reflect on something which Abraham Lincoln said in his Gettysburg Address. I may be misquoting him but I think he said:
"Men will little note nor long remember what we said here,
But they can never forget what they did here."
Some of the remarks that have already been made in this debate will, in the long run, compete with events that go on in another place.
My noble friend Lord Hunt was the first to mention the individual. I hope to deal with that consideration, which is very important to this debate, towards the end of my remarks. First of all, I want to quote some remarks from a previous debate. Then I shall remind your Lordships who said them and where. The quotation reads:
"I am suggesting that there are, from time to time, issues of such gravity that Parliament must speak with a single voice—whatever the differences and whatever the difficulties …"—(Official Report, 18/12/73; col. 204.)
Your Lordships may remember—the noble Viscount, Lord Amory, will
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certainly remember—that to everyone's surprise that was said by the noble Lord, Lord Diamond, in a debate in December 1973. The notion was not popular, but a few of us have never forgotten that intervention and, in a sense, have stuck to the idea that a time might come—not in war time but in peace time—when we shall remember those remarks of the noble Lord. Perhaps we may he given credit for a little foresight in holding to that attitude. The question we are really asking is whether the middle view has a place in national politics. Perhaps I may quote once more the remarks made by a noble Lord in this House. They were made in the debate to which I have already referred. The noble Lord, Lord Taylor of Gryfe, said:
"…we are living through a situation in which there is a great danger of the middle disappearing from politics …"—(0fficial Report, 18/12/73; col. 303.)
My Lords, my theme is that if we believe the noble Earl, Lord Gowrie, or in a degree the noble Lord, Lord Houghton of Sowerby, we are agreeing to the proposition that our institutions are incapable of responding to the view of the majority of our citizens. I mean every word of that. I am convinced—your Lordships do not need to be convinced, but I think that there is much in it—that something that one can call a middle view is probably acceptable to the vast majority of our citizens at this time. This showed itself most clearly when, after the great controversy whether we should confirm our membership of the Common Market—and great expectations were fermented by our friends of the media that it would be a very close thing and that there would be a great deal of ill-feeling—our countrymen went to the polls and voted by 70 per cent. for that middle, commonsensical and clear-headed course. Therefore, perhaps it is not quite enough to say, when presented with the Motion of the noble Lord, Lord Hankey, that it cannot be done, that our way of life and our way of conducting politics simply will not allow it. For a long time noble Lords who say that may be right but not for ever.
I want to attack the problem in a way which has not been previously attempted. I want to take several spheres of policies and suggest that a middle majority is possible. I shall start with the easiest one, which is foreign policy. There it is

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traditional that we have a consensus. We have not had it completely, but it has revived, as almost every citizen who is not either hopelessly innocent or is in some way implicated now realises that Soviet Marxist Imperialism is real and not invented or under the bed. That has cleared out the one dissidence, if I may use a suggestive word, in matters of foreign policies, that divided the Parties. Now essentially it does not. On that front we can assume that an almost total consensus is possible.
I turn from foreign policy naturally to defence. I suggest that there is a certain consensus, because between those who offer moderate criticism of the Government's actions and those who give slightly troubled support, there is not much difference. If one puts to the nation the proposition: is the person answering this question disturbed about the possibility that our reductions in defence strength are going rather further than anyone admits, the answer would, I am sure, be "Yes". There again there would be a wide consensus.
I now move to a more controversial subject; namely, organisation and financing of industry. I sat through a great deal of the Bill on the nationalisation of the aircraft and shipbuilding industry. I could not forbear to think, though I was not brave enough to say so, that if someone could have abstracted from Party programmes and policies and with some authority have said, "The right thing to do here is to nationalise the shipbuilding industry and to leave the aircraft industry alone", the middle view in the country would have responded completely, and we should not have had the protracted proceedings and ill feeling which occasionally arose. My suggestion is that many steady, commonsensical people—I do not use the expression "silent majority" because it has been worn out—would agree on middle courses for these policies
One can proceed further. Several noble Lords have referred to taxation. Here I speak not in terms of protest in particular, because I take considerable assurance from what both the Chancellor of the Exchequer and Mr. Joel Barnett have said. In quick-thinking countries such as India and Pakistan, your Lordships will find—they may well know already—that
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the conclusion was reached a year or two ago that anything above a 50 per cent. tax on earned income is simply not worth while because of the amount of administration involved, the deterrent to enterprise and so on. The vast majority of our citizens would wish their legislators to bring themselves up to date in this matter and take actions which would restore incentive and give hope to the ambitious.
In parentheses, in this respect the Duke of Edinburgh in his controversial speech was talking of something which means a great deal to a great many people (and perhaps he was the only person who could have said it) when he said that we are in danger of preferring relief to people who need it to the rewards for enterprise to a degree that is becoming dangerous. The only figure that I shall quote is that I gather, on good statistical authority, that to bring the maximum of income tax on earned income down to 50 per cent. would only cost something between £350 million and £400 million which, in these days, is perhaps not all that great in proportion to the very large amounts in our Budgets. Here again, I believe that I speak for the commonsensical person.
I will make one more comment on this particular design. Many of your Lordships will have attended the debate, or part of it, on heritage. I am, if you like, only guessing, but I think that the ordinary person in this country in that context is beginning not only to disapprove of but to resent the way in which taxes, which we will call altogether death duties under the old title, having begun as a small contribution to the revenue, having proceeded to be something of a fair readjustment of wealth, have now become simply a system of governmental pillage.
On the substance of whether there could be a consensus about a whole lot of things, I have no doubt whatever in my mind that this does exist. But, of course, it is absolutely fair to say, "Very well, but how are you going to bring it about?" There one can only agree with the many noble Lords who have mentioned and explained the difficulties which are inherent in the way in which we run our affairs. On that there can be no sudden conversion of our citizens and our Legislature to ways of doing it differently. Like the noble Lord, Lord McNair, I shall not venture on a lecture on different

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forms of representation, whether proportional representation or anything else, because they have their weaknesses also. I see no way to the objectives to which the noble Lord, Lord Hankey, pointed us except a continuation of discussion of this kind, and of discussion of this kind among people who, on the whole, tend not to discuss matters, because I believe that there are a great many ideas around which do not conform at the moment to the stereotypes which have established themselves in the present round of Party political controversy.
I present it to your Lordships in that way at least to seek to establish that there is a foundation in public opinion for feeling that the initiative which the noble Lord, Lord Hankey, has started is worth while. But I did say that I would make one allusion to the individual. One cannot cure this situation simply by altering institutions or payments. We have to take a long look at the individual, and if I were to pick out one problem of the individual in this country at the moment it is this: there is a serious loss in the whole of our population of what I would call the sense of obligation. It is not anything very pious, or something drilled into you by your parents; it is simply the sense that if somebody does something for you, you at least owe something back to him in return, or that if you are a human being with a conscience you have a certain obligation to follow it.
It is frightening the degree to which that feeling is no longer a natural feeling in this country, and all the agencies of instruction, exhortation, psychological examination, ought to have that word somewhere on their notice boards to look at all the time; how to persuade the young that obligation is something real. Unless each individual citizen recognises obligation, then I very much doubt whether all the ideas and the plans which may arise in your Lordships' House, or anywhere else, will make the progress we could hope of them. I would hope that that would remain from this debate in everybody's mind as something which it is in all of our interests to observe and to promote.
4.56 p.m.
Lord BOWDEN: My Lords, I am sure that we all owe a great deal to the noble Lord, Lord Hankey, for giving us an
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opportunity this afternoon of talking about some of the basic problems which afflict us. I am particularly glad because I propose myself to ask whether it is possible to acquire a consensus to several policies which I believe are unpopular with both Parties—in fact, all Parties—and are unknown and ignored by most politicians. Perhaps I may begin, if I am going to be rather controversial, by making what I believe to be a totally uncontroversial statement. If one plots a graph of the total amount of manufactured goods which are sold abroad on logarithmic paper, from the year 1950 to the present date, the curve is fairly regular with a few fluctuations in it. If one plots on the same piece of paper the amount of manufactured goods imported into this country one gets a similar curve which is lower but rising more steeply. Indeed it works out that the two curves will intersect in another five or six years from today, after which we shall be importing more manufactured goods than we are exporting. This is a situation which would leave this country in a difficult position indeed. Therefore, there can be no doubt at all of the extraordinary importance of acquiring some kind of consensus if our economic survival is to be possible at all. That is the first point I would make.
The second point I believe to be equally non-controversial. No country ever became rich or famous by keeping its working population in idleness. To the extent that we are forced by our fiscal policy, by our incomes policy, by our creditors, or by anybody else, to do this very thing, shows in my view that something is wrong not with the working force but with the fiscal system responsible for this quite absurd and anomalous result.
I want to speak briefly on some of the problems which have befallen us as a result of the operations of every successive Government we have had since the end of the war. There can be no doubt that everyone has tried to get rapid growth, and everybody in turn has had to stop and go into reverse because of the inflation which they thereby produced. But in seems to me that the problems have been tackled in far too simplistic a way. The real problem is not so much the inflation, it is the tremendous and appalling consequences for the balance of payments if

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the economy becomes overheated. We always find our imports immediately grow.
One would have thought, therefore, that the sensible thing to do would be to try to preserve those industries whose effect on the balance of payments is minimal, and whose effect on the total economy of the country is great. If there is one industry particularly which I think satisfies these criteria it is the building and civil engineering industry. It uses remarkably few imported raw materials and depends almost entirely for its product on the work done by British workmen on the things which we can dig up in the soil of our own country—for example, limestone, sand, clay, and steel too, of course. They are of our own manufacture, and we can increase or decrease the growth of the civil engineering industry without having any significant effect on the balance of payments. It may be for that reason that the Government have used the civil engineering industry as their principal regulator, and made its productivity grow and decline in answer to the Treasury dictates more dramatically than has been the case for any other industry.
This industry today has a total potential output of £10,000 million a year, which makes it one of the very largest of all our industries, yet as a result of the cuts which have just been imposed, the reduction in its orders have been about 17 per cent. of its total potential output. The industry may be divided into two parts. The first is what one might call the construction industry, which has about 1½million men in it. The total number unemployed in that part of the industry is about 250,000; in other words, about 16 per cent. of the total labour force is unemployed.
The other part of the industry is that which makes the various products which are used by the construction industry, such as window frames, steel bars, lavatory pans and anything else one cares to name, all of which are used in very large quantities by the building and civil engineering trades. The total number of men engaged in this part of the industry is about 1 million and, by coincidence, there are about 250,000 unemployed in that, too. Thus, that part of our industry as a whole has an unemployment rate of
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about 25 per cent., deliberately produced by Government policy to damp down the economy and keep inflation within bounds.
I ask seriously whether this particular industry is the right one to have chosen if the real reason for our trouble is the adverse effect of a boom on the balance of payments. There is no other industry of comparable size of which one can say that its raw materials are so totally dependent on our own efforts and so little dependent on imported materials of all kinds. We have a situation in which one of our great industries has been very seriously cut back. Everyone knows the reason—that public expenditure cuts have to be made—but when we come to work out, as we must, the total net result of these cuts, we have to remember that the 500,000 people unemployed somehow have to be supported; they are on the dole, many of them are on social security, they have to eat, they have to be housed and they still have to pay the rents on their television sets. The total effect of putting them out of work is very much less than the gross cost to the Government of the actual buildings they put up, whereas the total benefit to the community is nil.
Instead of having the work of 500,000 men, we have 500,000 men in idleness and, so far as I can make out, the principal effect of putting them to work would be the trivial cost to the community of sending some of them on holiday to the Costa Brava, something which they can no longer save to do for themselves. This is a matter of great importance and what no Chancellor or Government Department seems ever to have seriously considered is the total net effect on the balance of payments of the changes which are made in Government expenditure.
The Government have taken three steps to take the minds of those in the building industry off their troubles. The first of these is to come into effect on 6th April next, when there is to be a change in the system of paying ordinary workmen. As some noble Lords will know, two forms, Nos. 714 and 715, have become notorious throughout the building industry. Before a man can be paid he must prove that he is paying income tax or, alternatively, the man who pays him must pay him, less income tax at the standard rate. This means that an ordinary man

