Sitting of 28 July 1978

Preamble
The House met at Eleven o'clock

PRAYERS
[Mr. SPEAKER in the Chair]
That, in the opinion of this House, the following provisions about salaries and pensions of Members of this House should be made with respect to service on and after 13th June 1978:—
(1) The salary payable to Members of each of the descriptions in the first column of Table 1 below shall be at the yearly rate specified in relation to that description in the second column of that Table.

TABLE 1

Description of Member

Yearly rate of salary £

1. Member not within any other paragraph.

6,897

2. Member receiving a salary under the Ministerial and other Salaries Act 1975 as Comptroller or Vice-Chamberlain of Her Majesty's Household, Junior Lord of the Treasury or Assistant Government or Opposition Whip.

4,642

3. Officer of this House or Member, other than Member of the Cabinet, receiving any other salary under the Act of 1975, or receiving a pension under section 26 of the Parliamentary and other Pensions Act 1972.

4,299

4. Member of the Cabinet receiving salary under the Act of 1975.

3,529

MEMBERS' SALARIES, PENSIONS AND ALLOWANCE
Queen's recommendation having been signified—
11.5 a.m.
The Parliamentary Secretary to the Privy Council Office (Mr. William Price): I beg to move,
Mr. Speaker: I should inform the House that I have not selected any amendments on Members' salaries and pensions. Perhaps it would be for the convenience of the House to discuss at the same time the second motion,
That, in the opinion of this House, the limit on the allowance payable to any Member of this House in respect of the aggregate expenses incurred for his parliamentary duties—

(a) as general office expenses;

(b) on secretarial assistance; and

(c) on research assistance for work undertaken in the proper performance of those duties;

should be, for the year ending 31st March 1979, £4,098, and for any subsequent year, £4,200.
and the third motion.
That the draft Ministerial and other Salaries Order 1978, which was laid before this House on 20th July, be approved.
Mr. Price: The purpose of these motions is to give effect to the appropriate increases in parliamentary pay, Members' secretarial allowance and the salaries of Ministers and office holders in accordance with current stage 3 pay guidelines. Under the guidelines, Members are eligible for an increase of 10 per cent. in their parliamentary pay. The first motion therefore increases the figure from £6,270 to £6,897, with effect from 13th June. Corresponding increases are given in the abated parliamentary salaries payable to Ministers and office holders.
No doubt some of hon. Members will say that 10 per cent. is not the right figure, although I hope that many will argue that it is too high. Some may want an increase based on a figure more appropriately reflecting the salary that a Member should be receiving, and the last Top Salaries Review Body report may be called in evidence.
We have carefully considered that argument, as well as all the others put to us. Although we fully appreciate the strong feelings held in many parts of the House, we are convinced that the proposals on the Order Paper represent the only defensible course in terms of pay policy. Certainly it is not part of my case that the present situation is anything like satisfactory and I should like to say something about future prospects a little later. However, I hope that it will be accepted that Members of Parliament should be seen to accept no more than their constituents in the current pay round.
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It will be argued—I have a good deal of sympathy for the point of view—that it will never be the right time to correct the serious defects of the past. We recognise that argument, but we say that we could not pick a more difficult time. I do not need the House to remind me that I have been standing here each year since 1975 saying almost exactly the same thing. That is true, and I may as well admit it.
Some hon. Members are concerned about the disclaimers of the stage 1 increase of £6 which many signed. They believe that the time has now come to withdraw that. That, of course, is a matter for the individuals concerned, but no other TSRB group has received that £6 and for Members to do so now would, I believe, be seen as a conflict with pay policy.
Although Members will have reservations about the proposals on salary scales, I hope that there will be general approval of the Government's recommendations on pensionable pay. Last year's £208 pay increase was added to the £8,000 pensionable rate. The stage 1 £312 increase remained unincorporated, and in last year's debate the Government recognised the force of the argument that it should be included but could not at that stage support the proposal. My right hon. Friend has re-examined the issue in the light of current circumstances and we are therefore proposing that it should now be done.
The figure of £9,372 given in paragraph (2) of the first motion thus comprises £8,208 plus £312 plus 10 per cent. The table in paragraph (3) prescribes the supplements payable to cover the 5 per cent. pension contribution on the difference between actual and pensionable pay for the various new rates of parliamentary salary. The rate of contribution to the scheme will increase to 6 per cent. with the passage of the Parliamentary Pensions Bill and the rates shown in the third column of the table are in anticipation of that increase.
The second motion increases the reimbursement limit for secretarial allowance from £3,687 to £4,200. That will not only allow Members to increase their secretaries' pay by the amount under the guidelines; it will allow the increased costs of employers' national insurance contribu-

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tion to be met, and that is a move which I know many hon. Members welcome.
To some extent, the increases in national insurance costs were anticipated in the Review Body's 1975 recommendation on the secretarial allowance. However, I am proposing an additional element of almost £150 within the proposed new limit to cover increases which have arisen since then.
The third and final motion seeks approval of a draft Order in Council to implement a salary increase of 10 per cent. for all Ministers and office holders. The maximum salaries for these appointments are laid down in the Ministerial and Other Salaries Act 1975, and the rates may be amended by order in council, subject to a draft being approved by resolution in each House.
There is one point that I should make in connection with the order. Throughout, the order quotes maximum salaries which are not necessarily the actual salaries being paid. Appointments held by Ministers in another place attract higher rates of pay than the corresponding appointments in the House of Commons because of the addition of the rounds 1 and 2 increases which were available to Commons Ministers through their parliamentary pay. Since the 1975 Act gives no power to differentiate the rate laid down if an appointment is held by a member of one House rather than another, the higher rate has necessarily been given, but the Act permits a lesser amount to be paid than that authorised for any post.
Now I come to the question in the future, which is a matter of considerable interest to Members and one which inevitably will lead to some controversy. It is not an easy matter but it is not, in our view, one that we can ignore. During the past 12 months, Members have put to my right hon. Friend the Lord President of the Council by means of letters, Questions and through deputations, a multiplicity of views concerning the course that we should adopt for the future, and we of course are aware both of the amendments that were tabled to these motions and of Early-Day Motion No. 502.
I want at this stage to record on behalf of my right hon. Friend the value that he places on the constructive and helpful discussions that he has had with
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a group of Members led by the right hon. Member for Taunton (Mr. du Cann) and my right hon. Friend the Member for Anglesey (Mr. Hughes). We have said many times that we accept the argument that here are real problems of Members' pay, but there is no magic formula available to us which will suddenly put right the injustices of the past, particularly at a time of continuing pay restraint for the rest of the country. We can see little benefit in breaking away from the procedures already established for determining Members' pay, and my right hon. Friend, with the approval of the House, therefore intends to recommend to the Prime Minister that the TSRB should be asked to undertake a further review of parliamentary pay and certain related issues.
So long as we can keep the scope of the reference fairly limited, there is every reason to expect a quick report, and one issue in particular that we should like it to look at again is the question of a salary link—an attractive proposition to many Members.
Obviously, we shall be asked whether we can give an assurance that the Government will fully implement the resulting recommendations. My right hon. Friend has some sympathy for that view and has seriously considered whether a forward commitment would be appropriate. The Government believe, however, that there are grave difficulties in giving a blind commitment to accept immediately whatever the Review Body recommends.
Nevertheless, I assure the House that the Government recognise that they have a strong obligation to Members on the matter of their pay, and I remind the House that they have said that there would have to be clear and compelling reasons for the TSRB recommendations not to be accepted.
I believe that a further powerful argument in this respect is a move towards a bipartisan approach on pay, led by the right hon. Members for Taunton and Anglesey. This development has meant that for some time there has been a substantial common approach between the parties on the problem of how Members' pay should be tackled, and we are hopeful that there will also be a common approach to the acceptability of the report.

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This is a matter on which the time will never be right; neither will the amounts recommended meet with universal approval. There are very powerful views on this matter in all parts of the House, and they are by no means unanimous. What I do say is that the proposals before the House today are the most—and, in my view the least, as well—done in the circumstances. I hope that they will meet with general approval.
11.15 a.m.
Mr. Edward du Cann: hope that the Parliamentary Secretary, who has given that clear explanation which we all so much appreciate, will not think me in any way discourteous if my first words are of complaint. It seems to me profoundly unsatisfactory that all the proposed amendments to the motion are out of order. I understand that the reasons for that are largely technical. The chief reason, at least in respect of the amendment standing in the names of the right hon. Member for Anglesey (Mr. Hughes) and myself, is likely to be removed in a day or two, when the Parliamentary Pensions Bill receives Royal Assent, but that is scant consolation if one is not able to move the amendment today. This is typical of the confusion, muddle and total unsatisfactoriness which bedevil the whole of the situation and the discussions about Members' remuneration.
Not only did the House as a whole appreciate the explanation that the hon. Gentleman was good enough to give us; I am sure that all of us who have been responsible for the meetings with the Leader of the House, to which he referred, appreciate what the hon. Gentleman said about the way in which the representations have been conducted. It might be appropriate if I were to say now directly to the Leader of the House in public something that I have already said to him in private—that is, how much those of us who have been to see him have appreciated the courtesy and infinite fairness with which he has consistently heard us.
We have had a large number of meetings and a large number of people have seen the right hon. Gentleman, and I hope that he will not mind my adding that I think that the way in which those meetings progressed indicates clearly how necessary it was to have them. The
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Leader of the House took a great deal of convincing in the first instance that what we had to say was sensible and, indeed, responsible and in the general interest, but the fact that he has accepted that view and now has done something constructive about it is something for which we should all be grateful.
I should like to express appreciation that these motions have now been tabled. It is unquestionably right—no one can deny it—that the pay and allowances and pensions of Members of Parliament should be improved in the terms described by the Parliamentary Secretary.
It is also totally appropriate—I have always agreed to and acknowledge this—that what is done at this moment must come within the Government's guidelines. I have never suggested that Members should do anything other than conform to the same rules and obligations, voluntary or compulsory, which affect the remainder of our fellow citizens. If we are lucky enough to have certain privileges in this House—for example, free speech—we should be extremely jealous of those privileges. They should never be exploited, and in the ordinary way we have no business to argue that we should be in a privileged position in any other sense than what is necessary for the performance of our duties.
But certain things need to be said, and said plainly while we have the opportunity. There is no doubt that even at these enhanced rates the pay of Members, their pensions, and certain of their facilities are abysmally and stupidly inadequate. That is a matter of fact, not of argument. For many years the way in which we have dealt with our own situation has been unfair, but that is cur fault—I would not argue differently. As the Parliamentary Secretary suggested, this has always been a difficult and embarrassing matter. It is right, however, that it should be realistically approached, and that is my purpose this morning.
I am all for modesty. Modesty is one of the happiest and most charming of human virtues, and I think it behoves all of us who have the privilege of being in this place to be especially modest. However, I believe that in relation to our own circumstances we have displayed a degree of modesty which shows it to be a false modesty, and in so doing we have done

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the nation as a whole a disservice. To pretend that everyone should be paid some trivial remuneration because merit or responsibility cannot be properly rewarded may be honourable enough, but it is a foolish policy.
Therefore, my aim this morning is clear—to bring into the open some of these matters and, above all, to make the point that the responsibilities that we have cannot in any way be delegated. Hence the campaign in which I have been engaged, with my right hon. and hon. Friends and right hon. and hon. Members opposite—I am grateful to them for their support and encouragement in it—to ensure that the issues are better appreciated.
What is the right rate of pay for a Member of Parliament? Should we be paid the equivalent of the rank of colonel in the Army, of an assistant secretary in the Civil Service, of a county court judge, or of the chairman of a medium-sized company? These are all suggestions that I have heard canvassed.
The present position is that we are not paid amounts approximating to any of those suggested rates. We are paid very much less-50 per cent. or 60 per cent. of those amounts.
Should we be paid the same as is received by a skilled artisan working, for example, on a newspaper? Let anyone pick up the reports and accounts of a newspaper company and see the money which such skilled persons are paid. Let anyone calculate what is received by people on the shop floor, throwing in additions for unsocial hours and the rest, and see what the figures would be. We are not paid even according to those levels. Yet I firmly argue that the responsibility that Members of Parliament carry—particularly those who accept special duties in this place—is very much greater and always will be than that which is carried in any of those categories.
Let us compare our situation with membership of other Parliaments. I gave some of the figures and comparisons in a speech on 21st June, and I shall not repeat them. Suffice it to say that the British Member of Parliament is paid, on average, a half or one-third, or perhaps even a quarter, of the rate that other Members of Parliament in demo-
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cratic Parliaments are paid. Next June, we shall be having elections to the European Parli ament. So far as I can see, our present remuneration is likely to be between one-third and a quarter of what Members of that august Assembly will receive.
The file of cuttings kept in our excellent Library shows that there is not one serious newspaper which does not acknowledge how unsatisfactory the present position is. I cite just one example, a newspaper that suggested that we are just about the worst paid in the western world.
It is not only of today that it is appropriate to speak. Without doubt, the good will of former Members of the House is being exploited. As my hon. Friend the Member for Somerset, North (Mr. Dean) remarked, in a telling speech to which the Leader of the House listened, there are 270 potential pensioners of the House who do not draw a pension at all, just as there are, as the Minister hinted, a large number of Members in the present House who do not draw and may not be drawing the full amount that we see in the list on the Order Paper this morning.
A number of Ministers in the House of Lords are paid less than their equivalents in the House of Commons are paid. In respect of present office holders, the list of anomalies is legion. Let us take the position of the Prime Minister. I rejoice that it is proposed that the Prime Minister of the United Kingdom should be given an increase in his remuneration, but at £22,000 he will be drawing a salary approximately one-third of the remuneration of chairmen of some of the largest companies in the United Kingdom, and perhaps an even smaller proportion than that. The same is true of the Lord Chancellor of England. It is true also of a Cabinet Minister, whose salary, at £14,300—is vastly less than the remuneration given to the chairmen of nationalised industries. Junior Ministers, at £6,000, will be drawing less than is received by advertising account executives.
All this shows two things, does it not? It shows that once one starts having pay freezes, and the like, a number of distortions arise. Second, it shows, by comparison with the real world outside the

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House, how eccentric is our pay and how out of line it is with that real world.
In an endeavour to establish the rate for the job, as the Minister said, the Top Salaries Review Body was established. I think it appropriate as a general point here that we should pay tribute to Lord Boyle and his colleagues for the work that they do for the national economy. The Review Body reported in 1975 that the right rate for the responsibility of being a Member of Parliament was £8,000 a year. A lesser figure was decreed by the Government and agreed by the House.
It is never the right time, is it, to do the right thing in regard to Members' remuneration and conditions? For that past foolishness—I call it by no stronger term—we have to run all the harder now in order to catch up.
One can revise the figure recommended by that distinguished and disinterested group of persons after subjecting the whole matter to the most careful inquiry, and update it in two ways. One can use either the retail price index or the index of average earnings. Updating £8,000 according to the rise in the retail price index between June 1975 and June 1978, one arrives at £11,500. That is the figure that appears in the amendment tabled by the right hon. Member for Anglesey and myself. Using the index of average earnings, for which the figures I have are not quite as recent as those for the retail price index, one comes to a slightly higher figure—£11,678.
The purpose of tabling the amendment, therefore, is to illustrate the scale of sacrifice that Members of Parliament have made in the national interest. It is not true, as was said on the radio this morning and as, I dare say, a number of careless people may assume, that what the right hon. Gentleman and I are arguing for is a 100 per cent. increase in Members' remuneration.
The truth—I want to bring this out clearly—is that Members of Parliament are drawing only about 60 per cent. of the amount which an impartial investigating group of persons stated as the proper sum.
Moreover, as the Minister indicated and as I remarked earlier, the figure that appears on the Order Paper in the name of the Leader of the House is not the
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amount that many Members of Parliament receive. More than 100 Members of Parliament draw a smaller amount. It would be helpful if the right hon. Gentleman could tell us what their position is now. Are they entitled to draw their full amount or not?
I come now to the Minister's statement on the reconstitution of Boyle. I say at once that that is much appreciated. It was something for which the right hon. Member for Anglesey and I, together with our colleages, representatives of the 1922 Committee and the Parliamentary Labour Party, argued strongly, and we are glad that the Government propose to agree to it. I think that it is a wise decision and is the right decision.
Mr. Clement Freud: Does not the right hon. Gentleman consider that as the TSRB has given a decision, if the case goes back to it and it gives a different and advantageous decision, it may lead to every person who has been awarded anything by the body going back again?
Mr. du Cann: I shall come to that in a moment. I am sure that the decision to refer the whole matter to the Boyle Committee again is entirely wise, but there are some matters that I should like to raise in relation to that reference.
First, I hope that the Leader of the House will agree that the reference should be comprehensive. There are many matters to be considered. It is not only the question of what is the absolute rate for the job, which bears on the intervention of the hon. Member for Isle of Ely (Mr. Freud) but it is necessary, once and for all, to settle whether it would be appropriate to have a sort of running comparative yardstick. I think not, but I recognise that many hon. Members argue for that. I think that it is for us to make decisions and not to hide behind the skirts of another profession.
The reference should also include pensions. It was impossible not to be moved by the discussion in the House the night before last, especially by the telling speech of my hon. Friend the Member for Somerset, North who spoke about the 270 of our colleagues who do not have pensions. As the Minister said in that debate, we need to reconstitute that pension scheme in order to have more flexible rules. That is obviously a

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wise way to operate and it would be helpful to have the Boyle Committee's views and recommendations on that aspect.
Clearly we must also look at the scale of allowances and the comparative position of Ministers in another place, just as we must consider the position of Ministers in general. Last, but by no means least, we must consider the remuneration of the small group of our most senior public servants, including the Prime Minister, the Lord Chancellor and yourself, Mr. Speaker, and especially your pension provisions.
It is clear that the position of hon. Members has slipped through our carelessness, indifference and cowardice. It is urgent that the matter should be thoroughly investigated and it is fine that this is to be done. But that is not enough. There must be a commitment by the Government and the Opposition. What is the point of having an inquiry, with all the work that goes into it, if we do not know whether its results will be accepted?
I speak only for myself—I cannot commit my colleagues or Labour Members—but I should be willing to abide by the recommendations of the Boyle Committee, good, bad or indifferent. If we ask distinguished people to do a great deal of work and to make a thorough survey, we should say that we shall accept their conclusions. The Government and the Opposition should both say that. It should be an understood commitment so that we can remove this matter from politics altogether and say to the British people that we are conscious that we have not got this right in the past, but we are now determined to do so and, whatever party forms the Government and whatever allowances may be due in future, we are determined to see that this business is put into proper order. I hope that the Leader of the House will state that on behalf of the Government, plainly and forthrightly, and that the Shadow Leader of the House will echo that commitment.
We have been fooled once, because the Boyle Committee made a recommendation that was casually tossed on one side. That is not the way to do things. I hope that there will be a general consensus that that precedent will not be
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followed in future, and that by setting up the Boyle Committee and agreeing to implement its recommendations, even if we have to phase them, we shall ensure that this matter is handled with better sense and dignity than in the past.
11.35 a.m.
Mr. William Hamilton: I agree with almost everything said by the right hon. Member for Taunton (Mr. du Cann). The House owes him and my right hon. Friend the Member for Anglesey (Mr. Hughes) a debt of gratitude for seeking to put these matters on an all-party basis. Without that, we shall not get very far, but even with it we are not getting, all that far.
The House will know that according to radio reports, reporters on The Sun newspaper are striking for an extra £1,300 on top of the £8,000 a year that they receive at present. Another example was recorded in The Observer last Sunday. Under the recent Government proposals, a police sergeant in London will, from September, receive £6,000 a year, and the Opposition are on record as saying that if they are returned to power they will pay immediately the 40 per cent. increase recommended by the committee of inquiry, which would give that police sergeant £7,000 a year. He would then be getting more than an hon. Member. Such is the state of public opinion that people may say that police sergeants do a more important and better job than do hon. Members. That is a measure of the decline of the status of this House, but part of it is due precisely to the way in which we have handled the problem that we are now discussing. We get the respect that we deserve.
Mr. David Stoddart: Do the figures that my hon. Friend has quoted for the police sergeant include the tax-free rent allowance?
Mr. Hamilton: No, they do not.
Mr. Peter Bottomley: Do the figures include the overtime of police officers?
Mr. Hamilton: No, the figures do not include overtime, either. I listened with great interest to the radio interview given this morning by the right hon. Member for Taunton. The interviewer laid great stress on the fact that we get expenses

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on top of our salary, but that interviewer probably gets far more expenses than we get.
When I write to my local authority, the officials who reply to me do not pay for their secretarial assistance. Even the most junior official in a local authority has a secretary at hand. When I first came to the House, longer ago than I care to admit, we received no secretarial assistance, and we even had to pay for every stamp on every letter to every constituent who wrote to us. Indeed, some of us were driven to bringing sandwiches because we could not afford the lunches that were provided here.
Labour Governments have been meaner in these matters than have Tory Governments. Tory Leaders of the House have been more responsive to the views of Back Benchers than have successive Labour Leaders of the House. If I were a member of the Boyle Committee I would refuse to take this on board. We have had the Lawrence inquiry. I remember that a former leader of the Liberal Party, Clement Davies, caused an investigation to be made into the subject. All Governments, of whatever complexion, have refused to implement the recommendations that have come forward.
I remember that when Rab Butler, now Lord Butler, was Leader of the House he introduced a £2-a-day allowance, but it operated only from Tuesday to Thursday. A Member who came in on a Friday did not get the allowance. When we used to debate the motion for the Adjournment of the House before a recess hon. Members were inclined to say that the House ought to return a little earlier, because they could get two quid a day extra. That is the kind of squalor that we have brought upon ourselves by our own timidity and hyprocrisy.
The right hon. Member for Taunton was right to talk about European salaries. We have become so used to adopting the hair-shirt attitude that there is some surprise among hon. Members to find that those in the European Parliament will receive salaries three or four times as high as those paid to us. European Members of Parliament laugh at the way in which we have treated ourselves.
I can imagine what some of the newspapers and some people outside will be
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saying. They will be saying "Here they are again, on a Friday, fixing their own salaries." Who on earth can do this for us? Boyle cannot. Lawrence could not. If we tie ourselves to the Civil Service I understand that some of the trade unions would object, because it would be regarded as a backstairs method of getting a pay increase. It is extremely difficult to adopt the suggestion made by the right hon. Gentleman of taking these matters out of politics by getting agreement between the two Front Benches to commit a future Government following the next election. It is impossible to do that.
Let us imagine the scenario. There is a change of Government at the next election, with a hung Parliament, like this one. Does anyone imagine that that Government will place anywhere near the top of their priorities the subject of the salaries of Members of Parliament? There is not a hope in hell of that happening. Back Benchers have to get themselves together, as we are doing, and make some sort of protest against whatever Government are in power. We should insist that Back Benchers are sovereign in this matter. The more hung the Parliament the more sovereign we are. I hope that we shall have several hung Parliaments in the next 10 to 15 years because that is the only way to deal with this matter.
Let me give another example from my own experience. I hope that hon. Members will forgive the personal nature of this example. I have been here for more than a quarter of a century. If I were to announce my retirement before the next election—I hasten to add that I have no intention of doing so—I would not get a single penny by way of redundancy payment. But if I stood at the next election and lost I would receive the handsome sum of three months' pay, which would be about £1,500.
My right hon. Friend the Leader of the House has suffered closures in the steel industry in Ebbw Vale, his constituency. The workers affected are supposed to be covered by the redundancy payments legislation. But we are going outside that law to deal with these workers and are paying them above the rate. I do not complain about that. But things have come to a pretty pass when we say that Members of Parliament shall receive nothing, or at the most £1,500, and then only if they stand for election. If they retire