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who does an odd job from home is paid only two-thirds of what he expects to get and, if he is lucky, he will get the balance at the end of the year when or if the Revenue gets around to it. Almost everybody in the industry is having to use these forms, but unfortunately, owing to a failure on the part of the administrative machine, several tens of thousands of people who have applied for them have not been able to get them and the most terrible chaos is foreseen from 7th April, when the new system comes into being, and contractors will have to submit returns every week—instead of twice a year as they do now. As I say, this is one way of taking the minds of the workmen off their other troubles, although it is certainly no laughing matter.
Another way which has been equally effective has been applied to the manufacturers of some of the commodities used in housing, and I refer particularly to the sanitary ware people. They made a most terrible mistake; they believed the figures which the Government produced in the 1972 White Paper on housing. It predicted a dramatic increase in the number of houses to be built and the number of houses to be converted and modernised. On the strength of that, several of them invested large sums in new plant to produce more baths, washhand basins and so on. One firm spent about £5 million in this context, but now, as a result of the cutback, the new plant has not been able to be used.
While on this subject, your Lordships may remember that on the last occasions I spoke in the House I referred to a factory in the North of England making television sets, a factory which had to be closed down before it was ever opened, for precisely the same reason; namely, because of the credulity of manufacturers who believed a Government forecast, which turned out to be quite wrong. The sanitary ware people who spent £5 million on new plant cannot open the new unit because they cannot get any orders as a result of the Government cut-back, from about 450,000 to about 200,000 this year, on the number of housing starts.
What have the Government done to take their mind off their troubles? They are having them investigated by the Monopolies Commission. The directors are having to abandon their factories for
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the time being, to engage counsel, prepare briefs and so on, simply to satisfy the Government that if they remain solvent any longer they will not be in breach of the Fair Trading Act as it is interpreted by the Monopolies Commission.
The third step the Government have taken has just been discovered by the professional civil engineers. The salaries to be earned by civil engineers in Government employ—in the employ of the various nationalised industries and the town halls—will on avergae throughout their lives be about £1,000 a year more than such men would earn if they were in industry building houses, bridges and roads. These are three things the Government have done apparently to take the minds of the people who have been so damaged by Government policy away from their troubles and to give them something else to worry about. The Government are behaving like Dr. Johnson: if you argued with him and his pistol misfired he would knock you down with the butt end.
Government policy has been disastrously ineffective, and one matter on which we might seek a consensus is to find if there is any other way of controlling the economy apart from the ways which have been so unsuccessfully used in the last 20-odd years. In my view, it is first and foremost a problem of understanding on the part of officials and successive Chancellors who, in the past, have spoken proudly of controlling the economy—the fine tuning of the economy, as they have put it—and the management of the economy; all of those processes seem to have been disastrously ineffective and dangerous to the people who have been subjected to the operations concerned.
I now deal with a totally different problem but one which I believe is equally important. The other day Sir William Pile, who is the Chief Commissioner of the Department of Inland Revenue, said that, as usual, successive Chancellors had relied on inflation as their most effective tax-gatherer. Noble Lords will be aware that I have referred to this subject before. It was of course Keynes who said that in times of inflation Governments can confiscate secretly and arbitrarily a large part of the wealth of their citizens, and they do so in a manner which only one man in a thousand even notices.

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They do it in several ways; the first is to persuade people to lend money to the Government and then pay them back in depreciated currency many years later, retaining perhaps 95 per cent. of the purchasing power entrusted to them by the gullible people who bought gilt-edged in the first instance. Take the case of consuls in 1952. They could be bought by anyone who was the trustee of a will for perhaps £98, but they are now worth about £16. Not only that; the 2½per cent. earned has been taxed as unearned income ever since and, furthermore, the value of the £16 one gets is perhaps £3 in terms of equivalent purchasing power, which means quite simply that the Government have confiscated 97 per cent. of the money entrusted to them by gullible purchasers of consuls in 1952. This has been done joyously by every Government that we have ever had, on the grounds that it is one way of financing the country: if you can maintain inflation at this rate, you can rob your citizens as long as you can persuade them to go on lending money to you.
As I have already said, that is not necessary, and I believe that, if we were to adopt the policy which was adumbrated in, I think, the year 560 in the Koran, we should find that it was possible to adopt a fiscal policy in which the purchasing power of a loan was maintained and, when repaid, the person getting the money back could buy with it an equivalent amount to the amount which he originally lent. This idea has been used by the Muslims for 1,500 years and it was rediscovered by the Chinese in 1948. When the Republic of China took over after the terrible civil war, inflation was running at 10 per cent. a day. This is the second highest rate of inflation of which we have a record and it is considerably higher than that which the Germans had at the very worst time under the Weimar Republic. The Chinese Government immediately decided to do two things. First, they indexed wages and based them on a very simple index calculated from the price of no more than five commodities. These were, rice, millet, cooking oil, fuel and cotton cloth. That very simple index, which would be despised by any economist, worked so well that, by indexing wages to it, the Government persuaded people to go on
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working because they knew that they would be properly paid even if they were paid a few days late. They indexed bank loans so that anybody putting his money into a bank was sure that he would be able to buy something with it when he got it out. As a result of this operation, the inflation which had been running at this enormous rate stopped cold and disappeared entirely within two years. So this kind of thing can be done.
I believe that, if we were to index Government bonds, we should thereby encourage the building societies to index their loans and we might destroy the present system which uses the building societies as a mechanism—and a very complicated one—for transferring purchasing power from the hands of those who lend money into the hands of those who borrow it. It seems that this astonishing phenomenon has persisted for far too long and that it could be abolished quite quickly if the Government would index their bonds and allow building societies to index their loans. We should then know where we stood and people who lent money would be able to get something in return which would be as much use to them as the money they first lent. So I believe that this is a possibility which could only result in action if all parties were willing to examine it and study it in some detail.
In this country, we have had the report of Sir Francis Sandilands. I read it very carefully and I was strongly reminded of the creed of St. Athanasius which, your Lordships may remember, described the Father as incomprehensible, the Son as incomprehensible, and the Holy Ghost as incomprehensible, yet there are not three incomprehensibles but one incomprehensible. I feel that some of the arguments which have been put forward by my accountants from time to time can be likened only to the theological discussions and the niceties of the Schoolmen.
Nevertheless, progress is being made and the accountants are beginning to realise that the old-fashioned way of doing accounts is not necessarily the right one. It is very remarkable that New Zealand, which is not a country that one would expect to take the initiative in these things, has just produced the Richardson Report, which in my view is a much more

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helpful document than Sandilands. It is based on Sandilands but goes much further, and it copes with the problem so vexatiously discussed in the columns of The Times about what one should do about the assets of the banks. This is such a fundamental matter that one can hardly understand how any such report could be written without studying it. The Richardson Report covers the matter in some detail. It was introduced to the New Zealanders by Mr. Templeton, the Minister of Finance, and I am sure that before long New Zealand will introduce a system of accounting which makes it possible for industrialists to keep the value of their firms as it was and does not allow the Government successively to take all their assets from them. I believe that they intend to begin by indexing the level at which income tax is levied so that they will not have a system such as we have in England by which as soon as wages go up the Chancellor of the Exchequer starts levying more income tax. This is responsible for what he calls the "buoyancy" of his revenue and is, in my view, an open scandal. So here, again, is another unorthodox proposal on which I believe consensus will have to come sooner or later.
To revert to the subject of New Zealand, we should not feel any embarrassment in accepting the fact that they are ahead of us. After all, they introduced the Welfare State 10 years before we did; they were able to nationalise an insurance company about 100 years ago, and they nationalised at least one of the banks 20 or 30 years ago. They are by no means unenterprising and, in this matter, it seems to me that they are far further on than we are.
So my point is that it is perfectly evident that the policies which have been pursued by successive Governments ever since the war have been totally unsuccessful; that we have in large measure destroyed our industry in an attempt to save it, and that the fine tuning which the Treasury is so proud of has done infinite harm to almost every industry that it has affected. I have quoted television and the building industry, both of which are suffering terribly from the effects of treasury control. I believe that these policies would have been unnecessary had the true net cost of the operations been properly costed out. Furthermore, I believe that, if we
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were to change our system of accounting and make it impossible for Governments to continue as they always have done ever since 1950 to confiscate the assets of the citizens, we might then hope for economic prosperity as we have not had it for many years. But this could come about only if there were a consensus of very great significance on matters so far undiscussed by either Party.
5.17 p.m.
The Earl of HALSBURY: My Lords, in common with other Members of your Lordships' House, I am grateful to my noble friend Lord Hankey for raising the matters which he has and for giving me an opportunity to express my own views on the subjects he has raised. I believe that this economy has been basically mishandled for at least a decade, and possibly longer. We now have a labour force which is deployed in the wrong direction and I do not believe that we can put it right in less time than it took to put it wrong. How are we to achieve any kind of continuity of management within the framework of our political system unless, following the advice of my noble friend, we can agree on some kind of consensus on matters to be attended to irrespective of ideological dispute?
By consensus, I certainly do not mean political consensus of the type with which a dialogue of the deaf—greatly enjoyed by both of them—between the noble Earl, Lord Gowrie, and the noble Lord, Lord Houghton of Sowerby, would provide us. It must be something that can allow that dialogue to proceed as a pleasant exercise in shadow boxing across the Floor of either Chamber while we try to correct those matters that are wrong with us. That does not mean, to borrow a phrase from the noble and learned Lord, Lord McCluskey, in answering my Question today, "knocking my country". I should be the last person to "knock" my country, but I do not think that trying to diagnose where we went wrong and seeking to put it right is knocking my country. We must face up to our own shortcomings.
Because I agree with so much that has been said, and particularly with what has been said by the noble Lord, Lord Houghton of Sowerby, on the question of whether we have the will to do it, never mind whether we can agree what to do,

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I shall take a single issue so as not to repeat all the matters with which I am in agreement which have been referred to by noble Lords who have spoken. I shall discuss something rather tough and rather "nitty gritty". It has links with my Question earlier today, though it is a pure coincidence that both items of business happened to come up on the same day.
I want to consider why it is that when personnel directors and chairmen or secretaries of trade unions both want to avoid a strike they are not more successful in doing so. What is the mechanism that makes striking acceptable to those who take part in it? Wages calculations are very tricky, and if one tries to do them as an amateur one gets them wrong because all the differences are subject to differential rates of taxation as marginals. Therefore, with regard to the figures that I am to give to your Lordships I have got the personnel department of a company of which I am a director to go over the figures with one of their wages departments to make sure that I am not misleading you.
I am going to deal with the case of two men. They are real individuals; they actually have names. One is an unskilled worker, a warehouseman, and the other is a skilled worker, an electrician. I will deal first with the position of the warehouseman. He is a married man with two children, aged 12 and six. He is a member of the Transport and General Workers' Union. His basic pay is £42 a week, with £6 supplementary. He gets overtime on his basic, but not on his supplementary. By the 26th week of the PAYE year—and it is important to specify this week because the PAYE refund depends upon the particular PAYE week in the year when it is paid—he has earned a total, in those six months, of £1,482 gross, and out of this he has paid tax of £238, with other deductions of £86, resulting in a take home pay of £1,158, or £44·53 per week.
What happens if in Week 27 of the PAYE year he goes on strike, for just one week? He is all right at the end of Week 27 because he draws the wages that he earned in Week 26. The question is what will happen to him in Week 28 when he goes back to work, because what
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he earns in Week 28 will not be paid until Week 29? So what has he got to lay his hands on in Week 28? This is the key thing. First, he will get £6 strike pay from the Transport and General Workers' Union, and he will collect £9·50 as PAYE refund. His wife will be given social benefits of £12·70 for herself, £5·35 for the elder child, and £4·35 for the younger child, making £22·40 in all. This, added to his PAYE refund and his strike pay, comes to £37·50, in contrast to his normal take home pay of £44·53. He is £7·03 out of pocket.
Your Lordships might assume that that was a disincentive to go on strike, but it is not nearly as simple as that, because his employer during a week's strike will have lost 40 hours' production and will be willing to recover from that setback by paying overtime. At this man's marginal rates of overtime, 40 hours' overtime, after tax, will be worth £40·92, roughly speaking £1 an hour of overtime work. So, with £7 of overtime which the employer will be willing to pay, he is back in pocket on the £7 that he lost during the strike week, and with another £33 to come to put him back in pocket. If he has to repay the £22 social benefits, which can be required, he is still £11 in pocket without anything to do with what the strike was about.
It is just a wonderful way of knocking off for an hour, losing one hour's pay, and then coming back again and being paid £1·50. So you see, my Lords, the employer's recovery programme is what is in fact financing the willingness to go on strike. This is what I call the kind of analytic consensus that we might achieve. It is not an ideological matter at all. I am not disagreeing with the unions. They simply behave as one would expect them to in the circumstances in which they find themselves. I am not blaming the employers. They want to recover from the effects of a loss of their production. But in fact it is one of the factors which is the driving force in producing this situation.
If, instead of taking the unskilled worker who is a warehouseman, I take the skilled worker who is an electrician, it will be found that the figures are a little different because while he gets the same benefits as the less highly paid worker during Week 28 when he no longer draws

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any pay, as his take home pay is being bigger, that means that he is more out of pocket; and, instead of recovering in seven hours' overtime, it takes him 18 hours' overtime to recover. If the strike was unofficial, so that he did not get strike pay, it would take him 22 hours to recover. But he still has another 18 hours to come, and by the time he repaid what had been lent to his wife as supplementary benefits he would still be in pocket; and everybody is in pocket as a result of a willingness to go on strike.
Your Lordships might say: Have I not proved too much? This means that everybody would be on strike all the time. No, my Lords, I have not proved too much because everybody could not be on strike all the time. To begin with the willingness of the employers to pay overtime would be exhausted, and there would not be any overtime money coming in. Of course everything has its limits. But I think that this is a very important mechanism, and I want to point out that it is not a mechanism in which one blames either the employers for doing what is natural or the unions for doing what is natural. It is something wrong with the system, and we ought to be able to put it right on a non-Party basis. I believe, if I have seen sufficiently into the mind of my noble friend Lord Hankey, that it is this kind of consensus that he wants us to try to bring about, not a purely superficial transformation of two ideologically opposed Parties into a coalition which would not hang together for anytime at all—
Baroness GAITSKELL: My Lords, I hope the noble Earl will for give me if, before he finishes discussing this particular argument, I ask him a small question. Obviously all that he has said about two men is true, but how many men is he thinking of? Is he really saying that this applies to thousands of men?
The Earl of HALSBURY: My Lords, these figures have been taken out of the wages sheets of a typical week in a big company, employing about 20,000 people, but distributed over a number of factories. I think that they are reasonably representative as rates. If anybody who has worked his way up through the trade union movement would like to challenge them as rates I should gladly give way.
Lord COLLISON: My Lords, I cannot quote figures, but the assumption that the man is better off when on strike than when he is working is not correct. To start with, if he had a week's money the week before the strike, that is considered enough to cover him for the following week. If it is a month's money, it is considered to cover him for the following month. The man's wife and children do not get the allowance. The man is paid the allowance on the basis of supplementary benefit rates which are less than £20 a week, plus an allowance for the wife and an allowance for the children, and if his income is more than that amount he does not get supplementary benefit. It is made up only to that figure. If he has capital that is also taken into account. I am afraid that what has happened here is that there is a common assumption around that people can go on strike or stop working and be feather-bedded, as the noble Earl is saying, to a better degree than when they are working. That simply is not so.
The Earl of HALSBURY: My Lords, I can only say that I have produced these figures in good faith. They were provided for me by a wages office which is dealing with these kind of matters all the time. Obviously I stand corrected by the noble Lord, Lord Collison, who has spent his life in dealing with these matters and who used to be chairman of the committee that administered public benefits. But I cannot be entirely wrong, for this reason. If one looks at the continuous process industries, where it is impossible to work overtime because the process itself permits only so many hours a week to be worked, it is found that they are not strike ridden in this particular way. It is particularly the single shift light engineering factories, which work considerable amounts of overtime and are under pressure regarding deliveries, where the employers are willing to pay overtime in a recovery from the strike programme, that seem to be most affected by this situation.
Therefore, all I can do is to produce this as a contribution to thought and allow the matter to be debated. But I believe that it is the kind of consensus that the noble Lord, Lord Hankey, had in mind, and it is certainly what I have in mind. I believe that it is possible to get consensus. Even if I am wrong, there are plenty of

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other things on which other people can be right, and I believe it possible that there can be consensuses. This is what the noble Lord is seeking to bring about. I certainly believe that it is possible to do it, and that we should continue this quest.
5.30 p.m.
Viscount HANWORTH: My Lords, I believe that most of us would agree that over the last few years we have pursued a fairly tortuous path down the road. This is perhaps well illustrated by what each Party has said about a wage freeze, or whatever you like to call it. They have each in turn said that under no circumstances whatsoever would they ever introduce anything of the sort; and so we have gone on. There are many of us who believe that the two-Party system which we have at the moment tends to accentuate the differences between the Parties, rather than the reverse. Be that as it may, we feel that a measure of consensus on important issues is necessary for our recovery; and I think that perhaps if the Government remain in power, for the first time we may get this to a degree which we have not seen before.
It has also been said in the debate this evening—and great stress was placed upon it—that an important element in recovery is to have the nation behind us in a recovery programme. We cannot possibly have that if the Government and their policy are not really representative of what the public want. I would say that, certainly in the early stages of this Government, for reasons which I can understand and for which I do not entirely criticise them, most of their legislation was political and completely out of touch with what the majority of the public thought important, or even wanted.
My Lords, all this, I am afraid, leads me in one direction only. I do not believe that we can get the measure of consensus which we need with our present Parliamentary system. Some noble Lords will remember that for the last three or four years, on every reasonable occasion, I have come down on the need for this reform. I am afraid that inevitably this Motion leads straight there. I intend to be brief because I do not think this is the occasion to go over all the arguments;
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but I would say, as somebody else has said this evening, that some form of proportional representation is an absolute prerequisite. I also believe that we need a partially written Constitution; and I think that we should try to separate the Parties from complete dependence on outside sources.
Those are only three of many measures which I think are necessary, but I am sure that the time is long overdue for these sort of reforms to be made. We want a gradual reform. We do not want to find that our institutions are suddenly upset because we have left reform too late. That leads me on to one remark which, perhaps, by the way, I may make. I think that at least logically, if we are in favour of reform, the first place to make it is in the Commons, and that the form of the House of Lords, or whatever the second Chamber may be, cannot logically be decided on until we have decided on the form that the first Chamber will take.
The only other thing I propose to do is to tell your Lordships very briefly about a Marplan survey which was carried out on behalf of the Sun newspaper. Over 1,000 adults and representatives, by age, sex, occupation, region and so on, were interviewed. I am well aware that these surveys can be far short of the truth, but I think that even if you assume that it is in error plus or minus 15 per cent. it is nevertheless surprising, and I think bears out what I have been saying briefly this evening and what many other noble Lords have said.
The purpose of the poll was to see how satisfied electors are with the existing political system, and what steps, if any, they want to see taken to improve it. Electors are very disillusioned with the existing system of government. Two out of three adults—63 per cent.—do not believe that any political Party can solve either the economic or the political problems facing Britain. Seven out of ten electors replied that a proportional system would be fairer to British voters; and a similar number, 70 per cent., said they would have preferred the proportional result. Even a half—49 per cent.—of the still committed Labour voters would have preferred the proportional vote, which would have given Labour 65 fewer seats. The public demand for electoral reform is huge and insistent. As to

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referenda, there was a general feeling that they like referenda but that, in the main, they should not be over-used.
Possibly the most surprising figures of the lot concern reforming the House of Lords. The House of Lords is a very popular and respected institution. Seven out of ten adults—that is 70 per cent.—think it does a good job for Britain. Asked whether they would prefer it left as it is, abolished or turned into a second elected Chamber, a clear majority, 56 per cent., said, "Don't touch it." Only among current Labour supporters—22 per cent., or one in five of all the adults—is there some doubt, with half saying it does a good job, and half saying it does a bad job.
My Lords, never mind about the House of Lords: to my mind, this is nothing like as important as getting the necessary changes made in our present Parliamentary and democratic system. One could point out, as I did in a debate three years ago, that there have been so many changes in the whole of our social life that changes must also be made in our political system. It is strange that this is seen so clearly outside and yet there is such tremendous resistance, apparently, even to acknowledging the need for it, within Parliament itself.
5.38 p.m.
Lord MOTTISTONE: My Lords, I must start by congratulating the noble Lord, Lord Hankey, in finding this day for this debate. I know he has been commiserated with, in that it is perhaps not a suitable day on which to expect a great many people to be ready and waiting in the Chamber, but in a sense, I would suggest, it is very suitable. Knowing how long ahead one has to put down a subject for debate, after which it is selected, I should have thought that he had been in collusion with Old Moore in arriving at this day on which to talk about this subject, which is very relevant to what is going on at the other end of that long corridor. I must apologise to the noble Lord, Lord Hankey, that, owing to other commitments, I was too late to hear his introductory remarks. I hope he will forgive me for that.
My Lords, political consensus is the theme, and I must say here that I personally agree with the noble Lord, Lord
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Houghton of Sowerby, that that is not really practical, in these times or in any times. We in this country are naturally combative, and I feel that we shall never get very far with a political consensus, if it is a political one, because somebody will always find a jolly good reason for creating a non-consensus. It seems to me that, even if it was temporarily arrived at, in times of peace we are most unlikely to achieve that. What I should have thought—and perhaps your Lordships will agree—is that we could perhaps examine how things have gone and whether there are movements which we can take in a slightly different direction. I cannot see us taking major movements in a direction one way or another. It seems to me that that is not only not what the people want or will get accustomed to, but that it is impractical to put into effect.
If we could spend a few minutes looking at what movements might be made, I should say that, coming from a long line of liberals (with both small "1" and capital "L"), having voted Socialist in 1945, having followed the Liberals in 1950 and having found my natural home here in the 1960s, I can perhaps take a wide enough view about what is happening.
I would ask your Lordships—and I hope that this will not cause offence across the Chamber—whether we really have not reached the end of the application of the Socialist theory. This is not to say that it has not been very necessary, good and worth while on the way; but, really, all the things that were postulated 50, 40 or 30 years ago have come about—and almost more so! I would suggest that perhaps the first thing we might agree upon is to go easy on extending yet further what one might call the fundamental theory of Socialism as postulated at the beginning of the century. If we could agree on that, we could start movement in the right direction.
I feel that your Lordships might also agree that the situation we have now reached, with more than 50 per cent., as I understand it, of the national wealth in Government or pseudo-Government hands, is positively harming the mixed economy which most of us agree is a very worthwile way of trying to run a country. I would suggest that that sort of move,

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or any move in that area, needs to be in reverse rather than creating more Government control, direct or indirect, of our national resources. I would also suggest that the outcome of this (if you like) excessive Government intervention in everyday affairs has been the erosion of the dedication of public servants. A friend of mine in the public service said to me not long ago, "You know, I find it isn't possible to do my job with the same enthusiasm as I used to because I don't find that the people I work with feel that we are here to help the public. They feel that they are here in order to do a job, in order to earn money." He went on, "There was a time when we felt that we were genuinely here as public servants."
I would suggest that what has happened is that the public maw has grown so wide, it has gobbled up so many activities, that in some ways it is employing more people than it reasonably can expect to retain that sense of dedication. I should have thought that the Civil Service proper still remains very much dedicated, but I would suggest that a good example of where this has not come about is in the Post Office which used to have a sense of public service and now no longer has. Ironically, for my argument, this is probably because in a sense it has been denationalised.
What I would suggest, therefore, is that we weigh up which of those enterprises and which of those services are best employed as public services and which of them are best employed as enterprises as free as may be, and to look at this afresh. If we decide that some organisation, some activity, for example, the coal mines, would be best given greater freedom, then perhaps we could take the line that the Government are merely there as a shareholder—and I know that this argument has been put before—and that the enterprise itself should be given the maximum freedom of independence.
That sort of thinking—and I am talking about thinking—is, I am sure, right thinking about the direction in which to go. I would suggest that the next thing we could agree on—and I am talking on a rather more personal basis—would be the need for more encouragement of independent enterprise. I think it is true to say that in all walks of life almost everybody is asking for more freedom to earn for
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themselves what is reasonable for the effort they put in. I would suggest that the fact that very many good chaps (and young women, too, for that matter) have sought jobs abroad—and this is absolutely undeniable and all of us know examples of it—is because they feel they cannot get a proper reward in this country.
I am hopeful that we shall solve our problems here before those people have exhausted their usefulness to mankind and that we may yet attract them back and that their service in other countries may be of value both to them and to us. But I think it important that we should not duck the issue, for, unless we take special steps to avoid it, these people are not going to come back. We shall have lost them for all time to other countries who, in many respects, are our competitors in world markets. I would suggest that how to give more encouragement and more reward to individual enterprise is something on which we must try to seek agreement.
My Lords, when the noble Lord, Lord Hunt, was talking about more responsibility for young people—he talked about more of other things for young people, too —he was really on the same theme; because encouragement can be given not only by way of material rewards but by way of responsibilities. Most worth while young people will seek the latter perhaps the more; but at the moment they get neither responsibility nor material rewards. It is this that we must try to put right.
My Lords, I should like to suggest that this wish for a greater personal freedom (if you like) is much stronger than one might imagine from listening to those people who are vocal in our midst. I think it is something that is part of the malaise which is brought about by people feeling that it is not worth making a fuss about themselves. Sometimes they do not think it is proper to do so. Whatever the reason may be, I somehow feel that our public understanding of things is getting rather distant from the private situation as it really is. I suggest that we need to study much more what the individual wants, to talk rather less about the masses and more about the individuals. I am sure that everybody agrees with this and I am sure that most people will feel that their Party is doing just that; indeed, I think the