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they receive nothing. We pay ourselves in such a mean fashion that we are treated worse than the most humble worker outside.
Hon. Members will notice how sparsely attended this debate is. There are several reasons for this. One is connected with the fact that my opponent in Fife, the SNP, the Communists and the Tories, will be hanging on to every word I say. If they can use any of this against me at the next election they will do so. Every hon. Member is fearful of that happening to him. No doubt when these proposals go through there will be one or two hon. Members anxiously seeking to wear their consciences on their sleeves. They will say "I will give the increase to the old-age pensioners in my constituency." We have had that time and again. One or two hon. Members might refuse to take the increase and make sure that their conscience is not a quiet, secret thing. The fact that they are not taking the increase will be on the front page of the News of the World and The Sun, when it gets back into circulation. This is highly objectionable.
I wish now to refer to those who will not benefit from what we are doing today. When we discussed pension provisions for Members of Parliament earlier this week I was led to contact some of our ex-colleagues and find out about their problems. I want to put on record just what state they are now in. I will not identify them but the Leader of the House will recognise at least one case when I explain matters. The first case concerns a former Member who came to this House in 1945 when the salary was £600. He had to resign—because of the rules of the union which sponsored him—in October 1964, when the salary was £1,750. He received no pension at all after 191 years in this House. We had no pension scheme until 1964.
This former colleague now gets a means-tested payment from the Members' Fund, for which he is required to complete a form annually giving details of his means, his savings and so on. He makes no complaint about the trustees operating the scheme. On the contrary, he says that they are most humane, as one would expect. But why should someone who has been a Member of this House
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for a period of years be subject to that indignity? People outside will say that the supplementary benefits scheme is based on means testing. We on the Labour Benches have always said that we want to get rid of all means-tested benefits. I do not believe that that day will come but it is an ideal. I do not understand why we should inflict this system on ex-Members of this House, particularly since they form a small and declining group. I find it reprehensible that we should deal with these people in that way.
My second case concerns someone who came here in 1941. He retired in 1966 after 25 years' membership. He became a beneficiary of the first Members' pension scheme of 1964. He was given 10 years' back credits plus one year. He did not qualify for the extra five years that we now give.
My right hon. Friend will, perhaps, recognise the identity of my third example. This man became a Member in 1945 and resigned in 1968 after 22½ years' service. He received a pension of £780—£15 a week. He wrote to me saying that he had managed to save a little bit of money. He had been a lawyer and I think that he practised when he was in this House. He had put his savings into Government securities. He said:
"I was a bit of an ass. I did not realise what inflation could do."
He describes how he now lives in London. It is three years since he was out of London. He cannot afford to go to the pictures or the theatre or enjoy any kind of social life. He used to enjoy a drink in this House. He can no longer afford that. The only club he belonged to was the RAC, and he has had to abandon membership of that.
It is heartbreaking, and it makes one very angry, to recognise that this man used to sit on the Bench below the Gangway. He was the most scintillating, exciting and humorous debater in this House. It is absolutely outrageous to treat a man such as that in this way after that kind of public service. We talk about primitive societies in Africa and Asia! They treat their old people in a far more civilised fashion than we treat our ex-Members.
I concede that there are dangers in this. I should like to refer to one or two of

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them. First, not only our pay conditions but our working conditions encourage and foster the part-time Member. No one, unless with great difficulty, can do this job properly on the kind of salary and expenses which he now receives. I have always taken the view that however that may be, there is room for the part-time Member in this House. Indeed, I go further and say that some of the so-called part-time Members are more efficient at their job than some of the so-called full-time Members. The fact that a Member spends more hours in this House than others who have outside interests does not necessarily mean that such a Member is more efficient at his job. Nevertheless, this place could not function unless there was a considerable nucleus of full-time Members—I put the figure at about 200—in order to man Select Committees, Standing Committees, and the rest.
The salary ought to be geared to their requirements, rather than to those of the part-timer. But I am afraid that the salary is, and always has been, geared to the requirements of the part-time Member. Therefore, the full-time Member, existing on inadequate salary and working conditions, is subject and susceptible to all kinds of undesirable outside pressures. We can all quote examples of individual Members—I could name them—on both sides of the House who have been subject to all kinds of seedy pressures, and have been paid by those pressures precisely because they cannot resist the temptation as a consequence of the inadequate salaries which we receive. The great dangers of corruption are there. It would not be surprising if more Members than is the case yielded to those pressures under the present system.
We all know the problem. I do not know what the solution is. I doubt very much whether we shall get the solution recommended by the right hon. Member for Taunton. I think that there are two alternatives. There is the one that I have suggested—that Back Benchers ought to exert pressure on the tyrannical Treasury and Front Bench of whatever Government happen to be in power. It is Back Benchers who must assert themselves in this matter.
The other alternative—it is not a new one; I believe Nye Bevan also took this view—is that we ought to try to tie
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our salaries and conditions to those of an agreed grade of the civil service. Whatever the objections, I think that with little backlash a Government could agree to that in principle and then work on from that within the next 12 months, or whenever the next pay increase for that grade comes along. At least that would take the matter out of our hands.
Mr. Christopher Price: That is an attractive proposition, but is my hon. Friend aware that the greatest opposition to it comes from the Civil Service unions, who feel that such an arrangement might unnecessarily drag down their pay and force them to fight not only on behalf of their own members but on behalf of a whole group of 600 surrogate members who are not actually members of their unions?
Mr. Hamilton: I know that very well. My hon. Friend is quite right. That is where the opposition comes from. But this is where a Government should exert their own sovereign right to determine that our salaries shall be tied to that particular grade. After all, the Government now pursue a policy on incomes and the rest which is in conflict with the declared views of trade unions outside. But that has not discouraged the Government from pursuing that policy because they think that it is right and in the national interest.
I think that in the national interest we should put this matter on a civilised and sensible level. Whatever the views of pressure groups outside, it is up to the Government to assert that this is the way in which we shall handle this problem. Unless we do that, we shall come back to this position time and time again. We are very timid in relation to this matter, and Labour Governments are more timid than most.
11.56 a.m.
Mr. J. Enoch Powell: I am not opposed to the third of the three motions which are being considered together in this debate, but I am opposed to the first and the second. Although I suspect, from divers indications, that there may be general support for them in the House and, indeed, for propositions more far reaching, it is perhaps right that a contrary view should be stated.
My opposition is upon two separate grounds, the one narrower, the other

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broader. The narrow ground is that Members of this House of Commons ought not, even when they decide that it is right and necessary to increase the remuneration of Members of Parliament, to do so in such a way as to benefit themselves in this present Parliament. We, who alone have control of the public purse, ought not to vote money to ourselves. If we think the remuneration should be increased, let us make that decision for subsequent Parliaments—for those whom the electorate shall decide to return here in future; but let us not be seen to be using our power to benefit ourselves who sit here in this present Parliament.
That argument would, in my view, be valid quite apart from one of the principal reasons which brings us here, time after time, with this question, as the hon. Member for Fife, Central (Mr. Hamilton) said. Part of the reason is inflation. What we are doing is voting ourselves, or seeking to vote ourselves, an offset to the deterioration in the value of money for which we ourselves are responsible.
I shall not attempt to divert this debate into an economic discussion; but the Prime Minister believes that it was the profligacy of the previous Administration which, by increasing the money supply, caused the inflation of 1975 and 1976. That is the official view of the Government. So, at any rate on that view, we stand self-accused of being the cause of the inflation which has been inflicted upon the country. When that is so, it is an addition of shamelessness to use our power of the purse to vote ourselves an offset to see that we are all right, Jack. That is the narrower ground why I consider this to be a shameful thing that we are doing in the form in which we are doing it.
But the wider ground is that we have the whole idea of remuneration of Members completely and dangerously wrong. The right hon. Member for Taunton (Mr. du Cann) said that the financial position of Members had slipped. He assents to my quotation. Of course, all these comparisons very much depend upon the starting point which one takes. But I shall take a starting point which is not arbitrary from my point of view. The House and the country may be interested in the
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financial comparison between the year 1950 and the year 1978.
I belong, as others still here do, to the generation which came into the House after the war. It was a generation which longed to find a place in this House. To say the worst of it, those who came in at the General Election of 1950, the first General Election after the cessation of hostilities, were not the least distinguished generation of hon. Members to have entered this House and to have served in it.
The salary then was £1,000. It may surprise hon. Members to recall that a single Member of Parliament, who had no other income, paid £344 in tax out of that £1,000. In 1950 one was "passing rich" on £1,000 a year, if I may misquote Oliver Goldsmith. With a gross income of £1,000 in 1950, an unmarried Member of Parliament had a net income of £656.
Many of us who threw ourselves with the utmost enthusiasm into the work of this House were in some demand for journalism, broadcasting and in other ways. But the majority of those of whom I am thinking were, while Members of Parliament, mainly dependent upon that remuneration.
I have ascertained the net income which would correspond today to £656. It is £3,589 in purchasing power. I have ascertained further what at today's rates of tax the remuneration of a single Member of Parliament would have to be to yield the same net purchasing power after tax as the salary in 1950. That sum is £4,782, somewhat larger than the salary payable at the beginning of this Parliament, which some of us still draw and which was £4,250.
A salary of £4,782 would be the equivalent in purchasing power, net, after tax, of the remuneration on which the post-war generation of Members of Parliament, who against heavy competition managed to find a place in this House, in some cases very marginally, did their duties here nearly full time in many cases and reared families and provided by insurance for their old age or the other events which might befall their families. I thought the House might like to be reminded of those facts.
Mr. James Lamond: I have been following the right hon. Member's argument very closely, and it is extremely interesting. But there is a factor which he has not taken into consideration. It is that the general standard of living in the country has increased considerably since 1950. The standard of living has increased, and the expectations of all the people have increased since that time, including those of Members of Parliament.
Mr. Powell: The desire to be in this House has neither increased nor diminished, so far as I observe. However, there were factors that I had omitted, and I shall proceed to mention them.
At that time, there were none of the perks of all kinds which we receive today. I apologise, Mr. Deputy Speaker. That is not the right word. I should have said "allowances, reimbursements and facilities." As the hon. Member for Fife, Central said, except for correspondence with local authorities and Ministries, we stamped our own letters, as our constituents did theirs to us. There was no secretarial allowance.
Let me spend a moment on that, since one of these motions relates to payment for a secretary. The majority of hon. Members in this House do not need a secretary for the proper discharge of their duties.
Mr. William Hamilton: Oh, come.
Mr. Powell: Very well. One of the privileges which we have in this House, according to the right hon. Member for Taunton, is that of free speech. During the first 18 years that I was a Member of this House I had no secretary. In those years many complaints were made of me; but one complaint that was not made was that I neglected my correspondence or my duties to my constituents; nor was it urged against me that I was failing in diligence in applying my mind to the matters which successively were put before this House.
Has the volume of constituency correspondence increased? [HON. MEMBERS: "Yes".] That is curious. I am well aware of Parkinson's law; and I dare say that it operates in all sorts of areas. But my recollection is pretty clear about the volume of constituency correspondence
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when I came into the House in 1950. Of course, we could have some statistics about this. But I depose that in my own case the volume of correspondence which I received as the hon. Member for Wolverhampton, South-West was higher then than it was 25 years later. That is one hon. Member's testimony.
Mr. Peter Bottomley rose—
Mr. Powell: I see that a new hon. Member wants to intervene.
Mr. Bottomley: The right hon. Member is not putting forward an argument; nor is he giving any general information which may be of use to the House or the country. Has he sought information from the House of Commons post office to confirm his impression about the volume of incoming correspondence to Members of Parliament?
Mr. Powell: If hon. Members wished, I am sure that an investigation could be made. I am not suggesting it but, if hon. Members wished, I am sure that we could have an investigation made of the number of constituents' letters received by hon. Members per diem and per week. But in the absence of those figures we must state our own experience, opinion and, in the case of those who have a considerable length of service, our recollection.
I now have 90,000 constituents and a very considerable correspondence otherwise. I find at present, taking one week with another, that a half-time secretary meets my needs. I am not saying that she is not a very good secretary. I am not saying that I am not a very fast worker. But it is perhaps a little local colour which is worth contributing to a debate in which we are enhancing further the allowance to enable every hon. Member of this House to employ a full-time secretary if he wishes.
Mr. William Hamilton: He will not be paid it if he does not.
Mr. Powell: The hon. Member for Fife, Central says that he will not be paid it if he does not employ a full-time secretary. Well, we are all hon. Members in this House and, therefore, what he says must be true.
I shall not pile on the agony by referring to research assistants, although it sometimes strikes me to wonder what most

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Members of Parliament could possibly do with a research assistant, considering the excellent services, very much better than 25 or 30 years ago, that we can receive in the House of Commons Library without additional cost to the public purse.
When I said that the equivalent remuneration to 1950 is £4,782, that was an overstatement. It would probably be truer to say that, taking one thing with another—I have not mentioned all the details such as reimbursement for travel by car and so on which did not exist 28 years ago—the real remuneration of hon. Members who are now on £4,250 is the same as the real remuneration of hon. Members in 1950, the post-war generation on £1,000.
What, then, is the case for a higher remuneration? What is the case for the figure of nearly £7,000 as proposed in the motion, let alone the case for the much higher figures which have been mentioned?
Mr. William Price: As I understand it, the first part of the right hon. Gentleman's speech was devoted to the belief that I had no right at all to introduce any provision today. He has been consistent in that view, and I respect him for it. I understand him to be saying that we should not have any increase within an existing Parliament. Does it follow from that that he accepts my right to introduce something in the next Parliament? If so, what should that figure be?
Mr. Powell: I was at that moment about to come to the question whether there was any justification for the real remuneration of an hon. Member of this House being increased above the traditional figure, if I may so roughly describe what it stood at for several years before or after 1950, with adjustment for the deterioration in the value of money.
The hon. Member for Fife, Central, in comparing our remuneration with that of a police constable and other worthy members of the community, said that we get the respect we deserve, and he seemed to think that we should increase the respect we get by increasing our remuneration. He even went so far as to say that it was our inadequate remuneration which
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was the cause of our not being sufficiently respected.
I wish to state the opposite view. I do not believe one can make oneself respected by putting up one's income—certainly not by voting oneself an increase in income. It may or may not be right to do so; but the notion that we should be more respected because we put ourselves on the basis of an assistant secretary in a Government Department or a county court judge is something which this House should unite in repudiating.
It is inherently impossible to discover an analogue outside for a Member of Parliament. This is a unique House and the Members of it fill a unique position, and a uniquely honourable position. Whatever analogue one chooses, it is still absurd to say that the remuneration of a full colonel—or a field marshal perhaps?—a county court judge or a stipendiary magistrate or what one pleases is an analogue for the remuneration of a Member of Parliament.
Our position is unique, this House is unique by reason of our unique position, and we alone fix arbitrarily what remuneration we believe is defensible and what remuneration we believe will be to the future benefit of this House; for when we take decisions on this kind of subject we are taking decisions about the future of this House of Commons and about the quality of those who will sit here.
Mr. Michael English: The right hon. Gentleman said that there are no analogues in this respect. There are analogues, but not in this country. If we look over the water to the United States Congress, where there is a large estate but where the Members have fewer responsibilities because they are responsible only for federal government, we see that they fix their pay on the simple basis that no civil servant should be paid more than a member of the legislature. I am reliably informed that the civil service trade unions in the United States are among the strongest advocates of an increase in pay for representatives there.
Mr. Powell: The right hon. Member for Taunton said earlier that modesty is our characteristic in this House. He was heard without dissent. But in one respect,

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at any rate, I am not modest—and that is in regard to this House. I regard no other assembly in the world as in any way comparable with this House of Commons. I have nothing but contempt for those who would argue that we should conduct ourselves in such and such a way, or remunerate ourselves in such and such a way, because the assemblies in France or the United States or some other part of the world do this or do that.
Mr. Ivan Lawrence: It could be done for nothing.
Mr. Powell: There is a very good case for doing it for nothing Our honour and the honour of this House is derived from the view that is held of our motives. It is upon that, and that only, that our honour rests—namely, on our motivation. If we pay ourselves in this House a salary such as a person of reasonable talents and education might aspire to if he gets to be a county court judge or a full colonel, if we arrange for ourselves allowances for the expenses we decide to incur such as an employee in a Government office would have, if we provide ourselves with a pension so as to make a career with retirement to look to afterwards, we shall be valued at the valuation we put upon ourselves—as hacks, as people who have come into the job which offered us the best return for our limited talents and who wish to make a career of it, intending to hang on as long as possible until we disappear into a relatively comfortable retirement.
It ought always to be a privilege, and a privilege that demands some sacrifice—that is a word that has been used already in the debate—to belong to the House. There has been talk about hon. Members having undergone sacrifices in receiving the remuneration that has been available to them over the past 25 years. They did not seem to be conscious of the sacrifice they were undergoing when they sought to be re-elected.
We ought to be worthy of our honour and tradition. We should claim no more than that minimum remuneration on which any, high or low, can find the means, if that is his ambition, of serving in the House so long as the electors return him. If we alter that basis, we shall become a career assembly, we shall become an assembly that is not one
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which men compete to belong to for the sake of belonging to it whatever they have to lose elsewhere in order to do so. We shall become an assembly that will be valued by the scale suggested by the hon. Member for Fife, Central—in accordance with the money that we pay ourselves.
12.21 p.m.
Mr. Michael Stewart: I, like the right hon. Member for Down, South (Mr. Powell), was a Member of the House in the 1950s. I wish to make some comments not entirely in accord with his description of the situation. It is true that there were some hon. Members then, as there are now, who had other sources of income, private means, and therefore found what I believe was a most unsatisfactory salary to be a salary on which they could manage tolerably well.
As the right hon. Gentleman has somewhat personalised the debate, I shall weary the House for a short while by describing my own position. Compared with many hon. Members, I had a number of advantages. I had a London home and a London constituency. My wife and I did not have any dependent children. We were both able to earn a certain amount by writing and lecturing. We did not earn substantial sums because education work is never tremendously well rewarded. However, we had advantages that many hon. Members did not enjoy. Even with the possession of those advantages, I could only just about manage. I was able to manage because I had been a junior Minister from 1945 to 1950 and in that time I had been able to save. I was able to keep going during the 1950s by gradually reducing those savings. I do not think that I lived extravagantly.
With the advantages that I have mentioned, I could just about manage. That meant that many other younger hon. Members with three or four dependent children and with travelling expenses that I did not have to meet, and who before coming into the House pursued occupations that they could not continue once they were here, even on a part-time basis, were in a grave situation. They had to hope for the best. They had to hope that somehow they would be able to make some provision for their old age.

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I accept that many hon. Members in that position at that time did their work diligently. However, it is not right that people should be asked to do the work of Members of Parliament under the financial strain that many of us—I to a limited extent and others to a much greater extent—had to suffer. Members should not be required to do the work under that strain. I reject the idea that in the early 1950s we were all right. That is not borne out by the experience of most hon. Members who served at that time, unless they were fortunate enough to have private incomes.
It is also reasonable to say that the fact that the general standard of life has risen to some extent affects the amount that we should receive. I agree that Members of Parliament should not be desperately eager to see that they are always ahead of the pack. However, it is not desirable that over the years they should drop down and down in the general scale of incomes. That is what the right hon. Member for Down, South is suggesting. When it was pointed out to him that incomes in general had risen, his reply was one of the expressions of contempt which, if I may say so, he frequently uses as a substitute for argument. I do not think that we can accept his proposition.
The right hon. Gentleman spoke frequently of honour and of how we are discredited by raising our own salaries. I am entitled to point out that what is proposed will not make all that difference to me or to any hon. Members who are to retire at the next General Election. It will make some difference and I shall not be sorry to receive it, but I am not concerned about these matters very greatly on my own behalf. However, I should be failing in my duty if I did not have some regard to those who are to come to the House.
It is true that there are some who will say "I care nothing for my income so long as I can be a Member of Parliament." My own feeling is that anyone who is a family man has to pay some attention to his income. Anyone who is so devoted to being a Member as to be not greatly concerned about what happens to his family is not entirely likely to make the best sort of Member. The right hon.
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Member for Down, South should take a more generous view of what a Member of Parliament is entitled to and should be entitled to in future.
12.28 p.m.
Sir Nigel Fisher: I agree very much with the remarks of the right hon. Member for Fulham (Mr. Stewart). I was astonished by the speech of the right hon. Member for Down, South (Mr. Powell), who seemed to say that we should not vote money for ourselves. I do not know who else will ever do it. Are our salaries to be frozen for ever because in his view we are responsible for inflation, which in any case is not true?
The right hon. Gentleman went on to talk about the employment of secretaries. He said, to my amazement, that we do not need secretaries. In common with the right hon. Gentleman and many others, I receive many more letters now than I did in 1950. I remember a year or two ago my stepfather, who was a Member of the House and a Minister for many years, telling me that I receive more letters in one day than he received in a week when he represented the city of Norwich. Should our replies, or part of them, be in longhand? Every business man has a secretary. Why should we make ourselves less efficient than others and less efficient than we need be? In my early days here, I used to see hon. Members in the Library writing letters in longhand to their constituents—
Mr. Powell: Quite right, too.
Sir N. Fisher: —which took up a great deal of their time. I did not consider that to be a good use of a Member's time.
Like other hon. Members, I very much welcome the Lord President's announcement that Ministers' and Members' pay is to be increased by 10 per cent. and that there is to be a further review of parliamentary pay and allowances by Lord Boyle's independent Review Body. I thank him and the Parliamentary Secretary, who introduced the order, and my right hon. Friend the Member for Taunton (Mr. du Cunn) and the right hon. Member for Anglesey (Mr. Hughes), who joined together to make representations on this matter—it is not a party matter—and whose influence must have been considerable in inducing the right hon. Gentleman

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to bring forward the order. In my view and that of most hon. Members of this House and, as I saw in a recent debate, of the other place and of many people outside, our pay will nevertheless still be very low despite this increase. It always has been.
We know the history of Members' pay. Many members of the public may not. Therefore, I should like to spend a minute or two on it. No salaries were paid at all until 1912, when the rate was fixed at £400 a year. That was not increased until 1937, and then only to £600 a year. By the time that I came here in 1950 the salary was £1,000 a year. But there were no secretarial or other allowances. Members were actually out of pocket after paying for a secretary, postage, telephone, petrol and obligatory entertaining. Therefore, one had no net income at all. Indeed, it cost money to be a Member of Parliament.
Of course, that is no longer the case. But, even now, there is no allowance for entertaining constituents and overseas parliamentary visitors or for most of our constituency expenses and subscriptions. As a junior Minister in the early 1960s, I remember that I earned £2,500 a year for an average 18-hour working day and considerable responsibility. In those days, many hon. Members could not afford to take office because of the fall in income that it entailed.
Ten years later Members' salaries had gone up to £4,500, and in 1975 Lord Boyle recommended an immediate increase to £8,000 a year. The Government accepted that this was a fair figure and fully justified but decided that, in view of the anti-inflation policy, it could not be implemented. Therefore, our salaries were fixed at £5,750 instead of £8,000. That that was far too low was admitted by the Government when they had to resort to the extraordinary device of basing parliamentary pensions on a notional salary of £8,000 a year. Since then there have been two small supplements of £312 in June 1976 and £208 in June 1977 in line with the incomes policy for those years. But the £312 increase was paid only to those Members whose total remuneration from all sources was less than £8,500 a year. That, of course, created the unsatisfactory anomaly of two-tier salaries.
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Those who through outside activities earn extra money are inevitably and almost by definition somewhat overworked. But, in order to enjoy a reasonable, by no means extravagant, standard of living, that is almost bound to happen because we are underpaid as Members of this House.
Mr. Alan Clark: Is my hon. Friend going to tell the House—if so, I hope that he will forgive me—that the £400 a year which was paid in 1912—I have done a rough calculation in my head--if drawn in gold sovereigns, would be the equivalent today of £37,000 a year?
Sir N. Fisher: That is a very interesting figure and roughly comparable with what Members of the German Parliament get today. But in a precarious job, which may be cut short for Ministers by a change of Government or for Members by defeat in an election, our salaries are lower than in any other western country except Eire and Luxembourg, which are not very large countries. That tends almost certainly to lower the standard, because many able men literally cannot afford to enter public life in this country.
By trying to get Government and Parliament on the cheap, this country risks getting the quality that it pays for. Having regard to the rise in the retail price index and in the average earnings figure since 1975, a Member of Parliament's salary, as my right hon. Friend the Member for Taunton pointed out, to be brought up to the level of Lord Boyle's 1975 recommendation would need to be about £11,000 a year. Even at that rate of pay, we should still be getting far less than Members of Parliament in comparable countries.
Leaving aside the United States, where Members are paid the equivalent of £27,000 a year and Japan, where the pay is equivalent to £25,000 a year, the rate for the European Parliaments—some of them not very big countries—works out at the equivalent of £21,000 in France and Belgium, £19,500 in the Netherlands and no less than £37,000, including tax-free allowances, in West Germany.
Mr. Ronald Bell: My hon. Friend is quite right about the £19,000 in the Netherlands. But does he realise that they also have the very