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noble Lord, Lord Houghton of Sowerby, was saying something very similar to me earlier in the Chamber. But it is my belief that the kind of activity to which his Party has given expression has tended—whatever their good intentions; and I do not doubt them—to downgrade the opportunities for the individual in a desperate attempt to protect those people who require protection.
It is a difficult balance, and I suggest to your Lordships—and this is the main theme of what I am trying to say—that that has become out of balance; and though your Lordships will not doubt that I would think the Party now occupying these Benches would be better able to put that balance right, I personally would be prepared to accept that this situation could be worked towards by any Government in power, if only—and we come back to what other noble Lords have said—there was the will to do it. I suspect that noble Lords opposite do not have the will to do it. I am sorry about that and, because they have not the will to do it, I hope that they will give us the opportunity to take over at the earliest possible moment.
5.51 p.m.
Lord ROBBINS: My Lords, I should like to join with other speakers in expressing my gratitude to the noble Lord, Lord Hankey, for raising this fascinating subject for discussion. It is an ironic coincidence that while in this Chamber we are seeking common grounds of agreement, in another place the contrary state of affairs prevails. I only say—bearing in mind the latest Marplan survey figures—thank Heavens for the House of Lords!
I am glad that Lord Hankey's Motion speaks of a programme rather than a plan. I do not much believe in overall plans with quantitative targets for everything, in the iron curtain fashion. They are apt to be let down by events or, if they are not, those who carry them out are apt to adapt people to the plan rather than the plan to the people. Of course Governments must have plans: plans for expenditure, plans for revenue, plans for borrowing and plans regarding the money supply. However, so far as the broad field of commerce and industry is concerned, I am not convinced that in peacetime at any rate central plans are not
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actually inhibitors of adaptability. But programmes—to use the noble Lord's word—of broad objectives are another matter. It is very valuable to discuss them, especially when the present situation is still so precarious.
I am not so sure that I agree with the noble Lord about machinery. Frankly, I doubt whether much good comes of these ambiguous get-togethers, of which the famous Neddy is the prime example. I wonder by what fraction of 1 per cent. gross national product has been raised so far at the expense of so much time and so much machinery. I confess that I am also doubtful of the constitutional questions that are raised by this particular recommendation. In my judgment—and this may be old-fashioned—the business of formulation of broad programmes and means of carrying them out is still the business of Parliament and the Administration. I do not think that Parliament and the Administration have deported themselves in a very distinguished way in recent years, but that seems to me to be a case for internal reform rather than for multiplication of organs.
Now what about the objectives, my Lords? In my judgment, they are twofold. Perhaps as I read them you may regard them as threefold. My first objective is clearly both the elimination of inflation and the reduction of unemployment. The second objective, I suggest, is the increase of productivity per head. There is no need at this time of night to say much about inflation. We all know that it is going on, and we know that it is going on at a rate which, if not controlled, will ruin us sooner or later and tear this society asunder. We all know the underlying condition, however much we may differ about the minutiae of causes—it is, spending more than we produce. We all know that there can be endless debates about the exact measures to cure it.
There is more to be said about the objective which I have coupled with the reduction of inflation, namely, the reduction of unemployment. Since unemployment is, in the present circumstances, very largely the aftermath of the process of inflation, I hope that we all agree that unemployment is not to be cured by more inflation. I hope, too, that we agree that in a situation in which excessive spending is being reduced—as I hope it is being reduced at

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the present—some measure of pay restraint will prevent unemployment growing. That, I am sure, is the correct perspective in which to view measures of pay restraint, however irksome. Then, if pay restraint is maintained as inflation diminishes and confidence revives, we hope that employment will pick up. But as no less a person than the Prime Minister has said recently, that will not happen overnight.
Regarding the second objective, productivity, the important point to realise is the desirability of increased productivity per unit of investment. The noble Lord, Lord O'Brien of Lothbury, touched upon this in his most illuminating discourse earlier in the afternoon, and I do not think that it can be sufficiently emphasised. Our poor performance over the past 20 years or so, compared with our competitors, is very often blamed on deficient investment. I am prepared to agree that so far as investment as a proportion of gross national product is concerned, we have not done as well as might have been hoped.
But the important deficiency is that in productivity per thousand pounds invested. Here, as has been said already in this debate, in many industries our performance in relation to the performance elsewhere, is dismal. Of course here there is a complex of causes: restricted practices, poor management, poor Government, if I may say so—and that applies not only to one Party. Somehow or other, we must get this deficiency right or be content with standards which are considerably inferior to what we all want, and comparatively diminishing as regards the rest of the progressive world.
How are these objectives to be achieved? I have already indicated my distrust of increased machinery; and I should like to digress and to agree with the noble Viscount, Lord Hanworth, in believing in electoral reform. I believe both major Parties are at fault in jibbing at that for considerations of what I must regard as mere short-term advantage. But even with a reformed Parliament and electoral system, Parties are not going to disappear I am quite sure the noble Lord, Lord Hankey, would agree with me on that. It is probably undesirable that they should. Some degree of organisation, especially when more than 12 men are gathered
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together, is desirable if there is not to be intellectual chaos. What is desirable, surely, is that the differences between Parties should be confined within certain limits and that there should be no fundamental uncertainties overhanging investment and enterprise.
That is why I am so glad that in his opening speech the noble Lord, Lord Hankey, highlighted the desirability of consensus. I am so glad, also, that so frequently the same thought has formed the main focus of speeches which have followed that of the noble Lord. We shall not agree about all sorts of matters. We shall not agree in my lifetime, and we shall not agree for a hundred years; but I hope that the lessons of the last few years have brought men of goodwill together on certain, as I think, quite fundamental propositions.
Let me try to formulate three or four of those in as few words as I can muster. First, I think there should be a degree of consensus on the fact that at the present time it is production and not distribution which is the overwhelming problem. Recent statistical investigations which are not open to serious question—for example, the investigations of Professor Phelps Brown, whose integrity is a shining example to us all, and the investigations of the Diamond Commission—have surely shown that the margin available for redistribution in this economy is capable of great exaggeration. And, of course, if we try to distribute more than we produce or can borrow from outside, then we have inflation once again.
Secondly, I hope we would agree—I am trying to be as non-controversial as possible—that whether enterprise is private or public, regard should be had to prospective profitability. This is not a question of favouring the rich. Investments on a large scale nowadays tend, at any rate in large measure, to be in the hands of companies such as insurance companies, representing many comparatively small people. The question of the desirability of having regard to profitability of investment is one of the prudent allocation of resources; and although there may be exceptions in industries which are essential for national defence, I am quite sure that propping up unprofitable industries is a recipe for further decline.

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Thirdly, again seeking consensus, I hope we now recognise that in any sane policy regarding distribution, provisions must be made for differentials and incentives. The remedy for extreme need is to be found not in the structure of payments for work but in the structure of welfare services, about which there is room for generations of legitimate argument and inventive ingenuity.
Finally, as the noble Lord, Lord Gore-Booth, has mentioned the desirability of alleviating the burden of direct taxation, I would urge that there should be a similar consensus on the simplification of the tax structure. I say that with some trepidation in the presence of the noble Lord, Lord Kaldor. Some persons, and even some noble Lords, are apt to blame the Treasury for the present complexity of things. In my judgment, one should never blame civil servants, who are not in a position to defend themselves; but this particular indictment is aimed especially at the wrong target. The responsibility for the present state of affairs is the responsibility of successive Chancellors of the Exchequer in the last quarter of a century, that is, the responsibility of the Chancellor of the Exchequer, not as initially advised by the Treasury but by the Inland Revenue, which, in respect of direct taxation, is, under the Chancellor, almost a separate sovereign state. What is needed is insistence by a determined Chancellor that the present mess, which is so distracting for so many, and which uses so much time which should be given to production, should be cleared up and clarified.
Such, my Lords, are examples of the principles on which, hopefully, we might establish the sort of consensus for which the noble Lord, Lord Hankey, so eloquently pleaded. I personally believe there are many more such propositions which could be subscribed to by men of goodwill on either side of your Lordships' House and in any of the Parties, save those which are avowedly destructionist. So gradually there could be built up a body of generally-recognised limits within which sensible policy might move. That would surely immensely facilitate the conduct of Government.
My Lords, will that happen? I do not know, but I am quite sure that as far as private talk is concerned the field is ripe
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unto the harvest. In private, people really are much more intelligent than they used to be. Sensible, sane talk about all sorts of affairs is much more prevalent than it was in the days of my youth. The trouble arises in public discussion, so much of which is insincere, over-simplified and based on misconceptions. That is why the persistence of your Lordships' House, so much misrepresented elsewhere, is such a blessing as one of the few public places anywhere known to me where one can still have a grown-up talk, such as the talk which the noble Lord, Lord Hankey, initiated this afternoon.
6.10 p.m.
Lord KAGAN: My Lords, I, too, should like to join in thanking the noble Lord, Lord Hankey, for this most timely debate, and I echo wholeheartedly his wish for more stability in the economy and thus the ability to pave the way to recovery. Industry, particularly the private sector—and I speak from experience in Yorkshire—has suffered most seriously from the constant changes to which it has been subjected, fiscally and by legislation. Ever since the late 1950s, investment allowances and bank rate have changed, certainly from Government to Government, and from Budget to Budget, and in these circumstances it is most difficult to make plans and decisions, because one cannot base them on the facts which will apply by the time they come to fruition. The average investment decision in the textile industry takes three years to materialise, and by the time a machine arrives the picture looks very different from what it was when it was ordered, and that has, in turn, introduced an over-cautious attitude to investment from which we now suffer.
I know that the Government mean well, and I know that the noble Lord, Lord Robbins, said that civil servants are protected—and well they might be, because they are certainly free to act as they wish, but are not free from the consequences of what they have done; and the experiments which have been carried on with industry have very often dislocated and harmed it, and have slowed progress. It has been said that on the Continent politicians change, but policies do not. We have, on a repetitive basis, the same politicians but the policies

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change very frequently. Therefore, stabilisation is absolutely essential if we want recovery to take place.
These changes also have a very serious effect on the morale of industry, from the board room down to the shop floor. I have spoken about how board room decisions are affected. But on the shop floor—and I periodically talk to some of our textile workers—people are beginning to wonder whether the Government are really concerned about their problems, or are using the problems as a weapon in an ideological battle. Sometimes, I imagine that they would wish to become wards of court, just as children are protected from battling parents who, in their name, usually pursue their own arguments. The same applies to our political scene. We hear a lot about planning agreements. Is it not time to have a planning agreement with the nation rather than with a particular Government, and let industry get on without being regularly interfered with?
We are today aware of what is going on in another place—the euphoria and the chance of getting into power, the passion at the risk of losing it. I sometimes wonder whether one should be reminded of Oscar Wilde's saying:
"Sometimes God punishes us by granting us our wishes."
I should like, with respect, to say that, in my experience, industry has always done well under Labour Governments and the Stock Exchange reflects that. I think that my noble friend Lord Houghton is better qualified to react to some of the harsh things that are said against the Government, when they are really doing their best and even, it is suggested, borrowing Tory policies. Is it a case of: My mind is made up. Do not confuse me with the facts? I say with respect, and more in sorrow than in anger, that what matters is not who goes in the right direction, but whether the Government go in the right direction. I thank your Lordships for your indulgence.
6.16 p.m.
Lord TERRINGTON: My Lords, I am grateful to my noble friend Lord Hankey for introducing this wide-ranging debate, and at this late stage I should like to speak in just a little more detail on one aspect which has been touched upon by
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several noble Lords. My theme is a very simple one, and it concerns the need for the increased involvement of people in all walks of life in the prosperity of the country, through the medium of investment in industry and commerce, especially at a time when more capital investment is being called for. I believe, as I am sure other noble Lords do, that the successful operation of industry in a mixed economy requires a harmonious development of relations between the providers of labour and the providers of capital, and what better ingredients than this could one have as part of the programme of national recovery? I further believe that this relationship will be improved by a wider spread of capital ownership, leading in turn to a greater appreciation of the contribution which capital makes to the industrial process.
Having said that, I should, before going any further, declare my interest not only as a member of a City partnership, but more particularly as an executive of the Wider Share Ownership Council, which believes, as I do, that ownership of shares by individuals should be encouraged as one of the best and most responsible forms of participation in industry. Over many years now, statistics have unfortunately shown that the private sector has been a net seller of industrial investments to the extent of well over £1,000 million a year.
This is a trend which I deplore, as surely must all those who favour a mixed economy, and I have no doubt in my own mind that it is a result of direct discouragement of savings in industrial securities through the tax system, irrespective of the political Party in power. Moreover, it is a trend which other countries have tried to avert, and in France, for example, because of employee share ownership schemes, they have been able to give workers in Renault a 12½per cent. share in the company, although it is still State owned. In West Germany, twice the percentage of individuals have a direct shareholding in industry compared with the situation in the United Kingdom, and the United States' figure is five times as much as ours in percentage terms.
It might be asked: What is the significance of these comparisons and why introduce them into this debate? All I