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civilised system of having all votes on Tuesdays?
Sir N. Fisher: I thank my hon. and learned Friend for that information. I had not realised that. Even the Members of the State Parliaments in Germany get four or five times as much as we do. In Lower Saxony Members get the equivalent of £23,500, in Hesse £26,000 and in Bavaria £33,000.
As some hon. Members have already pointed out, the Members of the European Parliament will be paid about £20,000 a year after direct elections. Salaries in quite small countries, such as Denmark and Sweden, are also higher than we get. They amount to £12,500 a year in each case. In Canada the rate is £14,000 and in Australia it is £13,000.
The reason for our low pay is, as has been remarked, that we are always last in the queue for any increase. That is partly because it seems invidious to raise our own salaries and partly because to do so might be unpopular with the electorate. Therefore, no Government want to do it—we understand that—especially during a period of pay restraint and especially in a pre-election period.
There is, however, one way of overcoming this natural reluctance. It is by no means certain which party will win the next General Election. Therefore, if the leaders of both main parties jointly announced before the General Election that, whichever party wins it, the pay of Ministers and Members will be raised to the level that Lord Boyle, in his next review, recommends, there would then be no odium—or there would be equal odium—for the two main parties and no political disadvantage to either of them. It would also be more straightforward to the electorate to say openly what we have in mind.
Perhaps the rise would have to be phased over a period of two or three years as has been arranged for the firemen, but the principle would have been accepted and the hardship suffered by some Members, of both parties, would be mitigated. I hope that the Leader of the House and the leaders of both main parties will give serious consideration to this proposal.
12.40 p.m.
Mr. Christopher Price: The speech by the right hon. Member for Down, South (Mr. Powell) was, in one sense, preposterous and ludicrous. However, it contained, as do all the right hon. Member's speeches, certain germs of truth with which I have a sympathy.
The right hon. Member for Taunton (Mr. du Cann) spoke about company chairman earning £36,000 per year and said that that was an appropriate salary for our Prime Minister. There are dangers in taking the monetary values of our capitalist society and judging our salaries by them.
There are some dangers—I do not wish to exaggerate them—in taking the salary of, for example, an assistant secretary or colonel and comparing it with ours. The danger in that is that we would type ourselves as assistant secretaries or colonels. I believe that that would be undesirable.
I speak with some experience, because I have voluntarily stopped being a Member of the European Assembly, where I mixed daily with Members of Parliament who earned four, five and sometimes six times as much as I. Those Members of Parliament were firmly notched into a particular position within the hierarchy of their countries.
I agree with the right hon. Member for Down, South that we would lose something important if we admitted for one moment that the House of Commons was not unique. It is not to be judged by any other standard in British life. For my sins, I happen to have appeared before the Committee of Privileges for doing something in the House which I thought asserted exactly that principle—that we have the right to say things here which no one else and no other court in the land has the right to say.
I suspect that Boyle will recommend a linkage, but I hope that we shall not allow any linkage that emerges to lead to the Treasury's imposing regulation after regulation upon our salaries. That would break us away from the unique position that we are now in.
Many changes have been pushed through. There was the little change which no one noticed which made us no

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longer self-employed but employed people. The small print said that to be employed one did not have to have an employer. Technically, we are the only group which receives an employed person's salary but which has no employer.
Mr. George Cunningham: Let us not put that notion abroad. What happened was that in the 1973 Social Security Act it was provided that all persons who paid tax under schedule E as against schedule D would in future be treated as employed earners for the purpose of national insurance. We are not the only group that fits that category. Company directors are in that category. It is important that that idea should not be given any more currency, because it is not true.
Mr. Price: I persist in my argument. I do not understand enough about company directors to know whether they are technically employed by companies.
Whatever the arrangements for our salaries and allowances, and however they are organised, it is important that we should not be "employed" in the same way as civil servants. Our role is different, and we must assert the right to keep it that way.
The most eloquent testimony in the speech by the right hon. Member for Down, South was that this Parliament happens, for good or bad reasons, to be different from the other Parliaments with which I have come into contact on the Continent, because of the puritanical conspiracy that is unique to Britain and that stretches across from the right hon. Member for Down, South to the Leader of the Opposition and the Prime Minister. It is a conspiracy which, in a curious way, asserts that our democracy is different and that we should not try to fix our rate for the job in relation to anything else. It considers poverty in politics a virtue.
Mr. Powell: The word is not puritanical. It is aristocratic.
Mr. Price: I agree that there is an element of that. But the greatest characteristic is its nonconformist nature. It springs from the country's being Protestant rather than Catholic at heart. This puritan conspiracy has both good and bad points. I do not believe that the
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aristocratic element is anything of which to be proud.
The reason why this House used not to pay its Members a salary at all, and then began to pay its Members a comparatively low salary, was that before the Second World War a large majority of its Members did not need any pay. In fact, for quite a long time this House was a machine for ensuring that the aristocracy and the moneyed folk of the country kept unscathed their position of power and wealth in society. The reason we had to bring in salaries was that there came into Parliament increasing numbers of people who wanted fundamentally to change that balance of power.
We still have many people in this Parliament who want to change that fundamental balance of power. Indeed, I was elected in October 1974 on a manifesto whose last sentence is engraved, I hope, on my leader's mind and certainly on the minds of everyone on the Government side of the House—that our whole aim is to change the balance of power and wealth in favour of the working people of Britain. I think that we have gone a little way towards doing that.
Therefore, in the sense that we pay ourselves half salaries, as it were, as compared with the sorts of salaries that a large proportion of Members could get if they decided not to come into the House, it is an unattractive proposition, because it is a hangover of the old idea that so long as we pay ourselves low salaries we shall get here the sort of people who can earn their money outside and, therefore, will support those professions in which they can earn their money outside.
I feel a little persecuted by the lawyers at present, because the lawyers are one such group in the House. I wish that I could earn, through my humble journalistic efforts, as much as some of my lawyer colleagues in the House receive. But as long as we have a tremendous legal element in the House, to those people the salary is not all that important.
Mr. Lawrence: The hon. Member seems to be in danger of perpetuating the widely held myth that most of this House is made up of practising lawyers. I think that there are fewer than 30 practising lawyers in the House. I wish that the hon.

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Member would take that on board and not go on repeating what is clearly a falsehood.
Mr. Price: I did not make any statement about the proportion. The hon. Member may well be right. I do not know. The only point that I was trying to make was that as long as we have a comparatively low salary we shall attract people of that kind. To the extent that we attract that sort of person, there will be no incentive to raise the salary at all.
Mr. Alan Clark: I should like to ask the hon. Member a question about the aristocracy. As I understand it, he equates the aristocracy with moneyed folk. But "aristocracy" means "the best". I am sure that the hon. Member would feel that this House, from which the Government are drawn, should consist of aristocrats. Does not he agree that the aristocracy is something whose ingredients shift and alter? I take the view that it is perfectly legitimate and possible that the trade union movement can contribute aristocrats to our Government.
Mr. Price: I do not want to pursue that point, except to say that it has always been the characteristic of the moneyed folk, in all societies, to call themselves the best, the aristocrats—even in Athens. However, I do not want to get drawn down that road; I want to move over to what I believe to be the admirable side of the puritanical conspiracy that governs our salaries and has governed them ever since 1945.
I reject the aristrocratic side, but there is a very strong strain in British life, in, for instance, our trade union movement, which is reluctant to pay a general secretary more than the average wage that the membership of the union receives. One could replicate that in various other parts of our national life.
During my year in Europe, I found that this tradition, this strain, was unique to this country. To the extent that our salaries have been held down for this sort of reason, it does not derogate from our honour, standing and status; it is something that simply must be taken into account by anyone who comes into the House.
Having said that, however, I feel, like my right hon. Friend the Member for
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Fulham (Mr. Stewart), that all those things being considered, and in spite of the figures given by the right hon. Member for Down, South (Mr Powell), things have got quite badly out of joint. There is a point at which salaries drop to a level at which people simply do not understand why we allow the situation to continue. My feeling is that this is connected with the sort of fear that Labour Governments, particularly, have had, especially after the Labour Government's experience in 1964. They were quite wrongly castigated by a vicious, nasty Tory press, for purely political reasons, for implementing the recommendations of the Lawrence committee, which had been set up by a Tory Government and agreed by both parties.
That traumatic experience of the Lawrence committee is so branded on the hearts of every Labour Cabinet—it was said that we were putting up our salaries before pensioners could get their money—that over the period of Government from 1974 through to the 1990s, they have been and will be unduly concerned about it.
The Boyle report recommends increases in November or December. I do not know what sort of time scale the Leader of the House has in mind for all this. My view is that when we are reelected, if salaries were then to rise, with an increase of what might well look like nearly 100 per cent.—nearly double—it would pass with little more than a murmur.
Several Hon. Members rose—
Mr. Deputy Speaker (Mr. Oscar Murton): Order. Before I call the next hon. Member, I have to inform the House that a minor domestic problem has arisen. The digital clocks have taken charge and they are moving further away from the exact time. There appears to be no possibility of reversing time in this place—although hon. Members may think otherwise. Therefore, these clocks will be turned off shortly and we shall go back to the old-fashioned method of taking the time from the electric clocks at either end of the Chamber.
12.56 p.m.
Mr. Alan Cork: I completely reject the concept that our salaries can in any way be linked to, or that they are in any sense comparable

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with, earnings in other parts of society. I find it humiliating and ludicrous that company directors, and still less colonels or middle-range civil servants, should be compared with Members of Parliament.
I take the view—I say this at the outset to put at rest the minds of hon. Members on both sides of the House—that Members of Parliament should not receive any salary at all.
Mr. William Hamilton: He would.
Mr. Clark: The hon. Member says that I would. Would he care to elaborate on that?
The hon. Member rejects my invitation to explain. But he was arguing earlier, in a speech to which I listened with great interest, that we should be attached to a certain grade in the Civil Service. He knows how civil servants treat Members and the combination of contempt and evasion with which they try to keep us in our place. He knows very well that from the moment that we were attached to a certain grade in the Civil Service we would be completely brushed aside by those of a senior grade and we would be simply categorised at a medium range in the administration of the country.
Mr. George Cunningham: By whom would we be categorised in that way?
Mr. Clark: I should have thought that it would be done by anyone who could master simple arithmetic.
However, if Members of Parliament are to be paid a salary that is in any way commensurate with the arduousness of their task and the duties they have to perform, it should be something between £90,000 and £130,000 a year.
Let us consider the status, the responsibility, the unsocial hours, the working conditions and the hardships to which we are subjected daily in these crowded, stuffy quarters. Let us consider the disgusting and repetitive food that we are offered here. Deep-fried whitebait has been on the menu every day this Session. Let us consider the level of humiliation under which we exist, comparable only with that in domestic service in Victorian times.
Yesterday, the hon. Member for Bolsover (Mr. Skinner) was talking about knee pads being used by those who had to crawl about for jobs. Members of
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Parliament stand in a state of apprehensive subservience to practically every other individual whom they meet. They are subservient to their seniors because they hope to receive favours from them. They are subservient to their colleagues because they hope that perhaps at some time they may require their votes for some internal election. They are subservient to members of the party who elected them and put them here, and are apprehensive that these people may suddenly change their minds. They are, of course, subservient to their constituents, upon whose votes they rely for return to this place.
In view of Members' conditions, their duty to scrutinise and amend legislation and the disagreeable regime under which they try to work, either they do so from a sense of honour and duty, in which case their remuneration should be a totally secondary consideration, or, if they are to be paid, they should be paid at least at a level which completely removes them from any comparison with a middle-range civil servant or military commander. That is a completely mistaken yardstick for 635 individuals who have come here from a sense of idealism and a genuine desire either to alter or to conserve things.
The hon. Member for Lewisham, West (Mr. Price) was very dismissive of the the concept that the aristocracy should compose the Members of this Chamber, but, as I said to him, the concept of aristocracy simply means the rule of the best. It is arguable that this country was governed much better when the aristocracy occupied places in this Chamber.
Mr. John Stokes: Hear, hear.
Mr. Clark: I am grateful for that support. Were this country's prosperity, standing, prospects and size of its dominions any less when the aristocracy governed? No, they were much greater.
I do not relate the two directly, but if Members are to be paid on a proper assessment of what they do and of their status, honour and obligations, they should be paid six-figure salaries. If we look instead for a combination of a sense of honour a sense of duty and a sense of privilege which allows people to endure all our conditions, it is immaterial what

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they are paid. Personally, I would prefer that we were paid nothing at all.
1.2 p.m.
Mr. David Stoddart: The right hon. Member for Down, South (Mr. Powell) is about the smartest operator in this place. He has shown today how smart he is. He appears to have the argument both ways. He blames this House, quite wrongly by his own standards, for inflation, yet he does not want to give it the credit for doubling living standards over the past 25 years. That is sleight of hand.
On the right hon. Gentleman's figures, a salary of £1,000 a year for an MP in 1950, allowing for inflation, would be £4,782 today. But if we doubled that, as everyone else's standard of living has doubled—for which we can take some credit—the figure becomes £9,564, or almost exactly the figure proposed as the pensionable salary. So by his own argument the right hon. Gentleman confirms that the pensionable salary is correct. I hope that he will support it. He cannot say that this House is responsible for inflation and should penalise itself while at the same time refusing the House the credit for doubling living standards.
Mr. Powell: The hon. Gentleman is mistaken, with respect. It is perfectly possible to believe and to argue that Governments can and do cause inflation but that they cannot and do not cause an increase in the standard of living. There is no inconsistency between the two propositions. They may or may not be right, but they are not inconsistent.
Mr. Stoddart: I think that there is great inconsistency between them. The right hon. Gentleman has argued that rapid inflation does the most damage to the standard of living. I have heard him argue that, and he is probably correct. So there is no inconsistency in what I say.
I have been unable to discover the figures for professional salaries paid in 1950 as compared with today, but I have found the figures for the average manual wage. In 1950, it was £7·52 a week, and in 1977 it was £72·89. An increase of 10 per cent. would give us a figure of over £79, representing an elevenfold increase in money terms. I am sure that
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hon. Members would settle for that kind of increase on the £1,000 that they enjoyed in 1950. So the right hon. Gentleman is caught up in his own argument.
But there is something more serious about his attitude. It strikes at the very roots of representative democracy, which I know he supports and wants to continue. On his argument, it is certain that there is no possibility of representative democracy in this country. It would preclude many people from giving their talents.
My right hon. Friend the Member for Fulham (Mr. Stewart) mentioned the responsibility of all men and women to their families. If he had a family, a teacher, a doctor, a civil engineer, or an architect could not afford to give up his profession for the salary paid here—
Mr. Alan Clark: Yes he could; he could take a cut in his standard of living.
Mr. Stoddart: Yes, but he would also have enforced a cut in the standard of living of his wife and family, which he has no right to do.
Mr. John Lee: It is not that he could not do it so much as that more and more people will not do it. That is why we shall get fewer people of high ability from the professions, simply because it is not worth their while. More than that, it means such a cut in their standard of living that they will not put up with it.
Mr. Stoddart: My hon. Friend is right. The House would be denying itself the wide scale of experience and ability that is essential to a representative Chamber if it is to check the Executive. For that reason the argument of the right hon. Member for Down, South was wrong. If it were put into effect it would endanger the democracy that he, above all, wishes to defend.
The right hon. Gentleman discounts the attitude of people towards salaries. He believes that people have more respect for Members of Parliament or Members of any other Assembly if they do it for nothing—if, in fact, they do not put any value at all upon their services. I ask him to look at the respect with which county councillors and district councillors are sometimes held by the electorate. I

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think he will find that the lack of remuneration may have something to do with the low respect—not justified—in which the electorate holds such people.
The right hon. Gentleman also discounts the differences between salaries paid in this legislature and those paid in legislatures elsewhere. I agree that because France happens to pay three times as much to its legislators as we pay ours is not necessarily an argument for paying us three times as much as we are getting. Nevertheless, there must be a relationship; indeed, there is. I repeat that the value that people put on an institution may well be—it is not always so—related to the value that the institution puts upon itself. That is perhaps one of the reasons why the United States Congress may be held in greater esteem than this House.
I hope that the right hon. Gentleman will reconsider his attitude, particularly bearing in mind that next year we shall be electing yet another Assembly—one which neither of us wants. It will have an effect on salaries paid in this House, and may have an effect on the regard in which this House is held throughout the country.
I believe that the Government and the House have failed to consider Members' salaries in a proper way for a very long period. The House of Commons has been far too frightened of the electorate and has put far too low a value on the job that it does for the community. I hope that we shall reach a new era—I am pleased that my right hon. Friend has decided that the matter should be referred to the Boyle committee—when the salaries of Members cease to become a political issue, in the sense that they have been a political issue over the years. I do not think that they can cease entirely to be a political issue, but I hope that some means will be found, whether by relating the salary to salaries in the Civil Service or to the salaries of circuit judges, or what have you, by which the salaries of Members of this House can be settled without a political battle and without Members being criticised in the press over the business that we have of fixing our own salaries.
I hope that these motions will be passed in their entirety. My right hon. Friend has given an assurance that he will refer
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the matter to the Boyle committee, but I hope that he will also give an assurance that he will accept the Boyle recommendations in their entirety.
1.14 p.m.
Mr. Robert Rhodes James: I agree with the closing words of the hon. Member for Swindon (Mr. Stoddart), because we all feel a great sense of uneasiness at debating this matter at all. I have great sympathy with some of the points made by the right hon. Member for Down, South (Mr. Powell).
It is a privilege and honour to be a Member of this House. We have come perhaps for many different reasons, but the honour and privilege of being here is something that we all feel, whatever our political views, very deeply. First, we have the conflict as to what is the job of a Member of Parliament anyway, and, secondly, we are all volunteers. So why should we find ourselves in the position of, in effect, voting money for ourselves or putting ourselves in the position of at least appearing to do so?
I am conscious, particularly as we are approaching a General Election in which many Members will not be standing again—including you, Mr. Deputy Speaker, and the right hon. Member for Fulham (Mr. Stewart), I regret to say—of the fact that while I am Member for Cambridge now I shall not be for ever. In course of time I shall have a successor, and I should like to hand to him the same traditions and at least some improvement on the conditions which obtain for Members at the moment.
The right hon. Member for Down, South came to this House in 1950. I first came in another capacity in 1955. When I returned as a Member after an absence of 12 years, I was astonished by the enormous increase in the burden of work falling on the average Back Bencher. Of course, constituencies vary very much, as do the burdens; there is also a variation of manner in which Members cope with their burdens. Mr. David Lloyd George made it a point of principle never to open, let alone read, letters from constituents. Every few months, he would dig out those letters and throw them away. His biographer said that this was one of the egocentricities with which his constituents learnt to live. Whether his attitude would be tolerated by a constituency today is another question.

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Quite apart from the additional constituency work entailed in these modern days, the burden inflicted upon Members by Whitehall has increased. We have to consider whether we should not ask what is the nature of our job and whether we should continue to pretend that we are still in the Victorian era when a gentleman of leisure, having thought deeply about the great affairs of the day, came down to the House in the late afternoon or in the evening and made a great speech on the Spanish question, for example. I wonder whether we are not putting ourselves in the position of being little more than glorified councillors.
What should the position and role of a Member of Parliament be? I agree with those, including my right hon. Friend the Member for Taunton (Mr. du Cann), who have criticised Members in the past for their cowardice or failure to grasp the problem. Nevertheless, having said that, I have to feel some sympathy with our predecessors. When I was a Clerk in the House, at the age of 28 I was earning £500 a year more than Sir Winston Churchill or any other Member. I felt that situation very acutely. I feel it now as we come again to talk about these matters. We are talking about ourselves, and that is why I try to think of my successor, whoever he may be and whenever he may come in.
There are two points which I wish to emphasise. First, I am worried about a situation in which the allowances are so substantial and so important to Members. It worries me a great deal. Everyone is an "honourable Member" and so on, but when one is in a situation where allowances arc so vital, as I know they are to many Members who have no other source of income, the possibility of difficulty and of temptation clearly arises. I would like to see us come to a situation in which the salary is very much higher and we can look again at the whole question of allowances.
Although I agree with what hon. Members have said about comparisons with other countries and other legislatures, I think that there is something to be said for that part of the American system whereby the President and Congressmen and others are paid substantially and reasonably and given very good facilities, in return for which every candidate must
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give a clear declaration of his interests, his income and his background.
I know that a lot of hon. Members do not like that idea, but I have no reluctance at all about it. It seems to me quite legitimate to ask, in return for a substantial increase in the parliamentary salary, that candidates should be clear and should inform their potential electors of their worth. The present Register of Interests is quite worthless. The word "barrister" or "consultant" can mean anything. It can mean a very small income or it can mean an enormous income. It can mean a part-time Member of Parliament or an absolutely full-time Member of Parliament.
If we are to move—I know that we shall not do it today, but I hope that we shall in the future—in the direction of a substantial and reasonable salary for Members of Parliament, we for our part must recognise that we have an obligation to be absolutely open with our electorate about our worth and our general financial position.
1.19 p.m.
Mr. Alexander W. Lyon: Membership of the House is unique, but that does not make it any easier for us to make a unique valuation of our worth. It falls to us to do so by the nature of the means by which we are paid. We have to decide, though perhaps on the advice of some committee, how much we shall pay ourselves, and there is no escape from that.
If I could believe that the 630 Members of Parliament had the political courage and virility to take a decision about their worth in complete isolation from the valuation of any other job in the country, I should be happy to leave it at that. I accept the difficulties of trying to tie ourselves to a particular status in the Civil Service, to the status of a company chairman or any other analogue anywhere else. But the reason why we turn our attention to that is that we have lacked the courage in the past to say to people that membership of the House of Commons, although it is unique and although it is an inestimable privilege to be here, is nevertheless a factor which we have to consider in deciding the amount of money which we are paid since, like anyone else who goes out to work, we are dependent for the standard of living

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which we provide not just for ourselves but for our families upon the salaries which we receive.
It is right that we should make a position for ourselves which allows those Members—their number is increasing—who decide that they must be professional Members of Parliament and have no other income to live adequately upon those resources without having to burden themselves and their families with concern about finance on top of all the other concerns which we take upon ourselves as Members of Parliament.
Accepting that, I should be quite happy to make a judgment of our own worth and tell people that, if they did not like it, that was what we thought appropriate and at any subsequent election they must make whatever choice they liked about our valuation of ourselves. But I know that that is not how the House works, and still less how the process of government works.
For that reason, we have tried to find alternative ways of reducing the political tension which arises whenever we decide what we should be paid. We have tried the advisory committee. We are now suggesting another way—tying ourselves to Civil Service rates of pay so that automatically we get a payment which we do not have to settle for ourselves.
If hon. Members feel that that is an easier way of settling a valuation of our services, so be it. I should go along with it. But I think that to pay ourselves the rate of an assistant secretary is to some extent demeaning. I remember that when I was a junior Minister, and only a junior Minister, the lowest form of Civil Service life allowed through my door was an assistant secretary, and he was allowed in only in exceptional circumstances. When I recognised that when he came in through the door he was at that time being paid substantially more than I was being paid to take the decisions on which he was advising, it seemed to me that it was a bit demeaning to talk about that, but at the present time an assistant secretary on the full rate is being paid about double the rate at which we are paid.
We cannot be immune to that. It is not true that civil servants will categorise us, as the hon. Member for Plymouth, Sutton (Mr. Clark) said, according to the amount
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of money we receive and that a permanent secretary will be dismissive of us simply because we are paid less than he is. If we were paid a lot more, he would be dismissive of us. The real reason why he is dismissive of us is that we do not assert the power we have. Indeed, my main concern in this matter is that we are Parliament. It is not for us to wait upon the Lord President of the Council. It is not for us to wait for the Cabinet or Lord Boyle, or, indeed, the assistant secretaries or the Civil Service unions. We are Parliament. If we really had the dignity which the right hon. Member for Down, South (Mr. Powell) says we have, we should be impervious to the criticisms of outside bodies of that kind. We should decide how much we were to be paid.
I had not intended to refer to the speech of the right hon. Member for Down, South, which seemed to me to be beneath contempt, but, when he expresses populist sentiments of the kind which we heard from him this morning, I recall how much he charges for his television appearances, and I take it ill from him when he talks about hacks. Incidentally, I noticed that when he uttered his populist sentiments the hacks disappeared from the Press Gallery in order to put into tomorrow's newspapers what one Member of the House thinks about 629 others. I do not regard that as improving the standard and dignity of the House of Commons. Moreover, one may add that among those hacks who disappeared gleefully to report that we should not be paid more than £6,000 a year some will not be able to report it in The Sun as they are on strike because they were paid only a 10 per cent. increase on their £13,000 a year and they want a lot more. They are the real hacks of Fleet Street.
Therefore, we need not apologise for saying that we ought to be paid a proper salary—and by a proper salary I mean something which will allow a man to be a professional Member of Parliament and live on his salary without having constantly to consider his own finances as opposed to the other issues which he has to consider.
In deciding what that value is, the kind of role we have is an important matter. When I see the Badge Messengers who bring us our messages wearing their white ties and tails, I remember that I was

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told that they wear that dress because they are the descendants here of the butlers who used to come here in the nineteenth century to prepare the meals for their masters who came down for their evening sojourn in this place.
But that was an entirely different kind of Member from the Member who is here today. I recall the right hon. Member for Orkney and Shetland (Mr. Grimond) once told me that, after his first arrival in the House in 1945, he went to King's Cross station to catch the train back to his constituency and there met a Member of Parliament—who shall be nameless—who said "I am just making my annual visit to my constituency." None of us could get away with that now, whatever the size of our majority.
The truth is that, whatever the right hon. Member for Down, South thinks—I am little surprised at his recollections—we are all conscious that we are working harder and we are doing a more professional job, even if we are not full-time professionals. We are doing a more professional job in the House, and we are doing it with much less support in the way of services, facilities and accommodation than is enjoyed by most other people who are doing a professional job.
I want to put this matter into its context. My judgment is that the House of Commons is no real challenge to the power of bureaucracy and the power of Government in this country as at present constituted. We must revise the way in which we work so that we can take a real share in decision-making. We cannot go on with the tradition which has come down to us since the sixteenth century that we simply correct Government decisions after they have been made—that we are the better after the event. The fact that we have the party structure and that we have a systematised way of expressing opposition, which simply means that we can delay things for a little while but in the end the power of the Whips will decide, means that the decisions when taken by the Cabinet are almost always irrevocable.
I accept that in this Parliament—I see my right hon. Friend the Lord President looking a little pained—things have been slightly different because it has not been possible to amass the majority quite as
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easily as in past Parliaments, but overall the Government get their way. They got their way last night in circumstances which seemed to be quite unexpected. It is the unexpected for a Government not to get their way, and as long as that continues decisions when in the Cabinet are almost always irrevocable.
Therefore, if we wish to influence the Government and, more important, if we wish to check the power of the bureaucracy, we must be involved in decision-taking before the decisions are made. That requires that we go over to the kind of powerful Select Committees which amass the evidence and evaluate it before it goes to Ministers and before the final decision is taken. This calls for a Member of Parliament entirely different in kind from the Member we have today.
Such a Member must be here more often than we are. He must have support services in the way of research and staff which we do not have. He must be able to work during the day and have his nights off. That means that we have to alter the times at which we sit.
We shall not get that sort of hon. Member on the present part-time basis. I admit that I am a part-time Member in that sense. I do not regard myself as doing a part-time job for my constituents, but I have another source of income. I hate having it and would much prefer to be a professional Member. The only reason why I have the outside income is that I cannot live on the present income of an hon. Member and I regard the other job as a sort of insurance.
If we were given a proper salary and were paid properly for a period after we left the House, none of us could ask for more and we could all become professional Members. I do not think that it is necessary for us to have a ruling that everyone should be a professional Member, but our hours, means of working, pay and resources should be based upon the notion that that is what we are, and I hope that the Boyle committee will evaluate our work on that basis alone. If it tries to evaluate our work on the basis that some of us have other sources of income, that will be an injustice to those who are already professional Members.
We are also discussing the question of the new parliamentary building.
Mr. Deputy Speaker (Sir Myer Galpern): Order. The hon. Gentleman is under a misapprehension. We are not debating the new building at present. That debate will come on later.
Mr. Lyon: I am grateful, Mr. Deputy Speaker. In those circumstances, I shall not say much about the new building, but it is part of the whole business of what sort of evaluation we have of hon. Members. We must not have the sort of evaluation that says that we cannot be housed in proper facilities with proper accommodation, but we must allow civil servants and anyone else to be housed in such accommodation. Indeed, we make it an offence for employers not to house their employees in proper accommodation, yet we bury ourselves in little holes down Whitehall or round the back of the Jewel Tower. That demeans the role that we should have.
I support the notion that we should be paid properly and should have proper back-up services. We should not be so dependent upon our allowances for secretarial assistance and so on. These should be provided for us because of our need for them rather than by our having to claim them. That is a better way of dealing with our status in this place.
1.33 p.m.
Mr. Charles Morrison: I feel that the sands of time have run out even before I start, so I shall endeavour to be brief. I agreed strongly with the hon. Member for York (Mr. Lyon) when he said that hon. Members should be able to live adequately. I might add "by roughly equivalent standards", but I emphasise "roughly" because I also agree with him that we are unique and I do not think that our salary scale should be attached to any other scale. That must mean a review by the Boyle committee or its equivalent not just once in a while, at the behest of the Government, but at regular intervals. This is an objective towards which we should be working.
I was glad that the hon. Member for Swindon (Mr. Stoddart) laid so much emphasis on the extent to which, even now, certain people—an increasing number in future—will be precluded from becoming Members because they will not be able to maintain the standard of living that they could obtain outside.
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However highly motivated the potential parliamentarian aged 28 or 30 may be, since it is not unusual for young people of that age to have been married only recently, he may well have to consider carefully his responsibility towards his wife and family. In addition, when wives consider the alternatives of the parliamentary salary or their husbands continuing in their present careers and gradually climbing the ladder, most will tell their husbands that in no circumstances should they go into the House of Commons. That is an important aspect for us to take into account.
There was a germ of truth in some of the comments of the right hon. Member for Down, South (Mr. Powell), but his main argument was old-fashioned stuff, which had nothing to do with the world in which we have to live. He said that we should make our decision on behalf of subsequent Parliaments and not for ourselves. I disagree; I believe that we should make the decision, implement it, and go to the country carrying that responsibility on our own shoulders, rather than half-pretending that only others will benefit from our decision. I would prefer to come clean with the electors to putting up a smoke-screen and pretending that something that is to happen will not happen.
I agree strongly with those who said that it is never the right time to review parliamentary salaries. For almost as long as I can remember, there have been the additional problems involved with incomes policies, but the real and relative values of parliamentary salaries have been steadily eroded. If it pleases the right hon. Member for Down, South, I add the words "while I have been an hon. Member."
The fact that salaries are too low is entirely the fault of ourselves, particularly the Back Benchers. Our salaries are not imposed on us by the Treasury; they are imposed on us because we have not been prepared to take a strong line ourselves. In the past, there has been a lot of lobbying by us all, particularly Back Benchers, about salary increases, but when the Government of the day decide to make increases or to implement someone else's recommendations, we Back Benchers have too often run scared. We have run for cover and let the Government carry

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the can. In consequence, we have got what we deserve—or, perhaps, what we do not deserve.
Looking to the future, it is important that, to a much greater extent, we should personalise the responsibility on each of us for justifying the salaries that we receive. This is a subsidiary objective in the development of the joint approach between both main parties for which the greatest credit must be given to my right hon. Friend the Member for Taunton (Mr. du Cann) and the right hon. Member for Anglesey (Mr. Hughes).
The Minister referred to future pay increases and said that there were grave difficulties in giving a blind commitment in advance. I understand that. It is not surprising that there should be that reaction from the Government Front Bench, in isolation. It is not impossible for the commitment, which has been requested by other hon. Members, to be made by both Front Benches and, if need be, by the minor parties. If such a commitment is not made there will be continuing and growing dissatisfaction because of the uncertainty that will arise.
Unless some such commitment is entered into there will be an unseemly row, such as there has been in other countries, for example, Australia. The outcome of that sort of row will be that the Back Benches will be in control and will impose their will on the Government of the day and, perhaps, the Opposition Front Bench. The Government have to remember that they are the servants of Parliament, not vice versa.
1.42 p.m.
Mr. John Stokes: In some ways it is a pity that this debate has been so wide ranging and dominated by the bizarre and perhaps brilliant exposition of the right hon. Member for Down, South (Mr. Powell) which I felt was more suitable to an eighteenth century Parliament than to our Parliament. I often wish that we did live in those great and glorious days but, alas, we do not. I agree that when Members of Parliament were not paid we were probably better governed than we are now, but we have to address ourselves to the realities of the present situation.
I was sorry that the right hon. Member for Down, South seemed to imply
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that he was a slightly more honourable Member than others. I am sure that he did not mean to imply that, but it might be read into some parts of his rather puritanical and hair-shirted speech. The right hon. Member was very personal about himself. I do not intend to be. I will say that although it had been my ambition to come to this House for as long as I can remember, I waited until I had started a business and made a success of it and had some money behind me, apart from what I might earn here. When I came here I never thought for a moment of what I would earn or how well off or otherwise I would be.
That is not the case for everybody. Many hon. Members entered this House years before I did. Many depend entirely and exclusively upon their salaries. It is those hon. Members about whom we should be mainly concerned. Those of us who have the advantage of another income must be particularly careful to give that point due regard. It is always a difficult thing for us to consider our own salaries. There are two difficulties to overcome. I speak as someone who has been dealing with salaries and other matters for most of my adult life since the war.
The first point to make is that we are practically the only people in this country who fix our own remuneration. Secondly, that already difficult situation is exacerbated by the Government's pay policies, which have introduced anomalies, delays and frustrations. The occupation of Members of Parliament, strictly speaking, cannot be compared with any other job.
I deal first with Ministers' salaries. We have heard a lot about Members' salaries but little about the salaries of Ministers. I believe that they are still scandalously low, by any comparison. That must have a bearing on Members' salaries. I cannot see why the Prime Minister should not be paid a salary of around £50,000 a year. That is much lower than the salaries of some of the chairmen of our great companies. The salaries of other Ministers could then rise in proportion.
There is a new factor affecting the salaries of Ministers and hon. Members—the vast improvement in the salaries, pensions and conditions of service of the Civil Service. There has been created a

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specially favoured class, insulated from the financial problems faced by almost all other people. While I would not for a moment claim that we should enjoy such exceptionally favourable terms, I do say that it is wrong that there should be such a colossal disparity between the Civil Service and ourselves. This disparity is shown up in the non-contributory pensions and in the pay and other conditions of service enjoyed in the Civil Service.
I speak as a Member who, since leaving the Army, has spent most of his life as an industrial manager. I believe that we must attract into the House more people from industry, commerce and the City. The able young men, possibly in their early thirties, who are making their careers outside, must be offered some sort of salary which will not involve too great a financial sacrifice, particularly if they are married, with families. We can never make up our minds what sort of people we are here. Listening to the right hon. Member for Down, South, I felt that he seemed to think that we were still members of the old aristocracy or landed gentry, or possibly the richer burgesses from the towns. Those days are over. This place should represent all classes in society. We still have—I hope that we always shall have—the upper House to correct any excesses of democracy here. I strongly believe that the upper House should be based on hereditary peers. If we are to say that, surely we must have a truly democratic assembly here.
Pay policy has utterly confounded salaries in this place, as it has in every other department of our national life. I do not believe in incomes policies. They are holding back the country's industrial, commercial and professional life. As long as the Government insist on a rigid pay policy we are placed in an awkward situation. If this House later decides that all of those in the country—those who work and those who do not, those with responsibilities and those without them, those who are highly skilled and those who are not—should be limited in their new contracts of employment to an increase not exceeding 5 per cent. it will make us look very selfish and foolish if we talk about paying ourselves thousands of pounds a year more.
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That is not to say that we should not do so. It shows how absurd and ridiculous is the 5 per cent. limit. There has been much talk of attaching our salaries to an outside source. This has its attractions. However, I believe that we should have the courage to say that we are comparable with no one, and that we have, in our own wisdom, the right to fix our own levels of pay. The time is soon coming when we must make a supreme effort to deal with this matter once and for all. I feel most embarrassed when I see older Members here hanging on, dreading retirement, because of the continued delay about fixing proper rates of salary and pension.
It is also extremely confusing and muddling to have one rate of salary here and to have another notional salary for pension purposes. The only way to deal properly with pensions is to have a proper rate of salary here.
We have very serious issues before us. People say that the public are extremely disagreeable about our salaries, but I believe that to be largely unfounded. In all the correspondence that I have received in the eight and a quarter years that I have been here, I have not received a single letter either about my salary or about the salaries of other Members. Therefore, I say to hon. Members on both sides of the House, let us be bold, decide what is right, and make absolutely sure that the new figure applies the moment the new Parliament meets.
1.51 p.m.
Mr. Ian Stewart: I should like to say a few words about early-day motion no. 502, which is in my name and which now has substantially more than 300 signatures of right hon. and hon. Members. The Minister alluded to this in his opening remarks. Before I do so, I think that I should make my own position clear. I am a full-time Member of this House with a part-time job outside. I suspect that that is true of many other hon. Members.
As a matter of fact, I find the extra income very useful, even almost essential, but I would go on doing that job even if it were not for the financial considerations, because as a director of a bank which I joined nearly 20 years ago I find that the information which that gives

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me on financial matters is very relevant to much that goes on in the House. I felt that I owed a personal comment before saying something about early-day motion no. 502.
In some people's minds I am probably not the likeliest candidate to become an unofficial shop steward for Members of the House, but as a result of tabling that motion I have found myself taking on some aspects of that role. The question of our own pay is such a delicate subject that I wonder whether I am rushing in where more experienced Members have feared to tread. However, in the last two or three weeks many hon. Members have said to me that they thought it was courageous of me to table a motion on such a subject. They thanked me for having done so, because they were then able to add their own names to it.
I certainly do not regard myself as courageous, and I am grateful for their thanks, but I am astonished that that should have been the attitude which they held. It set me thinking about the reasons why hon. Members have these problems in getting round to the subject of their own remuneration. It is on this point that I might be able most usefully to contribute to this debate.
I tabled that motion late one night during the course of the Finance Bill Committee proceedings, when we had just had a debate on the effects of inflation and indexation on various forms of assets and incomes. I thought it might be interesting to table a motion of that kind to see what sort of reaction it evoked from hon. Members. The reaction can now be seen in print, because I think that 308 Members have now signed it. Two others have signed an amendment which actually strengthens it by making it more immediate, and my post bag this morning suggests that other names will be added in future. That makes a total of more than 310 hon. Members who have signed my motion, which numerically is half of the total number of right hon. and hon. Members in the House.
Mr. Powell: Not quite.
Mr. Stewart: I said more than 310. Of course, all members of the Government, the Shadow Cabinet, Parliamentary Private Secretaries to persons in positions
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of responsibility, Mr. Speaker and the Deputy Speakers, are all affected. There are also the senior officers of the 1922 Committee and the Parliamentary Labour Party, who have felt that since they were involved in direct negotiations with the Lord President they should not append their signatures to my motion. I calculate that there are possibly about 150 Members of the House who are, therefore, precluded from signing such a motion at all. Therefore, the true number of Back-Bench Members who might sign such a motion is probably not more than about 480 in all. To my mind, exceeding 300 represents a substantial strength and breadth of feeling in the House that something needs to be done.
In collecting the signatures to the motion it was not very difficult to get a few dozen, perhaps the first 50, because a number of hon. Members take a particular interest in this subject and would be willing to sign almost any motion which had as its general purpose the aim of correcting the problems of the level of Members' pay. From then on, however, it was very difficult, because so many Members with whom I discussed the problem were reticent about putting their own names forward on a motion relating to their own remuneration.
However, once the figure reached between 150 and 200 it became dramatically easier, because many Members to whom I had spoken a week or two before came up to me and said "Now that so-and-so has signed, and now that you have a respectable number of signatures on your motion, I shall be very happy to add mine." I am not saying who those Members are, but a number of right hon. and hon. Members—I am sure, for the best of motives—clearly felt that there was something rather improper and seemed to be shy about adding their names.
I said that the number had now exceeded 310. That is a very considerable number. I should like to comment on some of the reasons which have been given to me by those who have not signed the motion. First, some hon. Members feel that Members of Parliament should be unpaid. That view was put forward by my hon. Friend the Member for Plymouth, Sutton (Mr. Clark) earlier in the debate. There are others who feel that the level of Members' pay should be more

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or less in line with that of the average for their constituencies. I respect that view although I do not agree with it. Again, they are numerically not very many. A greater number of hon. Members did not feel that they could go along with the last line of my motion, in which I said that the House should delegate its responsibility for these matters. However, they certainly wanted to go along with the substantive part of the motion which calls for the implementation of the Boyle recommendations immediately after the next General Election. Therefore, I think I can say fairly that there are substantially more than 310 Members who actually believe that the Boyle recommendations should be implemented after the next General Election by whatever party forms the Government.
I agree with a number of hon. Members that we are probably over-sensitive about this issue. I do not believe that there is nearly as much public hostility to the idea of having a proper rate of pay for Members of Parliament as is sometimes imagined by the press or by those Front-Bench Members who have to deal with these difficult matters. Perhaps, having publicised my initiatives in this matter, I shall now receive a great deal of abusive post and correspondence. However, when I have discussed this matter in my constituency I have found that the number who believe that we should improve our earnings is greater than the number who resent the increases. Of course, there are a number of people who feel strongly that way, but the body of public opinion actually believes that its representatives in Parliament should have a more reasonable salary than they now receive.
The failure to face up to this problem over many years has had some positively damaging consequences. It may be that some admirable persons, such as the right hon. Member for Down, South (Mr. Powell), can live, bring up their families and conduct the whole of their financial affairs on very much less than is possible for most people. I do not believe that the degree of thrift which the right hon. Member is able to exercise is within the scope of most hon. Members. Certainly I have come across, quite unwittingly—to my astonishment and surprise, and even to my horror—cases of hon. Members who have spoken to me about this subject and who are clearly in financial hardship, not
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because of the mismanagement of their affairs but because of a factor too easily forgotten, which is that public life is more expensive than private life.
There are certain expenses attaching to our job which are not compensated by allowances but which we have to fulfil if we are to act properly as the representatives of our constituents and as Members of this House. I am not saying, therefore, that we should have a substantially inflated salary. However, we need to take into account in the argument that we cannot say what is the basic subsistence level of any family and say that that necessarily is a living wage for someone who has to carry out the duties and responsibilities of a Member of Parliament.
If parliamentary salaries are unecessarily depressed, inevitably this will have an effect on the quality and variety of the intake in the House. After all, it could be said that as long as anyone was willing to stand for Parliament, the parliamentary salary was adequate. That could be carried ad absurdum to saying that as long as it was above the supplementary benefit level, someone would be willing to stand in all the 635 constituencies. I do not regard that as a serious argument.
It is difficult that we have this recurrent preoccupation with our financal problems. Many hon. Members have told me frankly that they have to resort to a form of moonlighting, not because they want to or even because they have the energy for another job, but purely for the purpose of obtaining additional income. That cannot be healthy for the operation of the House, and I felt that in putting forward my own name on the motion it would come more easily from one who was not in that position. I have another source of income, but I do the job because I think that it is a useful occupation as well. But we should not forget that a quite significant number of our colleagues find it difficult to live on what they are currently paid.
That is the result and the reaction which I have had from what might he described as the straw poll which I have been conducting since my motion first appeared on the Order Paper.
Mr. William Price: I am sorry to interrupt a speech for which I have a great deal of affection, if I may put it that

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way. Has the straw poll given any indication of what those Members who signed the early-day motion regard as a proper salary? Will the hon. Member say what he would regard as the proper level at which it should be set?
Mr. Stewart: I prefer not to answer that question for the obvious reason, which the Minister will know, that there are many opinions about this. My point is that the present level clearly is below a realistic threshold for a considerable number of our colleagues. I have avoided touching on absolute levels partly because other hon. Members have dealt with the question and partly because Boyle has been debated already and I do not want to go over the ground again, but particularly because I want not to move away from the central theme, which is that I believe that we have reached the stage where, whatever we may feel about the right salary, clearly the present arrangements are inadequate and substantially so.
That is my reason for not touching on a matter which I should be happy to deal with if I had much more time and had prepared myself to discuss it. Perhaps I shall have an opportunity to do so outside the Chamber on some future occasion.
The reason why we have this problem arises from a matter of timing. Obviously we are restrained by pay policies, in the same way as every other citizen. But, in those brief and occasional intervals when controls are lifted, it always seems to be the wrong time politically or psychologically to make the necessary adjustments. The only really certain right time is immediately after a General Election.
The Members of the next House of Commons will not necessarily be ourselves. I shall put myself forward, I hope, as the Conservative candidate for Hitchin, and I trust that I shall be returned. But I may not be. Certainly some hon. Members will retire, and others will fill their places. Some will be defeated, and others will come in to replace them. Therefore, it seems proper that Parliament should come to a decision to fix the level of remuneration for the Members of a subsequent Parliament, even though we may hesitate to make substantial changes in
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the remuneration of Members of the current Parliament.
In recent years, the Government of the day have been to some extent entitled to disregard the views of hon Members because they have been so reticent in coming forward with their feelings. But it is not a state of affairs which should be continued much longer. The experience of discussing this question personally and privately with a large number of hon. Members from all parties over the past three weeks has convinced me that it is a much more serious issue than I realised when I started down this road. If it becomes necessary on a future occasion for an hon. Member to table a similar motion, I hope that someone else will assume that task, because it has taken me a great deal of time and energy to go through with it. But I felt that having stumbled on to this task I should perform it to the best of my ability.
I can assure the Treasury Bench that the signatories to my motion, whether or not they agree with every word of the way in which it is phrased—it is always difficult to draw up any motion, especially on such a subject, so that it wins the exact approval of all those hon. Members who sign it—agree that there is a need for a clear commitment from both Front Benches that this problem will be tackled after the next General Election Therefore, I welcomed what the Minister said, though I wish that it had been a little more absolute than it was. I hope that a similar commitment will come from my right hon. Friend the Member for Cambridgeshire (Mr. Pym) at the end of this debate.
If my motion has served in any way to concentrate the minds of those responsible on this difficult and recurrent problem, I shall feel that my efforts have been well rewarded.
2.7 p.m.
Mr. George Cunningham: I am one of the several hundred Members who have not signed the early-day motion tabled by the hon. Member for Hitchin (Mr. Stewart). I do not want to be discourteous, but I regret that I cannot join in the self-congratulation that he has poured upon his motion, which I regard as a decadent one.
Mr. Ian Stewart: I did not mean this to be self-congratulation. If what I said sounded like that, I apologise to the hon. Member and to the House. I felt that it was necessary to describe how the motion came about. I did not mean it in any way as a personal reflection on myself.
Mr. Cunningham: I accept that. Obviously the motion attracted a great deal of support and, as a result, some nice things must be said about it. But I regard it as decadent because of two ingredients in it. First, it calls on the Government to do something. We should not be bothering the Government about Members' pay; it has nothing to do with the Government. It is a matter for Members to decide. The Government are here as a collection of individual Members, each with one vote. The House should stop paying attention to what the Government want and waiting for the Government to act on the matter. This is far too important a matter to leave to the Government. This is a House of Commons matter. It is a constitutional matter.
The second ingredient that I dislike is the motion's proposal that the decision on this matter should be taken away from this honourable House. Decisions cannot be taken away from this House. We are in charge of everything. This is one of the things that, inescapably, we are in charge of. If we were to set up a body and to say that we would implement its recommendations, we still would not have passed the buck. When a recommendation was made it would still have to be implemented by us. So those Members who have a very low embarrassment threshold and who would like to be shot of the problem must face the fact that they will be embarrassed.
I must have a high embarrassment threshold. I do not feel this embarrassment very deeply. We are deciding how much we are to pay ourselves for the coming year, but we are also discussing a matter that is of considerable constitutional significance. How much Members of Parliament are paid and, consequently, how independent they feel in the exercise of their functions in the House, is a very important part of constitutional behaviour. There is a key relationship in this argument. I refer to the relationship between what we pay ourselves as non-ministerial Members and what we choose
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to pay ministerial Members of this House. That ratio should be kept fairly narrow, so that there is no enormous incentive to become a Minister and no enormous disincentive to resign ministerial office.
My impression is that the degree of independence exercised by the House in this last Parliament, which has derived from the fact that we have had narrow majorities—if majorities at all—by the governing party, is something that the public want. The public does not want Members of Parliament to be zombies who go into the Division Lobby as instructed by the Whips. Furthermore, they do not want Members to be compulsive rebels who will go against their own side for the hell of it and enjoy doing so. But they do want Members to exercise their judgment. They think that that is why we were elected, and they are right.
If that is to happen, the Member concerned needs a sufficient measure of financial security. If he is to give to the job of the House the time and effort that it requires in these days, given the vast and complex nature of governmental activities in modern times, he must be a full-time Member. He cannot conduct that task—or the House cannot expect him to do so—unless he is.
I should not like to make it a rule that every Member has to be a full-time Member, but I would regret it if most Members were not full time. The trend is clear. More and more Members on both sides are full time and give the vast majority of their time to working in this place. It is preposterous that Members of Parliament, even after the increase for which we are providing today, pay themselves less than very large numbers of not just senior but middle-rank employees, not only in Whitehall but in local authorities.
The borough secretary of every London borough is paid probably 30 per cent. more than a Member of Parliament is paid. That is absurd, and is not even a matter of argument. Anybody who thinks that that is a sensible arrangement is nuts. That cannot be right. It is not fair, because it is not a sensible allocation of financial resources to the responsibility of the various jobs.
We must also face the question of the relationship between the pay that we determine here and the pay of European