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would say in reply is this. My noble friend, in the terms of his Motion, uses the word "consensus" and, interestingly, the Government have said that one of the requirements for legislation on the Bullock Report is consensus. Furthermore, studies over many years in the United States, where I have spent a good deal of my working life in recent years, indicate that companies with a substantial number of employee shareholders have shown an improving record of productivity —a subject much under discussion this afternoon—and this seems to me a highly desirable objective in the private sector of our own economy.
I now come to the most difficult part of what I have to say, because, obviously, I cannot make these comments without offering some constructive suggestions, and thus I cannot avoid becoming involved in certain matters of taxation. However, despite the imminence of the Budget, I must make three points which I consider to be of long-term importance if we are to get away from the high concentration of capital investment in the hands of the institutions and return to individual participation in the country's economic growth.
First, we must get away from the terms "earned" and "investment income". A great deal of so-called "investment" is today derived from the savings of thrifty people who during their working lives have already met their tax liabilities. No economy comparable with ours has such a distinction—notably the United States, France and West Germany who, as I have already pointed out, have substantially more individual shareholders than we have. This- is a point which I believe deserves considerable emphasis.
Secondly, we must put an end to dividend control in the interests of injecting new capital into industry. If industry is to succeed in attracting individual savers, the risk capital must be adequately rewarded. Here I would stress that I am not pleading for the so-called "idle rich" but for the mass of small, private individuals who stake their savings in British industry. Of these, according to the Diamond Commission's research in 1973, around 50 per cent. had a total statutory income of less than £2,000 a year, and three-fifths were of pensionable age.
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I realise that the usual justification for dividend restraint is that if wages and prices are to be restricted, so, in fairness, should the rate of dividend income. But, my Lords, is this justified? I wonder. Taking a look at the period from 1965 to 1973, we find that the total income from dividends was no higher at the end of the period than it was at the beginning, while wages and salaries had doubled and prices had increased by more than 60 per cent. I hate to think what has happened since 1973, but even the statistics I have just given can hardly be described as an encouraging picture for the individual saver who wishes to back British industry.
Quite apart from the unfairness, I would also question the logic of this restriction. The provision of capital for industry means jobs for its workforce. Dividend restraint distorts the allocation of funds raised from savers through the market place, and the successful companies cannot offer the rewards which will attract new funds. This is clearly recognised by the authorities, who have tried to interpret the rules flexibly when a company has wanted to raise new capital. As a result, on such occasions they have usually allowed increases in dividends beyond the maximum—and, in my opinion, quite rightly so. However, this has led to criticism that the rules are being flouted and that dividend control is not being effective. But what it really shows is that the rules are nonsense and that the authorities know they are and act accordingly. Why, therefore, maintain something which is not only unfair but which is acknowledged to be harmful in its effects on capital-raising? I would submit that control should be ended in the interests of industrial investment, greater employment and general prosperity.
Thirdly, I must say a word about capital gains tax. These gains, when realised in inflationary conditions, are frequently only a mitigation of a real loss incurred. To tax such mitigation is excessively harsh and a great discouragement to the very people that this country needs as investors in industry. The report on inflation accounting, which has been generally welcomed and accepted, recommends a radical change in the accounting treatment of assets held by companies. If the financial position of companies is to be corrected for the effects of inflation,

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it is surely reasonable that the same process should apply to individuals. It seems to me totally inequitable that the private investor in industry should be faced with this tax. By way of encouragement, I would suggest that for the purpose of computing gains, an adjustment be allowed of the purchase price of a security held for more than two years by the difference in the retail price index over the period for which the security has been held.
Finally, I should like to say a very brief word about the Employee Investment Bill which was recently introduced in another place by the honourable Member for Harwich. Like many others concerned with increasing the ownership of industrial shares by individuals, I was most disappointed that this Bill failed to receive a Second Reading. I say this because it seemed a logical follow-up to certain rulings evolved by the Inland Revenue to facilitate the operation in this country of deferred profit sharing schemes for employee share ownership similar to those operating in nearly 200,000 companies in the United States. At this stage, however, I can do no more than express the hope that the 1977 Finance Bill will confirm the important fiscal provisions contained in the Bill.
I hope that what I have said is relevant to my noble friend's Motion. I believe it is, because, as I said earlier, I am convinced that an essential ingredient of a national recovery programme is a reversal of the present trend and a return to direct involvement of individuals in industrial investment. I fully recognise that there are those who are opposed to this type of individual participation and prefer centralisation as a matter of principle. To them I can only respond by expressing my disagreement and by drawing their attention once again to the deliberate policies of our EEC competitors, such as France and West Germany, who appear to be deriving positive advantages from them. If they can do it, why cannot we? However, I do not believe that we can, unless we have an all-Party approach to the matter which can produce the kind of political consensus clearly desired by my noble friend. Surely this kind of agreement is achievable in the interests of the country as a whole.
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Personally I do not see this important matter as in any way a Party issue. I will conclude, therefore, by expressing the hope that I may hear some words of encouragement not only from the noble Lord who leads the House, despite the imminence of the Budget, but also from noble Lords in other parts of the House.
6.27 p.m.
Lord ROCHESTER: My Lords, first I should like to say, as simply as other noble Lords have done, that I agree wholeheartedly with the underlying theme of the Motion which has been introduced by the noble Lord, Lord Hankey. However, as has also been noted, the trouble is that as a matter of practical politics, all we can have now, in the short term, is a limited agreement between one or two of the minority Parties and the Government. I think I am speaking for all my noble friends when I say how glad we are to learn that a limited agreement has been reached this afternoon between the Government and the Liberal Party in what we conceive to be the national interest.
Starting, I think, with the noble Lord, Lord Houghton of Sowerby, a number of noble Lords have said—and I certainly agree with them—that the prospects for a longer-term agreed programme for national recovery depend very much upon a general willingness to see this come about. It was the noble Lord, Lord Houghton of Sowerby, who first asked this afternoon how this common purpose could be achieved. As for the answer to that question, I know no more than other noble Lords. I have some idea from my industrial experience of the procedure by which this common purpose could perhaps be achieved, given the will. I am at least clear that the first essential is for those elements in society who are chiefly involved in some of these major national problems to come together in order to confront the problem, or problems, to identify them more closely and to see what areas, however limited, can be found upon which they might build together.
Beyond that I do not see how we can move at present, except to say that it may be that one day events will prove that the electorate is ahead of us as politicians. In other words, if your Lordships will forgive me for striking what may appear to

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be a partisan note but is not so intended, it may be that the conditions for a political consensus will be created only when a sufficient number of people choose to vote for the Liberal Party or for some other minority Parties and that in that way consensus politics will be brought about.
I had a number of things that I was going to say but with which I will not weary your Lordships now. My noble friend Lord McNair has spoken of a number of points which relate to any long-term national recovery programme that it might be possible to create and which fall in the political field. I should like to mention one or two in, broadly, the industrial and economic fields which I think have not been referred to today. Again, the first has to do with procedure. I agree with the noble Lord, Lord Hankey, that the National Economic Development Council is a body which is ready to hand and that it should be made use of; but because I believe that the rights of the individual are those above all which must be safeguarded, I do not think it will suffice merely for Opposition Parties, as he seemed to be suggesting, to be represented on that body. I am not sure precisely how best to achieve it, but because I believe that the sovereignty of Parliament must somehow be retained, or rather restored, in my view it follows that it is employers and trade unions or their representatives who should somehow become involved in the Parliamentary process, perhaps through an extension of the Select Committee procedure, rather than the other way round.
I have to acknowledge that as events in the last few years have demonstrated very clearly, trade unions exercise great power; but surely it is in the interests of all of us, including union members, that as far as possible we should seek to subordinate their power to that of Parliament. There is a further complication, in that increasingly within trade unions power is being wielded in the localities rather than at the centre; and if we needed any reminder of that, I suggest that recent events concerning the toolmakers at British Leyland have supplied it. However, in contrast to the noble Lord, Lord Hankey, I believe that this calls not only for what might be called more member participation in trade unions, but also for better training of management in leadership, for in my view it is only through joint
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action by management and trade unions that workable negotiating procedure agreements will first be made and then adhered to.
The only other point that I wish to make relates to the equally difficult questions of productivity, of investment and of the future of incomes policy. I suggest that the first need is to develop the existing agreement between the Government and the TUC so that it formally involves the CBI, for if they are not included there will not be a consensus, the value of any agreement will be limited to bilateral bargaining on pay and on prices, and that will not promote active collaboration between employers and employees in achieving what I believe many trade union leaders would now agree to be the basic purpose of industry, namely, the efficient production of goods and services for the benefit of the community.
From this base, if it were possible to construct it, as I see it there would then be a better prospect of creating a climate of trust in which management could more confidently consult employee representatives from the start about specific investment plans, and there could thus be more joint commitment to increasing the size of the "cake", so to speak, before bargaining about how to slice it up, instead of, as now, after doing so. Arrangements could also be made for management and trade unions to help each other in training shop stewards to achieve what would then be their common purpose, and an institutional framework or superstructure could then be established within which a more effective national incomes policy would have, I suggest, a better chance of surviving.
I do not believe that this is all wishful thinking. Indeed, the company for which I used to work has just held the first meeting of a central business and investment committee with full trade union backing and having just these points in mind. It is representative of all ten divisions of that very large company, and I think I am right in saying that in each case the representative is a shop steward.
I believe it is for us as a nation to choose—although I am not so naive as to suppose that such a desirable general state of affairs will easily come about—between

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either starting to work together towards some arrangement such as I have sought to suggest, or on the other hand seeing our living standards gradually decline still further while we continue to bicker among ourselves. It may be that things will have to get worse before they get better. I find myself in some sympathy with the noble Viscount, Lord Amory, on this theme; that is to say, it seems to me that in the end the measures that will be needed may prove so unpalatable as to mean that they cannot be achieved by any single Party. It is because the noble Lord, Lord Hankey, has had both the wisdom and the courage to raise this basic issue that I am glad to support his Motion.
Lord MOTTISTONE: My Lords, before the noble Lord sits down I should like to ask him a question. In his opening remarks did he imply that his Party has allowed itself to be sucked into the Socialist whirlpool?
Lord ROCHESTER: My Lords, I do not think it is necessary for me to add very much to what I said, but just to remind the noble Lord, Lord Mottistone—and I hope I have made it plain—that in making this agreement we are satisfied that it is in the national interest. It may be that the noble Lord, Lord Peart, when he comes to reply, will have more to say about it. But certainly I think the noble Lord can rest assured that we are not likely to be party to any Socialist measures of the kind he appears to have in mind.
6.40 p.m.
Lord KILMARNOCK: My Lords, I should like, with respect, before we come to the end of this extremely interesting debate, to refer to an area of study which I believe to be relevant but which has so far not been touched on this evening. As we all know, most discussions on economic and social affairs tend to centre on how to share wealth, and, naturally, as several noble Lords have pointed out, the distribution of wealth depends on its creation. One of the premises of the Welfare State was an expanding growth economy. But though Eddington's universe was an expanding one and that expansion was an essential part of its nature, there is grave doubt that our global economy can expand indefinitely in a similar way. In
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recent years very substantial doubts have been cast on the possibility of continuous and regular growth among the major industrial Powers. For instance, the Club of Rome's report entitled Limits to Growth, published in 1972, makes fairly chilling reading. One does not have to accept all its conclusions, and many do not, but it is very difficult to dismiss them altogether.
My Lords, it may be possible by competitive prices, wage restraint, increased investment, and even by a dollop of enthusiasm, to improve export performance and balance of payments. But none of this is likely to affect more than marginally the single most malignant ill of our society, which is, of course, unemployment. I was glad that Lord Hunt touched so tellingly on this in relation to youth, and Lord Robbins also, of course, gave it due prominence. This problem affects not only us, but also other industrial countries, whose economies in most respects are much healthier than ours. Last Wednesday we had a very interesting debate on unemployment, and it is not my intention to go over that ground again. But I cannot refrain from quoting Lord McCarthy's first two propositions: namely, that we face a growing threat of mass unemployment which is unprecedented since the depths of the depression in the 'thirties, and which will certainly be much more difficult to remove because we know far less than we did then about how to do it. I beg your Lordships to take note of that disturbing statement, because I shall refer to it again.
Lord McCarthy's second proposition was that the existing policies of the Government are unlikely to have more than a marginal impact on the problem. I take this, incidentally, to be just as true of any Government we are likely to have in the foreseeable future. Even if there is an upturn in the economy, as some predict, it is not likely to affect the level of employment in anything like the same proportion. As the noble Lord, Lord Douglass of Cleveland, has remarked on at least one occasion in this House, investment does not necessarily create employment. Did not the noble Lord, Lord Rochester, tell us the other day of an investment of £65 million which was only expected to create 90 jobs.