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Members of Parliament and of the Members of Parliament of the other member nations of Europe in their national parliaments. It will not be acceptable that Members of this House should be paid a salary which is less than half of that which is inevitably to be the salary of Members of the European Parliament. We shall not for long be greatly out of line with the rates of pay established in the national parliaments of the other European nations.
We should decide that the rate of pay for a Member in the coming decade or two should be equal to the rate that applies somewhere near the top of Civil Service salaries. I do not wish to put the matter any more precisely than that. That means a minimum of the rank of assistant secretary and a maximum, in my view, of the rank of deputy secretary, or somewhere of that order.
Mr. Powell: Why?
Mr. Cunningham: That may not be the appropriate arrangement thereafter, but it is the rough level that I would establish for the coming decade or two.
I favour linkage, and we must remember that in 1975 the House decided in favour of linkage. The resolution of 1975 was in favour not only of linkage but of linkage to a particular grade in the Civil Service, namely, that of assistant secretary, although we did not prescribe whether we meant the top or the bottom of the broad range of salary payable to an assistant secretary.
Mr. Powell: Would we be given increments as well?
Mr. Cunningham: No. I do not think that there is a need to follow the exact habits of the Civil Service simply because one links to a grade in the Civil Service. A number of Members in past debates—and it has been hinted at in this debate—have objected to linkage on the ground that somehow this would affect their status. It was suggested that if we were to link to a salary or grade in the Civil Service, when a Member of Parliament sat in a Committee interviewing civil servants he would feel that the civil servant at the end of the table was saying to himself "I am an under-secretary, and he is only an assistant secretary." It does not matter a hoot what any civil
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servant thinks. Our status and power do not depend on what civil servants think. We have but one thing in this House, namely, the right to vote in it. That is all the power that we need to do everything we need to do. Therefore, I would not feel at all embarrassed at establishing an equivalence of this kind for the purposes of avoiding having to pluck a figure out of the air every year. It would not affect our status in any other way.
I apologise for the fact that I did not hear the opening speech. I assume that it mentioned the reference to Boyle that the Government will now make. I hope that in that reference to Boyle it will be made clear that the committee is expected to take serious account of the resolution that the House passed in 1975. I accept that it cannot bind the Boyle committee. It is an independent committee, and must put forward what it thinks is the right recommendation. But it would be curious, to say the least, if the House, having passed such a resolution with a large majority, were to regard itself as free to ignore that decision because the Boyle Committee was opposed to the notion of linkage. The House has taken its decision once. It can change its mind, but it has taken its decision. The Boyle committee should accept the situation and work within those parameters.
Finally, I repeat that the ratio between the pay of a non-ministerial Member and that of Ministers other than the Prime Minister is a key one. Personally, I would increase the rate of pay of the Prime Minister to an enormous level compared with the present figures. I would think of a figure in the region of £50,000, £60,000 or £70,000. I think that the Prime Minister is in an exceptional position.
Mr. Powell: I wonder why there should be such an enormous inducement in a job that people want so badly.
Mr. Cunningham: That is not the only principle that one should adopt—it is one of the principles. If many people wish to do a certain thing, one does not take into account the subject of shortage of supply in determining what the late of pay should be. There are other considerations—there always are—in determining how much is to be paid. I think that it is contrary to the dignity of this

2087
country that we should pay our Prime Minister as little as we do.
However, let us leave the Prime Minister out of the argument, because the point that I am seeking to make is that there should be a close ratio between the pay of a Member of Parliament and the pay of a Cabinet Minister. I would settle for a ratio of 2:1. On that basis a Cabinet Minister would receive no more than double the pay of a non-ministerial Member, with all other Ministers fitting into the calculations. It is important that an hon. Member should not feel compelled to seek ministerial office and, having achieved it, should not feel compelled to hang on to it even if his conscience suggests that he should resign.
2.20 p.m.
Mr. Ronald Bell: I always find these debates rather distasteful. I never take part in one without referring to that distaste. I sympathise with the many hon. Members who have, perhaps, absented themselves today rather than incur that disagreeable sensation. On the other hand, it is the duty of some hon. Members to take part in these debates, perhaps more especially those who are so circumstanced that they are able to earn an income outside the House.
I, in common with a few of my colleagues, am a London-based barrister. I have a constituency that is near the capital. It is not a difficult position. I must point out to some hon. Members, including the right hon. Member for Down, South (Mr. Powell), that the House represents the whole kingdom. For example, how is an Edinburgh-based barrister to earn a living in his skill once he comes to the House? How is someone from Orkney or Shetland to do so, whose connections may be local? After all, we do in a special sense represent our constituencies. It would be sad if those who came to the House had to be people whose roots were not strongly in their own area.
Many who come to the House to represent their constituencies are not able to earn a living outside the House. We must take that into account. It has been said by many that the House has only itself to blame for the continual predicament in which it finds itself. That is not so. During the time that I have been
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here, I have not found that the House has been inhibited—it has, of course, been troubled and unhappy—about doing anything in respect of its pay. However, the House is almost powerless. Only a Minister of the Crown can propose a change. Today all the amendments are out of order because they are not proposed by a Minister.
Mr. George Cunningham: Today the amendments may be out of order, but until a year ago they were not thought to be so, and until 1972 they really were not. As soon as the Pensions Act comes into force—the Act that we passed last month—it will be perfectly in order again for a non-ministerial Member to move increases in expenditure on this subject, provided that they are in traditional form, being only opinion-expressing motions. The House has always jealously guarded the right of hon. Members to propose increases in public expenditure for this purpose as against others.
Mr. Bell: I am aware of what the hon. Gentleman says, having discussed the matter fully with the Clerks at the Table. I appreciate that there may be a change coming. I hope that there is. I am not sure that it will follow that a private Member will be able to move such a proposal. He may be able to do it in the form of an amendment to a motion that already has the Queen's recommendation. I do not wish to become involved in a dispute about the future. I was dealing with the present. All the amendments today are out of order. On previous occasions the motions that the House has passed have not been treated as having effect. For example, the motion that it passed in 1975 did not do anything. That has always been the trouble.
The Government of the day are bound to regard a vigorous and independent House of Commons not as a vision but as a threat. To them the House of Commons is a nuisance. However, hon. Members are sent to this place to ascertain what the Government want to do and to stop them, if necessary. We can hardly expect Governments to want to build up the power of the House of Commons—to make it better informed and more vigorous. We see that there are complications when we consider these matters. I suppose that Ministers feel a sense of deli-

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cacy. I suppose that their remuneration is in some degree linked with ours.
These matters go back a long way. I must tell the right hon. Member for Down, South that it is not very much a matter of inflation. It is never the right time to increase the pay of politicians. For example, in 1831 there was a great cry for economy. Secretaries of State accepted a one-third cut in their salaries, reducing them from £7,500 to £5,000. It took slightly over 130 years for the cut to be restored. That is because it was never considered to be the right time to restore cuts. The temporary crisis passed, but the crisis of delicacy never passed.
The issue was raised time and time again. A Select Committee sat in the 1920s. Those who are interested may read the evidence of Mr. Stanley Baldwin, the Prime Minister of the time. He was asked how on earth the situation had been allowed to develop, and he replied that he supposed that we all have a sense of delicacy about proposing increases in our own remuneration.
In 1950, I introduced a Bill—at the time we had a Labour Government and I did not think very much of them—to increase Ministers' salaries to what I thought were reasonable figures. I believe that I proposed increasing the Prime Minister's salary to £20,000. The Bill got nowhere. Apart from anything else, I was not a Minister. The issue is not linked to inflation, and this is a long-continuing controversy. It is for that reason that I strongly support linkage. I can understand all the objections to linkage. There is the lack of true comparability. However, we want to get rid of the embarassment that so often occurs.
We often overlook the reason for the payment of Members out of local funds fading out. Traditionally, the House was paid in that way, but it would be wrong to look back to the nineteenth century and to generalise from that basis. It may be a lot to ask, but I should like the attention of the Leader of the House. Members used to be paid out of local funds. If we were paid out of the rates now, there would be a great deal of controversy. However, Members were paid in that way, and through the centuries there were endless controversies and lawsuits because of that fact. The
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unpleasantness of bringing a lawsuit against one's own local borough or county was such that the payment of Members began to fade out.
I often agree with the right hon. Member for Down, South, but I cannot do so today. He went back to 1950 and brought forward Members' remuneration from that time by reference to the index of retail prices. Why did he start at 1950? Why not go back to 1900, when Members were not paid at all? That should be no precedent for what we do now. Indeed, we could go back further, to the days when the grand jury of the county of Lancaster indicted the sheriff for promising to pay the Member £10 for the Session. The indictment continued:
"when a perfectly adequate man could have been got for £5."
Are we to take the purchasing power of those times, extrapolate it, and say "If a perfectly reasonable or adequate man could have been obtained for £5 at that time, what should one pay for a perfectly reasonable man now?" We cannot do that. One of the disputes of those days ended in a compromise and the Member was paid a barrel of salted herrings at Christmas instead of being paid in coin of the realm. We cannot value a barrel of salted herrings at that time and extrapolate it to ascertain what we should now be paid.
We must take a commonsense view. We cannot apply anything but common sense. Surely it cannot be common sense that at present Members are paid almost precisely the same as a London bus driver if he is driving a one-man bus. He is performing a valuable job, but if there are to be differentials in society, that does not make sense.
The desire to enter the House does not have a lot to do with it. By statute, I am qualified to be Lord Chief Justice of England. I have the requisite qualifications, experience, and so on. I suppose that I would take on the job for £500 a year less than he is paid. What is more, everyone at the Bar with more than nine years' seniority in practice is qualified to be Lord Chief Justice. I can think of hundreds of people at the Bar who would be prepared to take on the job for £5,000 a year less than the Lord Chief Justice is being paid. That goes for many other positions.

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All the top positions in society are immensely prestigious and desirable. Many people who are technically qualified would be prepared to take those positions for less than the present incumbents are being paid, but we all recognise that those top positions in society should be filled by people with the highest ability.
This is a deliberative assembly. Collectively, it is sovereign. Individually, its members are nothing. But it would not be much of an assembly collectively if individually the people who came here merely wanted to obtain some minimum remuneration. We must think of the kind of people who come here.
This is a complicated argument. If we think of independence, there is no one so independent of the Government and the Whips as an unpaid Member. Ideally, I suppose that we should go back to the assembly of the eighteenth century, when the magnates of the kingdom sat here. They were stiff-necked and independent. They would not have been bullied by the Whips. The Government of the day had to argue for their legislation. There was no nonsense about the Government's having a right to get their business. There ought not to be now. Governments have no right to get their business. They should have to persuade Members. Some of us often point that out and, I hope, act accordingly.
But we must apply contemporary common sense. In each century the House has to reflect the society that it represents. I remember one of the predecessors of the present Clerk of the House telling me that in his day he had many letters from people complaining about the number of apparent lunatics in the House of Commons. He said that he always replied by pointing out that there were many lunatics in the population at large, and that fact ought to be reflected in the House of Commons.
However that may be, the fact is that the House should mirror in a special and sophisticated way the society in which we live. The fact is that the society in which we live would not furnish an eighteenth century House of Commons. We have moved on. Expectations are different. More than that, the demands upon people's time and the taxes imposed upon them make a leisured category of
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Members of Parliament almost non-existent.
I cannot suggest any exact criterion. The Minister invited hon. Members to name a figure. I shall not name a figure. It is not that I care about being associated with a particular figure; I do not. I apply the broad test of common sense. That tells me that the present remuneration of Members of Parliament does not make sense in relation to those who come from a distance—for example, those who were coal miners, or something like that—and do not have the opportunities of London-based barristers, journalists, broadcasters, or writers. There are some people whose earning power is enhanced by their being in the House, but for the great majority that is not so. We must do what seems to us to be right and explain why we are doing it. I think that the British public are fair-minded. They grasp the main point. If we get a recommendation from the Boyle committee, I think that the public will accept it.
I recur to the point that I made earlier. Whatever the disadvantages, for goodness sake let us have a linkage and an automatic system, so that we can get on with the job for which the public sent us to the House of Commons, namely, to look after their interests, to scrutinise legislation and to criticise the Government, and not continually fuss about our remuneration and allowances. We should be able to forget about them, having established reasonable levels, and not have any more of these wretched debates on Friday afternoons.
2.35 p.m.
Mr. Philip Goodhart: My hon. and learned Friend the Member for Beaconsfield (Mr. Bell) carried us back to the nineteenth century and beyond. Other hon. Members—for example, the hon. Member for Islington, South and Finsbury (Mr. Cunningham)—have carried us abroad and looked at the rates of pay in other parliamentary assemblies. I met that situation last February. The Congress of the United States voted its Members an increase of $12,900, which, give or take fluctuations in the exchange rate, is almost exactly equal to the increased amount of pay that we shall get when this motion is passed.
At the moment, we seem to get the worst of all worlds. I cannot recall any

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person in the last 20 years coming to me and saying "We admire your forbearance in not pushing up your salaries higher than they are." On the other hand, I can recall many friends and constituents who jeer loudly whenever an increase in Members' pay is a matter for active public discussion. Almost invariably, those who jeer draw higher salaries than we get as Members of the House of Commons.
For many years I have believed, as have the right hon. Member for Down, South (Mr. Powell) and my hon. Friend the Member for Hitchin (Mr. Stewart), that the right way of tackling this problem has been to ensure that any increase in salary took effect only after a new Parliament had been elected. I take the point that we naturally have some influence on the rate of inflation. If inflation goes up rapidly in the course of one Parliament, we should bear some of the cost. But it has been easier to say "We shall vote an increase in salary, but it shall take effect only for Members elected in the next Parliament".
That was a tenable view in the 1950s and 1960s, but I doubt whether it is tenable in the inflationary 1970s. We are soon to have a General Election. I dare say that it will be pointed out that since the last General Election the cost of living in this country has increased by 90 per cent. We live in inflationary times. I do not believe that it is any longer possible to say that an increase should take effect only after a General Election.
Unlike my right hon. Friend the Member for Taunton (Mr. du Cann), who has done so much excellent work in this area, and my hon. Friend the Member for Devizes (Mr. Morrison), who also made a substantial contribution, I have reluctantly come to the conclusion that we should accept the recommendation of the House in 1975 regarding linkage.
I am glad that the Boyle committee's attention has been drawn specifically to the question of linkage. The committee will have to decide what our salaries should be linked to. We have heard about the disadvantages involved in a linkage with any particular grade of the Civil Service. The Civil Service unions seem to be opposed to that, for understandable reasons. It is fundamentally
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wrong that our salaries should be linked to any particular grade and be affected by trade union pressure.
When the Boyle committee last examined our salaries, it recommended a sum which was then almost equal to the recommended salary of a full colonel on appointment. The sum suggested by my right hon. Friend the Member for Taunton is almost exactly equal to the salary for a full colonel suggested by the Armed Forces Review Body. There are substantial benefits in linking our salaries to a rank in the armed forces. There is a regular system for evaluating the pay of members of the armed forces which is wholly insulated from trade union pressure.
I accept that we are a unique body and that Members of Parliament are unique. Every colonel and every corporal is unique. Each of them bring to his job unique qualifications and experience. The fact that we are unique does not mean that we should reject a sensible method of setting our salaries. The present system does not work. We must change it.
2.43 p.m.
Mr. Peter Bottomley: I wish to speak briefly on a number of matters. The right hon. Member for Down, South (Mr. Powell) courteously allowed me to intervene as a new Member. He is right. Most hon. Members have entered the House since 1950, and the right hon. Member's speech could have been made by an hon. Member who entered the House after a by-election in 1965. That hon. Member could come to totally different conclusions from those of the right hon. Member.
There was a time when hon. Members paid for their own postage and a three-course meal in the Members' Dining Room cost is 6d. If one updates the cost of that meal by five times, as the right hon. Member updated the salary of hon. Members, one should be able to get a meal for 7s 6d. I visited the Dining Room today and had a cheese omelette and chips, pineapple fritter and custard, a cup of coffee with two lumps of sugar and a glass of water. It cost me £1·03. One should be careful about that type of argument. I recognise that my argument is incomplete, but it contains a useful degree of anecdotage.

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I know of an hon. Member who kept records of the postage that he paid in 1950. The bill came to £30 a year. If that is updated by a factor of five, that sum would now pay for 14 letters per day. If we sent only 14 letters per day, we should not need secretaries. Most of us send many more letters.
The right hon. Member for Down, South is right to say that this place is unique. The respect which people have for the House is determined by the people who are here. I felt that I had arrived when I was washing my hands in another part of the building next to the right hon. Member. Having read many of his speeches with great respect in the past, I felt that I was part of the product of the Mother of Parliaments, and I have enjoyed being here. The fact that I do not always agree with the right hon. Member does not alter that feeling.
Certain facts settle the calibre of the people who are sent to the Commons. There is the choice at election time. Most electors have a choice of up to eight candidates but normally a main choice of two or three. The person who comes here is the result of the popular choice. Beyond and behind that, there is the choice of constituency associations or parties. The selectors will not be changed by pay. The calibre of people who are on the selection committee will not change.
What will change is the range of people who put themselves forward to be considered as candidates. An acquaintance rang me up three weeks ago and asked what was likely to happen to pay for MPs after the General Election. He is deputy headmaster of a comprehensive school and earns £9,000 a year. It is not easy for someone such as he to get part-time work if he gets elected at the next election. Should we seriously ask him and his family to take a reduction in their standard of living for him to become a Member of Parliament?
Many people who stand for Parliament are willing to take severe cuts in salaries. I call them the "vicar" types and I respect them. If, however, one followed the free market economy, one would look for the marginal pricing that would bring in all the group that is wanted. It is clear that certain people will be brought in only if they do not have to make too great a personal sacrifice.
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Some people have been brigadiers at the age of 30. Others are Members of Parliament. But the difference in the pay of a brigadier and a Member of Parliament is enormous. People have family responsibilities, and we need Members of Parliament who have heavy responsibilities.
I do not wish anybody to think that we are unaware of the plight of the unmarried mother with one child who probably receives an income of £16 a week plus rent. We do not overlook the many people who are worse off than we are, such as pensioners, some workers and people who cannot work. That does not affect what the rate of pay for a Member of Parliament should be. It should be borne in mind, but it should not be the determining factor.
The Minister asked for suggestions about what the rate of pay should be. I believe that had the hon. Member for Islington, South and Finsbury (Mr. Cunningham) stayed in the Civil Service, he would now be earning between £12,000 and £14,000 a year. The same could apply to many right hon. and hon. Members. That is the level at which pay should be set. I recognise that that figure might be regarded as being in excess of the value of someone such as myself, but perhaps in time I would be replaced or would learn the job and become worth it. The point is that, if the rate of pay is put at a higher level, the electorate can do something about it and other people who think that they would be better Members of Parliament can also act. We are not only dealing with the rate of pay of present hon. Members but we are trying to ensure that the right people come here in the future.
2.49 p.m.
Mr. Roger Sims: My hon. Friend the Member for Woolwich. West (Mr. Bottomley) underrates his own contribution to the House. It has emerged from what he and other hon. Members have said that our debate centres around the nature of the job. It is a curiosity of the job that there is no such thing as a job specification for a Member of Parliament. In fact, it is up to each of us as individuals, whether we are new arrivals in the House or have been here for many years, to carry out the job in the way that we think appropriate.

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We have had some discussion about that. We had an interesting contribution from the right hon. Member for Down, South (Mr. Powell) on the way in which he interprets his job and the tools that he finds necessary for it. I suspect that most of us find it essential to have the facilities described in the second motion that we are discussing, which puts forward a figure for an allowance to cover general office expenses, secretarial assistance and research assistance.
I think that most of us would find that in order to carry out the job of a Member of Parliament in the way that we think proper we need some sort of office accommodation—which is provided, of course, by the House—we need expenses to cover the running of it, and we need a full-time secretary to carry out the work involved, not only in constituency correspondence but in correspondence connected with matters in which we take a particular interest in the House. Many of us could certainly do with some sort of part-time, if not full-time, assistance from a research assistant, or something of that sort.
To cover all these things, the salary of a secretary, plus national insurance and so on, the expenses of running an office, and possibly the services of a part-time assistant, it is now suggested that we should have for the forthcoming year £4,098 and for any subsequent year £4,200.
Any hon. Member can walk a few hundred yards away from this building, down Victoria Street, and see advertised at any employment agency vacancies for secretaries at figures of that sort, simply for employing a secretary alone—£4,000 plus luncheon vounchers and all sorts of fringe benefits. Therefore, we must consider whether even this, increase though it is, is a realistic figure to provide Members with the sort of facilities necessary to do their job properly.
In my view, it is not a realistic figure. It is not surprising that many Members of Parliament have to make do with using half a secretary, or with a secretary of indifferent quality, or with a good secretary who does not last because she goes elsewhere to get more money. Happily, many of us have the services of a secretary who works here because she is
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dedicated and enjoys doing the work, but who is overworked and underpaid. That is not something of which the House ought to be proud.
Necessarily, perhaps, because it involves us all personally, much of our debate has centred on the salary of Members of Parliament. It is right that we should emphasise that we are talking about salaries, to avoid the confusion that arises so often in the media with regard to our expenses or, as they are commonly called, our perks.
Concerning the secretarial allowance, there can surely be few other jobs in which a secretary is not already provided. It is very unusual for people to have to provide their own secretaries. Certainly I know of no other job in which, when one takes it on, one is expected to provide not only one's secretary but a typewriter and other equipment.
On the question of the allowance for a second home, there are very few jobs where it is not normal for an employee to get some sort of allowance or expenses for lodging or staying away from home, if that is the nature of the job.
What is described as free travel is confined to driving from one's home to Westminster and the constituency. Again, in virtually any other job that involves travel it is taken for granted that the employee will have some sort of allowance and that those expenses will be fully covered. My complaint is that our travel is unnecessarily restricted within that triangle. Although there are many circumstances in which, as Members of Parliament, we would want to undertake travel in furtherance of our personal parliamentary duties, we are unable to do so unless we do it out of our own pockets.
I am secretary of the all-party paper industry group. If I visit a paper mill for the purpose of forwarding the interests of that group, I must pay for it out of my own pocket. As secretary of my party's home affairs committee, if I am interested in visiting a prison or a children's home outside my constituency, the travelling expenses have to come out of my own pocket.
Similarly, if Members wish to visit defence establishments, or anything of the sort, their expenses must come out of their own pocket—unless they go as members of a Select Committee.

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I cannot see why it should not be practicable for Members of Parliament simply to have a rail pass, which is quite usual in other legislatures. It would be perfectly practicable. It might be possible then for Members to carry out the sort of visits that I have indicated. Our commitments in this place would give very little opportunity for abuse, if there were the slightest temptation on the part of any Members to abuse it. Certainly the existence of such a pass would save an enormous amount of time and trouble on the part not only of Members but of the staff of the House, with all the paper shuffling that goes on in filling in warrants, passing them for payment, and so on.
Finally, I turn to the question of the salary itself. It is important that it should reflect the responsibility of the work that we do—"the rate for the job", quite rightly, has been the expression used. Much of our discussion stems from the Boyle report of three years ago. Boyle was not printed yesterday. It was three years ago, almost to the day.
The House will recall that in his report Lord Boyle analysed the work of Members of Parliament and the amount of time that was spent on our various commitments. He commented, incidentally, that between 1971 and 1975 the average number of hours that Members of Parliament devoted to their parliamentary activities had increased from 63 to 70 hours a week. It was 70 hours a week in 1975, and I suspect that it has not decreased since then. That is an interesting figure to bear in mind at a time when there is pressure for a 35-hour week.
In paragraph 20 of the report, Boyle recommended that the salaries of Members of Parliament should be increased to £8,000.
In paragraph 21, Boyle went on to say:
"We consider it to be of the highest importance that our recommendations both on Members' salaries and on their allowances, and on a Parliamentary salary of Ministers and office holders, should be implemented in full and without delay.
That was in July 1975. Both sides of the House decided to ignore that recommendation and to offer only a marginal increase. Both sides of the House have continued to ignore that recommendation for three years.
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The time has come when this issue should be dodged no longer. After all, it is not simply Members of this House who are suffering from being inadequately remunerated for the work that they do. In my view, we cannot do our job properly. I have already referred to travelling expenses, which are inadequate. Also, we arc often precluded from, for example, entertaining constituents as we would wish. That is the sort of thing which a Member of Parliament ought to do and ought to be expected to do, but he should not have to suffer financially for doing it.
How many of us have experienced the situation in which a constituent of ours turns up in the House to speak to us, and although we would like to take him for a meal we just have to take him to the bar and give him beer, because that is the best we can do. We ought to be able to entertain our constituents to a reasonable level.
Mr. Rhodes James: Will my hon. Friend emphasise the point that the take-home pay of a Member of Parliament is less than £100 a week? That is the key salary figure which is involved in all the problems about which he has been talking.
Mr. Sims: Whether we are talking about the take-home salary on a weekly, monthly or annual basis, obviously it will depend upon a Member's commitments, and so on. But I would not dispute what my hon. Friend says.
The whole point is that at the end of the day it is not simply we who are suffering. Indeed, the right hon. Member referred to sacrifices and said that we should expect to make sacrifices. He is absolutely right. We willingly make sacrifices, but our wives and families have to make them too and we should be able to recompense them with holidays and nights out without putting an unreasonable strain on our pockets.
We cannot and must not dodge this issue any longer. Shortly before a General Election, this is a golden opportunity to introduce a commitment to solve this problem. The lines have been indicated in early-day motion no. 502, in connection with which my hon. Friend the Member for Hitchin (Mr. Stewart) has done so much work. I pay tribute to the work of my right hon. Friend the

2101
Member for Taunton (Mr. du Cann) and of the right hon. Member for Anglesey (Mr. Hughes) towards getting a solution and a decision from both Front Benches.
I welcome the Minister's undertaking to ask Boyle to look at this matter again—although if I were a member of the committee I should think twice before doing so, in view of the way in which its previous recommendations were treated. However, I deplore the Minister's refusal to permit the Government to accept the recommendations. There is ample precedent, with the armed forces, the police and the firemen, to announce beforehand that the recommendations will be accepted, either immediately or in phases.
I see no reason why both sides of the House should not make a commitment. The Leader of the House has the task of representing and defending the interests of Back Benchers, and I hope that he will do so in this connection. I urge my right hon. Friend the Member for Cambridgeshire (Mr. Pym) to take the lead and commit the Conservative Party to implementing in full any Boyle recommendation. Perhaps that will shame the Government into doing the same. I urge my right hon. Friend to do so not only in his personal capacity but as Front-Bench spokesman. His Back Benchers have rightly supported him and his right hon. Friends; I ask him now to support us.
3.1 p.m.
Mr. Francis Pym: This has been a wide debate, covering not only a whole range of matters relevant to Members' pay and pensions but, beyond that, to the role of Members of Parliament and how we carry out our responsibilities. Is it slightly unfortunate that we have spent almost a whole parliamentary day on our own salaries. That is slightly out of proportion, but it reflects the problems created by inflation.
Many conflicting views have been expressed today, but everyone has agreed that this place is unique and that the job of an MP cannot easily be compared with anything else. However, the needs of those of us who try to do this job and the needs of our families are not so different from the needs of people outside. Our difficulty is largely the fault of the House itself. We have been pusillani-
2102
mous. Despite the terms of early-day motion no. 502, put down by my hon. Friend the Member for Hitchin (Mr. Stewart), he himself said that we had been oversensitive about this matter. That is correct.
The 10 per cent. increases provided for in these motions will obviously be accepted by the House so far as they go—not, I think, by the right hon. Member for Down, South (Mr. Powell), but by everybody else—but reluctantly and only on account of the present Government's counter-inflation and pay policy. The 10 per cent. is not only the maximum which the Government can afford and permit: it is also the minimum. It is the least they can do.
If these motions are passed, we shall be very much where we are now in terms of remuneration. Wherever that is, it is not satisfactory and requires adjustment. With the exception of that one speech, I think that every hon. Member takes that view.
One particular anomaly is the two levels of remuneration—the difference between hon. Members who accepted the full increase a couple of years ago and those who did not and who have since received £312 less. My right hon. Friend the Member for Taunton (Mr. du Cann) referred to our pay conditions as eccentric, and this is a particular eccentricity. It ought not to have happened, but it did, and it should now be erased.
As I understand it, the Government's view is that Members may on their own initiative cancel their own waiver because the pay policy is voluntary. But my inclination is for the Government themselves to be active and forthright about this and to facilitate the payment of their salaries to all Members on the same basis. I think that everybody ought to be on the same basis. The Parliamentary Secretary advised against that, but I think it is wrong that there should be some Members paid at one level and other Members paid at another level, unless entirely through their own voluntary will they wish to have a reduced salary or no salary at all. This is an anomaly that should be ended.
I remind the Leader of the House that he wrote to at least one of my hon. Friends—the hon. Member for Norfolk, South-West (Mr. Hawkins)—a couple of

2103
years ago, in 1976, indicating that the present situation would be only temporary. As I understand it, it has in effect ended, so I hope that he will be able to advise in that sense.
Mr. George Cunningham: I am wondering about what the right hon. Gentleman has just said, because surely it is entirely the responsibility of the individual Member whether he chooses to receive the full figure or the full figure minus the £312 or whatever it was. As I understand it, no obstacle is being placed in the way of any Member who wants to cancel his instruction.
Mr. Pym: I am grateful to the hon. Gentleman for that information, but the Parliamentary Secretary advised Members in certain circumstances not to request payment of what they had waived. I am suggesting that that advice ought not to have been given and that the Leader of the House should give revised advice today.
I come now to the question of expenses and allowances. I agree with the hon. Member for Fife, Central (Mr. Hamilton) that it is wrong to regard the recoupment of the expense of a secretary as being in any sense an allowance. It cannot possibly be regarded as an allowance. We know that the right hon. Member for Down, South can manage his constituency and other work without a secretary, and I think that he can probably manage a lot of things in a way that some of the rest of us are not able to do. For practically every other hon. Member, however, a secretary is necessary, and it is not right for that to be treated as an expense, because it is not.
I also agreed with my hon. Friend the Member for Cambridge (Mr. Rhodes James) when he referred to the connection between expenses and allowances and salaries. I refer the House to the comment in the eighth report of the TSRB. It said:
"we are perturbed that, whereas our recommendations for increased allowances have been accepted in full, Members' salaries have been increased by little than one-third of what we recommended. We consider this imbalance between salaries and allowances to be wrong in principle and unwise in practice."
I agree with that view. I remember that in 1975, when we had one of these debates, it was being said to Members who
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were complaining about the extent to which the proposed increases in salaries were being limited by the Government that the allowances and expenses were not being limited. I think that that is wrong.
The most important issues are what should be the level of remuneration of Members and Ministers and how that decision, whenever it is reached, should be implemented. The Parliamentary Secretary referred to injustices. He also referred to the obligations of the Government, which I think almost every Member who has spoken feels that the Government have not actually fulfilled. He made the point that the time is never right to do it. We have to put that right; we have to decide and find the right way to implement whatever decision is taken.
It must be right to ask the Review Body to reconvene and consider the matter. That is the body to determine the issue. I agree with the Government about that. But I doubt whether the members of the Review Body will be very pleased to be asked to do it after the treatment accorded to their deliberations on the last occasion. Indeed, the Review Body was outspokenly critical in its eighth report about what was subsequently done. In paragraph 4 it said:
"we feel bound to express our concern at the consequences of continuing to undervalue the demands on those elected to govern the country."
I share that concern. The report does not specify the concern or go into detail, but at this point in our history, in the economic circumstances of today, the present levels of remuneration put many Members in great difficulty. That difficulty is not peculiar to them. There are lots of other groups in our society which are in difficulty, and to the extent that we share that difficulty perhaps it is good for us, but that does not alter the fact that there is something wrong.
It is a serious matter to put those in highly responsible positions in public life in such circumstances that they can scarcely make ends meet or, at any rate, have great difficulty in doing so. There are dangers in underpaying those who carry substantial responsibilities in public life. That is one reason why historically, for example, the judges have been relatively highly paid, though I do not think that they are so relatively highly paid today. Anyone in a responsible position

2105
in public life ought not to be underpaid, since the result must surely be to give such a person a strong incentive—even a need, but certainly an incentive—to find extra sources of income.
Some Members in such circumstances will find it easier than will others to increase their earnings. Some will be able to augment their salaries without too much difficulty, and that will be of general benefit to the House, as the hon. Member for Fife, Central said, and it will be of benefit also to the particular Member. But when a Member has difficulty in finding extra income he may be put in an acutely awkward situation, and so perhaps may his family. I thought that the right hon. Member for Fulham (Mr. Stewart) spoke very compassionately, sensibly and with great understanding about that.
This state of affairs is worrying since in current conditions the demands made on Members of Parliament are extremely onerous. As the years go by, more and more is expected of them, and I do not imagine that many hon. Members will agree with what the right hon. Member for Down, South said about that. For just a few minutes during the course of the debate I went out and obtained information from the post office in this building, and I was told—I give the facts in so far as they can be taken as an indication of what is happening—that over the past six years the postage in and postage out has increased by about 35 per cent.—at any rate, by more than one-third—which by any standard is a pretty substantial increase.
The development and extension of Government into many areas of everyone's everyday life, areas never previously invaded by Government—a point well made by my hon. Friend the Member for Cambridge—means that over a wide range of matters a Member of Parliament is often the last hope or the last resort for a constituent who seeks redress of a grievance.
We all know from our surgeries the frustration and exasperation of our constituents at the consequences of greatly extended bureaucracy. One of the things which we can do for them is to investigate a case on their behalf, to compel consideration or reconsideration of some matter or decision already taken. In relation to overall policy, it may not seem
2106
a major issue into which they ask us to look, but to the individual it is a major matter, and, of course, all of us in the House like to help people in that way as far as we can. But I often wonder how many more people there must be whom we could help and would like to help, as Members of Parliament, but who have not yet got in touch with us.
That is only one facet of a Member's responsibilities. There is plenty of other parliamentary and other work to be done here because of the expansion of Government. For example, there is the scrutinising role which we want Parliament to do more effectively in future than it has been doing recently. But I mention the constituency work load of Members is the present context because I believe that the full range of responsibility that a Member has is not widely known or understood. Historically in this country we have had our politics on the cheap in terms of public expenditure, but in today's circumstances it is hard to see how Parliament can work satisfactorily or successfully on that basis.
We are experiencing a transition from what could be described as an amateur to an increasingly professional Parliament. My hon. Friend the Member for Surbiton (Sir N. Fisher) said that it used to cost money to be an hon. Member. Comparing that situation with today's circumstances indicates the scale of the change that has taken place. However much anyone may regret that change, much regret is irrelevant because the change is inevitable. We have to cope with things as they are. The approach of my hon. and learned Friend the Member for Beaconsfield (Mr. Bell) was entirely right. We must do it on a commonsense basis. My hon. Friend the Member for Woolwich, West (Mr. Bottomley) made this point most effectively. Whatever else happens in future, I hope that there will always be scope for part-time Members on quite a large scale, or at least many Members who have time for outside activities. If we had a House where that was unusual, I am sure that we would take even worse decisions than we sometimes take anyway.
To the extent that politics and parliamentary life are becoming more professional and a more full-time job, with commensurate salaries, the independence of hon. Members may be affected. The

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genuine and individual independent judgment that is so vital to the successful working of the House—indeed, it is of its essence—against party lines or anyone else would be jeopardised to some extent if being an hon. Member represented a person's only livelihood. There will inevitably be at least some disincentive from doing anything that puts that livelihood at risk. I do not make much of that, but it is worth saying.
There has been talk of high-quality people not giving up other occupations to come here because they could not afford to do so. This is, in part, a misconceived argument, because this is a voluntary occupation. No one has to come here. In addition, there is an element of sacrifice in coming to this House, and I hope that there always will be. To talk of people not being able to afford to come here is to talk of membership of the House as a major professional career, and if that ever became the basis of membership throughout the House it would considerably alter the character of the place.
Reference has been made to Parliaments in other countries--the international comparison argument. I have no doubt that the Review Body will take such comparisons into account. I expect that it will take all factors into account and will update its 1975 figures to recommend a salary that may well be into five figures. How many of us are likely to disagree with that?
If our job is to be done properly and as many members of the public want it to be done, it must be paid for. In today's circumstances it cannot be done properly on the cheap. Obviously we must await the outcome of the review which the Government are setting in hand, and it is not fair to ask them to commit themselves absolutely in advance to accept all the recommendations in full.
The early-day motion of my hon. Friend the Member for Hitchin asks for that undertaking, but it is difficult to visualise that the Government could go that far. We have to acknowledge that no Government, as far as I know, have ever done so. The nearest that a Government came to this was with the undertaking which this Government gave concerning the Edmund-Davies report on the
2108
police. There may be a precedent there which might be relevant to what my right hon. Friend the Member for Taunton and the right hon. Member for Anglesey (Mr. Hughes) are asking the Government to do.
With that possible exception, it is an unusual thing for a Government to accept undertakings in advance. I am certain that a strong indication from the Leader of the House in the direction of acceptance or something close to it would be both realistic and reasonable. I remind the House that the last Conservative Government implemented in full the recommendations of the then Boyle report. That is a credential that it is possible and appropriate for me to put forward at this Box as an indication that we for our part in the circumstances envisaged—that after a General Election we shall be the Government—would do our utmost to go as far as we can in whatever is recommended and give the House of Commons the chance of coming to a decision.
I turn to the question of responsibility for the decision about our pay and conditions. Traditionally, the initiative has come from the Government. It has had to do so. They have to release the money and carry the responsibility for that release. Therefore, the Queen's recommendation has been required. That procedure fell into doubt, but it has now been put right with the help and encouragement of the hon. Member for Islington, South and Finsbury (Mr. Cunningham)—in so far as it ever went wrong—by new clause 4 which was inserted in the recent Parliamentary Pensions Bill. In that way it is possible for Back Benchers to move an amendment or to debate this issue in the way suggested in the amendment tabled for today by my right hon. Friend the Member for Taunton which is at present out of order.
In recent years the Government have not faced up to their responsibility. That is one reason why we have got into such a mess. This is a matter for the House of Commons rather than the Government. It is a matter for the Back Benches just as much as for the Front Benches. It is they who should take the initiative and the responsibility for whatever is decided. There are difficulties for the Government in giving firm commitments. There are

2109
similar difficulties for the alternative Government, sitting temporarily on the Opposition Benches. This is an issue in which the whole House should be involved.
It is possible that, thanks to the new clause 4 added to the Parliamentary Pensions Bill, we shall have found a way of enabling the House to take the initiative and the responsibility for whatever is decided. The same thing applies in principle to the linkage argument contained in the early-day motion and also contained in the amendment passed in July 1975. I refer to the linkage with the Civil Service. I am against that proposition. I realise that I am in a minority, although I was supported by my hon. Friends the Members for Plymouth, Sutton (Mr. Clark) and Halesowen and Stourbridge (Mr. Stokes) as well as the hon. Member for York (Mr. Lyon). I appreciate that my hon. and learned Friend the Member for Beaconsfield, together with my hon. Friend the Member for Beckenham (Mr. Goodhart), took a different view. It is difficult to know with whom we can link ourselves.
I remind the House of what the eighth report of the Review Body on Top Salaries said in paragraph 5. It commented:
"the level of remuneration for Members of Parliament should continue to be judged on the demands of the job itself and against all factors relevant to it; Members ought not to be insulated from these factors".
I am inclined to agree with that.
The controversy will not go away. I do not believe that there is any action which could flow from the last line of the early-day motion which would remove responsibility for future decisions from this House. I do not see what can be done to achieve that, because there will always be the argument over to whom or to what we should link our salaries. Should it be to civil servants, colonels, bus drivers or miners? What is it to be? It is not for me to say. It is not for the Leader of the House to say. It is for the House of Commons as a whole. I may not like the decision which we take, but that does not matter. The important thing is that the House of Commons should take that decision.
Mr. English: We did.
Mr. Pym: The hon. Gentleman says "We did". That amendment was passed three years ago and that decision can be said to have been taken. But I am sure that the House of Commons will have to return to this matter after the reference to Boyle. I am simply saying that I personally disagree with it. That is as may be. The point is that the House of Commons as a whole will have to decide.
We cannot escape our responsibility. In my view, we ought not to try to do so. If the House decides to try to escape from its responsibility for settling the salaries of Members, so be it. But I predict that, whatever we do, we shall find that in the end the buck stops right here.
I ask the Leader of the House to be as positive, forthcoming and helpful as he possibly can be about the future. He knows the uneasiness and disquiet which there is in the House about the level of salaries at present. Indeed, he knows what hardships there are on both sides of the House. We appreciate that the Government are hooked with their own pay policy and with those problems. But the right hon. Gentleman also knows that we cannot continue with Members remunerated on the basis upon which they are remunerated today.
In supporting the motions, for the reasons that I have given, I ask the Leader of the House to be as helpful, forthcoming and as positive as possible in indicating how he sees his Government putting this matter right in due course.
3.26 p.m.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): Before responding to the final words of the right hon. Member for Cambridgeshire (Mr. Pym)—obviously the matters to which he referred at the end of his speech reflected some of the principal questions discussed during the debate—perhaps I may comment on some of the other general remarks that have been made. If I hinge some of them on the speech of the right hon. Member for Down, South (Mr. Powell), it is because he took a view contrary to that of all other hon. Members who have spoken in the debate. He put the case against what we are proposing. I should therefore like to comment on some of the things that he said, and comment thereby

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on some of the other remarks that were made by other hon. Members.
The first proposition that the right hon. Gentleman put was that in some sense this was shameful. I think that that was the word that he used. One of the reasons why I should reply to the right hon. Gentleman is that his comments speed around the country and, therefore, it is necessary to reply to them.
I do not assent to the right hon. Gentleman's view that in some sense it is shameful that the Members of the House of Commons should vote amounts for themselves prior to a General Election. I think that it is perfectly proper for the House of Commons to do what it is doing. We are doing it in the open. We are not seeking to conceal what we are doing, or the reasons why we are doing it. Nor have we concealed what has happened in the past, or what we hope will happen in the future. There has been no attempt whatever to do anything behind the backs of the electorate. I do not say that the right hon. Gentleman was suggesting that, but there was an implication that this is the wrong way for us to proceed. I cannot accept that.
Although many of my hon. Friends, and others, may disagree, I think that it would have been wrong, if, in 1975, when we had the Boyle recommendations and when, almost at the same time, we were asking for a voluntary acceptance of a £6 limit throughout the country—a limit that some of us believed was essential to defeat the very great danger of inflation—we had proceeded to carry out the Boyle recommendations in respect of Members of this House. That is what I said in the House at the time, and I do not depart from it now.
It is easy for some hon. Members to say—and the right hon. Member for Cambridgeshire said it, in a sense—how pusillanimous the House of Commons has been, or how much too sensitive it has been. If we remember the circumstances in which we had to make up our minds, and if we recall the reason why the House of Commons came to what I believe was the proper decision, that we should not give ourselves more than we were asking others throughout the country to accept, I am sure that most of us will agree that the same principle applies now. However, that does not mean that I agree
2112
with the right hon. Member for Down, South that we have not the right to do this now as we are doing it and as we did it three years ago.
The right hon. Member made a comparison with the time when he came to the House in 1950, and various replies have been given to him. My hon. Friend the Member for Swindon (Mr. Stoddart) replied on the grounds of numeracy, and I shall not seek to compete with him. He gave the numerate reply. I am not an expert in these matters, and I shall not go into any figures if I can avoid it. My hon. Friend replied effectively on that subject. My right hon. Friend the Member for Fulham (Mr. Stewart) also replied on another aspect of the matter. The hon. and learned Member for Beaconsfield (Mr. Bell) also joined the common retort to the right hon. Member for Down, South on these matters.
The right hon. Member for Down, South did not merely get the figures wrong in the sense that was described by my hon. Friend the Member for Swindon; he also took a slightly romantic view of what happened in the House of Commons when he first arrived here in 1950. I believe that he is a romantic and that that is one of the explanations for his attitudes in politics generally.
I remember the 1950 Parliament and how some Members of Parliament used to conduct their business in those times. I remember Seymour Cocks, for example, who was one of the closest friends that I had in the House of Commons. He spent hours and hours in the Library replying in his own hand to every letter that he received from his constituents. He was so careful, precise, diligent and conscientious in the way that he discharged his duties that he even wrote to Ministers, in his same longhand, telling them what he wanted to say to them. There was none of this business of attaching a little card to a constituent's letter saying "Get on with this, please, and let me have a nice full answer to send to my constituent." A vast amount of his time had to be devoted to replying to his constituents satisfactorily in that way. He was also scrupulous in avoiding coming into the Smoking Room unless he was sure that he could pay for a round of drinks. We saw him there only once a month, and we always looked forward to his coming.

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There were many Members of Parliament who sought to conduct their affairs in that manner during the years that the right hon. Member for Down, South described. I do not believe that that is a satisfactory way for hon. Members to operate. I am not saying that the right hon. Member for Down, South did not discharge his duties, but I believe that many Members of Parliament sacrificed their health in discharging their duties to their constituents. The right hon. Gentleman's picture of the way in which hon. Members can discharge their duties, therefore, does not tell the whole story.
There have been great changes in the House of Commons over the past 20 or 25 years. I am not sure whether the right hon. Member made the suggestion, although there may have been some implication in what he said tending in this direction, but I disagree strongly that there has been any decline in the sturdy independence of Members of Parliament during that period. In my view, the opposite is the case. Members of Parliament today are a good deal more independent than they were 20 or 30 years ago, when I first came here. Certainly they are a good deal more independent than many Members of Parliament in previous decades, or even in previous centuries.
It is a myth to imagine that in the eighteenth or nineteenth century all 600 Members of the House of Commons were sturdy people coming here and, on their aristocratic incomes, defying the Whips, such as they were in those days, determined to stand up for their rights. The independence was confined to a very small number.
In a sense—I turn to my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) when I say this—there is much greater independence in the House than there has been for a long time past. My hon. Friend and others sometimes suggest that the sole reason for that greater independence is the non-existence of a majority for the Government. It has an effect, because no Government want to expel their own majority. That would be a curious course to take. Even if one were tempted to do so, one would be brought back to reality the following morning, because there
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would always be another night to be got through.
Going back to the 1940s and early 1950s, I remember the strictness of the party machines that then operated. Long before the narrow majorities of this Parliament, there was a great development in the independence of Members of Parliament. In the 1930s such was the power of the party machines that on the Labour side the machine took steps to throw out of the party altogether Aneurin Bevan. On the Conservative side it took such steps as it could just before 1939—indeed, the war came in the nick of time to prevent its happening—to kick Winston Churchill out of the Conservative Party altogether. In those days independence on both sides of the House had to be striven for.
Compared with that position, there has been a healthy transformation. The fact that the salary of Members of Parliament has risen in the interim has not injured independence; it has assisted it. I agree with the right hon. Member for Taunton (Mr. du Cann) that in sustaining, encouraging and developing the independence of Members of Parliament there is a strong case for bringing about a considerable improvement in their pay, conditions and pensions.
Pensions, in one sense, are the most important of all. The most disgraceful feature of what has happened in the treatment of Members of Parliament is the way in which hon. Members who spent as long as 30 or 40 years in this House were awarded no pensions at all. On retirement from the House, many of those people had to return to circumstances which were utterly degrading and which should not have been tolerated.
We are seeking to overcome that position. We now have in operation a decent pension scheme. There are some anomalies and problems. Those matters are still to be referred to the Boyle committee, and I hope that they will be overcome.
I fully agree that there must be a substantial improvement in the general pay and conditions of Members of Parliament, because it will enable the whole House to transact its business in a better fashion. I want to see that happen as speedily as it can be assured.