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"How is this germane to Lord Hankey's Motion?" some of your Lordships may ask. I believe it is highly germane, for until we have an agreed and accepted programme to defeat this evil we shall not get the consensus in the country which the noble Lord, Lord Hankey, calls for. The problem will not be solved by investment, nor by exports, nor by worker directors. It is a disease which marauds across the boundaries of disciplines and departments, laying waste good men and women wherever it goes. We should not delude ourselves—and to be fair I think few of us do—that it is conjunctural, that it will go away when the economy gives its next little skip out of the red with the help of North Sea oil. My Lords, it is not conjunctural, it is structural, and it cannot be solved without a very long, painful, searching look at many of the things we take for granted in our society. It will not be solved, nor will any of the more deep-seated problems facing us be solved, until we face the proposition—I am not saying that we should necessarily accept it, but it would be folly not to face it—that the cut and thrust of industrial competition among the richer nations may no longer be an appropriate or even a viable response to a world where frontiers constantly contract, millions starve, and it is increasingly recognised that resources are finite—in short, a world in which the challenge may shortly not be affluence but survival.
My Lords, I come back to Lord McCarthy's disturbing proposition that we know less about how to solve unemployment than we did in the 'thirties. This is patently true, but is it not extraordinary? In most branches of knowledge, surely, we know more. Why, in the face of this central socio-economic problem, are we so helpless? One part of the answer lies, I should like to suggest, in the increasing role of Government in our lives and in the tremendous complexity of the Government's task. The Governments in democratic societies are of necessity of short duration and tend to plan intensively for quick results which will bear fruit during their term of office. This is not to say that Government Departments in this country do not commission objective analyses of a range of problems confronting them. There has certainly been funding of studies on specific issues by, for example, the DHSS,
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the Department of the Environment, the Home Office and others, sometimes in conjunction with private trusts, such as the Gulbenkian, and PEP also study selected problems and publish the results. Yet such studies, however excellent, are bound to be limited in their scope by departmental boundaries, while Royal Commissions can be hamstrung by their terms of reference, as in the case of the Bullock Report.
We have, it is true, the Central Policy Review Staff, which is designed, I believe, to be ruthlessly objective, but it can only chew over what the Government puts on its plate. Of course, there are able political and social scientists and econmists working in the universities. Only the other day a review of the current situation was published by the Cambridge Economic Policy Group. Then one must not forget the institutes, such bodies as the RIIA at Chatham House, and the Institute for Strategic Studies, which are independent of the Government, or the Centre for Environmental Studies, which is financed partly by the Government and partly by the Ford Foundation. There are many other institutes covering many aspects of our national and international life.
All this activity is very admirable, but the whole of it—taking into account all the earnest endeavour and all the undoubted brainpower—does not seem to add up to more than the sum of its parts, because the parts do not come together in meaningful interaction; that is to say, in the generation of programmes of action which is what we seek. One of my first ideas was that what was needed was a federation of institutes, to bring together the results of research being done in the fields of social and political science and economics and other fields, and to foster inter-institute contacts, in the hope of some cross-fertilisation. But my information is that this would not be feasible.
Let us look very briefly at what is happening abroad. Perhaps I should start with the EEC, as we belong to it. Here the Commission set up a project entitled Europe Plus Thirty, which was headed by the noble Lord, Lord Kennet, who gave evidence about it to Sub-Committee E of your Lordships' EEC Scrutiny Committee, though I do not know yet whether

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anything concrete will emerge from this. Of course, it is very easy to dismiss all medium or long-range forecasting as futurology, something that sensible and practical men should have nothing to do with. But even some of our most hardheaded and hardnosed friends and competitors—among them the USA, Canada, Japan, Holland—go in for some kind of futures research.
In the USA, as we all know, "think tanks" abound, of all shapes and sizes, and many degrees of dependence on or independence of government, and of varying credibility. Attached to Congress itself is the Congressional Budget Office, which not only provides Congress with basic budget data and with analyses of alternative budgetary measures, but also provides periodic forecasts and analyses of economic trends and alternative fiscal policies. Here you have something which might be described as Congress's own "think tank." In this connection, Lord Hankey, very rightly, I thought, foresaw an expanded role for NEDC in this country. The Dutch, who few would accuse of being fantasists, published in 1966 a medium-term economic projection by their Central Planning Bureau, and the director of that body published a year later a macro-economic projection up to 1990. A report on physical planning in 1966 tried to describe a kind of Utopia in the year 2000. The Dutch now have a Scientific Council for Government Policy whose members are nominated by the Crown. Its main task is to inform the Government of possible long-term developments, thereby creating a basis for the evaluation of policy alternatives. The council reflects, the Ministers decide. This council is apparently very much alive.
How they order things in the United States of America or Holland may not be in accordance with our more ad hoc system of what perhaps I might be allowed to call "Government by flair". But flair, though always admirable, may not be enough. It is in this context that I should like to call your Lordships' attention to the initiative of Professor Dahrendorf—who until recently, as many of your Lordships will know, was an EEC Commissioner and is now head of the London School of Economics—in the direction of a body in which long-range policy studies and analyses can be
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carried out on the lines of the Brookings Institute in Washington. I understand that conversations are taking place today among trustees of the Ford Foundation concerning the possibility of establishing a branch of Brookings in this country.
The parent body, which came into being in 1927 as a result of a merger of some even earlier institutes, is an independent, non-partisan organisation and it is the single most important outside consultant to the United States Federal Government. It supplies and lends people to Government and takes them back into research—a two-way traffic perhaps not common enough in this country and perhaps analagous to the two-way traffic which the noble Lord, Lord Tedder, has advocated between the universities and industry. It relies for only 15 per cent. of its finance on Government and it works for Government only on the condition that work will be unclassifiable and publishable.
In my submission, we should welcome Brookings if it comes to these shores, as capable of making a real contribution to better policy-making and better decision-taking. Such a centre might well receive contracts from the TUC, the CBI and Government Departments for long-term forecasts, which no Government are able to carry out themselves owing to day-to-day pressure on their hard pressed officials and owing to the transient nature of ministerial office itself.
Far be it from me to suggest that all our problems will melt away if we copy the Dutch example or queue up on the doorstep of Brookings, or its equivalent, though I hope that the initiative of Professor Dahrendorf and his friends will come to something and become a pace setter in this country. Nor do I wish to under-value what is already being done. Every additional pound earned abroad must be applauded and every job created or saved is worth a cheer. But I want to suggest very strongly that we must recognise the need for longer-range and deeper analysis of policy alternatives than is at the moment common in this country, and for a centre where these activities can be carried out. I do not pretent to know what would emerge from such an institute or centre. Even if it did no more than act as a stimulant to a new type of awareness of our contracting globe, and help to create

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a new climate of opinion, it would be performing an extremely valuable service. For these, my Lords—a new awareness and a new climate—are the prerequisites of that consensus which the noble Lord, Lord Hankey, called for and which I am sure we all desire.
6.53 p.m.
Lord PEART: My Lords, I, also, should like to thank the noble Lord, Lord Hankey, for this debate and for an excellent speech. He read a very moving quotation to the House. The noble Lord sent me a copy of his speech earlier this month—very real proof of his sincerity in calling for co-operation from all parties. I should like to thank him publicly for the good spirit that he has shown. We have had a fine debate. As one colleague said, this is the House of Lords at its best. We should be honoured by the fact that people think that way. I was glad to receive the results of the Marplan survey on the attitudes of the British people towards the second Chamber. I may want reform although others may not, but I believe it is necessary to have a bicameral system.
A number of noble Lords have referred to the debate in another place on a Motion of no confidence in the present Government. The noble Lord, Lord Mottistone, seemed very disappointed—particularly with the Liberals—in his extravagant phraseology about a whirlpool of Socialism. I am sure he will not mind if I say that it showed that he has had a rather erratic political career. I do not know how many Parties he has been a member of—he read a list. There may be hope for him still. He can have a bet with me, but I think the Government will survive tonight. The noble Lord asked the Liberals about their limited agreement. The sooner he reads that agreement the better. He will find that it is a very sensible one.
I have made notes, as I always do when I reply, on what noble Lords have said. The noble Lord, Lord Terrington, asked me to make sympathetic remarks about share schemes. I believe that he is right and that he made an excellent contribution. He said, quite rightly, that we are in a mixed economy. He quoted the example of the employees in Renault, which is really a nationalised concern; he described
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how worker participation of that kind has been a success there. I agree with the noble Lord and I appreciate that he has been connected with this movement in a big way. I hope that the movement develops. Direct involvement by workers is important. If a sensible, practical scheme can be worked out at factory level with the unions, all the better. I hope that his point has been noted sympathetically.
The noble Lord, Lord Kagan, referred to fiscal policies affecting employment and to the many changes in the sphere of Government activity in relation to financial measures. The noble Lord is right: businessmen can be very much affected by new taxation. It leads to changes in policy. When I was a director of a fairly large firm I recognised the problem. As a leading industrialist, particularly in the textile industry, the noble Lord knows the difficulties full well.
The noble Lord, Lord Robbins, spoke about a programme but wanted broad objectives. As always, I listened to his remarks carefully. He had doubts about the machinery of Government, whether that would lead to complications and bureaucracy. He argued that it was Parliament and the Administration that should make the decisions, with which I agree. The noble Lord laid down two objectives, although if we include a reduction in the level of unemployment there were three. He said that we must seek to eliminate inflation; that we must seek a reduction in unemployment, and that, above all, we must increase productivity per head in manufacturing industry.
The unemployment theme was taken up by many other noble Lords. The noble Lord, Lord Kilmarnock, stressed unemployment. He developed his theme further and spoke about some of the problems which may affect competitive industry here and, indeed, in countries which are affluent in the world. Conditions are changing so quickly that a new situation could seriously affect us here. The noble Viscount, Lord Hanworth, mentioned a consensus. He supported the need for recovery. He thought that we could not achieve consensus under the present Parliamentary system. He developed a very powerful argument for proportional representation—no doubt he won many friends on the Liberal Benches. Whether the noble Viscount is right, that

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the reform should be gradual, is another matter; whether he is right, that we should reform the Parliamentary system first before we tackle the problems which face us, I do not know. The objectives that were laid down by the noble Lord, Lord Hankey—I shall deal with his remarks later—and also by the noble Lord, Lord Robbins, were right.
The noble Earl, Lord Halsbury, said that we should have a dialogue but he hoped it would not be a dialogue of the deaf. I hope that he is right. The noble Lord, Lord Bowden, spoke on a theme about which I know he feels passionately. I think that the first speech I heard him make in this House was on indexation and other matters. I wish him well in his campaign, although I cannot agree with him.
The noble Lord, Lord Gore-Booth, said that Parliament must speak with a single voice. I think he read an extract from a speech by the noble Lord, Lord Diamond. He said that he was in the middle position in politics. I am not sure what the middle position is exactly, but I agree with him about consensus. There are parts of policy where we can have consensus. He mentioned particularly foreign policy. I think that that has been true. Broadly speaking, ever since I have been in Parliament, both here and in another place, there has been consensus, certainly between the Leaders of the major Parties. There are always fringe elements in all Parties, but during the period of Labour Government under the Attlee Administration there was consensus. What they sought to do was basically supported by the great Prime Minister Winston Churchill, and also by Lord Avon to whom we paid tribute not long ago. There was a consensus.
It is true also in the field of defence. Naturally, we have to respect the views of those who are against defence for various honourable reasons, such as pacifism, but in the House even now there is consensus. It may well be that noble Lords opposite were rather touchy about cuts in defence expenditure. But, after all, their own Prime Minister said that there must be no sacred cows in the field of public expenditure. You cannot shout for no cuts in defence when you preach cuts in public expenditure. I think there is double talk on this.
The Earl of GOWRIE: My Lords, what we were maintaining was that cuts had already been made, and it was the cuts on cuts that we were objecting to.
Lord PEART: My Lords, that is an easy get-out. You agreed with those early cuts; you had no critical Motion, and there was no critical Motion on the further cuts. I believe the cuts to be necessary as long as defence capability is not harmed. I believe in defence and always have, like most noble Lords in this House, but I believe that there must be no sacred cows.
The noble Lord, Lord Gore-Booth, developed admirably the theme about the middle position. The noble Lord, Lord Hankey, dealt with it in his speech when he referred to agriculture. How I have been feasted by the National Farmers' Union and the Agricultural Workers' Union. I must add another important organisation—very important to noble Lords—the Country Landowners' Association. It was a rather remarkable evening that I had. I see one of my ministerial predecessors, the noble Viscount, Lord Amory. I think he would agree with me even in the sphere of agricultural policy, which is very important for our country, partly because of the efficiency of the industry and its importance to our people, and also partly because of our role in the Community where we make a major agricultural contribution.
There has been a consensus about agriculture for all the time that I have been connected with the industry—since I first became a humble Parliamentary Private Secretary with Torn Williams. It was a Labour Government which initiated that consensus. It was a Labour Government that changed the whole atmosphere in the agricultural field with major measures. There was the 1947 Act, which gave the farming community assured markets and guaranteed prices; which set up an advisory service and enabled the farmers, farm workers, and representatives of the country landowners to sit on executive committees in the regions, where a wonderful consultative system was set up.
Unfortunately, some of that consensus was destroyed by cutting down public