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I am not enamoured of top salary review bodies. I do not think that they always make the best recommendations, and they do not always make it easy for Governments to make choices. I do not recommend such a system as ideal but, faced with our present position involving the pay of Members of Parliament, I believe that it would be absurd at present to try to seek a different way of dealing with it. Therefore, I am in favour of the reference to the Top Salaries Review Body as speedily as possible after we have been able to carry the relevant motions. Following the consultations that will enable us to proceed, I am in favour of referring the matter again to that body, in the hope that we shall achieve some fairly early recommendations.
The right hon. Member for Taunton said that the terms of reference should be comprehensive. I do not dispute the desirability of that aim, but we do not want to make the terms so comprehensive that the procedure will be too lengthy. To some extent we must limit the number of recommendations, but all the matters referred to in this debate can be included in the references.
We should, of course, have consultations with those who have made representations on the subject, especially the right hon. Member for Taunton and my right hon. Friend the Member for Anglesey (Mr. Hughes). In the Labour Party we have a parliamentary affairs group that has a special interest in and knowledge of these matters. We would wish to consult with all interested groups about the form of the new recommendation. I want to ensure that it commands the general support of the House. That does not mean that I want to delay proceeding with it.
The hon. Member for Beckenham (Mr. Goodhart) and others asked whether the Government were able to give an absolute commitment that we should carry out what the Top Salaries Review Body might recommend. I cannot give that commitment. I set out the Government's position in the same terms as those used by my hon. Friend the Parliamentary Secretary at the beginning of the debate. However, I do not think that our approach differs in any sense from what the right
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hon. Member for Taunton said. I am grateful to him for what he said. I do not dissent from his words.
I believe that we have made a considerable advance, in the sense that the proposal that there be a reference to the Boyle committee and the way in which it is to be done has resulted from the representations made by the right hon. Gentleman, my right hon. Friend the Member for Anglesey, and many other Back Benchers who have spoken to me and discussed the matter. I believe that the reference will be made with the general asset of the House. When the recommendations come forward I think that there will be strong backing for proceeding along those lines. I am ready to respond to what the right hon. Member for Cambridgeshire said at the end of his remarks, in almost the terms that he used.
Mr. George Cunningham: My right hon. Friend will remember that in 1975 there was considerable irritation that the Boyle report was made available to the Government and was in the Government's hands certainly for several weeks, and perhaps even for a month or more, before it was made public. Is my right hon. Friend able to give an undertaking that that will not be repeated and that as soon as the report is out from the Boyle committee it will be made available to hon. Members, who have a direct interest in it, before the Government make up their mind on their recommendations?
Mr. Foot: I am afraid that I cannot give the undertaking that my hon. Friend seeks. I doubt whether it is a reasonable idea. When the Government receive a report they must be able to consider whether it is desirable to issue it at the same time as they publish their recommendations or comments. That is what has happened on many other occasions. There have been a number of occasions when the possibility of the Government's being able to give consideration to a report before its publication so that their recommendations or comments may appear at the same time has been highly beneficial to those included in the recommendations. I would not give the undertaking that my hon. Friend seeks without being able to consider the particular circumstances—and who knows what they

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might be? That does not detract in any sense from what I have said about the way in which we wish to approach the matter and the way in which I believe the whole House should approach it.
The right hon. Member for Taunton is correct about the way in which we shall be able to deal with these motions in future. That is largely due to the initiative and persistence of my hon. Friend the Member for Islington, South and Finsbury, who ensured that the relevant clause was included in the Bill. I believe that that will be of benefit to the House in dealing with these problems in future.
Mr. Rhodes James: We are deeply appreciative of the manner in which the right hon. Gentleman has replied to the debate. Will he deal briefly with the problem that I endeavoured to raise, namely, the problem of the disparity between allowances and salary? Will that be referred as well?
Mr. Foot: That can certainly be referred. It is obviously a matter on which the Boyle committee will wish to comment. I think that it commented upon it before. Therefore, it will no doubt wish to comment on it again. We would not wish to do anything that would debar that committee from commenting upon that matter. We shall look at that aspect of the matter, too, in making our recommendations.
The motion in the name of the hon. Member for Hitchin undoubtedly commands wide assent throughout the House and the Government must certainly take that into account. I am sure that the Boyle committee must also take it into account. I am glad that I have not omitted to emphasise this aspect, because I fully intended to do so. The Boyle committee must take full recognition of the motion passed by the House on the whole question of linkage. This matter has been debated in the House many times. Arguments on both sides have been put forward. However, it does not alter the fact that Members are in some respects the best judges of some of these questions.
There is no doubt that we had a serious debate in 1975, when Members voted on that motion precisely because they believed that it was one of the ways in
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which we could escape from some of our difficulties. It commanded support in many parts of the House. That is why we have made clear in our motion that we are asking Boyle to look afresh at the possibility of linkage. Of course, we are referring to the motion that was passed by the House of Commons. I believe that the committee must make some recommendation on how best we can carry out that resolution. Whether, in the end, the House wishes to choose that course is another matter. It is for the House of Commons to decide. We are seeking to ensure that we get a further fresh consideration and recommendation on that aspect of the matter.
I hope that on these general grounds, despite the position of the right hon. Member for Down, South, the House will be prepared to accept these recommendations and motions. I do not believe that it is possible for anybody to say that Members of Parliament have in any sense sought to treat themselves favourably compared with other sections of the community. Anyone who looks at history over recent years will see that, so far from doing that, Members have held back. That should be well understood. It is not always understood by those who report the affairs of this place. Some of them apparently have no interest in reporting the situation.
Mr. Sims: I am grateful for the trouble that the right hon. Gentleman has taken to meet the wishes expressed in many corners of the House. Does he appreciate that the terms that he used have been so general as to allow either side of the House in government to do anything or nothing on receipt of the report? Will he give us an assurance that at least we shall not be told that while the Government completely accept the spirit of the report, under the present policy of 5 per cent. that is what we shall get and no more? If so, the debate has been a waste of time.
Mr. Foot: I think that the hon. Gentleman has misconstrued—I think he is unwise to do so—what I said and what was said by the right hon. Member for Cambridgeshire. Neither of us said that the report would leave the House of Commons free to do anything or nothing. Those were not the terms used by either of us. We said that, particularly in the

2119
light of the way in which the recommendation is being made by the House, all the representations that have been made by hon. Members on both sides following the appearance on the Order Paper of a motion of this character will be taken into account by the House of Commons and by the Government when they get the future report of the Boyle committee. The interpretation by the hon. Member for Chislehurst (Mr. Sims) of what I said does not stand. I would rather rely on what I actually said.
Mr. Rhodes James: In view of the right hon. Gentleman's comments about the linkage at the tail end of early-day motion no. 502, I must tell him that one of the factors that led hon. Members to sign that motion—even though they had doubts about linkage—was the reluctance of both Front Benches to make a commitment to implement the recommendation. That has happened in the past. If hon. Members felt that the recommendations would be implemented the question of linkage would be regarded as secondary.
Mr. Foot: The hon. Member interprets the views of some of those who signed the
Resolved,

That, in the opinion of this House, the following provisions about salaries and pensions of Members of this House should be made with respect to service on and after 13th June 1978:—

(1) The salary payable to Members of each of the descriptions in the first column of Table 1 below shall be at the yearly rate specified in relation to that description in the second column of that Table.

TABLE 1

Description of Member

Yearly rate of salary

£

1. Member not within any other paragraph.

6,897

2. Member receiving a salary under the Ministerial and other Salaries Act 1975 as Comptroller or Vice-Chamberlain of Her Majesty's Household, Junior Lord of the Treasury or Assistant Government or Opposition Whip.

4,642

3. Officer of this House or Member, other than Member of the Cabinet, receiving any other salary under the Act of 1975, or receiving a pension under section 26 of the Parliamentary and other Pensions Act 1972.

4,299

4. Member of the Cabinet receiving salary under the Act of 1975.

3,529

(2) The ordinary salary of every Member shall be regarded for pension purposes as being at the rate of £9,372 a year (the proper rate for Members within paragraph 1 of Table 1).

(3) Members of each of the descriptions in the first column of Table 2 shall be credited, by way of supplement to their salaries, with amounts at the yearly rate specified in relation to that description in the second column of that Table (that is to say amounts representing, subject to certain adjustments, 5 per cent. of the yearly amount by which the salary of a Member within paragraph 1 of Table 1 falls short of what a Member's ordinary salary is regarded to be for pension purposes); but with effect from the date on which section 3(2) of

motion. He is entitled to do that, but I and others are entitled to say that the House passed a resolution on the question of linkage. We are entitled to say that those who decided to do that on that occasion must have their views taken into account as much as the hon. Members who signed the motion. It is because a resolution was passed and because of subsequent representations that we sought to include a fresh recommendation along those lines.
I hope that the House will be prepared to accept our proposal. Gibbon reported that the peroration of a Roman emperor addressing his troops was considered singularly eloquent because he offered £200 to all the members of his army. I do not know whether my words will be interpreted in that sense. I do not expect that that is the exact figure. But I believe that out of these proposals we shall achieve better treatment for Members of Parliament, enabling them to perform their functions better. It is high time we achieved that.
Question put and agreed to.

the Parliamentary and other Pensions Act 1972 is amended as proposed by the Parliamentary Pensions Bill the amounts so credited shall be at the yearly rate specified in column 3 of that Table.

MEMBERS' OFFICE, SECRETARIAL AND RESEARCH ALLOWANCE
Resolved,
That, in the opinion of this House, the limit on the allowance payable to any Member of this House in respect of the aggregate expenses incurred for his parliamentary duties—

(a) as general office expenses;

(b) on secretarial assistance; and

(c) on research assistance for work undertaken in the proper performance of those duties;

should be, for the year ending 31st March 1979, £4,098, and for any subsequent year, £4,200.—[Mr Foot.]

MINISTERIAL AND OTHER SALARIES
Resolved,
That the draft Ministerial and other Salaries Order 1978, which was laid before this House on 20th July, be approved.—[Mr. Foot.]

PARLIAMENTARY BUILDING
Motion made, and Question proposed,
That this House approves the Fifth Report from the Select Committee on House of Commons (Services) in the present session of Parliament (House of Commons Paper No. 483) on New Building for Parliament.—[Mr. Foot.]
3.53 p.m.
Mr. Robert Cooke: It is no secret that the vexatious subject of accommodation for Parliament has preoccupied the House since the last war. There have been constant Questions. The matter has erupted from time to time with
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debates in the House, the appointment of special committees and innumerable schemes.
Our thoughts today are not directed purely for the convenience of the legislators. They are outnumbered here by about four to one by the staff who serve us, often in appalling conditions. Indeed, the Acts that the House has passed to ensure decent working conditions cannot often be applied to the Palace. The Services Committee is almost continually in session to grapple with the day-to-day problems. I am told that the accommodation section of that Committee has sat formally 75 times in this Parliament. Never a day goes by without some new problem arising.
We have contrived to make the best use of what we have. Over the years we have infilled many of the courts of this Palace. We have then crammed far too many Members and other people into the small rooms that we have provided. Huts have grown up on every flat roof. Indeed, we can all see that we have blocked all the windows on the east side of the Chamber, and we have done worse in other places. We have pushed people out into a haphazard collection of outbuildings, and that is both an inefficient and a most costly process. I submit that we have now reached the end of the road.
It is true that in those days long ago—more than 21 years ago—when I came here, some of us managed with one-third of a secretary. The right hon. Member for Down, South (Mr. Powell) did even better. He did not have one at all. All of us had only a small cupboard in

2123
which to keep our papers. I believe that that was a relic of the days when Members had to have somewhere to put their silk hat and a couple of copies of Hansard, in Disraeli's time.
Mr. Russell Kerr: And their lunch.
Mr. Cooke: Possibly that, too.
Newer Members had to kneel on the floor outside the Whips' Office to get at the lower row of cupboards. Some can still be seen to do so—though there may be some other reason why they are kneeling on the floor outside the Whips' Office. I do not have the benefit of advice on that matter from my right hon. Friend the Opposition Chief Whip.
However, returning to the serious aspect of the matter, times have changed and the much increased staff who are so necessary here have to be housed. In an age in which the Government and their agencies touch every aspect of life, a Member of Parliament must have the resources with which to tackle the Government on equal terms. The people that Members need to help them cannot all be accommodated in this House.
We once thought that the completion of Barry's original scheme round New Palace Yard was the answer, but that—and a similar proposal in that style added on to the north end of the Palace—was condemned by almost all on aesthetic grounds, quite apart from the cost. Next came a scheme for building round the Courtyard in modern style. That, too, bit the dust without even a debate in the House.
Having probably wisely abandoned all those schemes, our attention was turned, and is now turned, to across the road. For many years we have owned what is known as the Bridge Street site. As part of the Whitehall plan, which hon. Members who have been in the House for some time will remember—this vast document which I am holding—which would have resulted in the wiping out of everything in Whitehall from Richmond Terrace to Parliament Square, a new parliamentary building competition produced the Spence and Webster proposal for a stark, modernistic, glass-covered block on Bridge Street. This had few friends outside the House and it, too, has passed into history.
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There then arises the question what to do next. That is the subject of this report. I want straight away to read out just two very short paragraphs which are absolutely vital. The first concerns the guidelines which we have laid down for anything that we might do on Bridge Street. Paragraph 50 states:
"We recognise that Bridge Street is one of the most sensitive sites in London. Nothing should be built there which in any way detracts from or seeks to dominate the historic Palace of Westminster. No assertive, intrusive, monolithic slab can be contemplated. The materials to be used should be appropriate to the site and neighbouring buildings."
There, fair and square, we state that the exterior of anything that we seek to do there is all-important.
Nor do we want anything that is done there for the House to blight or sterilise that neighbourhood. That was one of the chief criticisms of the Spence and Webster building. I quote paragraph 51 of the report:
"We are anxious that the restoration and replacement of buildings on the Bridge Street site should extend, improve and enrich the existing public amenities of the neighbourhood. Here is an opportunity to bring new life into a comparatively desolate part of Westminster."
It is no part of our thoughts that Parliament should be isolated or insulated from the people.
The Committee believes that it is to the Bridge Street site that we should turn. Anything that we do there must be linked—
It being Four o'clock the debate stood adjourned.
Ordered,
That the Motions relating to House of Commons (Services) may be proceeded with at this day's sitting, though opposed, until any hour. [Mr. Foot.]
Mr. Cooke: Anything that is done on that site must be linked, as it can be, by modern means underground and by lifts at each end of an underground link, so that there is no real physical or psychological barrier between it and this Palace. If the accommodation over there is to succeed, we must avoid the feeling of such a barrier.
There are a number of listed buildings on the site. The House can take considerable credit for occupying Norman Shaw North and giving it a permanent use. Now we are also occupying the south block,

2125
although in somewhat modest circumstances.
Norman Shaw South and the Whitehall Club—formerly the Welsh Office—are the two principal listed buildings. We believe that they should be retained for certain—as well as such other buildings, some of which are listed, as can be incorporated in new work. The Parliament Street houses are well worth considering here, although it is not for the Committee to make a judgment at this stage and we should wish to be guided by our architectural experts.
We believe that this site should be considered as a whole and that a scheme should be drawn up for consideration by the House and with the benefit of public opinion, as indeed has already been the case with this report, which was launched at a much-advertised press conference and has been followed by a visit of representatives of all the national amenity societies to the buildings on the site.
The scheme that we envisage is the rebuilding, by stages but to a coherent plan, of the Bridge Street site for parliamentary purposes. The work could proceed by stages as required with such internal arrangements as were then required, but all would be behind a coherent exterior, which, when completed, would complement and not dominate this Palace and the rest of Parliament Square.
To achieve that, we need the assistance of the best possible architectural advice. The Committee, for the reasons set out most fully in paragraph 53 onwards, unhesitatingly recommends the present president of the Royal Academy, Sir Hugh Casson, to undertake this work. He will have, of course, the benefit of years of study of the site by the Department of the Environment and he will also be in direct contact with the client, the House of Commons, through the Services Committee. We believe that this partnership can develop plans to meet Parliament's changing needs.
Apart from Sir Hugh's proposed professional relationship with the Department of the Environment, it is proposed that he should also be appointed a special adviser to the Select Committee. Hence the second motion on the Order Paper.
We believe that these proposals will avoid the fatal pitfall of all previous
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attempts—that is, designs produced on an increasingly out-of-date brief, in isolation from the client's changing needs.
Today we are asking the House to give us approval to go away and work out proposals to be submitted to the House—and here I might say that all suggestions would be most welcome. We have a number of hon. Members who take a most personal interest in these matters. Indeed, I see the Leader of the House sitting opposite me. He and many of his colleagues have given us considerable interest and encouragement. But no Select Committee can do a job on its own, and any hon. Member who has a bright idea should certainly send it to us as soon as possible so that it can be thought about with a view to incorporation in the scheme to be worked out.
If the House approves our report today, I can undertake that within a month the first preliminary meeting will take place between the consultant architect, the architect from the Department of the Environment and a representative of the Select Committee, and that no effort will be spared to produce the answers to Parliament's urgent need. We believe that a successful rebuild of most of the Bridge Street site can bring untold benefits to Parliament, and we must not forget that it will result in the rehabilitation and enhancement of this overcrowded Palace.
Your Committee, with the willing help and support of the Department of the Environment, has, I believe, already had some success in restoring the more important rooms and public areas in the Commons part of the Palace to something of their proper character, but we have always been frustrated by immense pressures of overcrowding. A successful rebuild of Bridge Street can bring the greatest benefit to Parliament, to all those hundreds who serve it, and indirectly to all those millions we seek to serve. Fine buildings do not guarantee good government, but we are not in any case proposing a palace—far from it. We seek only to provide the basic essentials.
I hope that, even perhaps on this very last Friday of what may be the end of this Parliament, we are capable of looking into the future, even if it is an uncertain future in which some of us may not be called to play a part. At least it will not be said by our successors that we stood idly by and did nothing.
4.8 p.m.
Mr. Paul Hawkins: I have had the honour to serve on the Select Committee since its inception in November 1974. It is another Committee of which one's constituents have little knowledge nor know how much work it does. The press knows little about it either.
I congratulate the Leader of the House on the way he presides over our meetings. He does it with great charm. I have never known anyone despatch business with such speed, at least recently. I must also add my congratulations, which I think will be echoed by hon. Members opposite, to my hon. Friend the Member for Bristol, West (Mr. Cooke), Chairman of the Accommodation Sub-Committee, with whom I have had the great pleasure of serving, on the immense amount of work that he has done for the whole House. Without exception, his drive, initiative and leadership have produced much very worthwhile improvement. The decorations and atmosphere really have been done with great care and have produced something very different from the House I entered in 1964.
Perhaps I may add a brief reminiscence about those days. The only accommodation I had for the first six months for my papers was one of those small lockers. Mine was strategically placed outside the door of the Dining Room. As I was kneeling there one day trying to put some things inside—I think I had only a bowler hat and some papers—one of the waitresses came along and, not seeing my feet, went clean over with a whole tray of soup and goodness knows what.
After that, I handed my key to the Serjeant at Arms and began even more vociferously to demand a filing cabinet. Then came the great occasion when I was allocated a filing cabinet, but it was in the gentlemen's cloakroom and the Serjeant at Arms—not the present Serjeant of Arms, of course—did not permit me to allow my secretary to go in there to file my papers.
From that moment onwards I began to take an interest in the services of the House, and I must say that the improvements that have been carried out by all Governments and members of the Services Committee since that day have
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resulted in far more easy working conditions such as we badly need in this place.
But now we have crammed as much as we can into this building. What we want is to be able to work as close to the Chamber and to this building as possible, and also we want to have our necessary services, our secretaries and other services, close at hand. I believe that this plan, after all those other plans, for utilising the area on the other side of Bridge Street will prove thoroughly worth while. We shall have the service of one of the most sympathetic, delightful and excellent architects that we could ever have the luck to work with, and I am sure that a plan will be produced to serve us and those who follow us here in the years ahead, enabling them to carry on their business in a far better and more convenient way than so many hon. Members have been able to manage in the past.
I end by thanking my hon. Friend the Member for Bristol, West for the way in which he introduced his report and for the immense amount of hard work which went into it. I sincerely hope that we shall see the plan come to fruition before long.
4.13 p.m.
Mr. Roger Sims: I served on the Services Committee and its Accommodation Sub-Committee from November 1974 until March this year, at which time that Sub-Committee was beginning its inquiries which have led to the present report. Therefore, although I have not been involved in the report itself, I may well appreciate more than most other hon. Members do the great deal of work which went into its preparation. I congratulate all responsible for it.
The need for additional accommodation is well summed up in paragraph 35, which points out that much of the accommodation which we now have
"is sub-standard, either because of the nature of the historic building which cannot be altered or because too many people are trying to work too closely together."
That is absolutely true, and the need for Members to have proper accommodation in which to work is just as important as the question of remuneration which we discussed earlier today.
This is an imaginative report with some first-class ideas in it. I am attracted by

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the proposal for new facilities at street level referred to in paragraph 51—
"A Public House and more extensive places of refreshment than exist at present will be needed".
I make no comment on the present catering facilities in this building when I say that I am sure most hon. Members would welcome the opportunity to have some alternative facilities reasonably near at hand.
I endorse what was said by my hon. Friend the Member for Norfolk, South-West (Mr. Hawkins) and I wish to express on behalf of Back Benchers and Front Benchers on both sides, I am sure, our thanks to my hon. Friend the Member for Bristol, West (Mr. Cooke), for all the fine effort he has put into the work of the Committee and the production of the report. The House has been particularly fortunate in having my hon. Friend handling these matters. He has applied his appreciation, his knowledge, his energy and his enthusiasm to this Palace not only for the benefit of us who are its users now but for the benefit also of future generations for whom it will be, as it is indeed for us, part of our heritage.
I know better than do most hon. Members the enormous amount of time, work and energy that my hon. Friend has devoted to our interests, not only in the meetings of the Accommodation Sub-Committee that take place virtually every Wednesday morning when the House is sitting but in the many hours of the day and night that he has spent in and around the building working on our behalf to improve the facilities and the building. I should like to put on record on behalf of us all our thanks and to express the hope that he will continue, in some capacity, to be able to contribute to the preservation and improvement of our heritage in future.
4.15 p.m.
Mr. Victor Goodhew (St. Albans): Having served for the shortest time of any hon. Member of the Sub-Committee, I shall speak for the shortest time in the debate. I can claim no credit for what is in the report, but I endorse every word in it and I also endorse the remarks of my hon. Friends about the work of my hon. Friend the Member for Bristol, West (Mr. Cooke), who led the Sub-Committee
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with great aplomb. Much credit is due to him for the fact that the Services Committee has produced a report that will serve the House well for many years. I thank him for his work and congratulate the other members of the Sub-Committee who worked so hard under his leadership.
4.16 p.m.
The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): I join other hon. Members in their tributes to the hon. Member for Bristol, West (Mr. Cooke). I do not believe that the House has any idea of the enormous amount of work he has done as Chairman of the Accommodation Sub-Committee to assist hon. Members in all parts of the House and to improve the facilities provided for them. I pay tribute not only to the work he has done as Chairman of the Sub-Committee but to the work he projects for the future by the report which he presented to the Services Committee and which carries the full backing of that Committee.
Thanks to the way that the hon. Gentleman has approached the matter, we now have a better approach than anything we have had before, and I express my personal gratitude to him for the way in which he has conducted all that work. The whole House and, therefore, the country owe him a great debt.
The recent history of the way we have attempted to deal with this question has not been a fortunate one. At least five schemes for major additions to parliamentary accommodation adjoining the Palace of Westminster have been abandoned during the past 25 years. Despite the remarkable ingenuity that has been shown in successive schemes for infilling, we are well aware of the continuing unsatisfactory nature of the accommodation for hon. Members and the staff of the House. The report before us marks a good first step towards the use of the Bridge Street site in a way that is worthy of the situation. This will be a significant contribution towards meeting the developing needs of the House and the supporting services we require.
I emphasise, so that no one should be under any misapprehension, that at this stage approval of the motions would commit the House only to the drawing up of a plan for the development of the

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Bridge Street site for parliamentary purposes. By proceeding by this method, we are learning from what happened or did not happen in the past.
I am sure that I express the gratitude of the House as a whole when I thank Sir Hugh Casson for the indication of his willingness to assist the House in this matter. I have no doubt that he would proceed with the utmost practicable speed and with the energy and enthusiasm to which reference is made in the report. We would be entrusting to him a formidable task, and it is bound to take some time.
If the House agrees to the motion, it will be only when Sir Hugh's plans have been drawn up and are known to hon. Members that we shall need to come to a decision whether to approve them and whether a start should be made. I emphasise that at this stage we are concerned only with the proposal to put in hand the preparation for a general scheme which will need the approval of the House before building starts.
Before this debate, I turned up the previous debate on the subject, to which I refer briefly. It should be a lesson to us all. There was a debate on the new parliamentary building on 25th June 1973. Some hon. Members may recall it. The House, in its alleged wisdom, decided to proceed with the approval of the scheme which had been drawn up by the architects to whom the hon. Gentleman has referred. I cast no reflection upon the architects. I know that that is a very dangerous game, even in the privacy and with the privilege of the House of Commons.
I recall the occasion because some of us, led in particular by my hon. Friend the Member for Liverpool, Walton (Mr. Heifer), who as a practical builder knew what he was talking about, sought to warn the House about what was proposed. If that plan had gone ahead, we would have committed an outrage on one of the most famous sites in the centre of London. We would have have perpetrated some of the same things that have happened, alas, in other parts of this great city. We learnt from that. That scheme was adopted with a thumping majority in 1973. I am glad to boast that I was in the minority then. It shows how things change and how, if the minority sticks
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to its arguments, eventually it may finish by proposing something better, because that is what we are doing.
We are proposing to deal with this site over the months and years ahead in a much more sensitive manner. In my opinion, all good architecture should have the quality of good manners. When a new building is to intrude in an area such as Parliament Square, it should do so with some decency and delicacy. I do not believe that that applied to the proposition which we were considering in 1973 and which the House hailed as a great step forward. We stopped that great step forward, and what we are proposing now is that we should proceed in a much more intelligent way.
I believe that we have the chance of providing on Bridge Street buildings worthy of the site and buildings which can assist Members of Parliament in doing their job. We shall need those buildings whatever happens. I have always taken the simple view that the best way to deal with the accommodation problems we have in this House would be to take over the House of Lords. It is just an additional reason for doing so. Many of our problems could be swiftly solved if we did that. I cannot expect to carry that motion at the end of this Session. We do not have the time to get it through. The proposal of the hon. Member for Bristol, West and this recommendation from the Services Committee do not in any way exclude the other possibility of dealing with our accommodation problems, and a few other subsidiary political problems, by taking over the other place.
Mr. Robert Cooke: I do not like to destroy the unanimity which seems to have broken out all over the Chamber, but the last remark by the Lord President calls for a brief intervention. In the report, to which he is a signatory, it is made absolutely clear that an attack on the other end of the building would not solve our problems. To have hon. Members sitting at small tables in the Royal Gallery or the Prince's Chamber or the Robing Room and such places would not help us very much. Even if the Chamber of the House of Lords was turned into a meeting room for party committees, I believe that hon. Members would feel rather uncomfortable and over-awed by it. Although the right hon. Gentleman

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is entitled to make his playful remarks, the serious aspect is that even if we did take over the other end of the building it would not solve our problems.
Mr. Foot: That is why I was so careful in my remarks to say that these two schemes were not exclusive. One does not exclude the other. I have emphasised that we need to do this in any case. That does not alter the fact that, even with this scheme, our ambitions would not be exhausted. I wanted to make that clear.
I conclude on a note of unanimity by once again thanking the hon. Member for Bristol, West for the great contribution that he has made to ensuring that we shall provide proper facilities for all the people who work in this place, whether Members of Parliament or the staff who serve us.
Question put and agreed to.
Resolved,
That this House approves the Fifth Report from the Select Committee on House of Commons (Services) in the present session of Parliament (House of Commons Paper No. 483) on New Buildings for Parliament.