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expenditure, which was really chicken-feed, in a field which did for a time harm our industry, and I am thinking about what our successors did. But the noble Viscount, Lord Amory, was proud of the industry he represented. I think that consensus is still there, even though some Governments have acted doctrinally, like a rather silly decision to remove, for example, the Rural Development Board, which was going to bring great benefits, I believe, for the hill and upland areas of the North of England. However, broadly speaking there is consensus in that industry, and that is the approach that I want and which I think we can have more of.
Of course, we must still have our own Parliamentary battles. After all, I do not complain about the Party system. It is one of our great traditions that we can have our political battles in a civilised way as we do in this House, and as we sometimes do in another place, and it is right that we should have this. It is right that we should have great debates at periods of time in the country.
The Party system is not a bad system. It has worked. One does not have just to preach the works of Bagehot and other constitutional writers on the virtues of our Parliamentary democracy; it is something we cherish. I hope that we shall never have a one-Party State. The vitality of our Parliamentary system is a great national asset, and I am sure that noble Lords would not want to harm it, although there are siren voices which sometimes try to attract us along certain paths. I think we should be proud of our system, and I see no reason why we should be pessimistic. I think we can have more consensus of the kind that many noble Lords want without harming the Parliamentary system, and still preserve that essential political conflict which enables British people to come to decisions and, when necessary, to change Governments and to elect Governments which suit them at certain different times in our history.
I want to try to make my speech briefer than usual but it is not easy when one is trying to reply to people. The noble Viscount, Lord Amory, talked about a definition of new socialism. I think he was wanting to know really what was behind the view of my noble friend Lord Houghton. I take the view that we must think
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in terms of a society. I am going to plagiarise a remark of Professor Graham Wallace, who is at the London School of Economics. I hope I do not frighten noble Lords opposite when I say that. He said that freedom was the possession of continuous initiative. I think our aim should be to create a society through consensus, where the wellbeing of our people is assured; where we have better health standards and better education. We should create a society which enables individuals to have continuous initiative. That is what we want, and that is why I am a democratic socialist.
I do not use the world Socialism in the Marxist sense; I use it in the sense of social democracy in Europe, and indeed in the way that my noble friend referred to it. We make no apologies for it. After all, in New Zealand it has worked in the sense that there is a mixed economy there, and the Government from time to time did certain things. They had a national health service and social security, and that is what I want. The noble Lord, Lord Hunt, was quite right when he talked about unemployment and the need to look after our young. I was pleased with his remarks about comprehensive schools. And I must condemn that dreadful film on BBC television the other night. There is something strange about that programme. I think that it was done deliberately. After all, Eton is a comprehensive school for the rich. A very good one, I am told. They have no problem of a dull child there. They get the best education.
I practise what I preach because I sent my only boy, who passed the 11-plus, to a comprehensive school. It has not harmed him. He has done very well. And it is true that the system will work better as it is known better. There is still a lot of political prejudice, but I believe that comprehensive schools are the answer, because the school is, in essence, a microcosm of our society. It is there where the principles of good living and democracy are created. Others will argue that it is in the family, but I believe that it is in both. Therefore, I want to see good schools. It is initiative that we want, and this is where even with people of good will we can have a consensus of opinion. So I am not pessimistic, whatever arguments there may be.

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I had better come now to some of the other arguments before I deal with the noble Lord who initiated this debate. The noble Lord, Lord O'Brien of Lothbury, talked, as always, sensibly about financial matters. He said that the Tories would not have acted differently compared with what had been done by the Labour Government, and I think that in reality he is right. I am fairly certain that if noble Lords opposite had been in power they would have acted much the same as we have.
The Earl of GOWRIE: But with conviction, my Lords.
Lord PEART: My Lords, no doubt they would have acted with conviction, even when they acted wrongly. I know that, and for that reason noble Lords opposite can be too stubborn. Perhaps they are rather arrogant in that respect, thinking they have a right to govern us always. I believe the Conservatives would have acted in exactly the same way. In fact, I do not think they are very far from us—I do not want to embarrass my supporters—because on the main matters of economic policy there has been a consensus, except that noble Lords opposite have never really come clean on the question of cuts in public expenditure, and I have often chided them about that. I hope noble Lords will forgive me for becoming a little political, but, after all, I am speaking of the need to obtain a consensus.
Lord O'Brien was right to say that the making of a consensus would depend in the end on market opinion in the economy. He asked for not too much nationalisation. These are all matters about which we can argue. Public enterprise can be a good thing for the country. A mixed economy means precisely that, public and private enterprise, and sometimes there are great dangers from private monopoly. One has only to look at the history of Germany to see what happened there over a long period. The noble Lord, Lord McNair, spoke about British trade unions and I believe it was he who mentioned trade unions on the Continent. It may well be argued that the German trade unions have developed an efficiency, and that they have done that only because they are large, whereas we have too many unions. On the other hand, many people argue that perhaps we should
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fragment the trade union system and that we have gone too far in relation to Government. I do not know, but certainly these are matters about which we can argue.
One should not be too pessimistic about the attitude of trade unions. Despite what has happened in Leyland, I believe that broad opinion in the trade union movement as represented by the TUC and its committees is helpful in the best sense to the running of our country. I believe that that is equally true of the CBI, and that is why it is a good thing that the leaders of industry can now work together, as they do, on many of the larger committees; "Neddy" was mentioned by Lord Hankey and the same theme was taken up by other noble Lords. Generally speaking, therefore, there is today a measure of broad agreement. The consensus at national level has also been developed through the Social Contract. Our social agreement with the unions has become the envy of the world and it has achieved widespread acceptance of pay policy, a national policy which, in my view, has an immediate impact on ordinary working people both when they receive their wages and when they go to the shops.
This consensus has, however, gone much deeper. As a result of the Social Contract, our industrial relations record has been dramatically improved, and I do not hesitate to make that point despite the difficulties highlighted by the Press recently. In the second major plank of the Government's industrial and economic strategy we have sought co-operation and consensus between the Government and those who work in the various industries covered by the sector Working Parties. I did that as Minister of Agriculture and I did it as the Minister responsible for the fishing industry. We always sought to get agreement for our decisions and the desire was to help the two industries, which were certainly not controlled by Socialists. They were not part of a Socialist economy; they were highly competitive in a capitalist sense. In other words, we have never been doctrinal on this score.
This search for consensus has also prompted us to look for an extension of industrial democracy. I will not develop that theme, because we are still talking

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and having discussions about it. It is, in my view, as important to ensure partnership between workers and management at the workplace as it is to develop agreement for national policies. I am not arguing now about the details of the Bullock Report, but that is why we commissioned that report on industrial democracy and why we are now engaged in widespread consultations on the best way to achieve this extension of industrial democracy; the search for consensus at the level of the individual firm, the industry and the whole community. This Government have sought and achieved a national consensus of a kind far more lasting than the sort of coalition which we are often encouraged to patch together here at Westminster.
The noble Lord, Lord Hankey, said there was considerable agreement about what should be contained in a national recovery programme, and I am sure he was right. Let me spell out quickly what I consider to be common ground among the vast majority of ordinary working men and women in this country. First—again, this point was made by Lord Hankey—it is common ground that Britain's industrial performance, productivity and overall rate of growth over a long period have been poor by comparison with our competitors. Thus, any programme of recovery must take into account both this and the special economic difficulties that we have had to face in the last year or so. We must encourage an improvement in our overall industrial performance in the long term, as many noble Lords have said today. But, at the same time, we must not minimise the difficulties that we have been experiencing recently, difficulties which arise from our relatively slow cyclical recovery from the worst recession the world has seen in the post-war period.
In my view, therefore, we are on the right path. The Government have been firm in our requirements in the present situation. The first priority is for a reduction in inflation, an improvement in net exports and increased industrial investment. We will need to achieve these in order to sustain growth and move towards full employment. But I would say to noble Lords that our strategy looks further ahead as well. While it is the only way to solve the immediate and pressing problem now facing the economy, it is
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also an essential step towards the longer-term need to improve our overall growth rates. We have sought to achieve financial stability in order to provide the conditions for recovery in investment, exports and growth in the medium term.
This has meant keeping a firm, I would say unprecedentedly firm, grip on the country's finances. Public expenditure targets have been controlled and met, monetary targets have been set and hit. We have tried to alleviate unemployment through short-term selective measures. Yesterday's figures, showing the largest monthly drop for three years, suggest that we are moving firmly in the right direction. They showed a fall of 38,000, the second successive monthly drop. These are measures which have to be taken in the short term and which I believe are generally accepted as sensible and reasonable, and I could certainly not accept, as the noble Lord, Lord Hankey, alleged, that they are obscure. This acceptance emerged during the debate in this House on 26th January about the Chancellor's December measures. Indeed, Lord O'Brien mentioned the Prime Minister's brave speech at that time, a speech which was welcomed in this House by noble Lords of a different persuasion and which outlined the strategy which we still accept. We debated them fully then and I do not intend to go over them now.
In the medium-term we have agreed with the unions the need to preserve our competitive position abroad, to hold down our costs and reduce our rate of inflation through the Social Contract. We have also, through an extensive system of selective assistance, concentrated on the growth points in the economy as part of our policy to expand this country's industrial base. And, for the medium to long-term through the industrial strategy, we are looking for the likely constraints to future sustained growth. Throughout the development of these policies, we have consulted widely and deeply with unions and industrialists. The political Parties represented here at Westminster have had every opportunity to put their views in debates and during the discussion of legislation. We have been debating the need for a commonly agreed national recovery programme. I agree that this is necessary and I argue that it is what this Government are doing.

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I have described in general terms the means whereby we have sought to achieve this consensus. I should like quickly to go into a little detail about some aspects of the Government's search for consensus at the level of the national community, the industry and the individual firm.
At the beginning of the debate, the noble Lord, Lord Hankey, said that there was a measure of agreement as to what our economic recovery programme should contain. He mentioned the discussions in the National Economic Development Council and asked what they amounted to. I shall answer him as best I can, though I must admit that I may not be able to better the account of the workings of the industrial strategy given by the noble Viscount, Lord Watkinson, in this House in the economic debate on 26th January. The industrial strategy is conceived as a "bottom up" approach to planning, unlike the National Plan, which attempted to impose a plan with targets and growth rates imposed from above. Decisions which improve actual efficiency are required to be taken in the enterprise and workplace. They must also be taken jointly by management and workers so that the strategy evolves at the level of the individual sector.
Unlike many attempts at planning, the industrial strategy both helps to influence and is influenced by decisions in individual firms and plants. The system is not and must not be too rigid. It allows flexibility so that individual sectors can adapt as the environment in which they are operating changes. A framework almost ideally suited to this "bottom up" approach already existed, as the noble Lord, Lord Hankey, knows, in "Neddy" councils for individual industries, and I agree with the noble Lord, Lord Hankey, that this Council is well placed to tackle this job. These have been in existence for over ten years and the participants have already learnt to work together. They have learnt the benefits to be obtained from improved communications both within and between individual sectors and, just as important, they realise that substantial results must take years to achieve.
I had better pass on and skip some of my speech because the time is getting on. I believe that there is a desire on the part of we, the Government, to further the idea
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of consensus. People may not always agree with our policy but we are anxious to see that there is full participation with industry, the trade unions and those who have responsibility. I feel that the concept of industrial democracy, when it is finally settled after the further discussions which I mentioned earlier, will in the end help to further the Social Contract and all those other instruments which I believe will, in the long term, do so much to enable our great country to recover.
I should like to pay tribute to the trade union leaders without whom the agreements we have seen so far would have been impossible, and to those forward-looking businessmen in the CBI who have co-operated as well. Here is real consensus. Here is something which we know will in the end enable our country to grow and will enable us to produce much more than we have ever done and to do so more efficiently. Finally, may I, if I dare, end this debate with a quotation in an attempt to match the grave but poetic note with which the noble Lord, Lord Hankey, ended his opening speech? It was in 1776 that Benjamin Franklin said:
"We must indeed all hang together, for most assuredly if we do not we shall all hang separately."
I believe that that thought is every bit as true today as it was over 200 years ago.
7.26 p.m.
Lord HANKEY: My Lords, after that brilliant summing-up, for which I should like to thank the Leader of the House, I shall not attempt to make any great summing-up myself. I feel that we have had a most interesting debate. We have produced an enormous number of constructive suggestions. Very nearly every noble Lord who has spoken has put some useful ideas into the common pot and I only hope that those ideas will be noted and made use of. I should like to thank everybody who has spoken for the trouble they have taken to contribute to our debate.
I think in a sense that we had bad luck about the day. I realised that my speech was bound to be like sowing the dragon's teeth—your Lordships will probably remember that exploit of the great Mr. Jason in ancient times. We had a little of this, but I should like to say that

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when I am thinking of a consensus I do not believe that it can be a consensus over the whole field. If we were going to have that, we should have a coalition Government, which is manifestly impossible. But I feel that we ought to be able to have a very considerable consensus over a limited field, as my noble friend Lord Robbins pointed out and as I think the noble Lord the Leader of the House also implied. I am not against the Party system of course. One cannot organise a Parliament without it. It would be sheer chaos. On the other hand, I feel that on certain aspects of our national life the Parties would be better occupied trying to see how much they can agree upon rather than how much they can embarrass each other. That, I believe, is where our Parliament has gone wrong in recent decades. I say this with some hesitation, but, honestly, I believe that it is a statement of truth.
I visited Russia with a Parliamentary delegation in May 1968 and, as we sped in smart black Russian cars across the steppes, I was able to have reasonably confidential conversations with members of every Party represented on the delegation. Every one of them said almost the same thing: it was, in effect, that if the next two Governments were not more successful than the last two our whole system would be at risk. I believe that that is the position today. I beg leave to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

REPRESENTATION OF THE PEOPLE BILL
7.29 p.m.
Lord WELLS-PESTELL: My Lords, I beg to move that this Bill be now read a second time. Your Lordships will be aware that county council elections in England and Wales are due to be held on Thursday, 5th May. Elections to the Greater London Council are to take place on the same day. District council elections in Scotland will be held on 3rd May and in Northern Ireland on 18th May. This Bill will be of particular interest to those noble Lords who are standing as candidates in these elections.
The limits on expenditure by candidates at local elections in Great Britain are
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laid down by Section 64(2) of the Representation of the People Act 1949, as amended. The purpose of these limits is to ensure that all candidates can fight the elections on equal terms and without excessive expenditure. From time to time, it has been necessary to increase the limits to take account of inflation. This happened in 1969 and, except for the limits relating to elections to the Greater London Council, again in 1974. The Government received representations from many quarters that these limits should once again be raised because the existing limits would present serious difficulties to candidates at the forthcoming local government elections. The Government therefore consulted the political Parties and the local authority associations. As a result of these consultations, there is general agreement that the limits should be raised broadly to take account of the fall in the value of money since April 1974, when the Representation of the People (No. 2) Act 1974 received the Royal Assent.
Separate limits for Greater London Council election expenses were introduced for the first time in the Representation of the People Act 1969. When other local government election expenses limits were raised in 1974, it was generally agreed that the Greater London Council limits were still adequate. The Government therefore take the line that it would now be appropriate to raise the expenses limits for Greater London Council elections on the same basis as the others, to compensate for the fall in money value since 1974. So far as the Government are aware, there is no disagreement with this approach among those whom the Government consulted.
The provisions of the Bill itself may be very briefly summarised. The limit on a candidate's election expenses at Greater London Council elections is raised to £320, together with an additional 2p for every entry in the register of electors to be used at the election as first published. This represents a 60 per cent. increase on the existing figures of £200, together with an additional 5p for every four entries in the register. Clause 1(1) of the Bill also raises the limit at any other local government election in Great Britain to £72, together with an additional 1·5p for every entry in the register. This is slightly less than the 60 per cent. increase. A straight 60 per cent. rise would have

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produced a sum per elector of 1·6p and it was felt that there was some advantage in simplifying the formula. The elections to which this limit applies are county and district council elections in England and Wales, community council elections in Wales, and parish council elections in England. The limit also applies to regional, island areas, and district council elections in Scotland.
My Lords, we are taking this opportunity also to raise the limit on candidates' election expenses at ward elections in the City of London. It has been customary to keep the limits in line with the limit on candidates' expenses at other local government elections. This tradition is continued by Clause 1(2) of the Bill. The Bill breaks new ground in Clause 1(3) by dealing with candidates' expenses in Northern Ireland local elections. The effect is to bring these limits into line with those for local elections generally in Great Britain. Hitherto, the limits in Northern Ireland have been set under Northern Ireland legislation. That legislation, however, has never exceeded the amount set for Great Britain. As a matter of fact, provision has recently been made in the Northern Ireland (Local Elections) Order 1977 to raise the limits in Northern Ireland to those laid down under the present legislation for Great Britain. It was not possible for that order to anticipate this Bill. To ensure, therefore, that the limits in Northern Ireland continue to be in line with those for the rest of the United Kingdom, we are proposing to supersede the provisions of Article 7.1 of the Northern Ireland (Local Elections) Order 1977 by the provisions of Clause 1(3) of the Bill now before your Lordships. I am sure that your Lordships will agree that this course is justified in the circumstances.
This legislation is uncontroversial and has passed with all-Party support through another place. It is urgently needed to enable candidates to prepare effective election campaigns in the forthcoming local government elections in May. I do not think that I need say any more, other than to beg to move that the Bill be read a second time.
Moved, That the Bill be now read 2ª.—(Lord Wells-Pestell.)
7.35 p.m.
Viscount LONG: My Lords, this is
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indeed a very important Bill for those who are to enter into local government, and it is important, too, from the point of view of the expenses incurred. I am grateful to the noble Lord, Lord Wells-Pestell, for the way he has put the facts and given us the information relating to the Bill. He mentioned just now those of your Lordships who will be going in for local government, but if I might say so there are also many others who will be interested. In this respect it is important that we here in Parliament must also remember that there is another type of parliament within our democracy, that of local government. It is important that we remember those who give their services to try to better conditions for those who live in the cities and towns. A Member of Parliament has his expenses, but he sees some of his constituents only once a week, at a Friday or a Saturday surgery.
In the old days, in order for people to embark upon service on local authorities they had to pay expenses from their own pockets so as to advertise their politics, or the reason why they were seeking to be elected to local government. All of us in the House welcome the idea that all candidates will be able to have the same expenses, and so those who in the past were unable to afford to incur these expenses will now have the same rights as others. I believe that this is a great step forward and, with my noble friends, I welcome it. I do so because many of us on this side of the House know what local government involves, and we know of its difficulties. I am sure that this feeling is shared in the whole House.
As the noble Lord said, the expenses allowance in London has risen to £320, and then there is the figure of 2p per head on the register. But there is a smaller figure in respect of local government outide the Greater London area. I should like to ask the noble Lord the reason for this difference. I should have thought that in other cities, such as Birmingham, there would be similar difficulties to those in London. Can the noble Lord inform the House of the reason for this enormous gap between the figure for the Greater London Council and that which applies to other districts? Can he let me know how this is arrived at, and, equally, how these figures have been arrived at? What committee decided how much the expenses should

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be? I admit that the Government and local authorities, including the different branches which work within that sphere, were able to agree on how to arrive at these figures; but I do not understand at this stage—I stand to be corrected by the noble Lord—how you get to the figure of £320 for the Greater London Council and yet have a smaller proportion in other cities.
My Lords, I leave that for a moment, if I may, because I think another important part of this Bill which is interesting to me, and others in your Lordships' House, is that this is the first time that I have seen Northern Ireland incorporated into a Bill. Many of your Lordships have dealt with Bills which have in fact covered only Great Britain, leaving out Northern Ireland; but here we see, for the first time, that Northern Ireland local government is incorporated and we have the United Kingdom as a whole. I find that very interesting, and I wondered whether the noble Lord could enlarge on it, because this might be the forerunner of many more Bills coming before your Lordships' House with Northern Ireland incorporated in them, and not being dealt with as a separate country as such.
My Lords, the Northern Ireland question being as it is, the other point I should like to ask the noble Lord is this. I believe that it was in 1965 that there was a Speaker's Conference on the subject of local government expenses, or that it was part of the agenda; and I am given to understand—I may be quite wrong here—that there is to be a further Speaker's Conference to renew the ideas concerning expenses for local government office. If I am right, I think it was the noble Lord's Minister in another place who mentioned that there is to be a further Speaker's Conference on the expenses of local government elections, and I wondered whether the noble Lord could possibly throw any light on this.
My Lords, we would not attempt to hold up this Bill. We believe that local government is vitally important. It is vitally important to have the right people there, and those who could not afford to stand will now be able to have election expenses. That is indeed vital to them; and so local government can go on, in carrying out the different acts of legislation that Parliament delegates to them and
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thus carrying on helping the people in the streets, in the districts and in the towns. We would not like to hold up this Bill at all. It is not controversial, and I hope it goes through as soon as is possible. I am grateful to the noble Lord for his advice. I hope he can answer the questions I have put to him, but if he cannot I will gladly have him write to me.
7.43 p.m.
Lord WELLS-PESTELL: My Lords, with regard to the fixing of the amount, that is the Government's responsibility and I think I said that the Government had consulted the political Parties—I think I am right in saying every political Party represented in Parliament—and also all the local authority associations, getting from them their views on what would be a reasonable fixed sum and a reasonable figure in respect of each entry. I think those of us who have had some experience of standing for county councils in large cities, and also in country areas, know that the costs—printing costs, for instance —are much higher; and I think it is fair to say that in local elections in a country area things of that kind can be done much more economically than they can be done in the large cities.
The noble Viscount raised the question of what this meant in terms of money as compared with what it was. If I may take one of the Greater London Council electoral divisions—I am thinking of Holborn and St. Pancras South, which is part of the London Borough of Camden but which is a Greater London Council electoral area—there are roughly about 40,000 electors in that particular electoral area; and whereas under the old limits the top amount was £700, they will now be able to spend something like £1,120, so there will be an increase of about £420. If we move into the smaller areas, where there is an electorate of, say, only 1,000, the new limit will be £87 as against £55.
The other point that the noble Viscount raised related to Northern Ireland. I think I am right in saying that there was an Order in Council on the 9th March to increase the amounts, and the amount in Northern Ireland was increased on that date to £45 with a penny per entry on the register. This Bill was more or less in process, and it was felt quite pointless to bring all the other areas up to a particular

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standard and still leave Northern Ireland lagging behind. It has therefore been incorporated in this Bill, with the result that Article 7(1) of the Northern Ireland (Local Elections) Order 1977 will be superseded by Clause 1(3) of this Bill.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

SOCIAL SECURITY (MISCELLANEOUS PROVISIONS) BILL
Read 3ª with the Amendments, and passed, and returned to the Commons.

INCUMBENTS (VACATION OF BENEFICES) MEASURE
together with the Report of the Ecclesiastical Committee thereon (178th Report).
Laid before the House pursuant to Section 4 of the Church of England Assembly (Powers) Act 1919; and to be printed.

EMU WINE HOLDINGS AND SUBSIDIARY COMPANIES BILL [H.L.]
  HERITABLE SECURITIES AND MORTGAGE INVESTMENT ASSOCIATION LIMITED BILL [H.L.]
  Reported with Amendments.
CITY OF LONDON (VARIOUS POWERS) BILL [H.L.]
Report from Her Majesty's Attorney-General received and ordered to lie on the Table.
AUSTRALIA AND NEW ZEALAND BANKING GROUP BILL
Brought from the Commons; read 1ª; and referred to the Examiners.
  TRAFFIC LIGHTS INSTALLATION
  TRAFFIC LIGHTS INSTALLATION
  THE GLASS BRIDGE, ISLE OF DOGS
  THE GLASS BRIDGE, ISLE OF DOGS
  GOODS STOLEN ABROAD: PROSECUTIONS
  GOODS STOLEN ABROAD: PROSECUTIONS
  NIMROD EARLY WARNING SYSTEM
  NIMROD EARLY WARNING SYSTEM