HOUSE OF COMMONS (SERVICES)
Ordered,
That the Select Committee on House of Commons (Services) have power to invite any specially qualified person, whom they may select, to attend any of their meetings in an advisory capacity on any architectural or related matters.—[Mr. Foot.]

STATUTORY INSTRUMENTS, & c.
Mr. Deputy Speaker (Mr. Bryant Godman Irvine): To save the time of the House I propose to put together the Questions on the four motions to approve statutory instruments.
Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, & c.)

STATUTORY INSTRUMENTS, & c.

  EUROPEAN COMMUNITIES
  That the draft European Communities (Definition of Treaties) (No. 7) (International Wheat Agreement) Order 1978, which was laid before this House on 13th July, be approved.
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  That the draft European Communities (Definition of Treaties) (No. 6) (International Development Association) Order 1978, which was laid before this House on 13th July, be approved.

  SOCIAL SECURITY
  That the draft Family Income Supplements (Computation) Regulations 1978, which were laid before this House on 13th July, be approved.—[Mr. Stallard.]
  Question agreed to.

  INCOME TAX
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, & c.)
  That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Norway) Order 1978 be made in the form of the draft laid before this House on 20th April.—[Mr. Stallard.]
  Question agreed to.
  To be presented by Privy Councillors or Members of Her Majesty's Household.

DISABLED MARRIED WOMEN (BENEFITS)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Stallard.]
4.25 p.m.
Miss Jo Richardson: Let me say at the outset that in discussing the question of benefit for disabled married women, I want to put on record the fact that this Government have a record second to none in their concern and care for disabled people. No previous Government of either political party have introduced so many benefits designed to assist people of varying disability to achieve dignity, to live as decently and comfortably as possible and, in many cases, to make a working contribution to the standards of the rest of us.
Of course, this is never sufficient and there will always be people dreaming tip new ideas to help disabled people, but that is exactly as it should be. I know that the Government are not asking for gratitude; nor is the Labour Party, which thought of many of these benefits. We in the Labour Party feel strongly that for decades disabled people have been

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neglected by successive Governments and have been made to feel second-class citizens because they have been ignored. It is their right to receive benefits. This is in no way a charity. I want to make that clear.
It is precisely because the Labour Government, and particularly my hon. Friend the Minister responsible for the disabled, have given so much thought to the problems of the disabled that I was very saddened that in extending the most welcome non-contributory invalidity benefit from disabled men and single women to disabled married women the Government should have reduced the effect by attaching a discriminatory test. To qualify for the non-contributory invalidity benefit, men and single women who claim have only to show that they are incapable of paid employment. That is fair enough. No other test is attached, except age and residential qualification.
Many thousands of disabled people have benefited since the introduction of the original scheme in the autumn of 1975. At that time the Government said that they must look further into the question of applying the scheme to disabled married women. The House will recall that it was a Back Bench revolt which forced the Government to extend the benefit much earlier than was intended. That was hailed on all sides as a great step forward. It was hailed with much relief by disabled married women. However, when it became clear that the extension of the scheme would carry with it a new household duties test—in other words, that the married woman had to prove that she was incapable of normal household duties—that great step forward began to look like a yawning trap into which a married woman might fall. Indeed, many of them did.
Many organisations criticised the imposition of the test itself and forecast the enormous difficulties of applying it with justice and fairness. They recommended that the Act should be swiftly amended to permit married women to claim this benefit on equal terms with disabled men and disabled single women.
Let me first take the equality point. The application of the test of "normal household duties" reaffirms the age-old image of a married woman being the dependant of her husband and of house-
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hold duties being her normal and natural job. It perpetuates that image at a time when more and more people in this country, and more and more women, are questioning the inevitability of the role of the housewife which is traditionally allocated to her by society—the role that she is there always to be tied to the home. The fact that it is disabled married women who are thus being classified makes this discrimination even more humiliating.
We are talking about the woman who is trying hard to overcome her disability and to make a contribution in her family and to other people around her, who is by that very disability in a vulnerable and defensive position, having her role as a dependant confirmed in a law which should have been designed to help her to achieve greater dignity and independence and to receive a benefit in her own right as an individual person.
The household duties test is the very worst kind of test that could have been applied to women who already suffer not only considerable physical handicaps but severe strains as a result of their physical disabilities. It is hardly the best way of helping women to achieve a measure of independence which I believe the benefit was initially designed to give.
How is the test working? The Minister may have more up-to-date figures, but I understand that by May 1978 there were 35,000 women receiving the benefit. Up to that time, however, more than 9,000 claimants had been turned down because they could not prove that they could not do the household duties test. They might manage some duties. but not others and, therefore, they failed the test and were denied the benefit.
About 2,400 claimants managed to go through the trauma of appealing against the insurance officer's decision that they were incapable of performing these duties. More than half of those—about 52 per cent.—won their appeals, which in itself is a staggering figure of successes, and very significant. It points up the unfairness of the test and the patchy way in which appeals are allowed.
I want to say a word about the test itself. The woman has to complete a five-page form which is made up of 25 questions. Many of them are routine, obviously, requiring her name and

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address, her age, and so on. But most of the questions are crucial to the success or failure of her claim. She has to answer questions about the type of accommodation in which she lives. She has to give details of any special arrangements that she has to make to enable her to manage the housework—wider doors being provided and specially adjusted types of working surfaces, for example. She must say whether she has any special appliances, and whether she needs help with those appliances. But there that kind of question ends, and there is no finer or more defined definition of it. So how is the woman to answer? What is a "special" appliance? Is it a Hoover? Is it an automatic food mixer? Does it mean a specially designed gadget for disabled people? The form does not say.
Nor does the form expound on what is meant by "help" to use any of the appliances. Does it mean that the woman concerned has to ask someone in the house to plug in the Hoover, or to fill the washing machine? All these questions are drawn so widely that it is impossible to answer them accurately and fairly. So the woman has to guess, and her guess may disqualify her from benefit.
Then there is a self-assessment question. The form lists some household jobs, and the claimant has to tick one of three boxes alongside each job to show whether she is normally able to do it with much difficulty, without much difficulty, only with substantial difficulty—in other words, that it pains her to have to do it—or not at all. What is more, the jobs are, as it were, lumped together.
The claimant is asked to say whether she can plan, select at the shops, and collect her weekly shopping—not plan, "yes", select, "yes", and collect, "yes". All three are lumped together. There is no provision for her to indicate that she may be able only to plan or to select shopping, and that she cannot do the others.
The second household job question asks whether the claimant by herself can plan, prepare and cook a main meal for herself and the family. The whole thing is lumped together again—all the preparation, all the cooking, and all the planning.
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The third question asks whether the claimant can do the normal weekly washing and ironing for herself and her family—all this by herself. The last question asks whether she can keep her home clean and tidy from week to week.
In respect of these rather selective jobs, before it is considered that she has completed the form satisfactorily the claimant is asked to make some kind of judgment whether she can carry out those functions.
There are endless permutations and combinations of these jobs. A disabled married woman may be able to undertake part of one job and part of another. How, in honesty, does she answer the questions on the form? The fact is that in trying to be as honest as possible and in seeking to maintain some kind of dignity in what they are trying to achieve in their own homes, many people will reply that they can fulfil these jobs when they cannot in reality fulfil them completely. The form asks whether the person concerned can undertake a job completely. Many women have disqualified themselves from benefit by being overzealous and by trying too hard.
It seems to me, from my observations and correspondence and from discussions with people who have been put at a disadvantage that the more a disabled married woman tries the more she is likely to be penalised. It is a humiliating and degrading test, and it is understandable that many women feel bitter that their efforts to help themselves and their families—with great difficulty but with pride, so that they can make some kind of contribution to their families—result only in their being disqualified from the benefits to which they are entitled.
The form is not the end of the matter. There is then a medical check, which is designed to grade the person but which appears to degrade her in the process of judging which functions she can carry out.
With the aid of these forms, how can an insurance officer fairly and adequately come to a reasonable decision? The fact is that the decisions are inconsistent. Some decisions are very good ones, but there are comparable cases where an insurance officer has arrived at a totally different decision. That shows up the

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unfairness of the way in which the test has been designed.
Let us suppose that a woman's application is turned down. We all know that, as with all benefits in the social security system, applicants are told "If you are turned down, you have the safety net of an appeal." We appreciate that there must be a safety net, but any woman who has been through an appeal, even when she is 100 per cent. fit, will know that it is a somewhat difficult process. The process is daunting, in that it involves a good deal of form filling, and the applicant must gear herself up to face the prospect of appearing before an appeal tribunal. She must reveal before total strangers all the details of her life. If she is disabled, those difficulties will be far worse.
Experience has shown that appellants need to be represented. There are many well-documented cases involving two women with the same kind of disability who have been assessed by their doctors in roughly the same way. It has been proved that a woman who is represented on appeal succeeds, whereas one who is unrepresented often has her appeal turned down. I advise any married woman who finds herself in these difficulties to try to obtain some kind of representation.
Another trauma that faces a disabled woman is that she must find somebody to represent her. She must go to the citizen's advice bureau, a friend or a solicitor. All this adds up to a burden on disabled married women. I do not believe that such women should have to prove a much greater degree of handicap and a more precise one than disabled men or disabled single women have to establish. The effect at present is to hinder the rehabilitation of disabled women, because it discourages them from seeking to improve the functions which they undertake at home.
In my view, the answer is to abolish the test altogether. I know that the Minister will tell me that to abolish the test will mean the spending of more public money. It will mean that disabled married women will be able as of right to get the benefit without undergoing the test.
I am aware, too, of the competing claims of others who feel themselves to be disadvantaged. Some of them are married
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women with problems in the social security system. We must start now to give a commitment or undertaking—I hope that a future Labour Government will do so—to phase out the test. Perhaps that might be done by age group or by starting with those in receipt of the attendance allowance or the mobility allowance. There must be many ways of devising a system for phasing out the household duties test.
We are discussing a new benefit and a good benefit. All that we are doing by applying the test to disabled married women is perpetuating and institutionalising discrimination against them. They make up a most vulnerable group and they cannot fight back.
I know that my hon. Friend the Minister, with his great record of devotion to the needs of the disabled, will appreciate the problem. I only hope that he can persuade his colleagues in the Treasury of the justice of the claims of disabled married women. I hope he will persuade them that theirs is a deserving case that is worthy of more public expenditure so that we may go forward with a commitment to put an end to the present practice. If we do that, it will give renewed hope to many thousands of people.
4.42 p.m.
The Under-Secretary of State for Health and Social Security (Mr. Alfred Morris): It is customary for the Minister replying to an Adjournment debate to thank the initiator. I do so with a special warmth today because my hon. Friend the Member for Barking (Miss Richardson) has shown by her work in the House an abidingly genuine and practical concern for the problems of the disabled. It is happily the sort of concern that in recent years has been shared by a growing number of right hon. and hon. Members on both sides of the House and by many outside organisations. Its effect helped us to introduce the non-contributory invalidity pension, NCIP, and to extend it last November to married women. As I know my hon. Friend appreciates, we extended NCIP to married women after an unprecedented degree of consultation with a host of interested people.
First and foremost we worked closely with representatives of the Disabled Income Group, DIG, sharing our views

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with them as we went along and getting their views about principle and detail in return. We held linked discussions with representatives of the all-party disablement group, again in an atmosphere of openness and trust. Leaving aside the help that we sought and obtained from other countries which had moved into this area before us, we consulted a number of experts and met representatives of the blind to look more closely at the particular problems of the blind housewife.
Finally, we arranged a pilot exercise, in conjunction with DIG and with particular help from the hon. Member for Wallasey (Mrs. Chalker), to try out with a small number of disabled housewives and doctors the sort of questions that we needed to incorporate in the final medical report and the claim form.
In short, a great deal of effort quite properly went into launching this important new benefit that is now called the housewives' non-contributory invalidity pension, HNCIP. It was quite different both in character and in extent from anything done before by this Government or any other. One reflection of the success of the work is that we told the House that we expected to provide a substantial net increase of income for about 40,000 disabled married women, and we have done precisely that. I understand and sympathise with the desire to do more, but the importance of what has been done must not be minimised.
We have now made over 43,000 awards of HNCIP and we are paying out £23 million in the current year to about 37,000 married women who would not have had a penny by way of disablement benefit before last November. They can also qualify for the attendance allowance and the mobility allowance, both of which have been considerably increased in value. There are severely disabled married women who not many years ago would have been entitled to no cash help who are now receiving £1,600 a year in HNCIP, attendance allowance and mobility allowance. Moreover, their income from my Department will rise to £1,900 a year in November. That may still not be enough, but it represents some progress for tens of thousands of disabled married women.
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Our plans for providing new benefits for disabled people were first presented to the House on 13th September 1974 in the document "Social Security Provision for Chronically Sick and Disabled People",—House of Commons paper 276.
NCIP was the first of our new benefits for disabled people. It was introduced in 1975 and now helps 130,000 people. They will all be receiving £11·70 a week from November.
NCIP was followed by the invalid care allowance—ICA—in July 1976, which gives an income as of right to nearly 6,000 people who have given up work to look after severely disabled relatives. "Social Security Provision for Chronically Sick and Disabled People" pledged that the Government would study how best to help disabled married women. At the same time, the document made it clear that NCIP could not cover women who were living with or maintained by their husbands. Nevertheless, it accepted that there were sound reasons for providing a non-contributory benefit for married women who, by reason of disablement, were unable to perform their household tasks as well as being unable to perform paid work.
The paper made it clear that it would be necessary to consider this group as a whole because
"it would not be practicable or justifiable to seek to distinguish those who would have been working outside the home but for their disablement. The qualifying conditions to be satisfied by married women dependent on their husbands would be rather different from those relating to the benefit now proposed for other women and for men (in so far as incapacity to do housework would be the prime issue on which entitlement of dependent married women would turn)".
There are not many countries which have an incapacity benefit for housewives. We looked very closely at those which have such a benefit before introducing our HNCIP. This and other consultations took time, and the commencement of the benefit had to be further delayed by the economy measures introduced in May 1976 by my right hon. Friend the Chancellor of the Exchequer. As I have shown, however, HNCIP is now in payment to 37,000 beneficiaries and awards have been approved for a total of 43,000 disabled married women so far.

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My hon. Friend and others are critical of the household duties test for the new benefit. They feel strongly that inability to take paid employment outside the home should be the only test. But the household duties test was introduced in the knowledge that large numbers of married women leave employment outside the home for reasons unconnected with disablement.
Again, the extra costs of the disabled married woman who cannot do housework or shop for herself are likely to be much higher than those of the married woman who can. That was a further argument for spending the limited resources available to me on a benefit that would help a disabled married woman who could do neither housework nor paid employment outside the home. In particular, we had to face the fact that to dispense with the household duties test would cost far more than was available to us when we introduced the new benefit.
We cannot be certain how many more women would be brought into benefit if the test were abolished. As the House of Commons paper in 1974 stated, it is difficult to estimate how many people might qualify for new benefits when using survey data not specifically designed for the purpose.
Using the 1969 survey of the Office of Population Censuses and Surveys—OPCS—and our own departmental records of payments of invalidity benefit, we estimate that abolition of the test could bring an extra 240,000 married women into benefit. If the calculation is based upon the 1976 general household survey, a lower figure of 141,000 is suggested.
Although the OPCS survey is out of date and was not designed for the purpose of showing how many disabled married women are incapable of housework, it has proved a reliable guide in a number of forecasts. We believe, therefore, that the figure of 240,000 would be more reliable.
Using the OPCS data and the benefit rates to be introduced next November the gross benefit cost would be £146 million. After adjustments for benefits already in payment the cost would come down to £135 million, but extra administrative costs would come to £9 million, giving a total net cost of £144 million. On the same basis the figure of 141,000
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suggested by the GHS would give an extra net cost of £87 million.
At either figure, the increase in public expenditure would be considerable. I emphasise that expenditure on benefits for the disabled has increased in real terms by £387 million a year since we came to office. Furthermore, this figure will increase again in November on the basis of decisions that we have already announced to the House.
The provision of services for disabled people has also been substantially improved. My hon. Friend recognises the problem of resources. She suggests a phased abolition of the housework test. That is something at which we have looked. But even phasing out over five years would require a yearly increase in expenditure of considerably more than the present cost of the benefit. That is a measure of the increase in expenditure that we are discussing in this important debate.
If we increase the resources available for HNCIP there will be pressures not only to do what my hon. Friend is seeking to do but to increase the rate of the benefit and to have it disregarded for purposes of assessing entitlement to supplementary benefit. To raise the rate of HNCIP and NCIP to that of the contributory invalidity benefit would cost about £42 million gross per year. To disregard HNCEP and NCIP for supplementary benefit purposes would cost an additional large sum.
Several of my hon. Friends recently went to see the chairman of the Supplementary Benefit Commission to press the case for disregarding HNCIP. One matter that was put strongly to them was that this would conflict with the Commission's long-term aim of reducing dependence on means-tested benefits. Nevertheless, they feel strongly that HNCIP should be disregarded by the Commission. No doubt they will be taking advantage of the review of the supplementary benefit scheme to argue further the case that they made when they met Professor Donnison.
I mention the competing claims for further increasing resources, since there is no general agreement about what we should do first if more money becomes available to spend on benefits. If everyone who wants further improvement could present their priorities, it would be helpful

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to my Department in considering what it should do first if additional resources become available.
I am not saying that HNCIP cannot be improved. It certainly can be improved. But all the improvements that are called for will cost money, as my hon. Friend recognised. That is my main problem. The other problem is to encourage all the organisations that are seeking improvements to agree on priorities. There are pressures not only for improvement in HNCIP but for higher spending on our other benefits, not least on mobility allowance. We are already in the process of quintupling the level of public expenditure on outdoor mobility.
I turn to the important question of how claims for HNCIP are decided. Judging from some of the letters that I receive, and from press reports, I can see that there is still a good deal of misunderstanding. I emphasise that claims are decided not by Ministers or by my Department, but by the independent adjudicating authorities which have always decided national insurance claims.
The national officer is the first of these independent authorities. He decides cases on written evidence consisting of the claim form, any accompanying statement and a medical report, usually from the claimant's own general practitioner. The
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claimant who is dissatisfied with the insurance officer's decision can appeal to the local tribunal, as about 5,000 women have already done. Tribunals decide cases after hearings and, as the chief national insurance commissioner said in a recent case, it is very important that claimants should attend hearings to give evidence if that is possible.
Their expenses are paid. Where necessary, the expenses of a travelling companion can also be paid. I know, and am very grateful, that many claimants have been assisted in pursuing their appeals by seeking advice from such bodies as the tribunal representation units organised by the citizens advice bureaux in different parts of the country, from the advisory service of the Disablement Income Group, from branches of Disability Alliance and from other groups that exist to help appellants before tribunals.
Finally, there is the national insurance commissioner—
The Question having been proposed after Four o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at five minutes to Five o'clock.

EMPLOYMENT
  "Employment Protection" (Survey)
  "Employment Protection" (Survey)
  Pay Policy
  Pay Policy
  Fishermen (Accidental Deaths)
  Fishermen (Accidental Deaths)
  Temporary Employment Subsidy
  Temporary Employment Subsidy
  Unemployed Persons
  Unemployed Persons
  Disabled Persons
  Disabled Persons
DEFENCE
  Nuclear Submarines
  Nuclear Submarines
  Land Disposal
  Land Disposal
  Polaris Missile Tests
  Polaris Missile Tests
  Civilian Apprentices
  Civilian Apprentices
  Sperm Oil
  Sperm Oil
  Service Personnel (Car Allowance)
  Service Personnel (Car Allowance)
SCOTLAND
  Tolls
  Tolls
WALES
  Mr. Alun Truman
  Mr. Alun Truman
INDUSTRY
  Inmos Ltd (National Enterprise Board Shareholding)
  Inmos Ltd (National Enterprise Board Shareholding)
  British Shipbuilders
  British Shipbuilders
  Mullard (Investment Programme)
  Mullard (Investment Programme)
  Aircraft and Shipbuilding Industries Arbitration Tribunal
  Aircraft and Shipbuilding Industries Arbitration Tribunal
HOME DEPARTMENT
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  Service Families (Electoral Registration)
  Prison Officers (Industrial Action)
  Prison Officers (Industrial Action)
  Seals
  Seals
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  Animals (Experiments)
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  Data Protection (Report)
SOCIAL SERVICES
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  Nurse Training (EEC Directive)
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  Death Grant
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  Non-contributory Invalidity Pension
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  War Widows (Taxation)
  War Widows (Taxation)
  Test-tube Baby (Birth Film)
  Test-tube Baby (Birth Film)
  Pregnancy Test Drugs
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TRANSPORT
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  Road Accident Casualties (Blood Groups)
  Road Accident Casualties (Blood Groups)
  Cycle Tracks and Lanes (Greater London)
  Cycle Tracks and Lanes (Greater London)
FOREIGN AND COMMONWEALTH AFFAIRS
  Sporting and Cultural Exchanges
  Sporting and Cultural Exchanges
  Mr. William Beausire
  Mr. William Beausire
  Shcharansky and Ginsburg (USSR Trials)
  Shcharansky and Ginsburg (USSR Trials)
TRADE
  Arms (Exports Licences)
  Arms (Exports Licences)
  Textile Imports
  Textile Imports
  English Channel and North Sea (Traffic Control)
  English Channel and North Sea (Traffic Control)
  Film Industry
  Film Industry
  Health and Safety (Company Reports)
  Health and Safety (Company Reports)
  Exhibitions
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  Unit Trusts
  Unit Trusts
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  Marine Safety Corps Scheme
  Banking
  Banking
NATIONAL FINANCE
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  Value Added Tax
  Value Added Tax
  Gross National Product
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  715 Tax Certificates
CIVIL SERVICE
  Pay Research Unit
  Pay Research Unit
EDUCATION AND SCIENCE
  School Milk
  School Milk
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  Milk Products (EEC Subsidy)
  Milk Products (EEC Subsidy)
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  Schoolchildren (Convictions)
PRICES AND CONSUMER PROTECTION
  Hearing Aid Council
  Hearing Aid Council
  Hearing Aids (Sales)
  Hearing Aids (Sales)
  Asbestos
  Asbestos
  Banking
  Banking
ENERGY
  Research and Development
  Research and Development
  National Coal Board (Overseas Activities)
  National Coal Board (Overseas Activities)
  Gas and Electricity Disconnections
  Gas and Electricity Disconnections
  Opencast Mining
  Opencast Mining
  Brazil (Uranium Supply)
  Brazil (Uranium Supply)
  Power Stations
  Power Stations
AGRICULTURE, FISHERIES AND FOOD
  Fish Catches (European Community Countries)
  Fish Catches (European Community Countries)
  Fishing (Conservation and Quotas)
  Fishing (Conservation and Quotas)
  Sugar
  Sugar
ENVIRONMENT
  Rent and Rate Rebates
  Rent and Rate Rebates
  Offshore Oil Installations
  Offshore Oil Installations
  Gipsy Caravan Sites
  Gipsy Caravan Sites
  Rates
  Rates
  Canvey Island (Hazardous Industrial Activities)
  Canvey Island (Hazardous Industrial Activities)
  White Waltham Airfield
  White Waltham Airfield
  Building Industry
  Building Industry
NORTHERN IRELAND
  Crumlin Road Prison
  Crumlin Road Prison
  Judgments Enforcements Office
  Judgments Enforcements Office

Preamble
The House met at eleven of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark

AGRICULTURAL LAND: THE STRUTT REPORT
Lord SANDYS: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they accept the findings of the Strutt Report, entitled Agriculture and the Countryside dated May 1978, and what measures they propose to remedy the loss of agricultural land.
Lord STRABOLGI: My Lords, the report of the Advisory Council on Agriculture and Horticulture in England and Wales is a valuable contribution to a subject which is becoming of increasing interest. Its recommendations are important and far-reaching, and they are now being considered carefully by the various Government Departments concerned.
Lord SANDYS: My Lords, I thank the noble Lord, Lord Strabolgi, for that reply. Could he tell the House whether his right honourable friend is of the opinion that the adoption of a wider role for ADAS is going to benefit the position of the less-favoured areas in the United Kingdom?
Lord STRABOLGI: My Lords, the recommendations of the report that MAFF and ADAS should play a wider role in landscape and nature conservation have been generally welcomed. With regard to the less-favoured areas, as the noble Lord knows, Lord Porchester, in his report on Exmoor, recommended a wider involvement for ADAS in the uplands, and his recommendations have been generally accepted.
Lord DAVIES of LEEK: My Lords, is my noble friend aware that some of us are distressed by the apparent ruthless
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exploitation of agricultural land for cutting new roads? Will he urge Her Majesty's Government to conduct deep and searching research into the use of agricultural land for roadways and highways before granting a permit to destroy good agricultural land, thereby, I hope, helping to get more traffic back on the railways?
Lord STRABOLGI: My Lords, I agree that the steady increase in the amount of agricultural land taken for development is a cause for concern. There is an inexorable demand for land for housing, industry, roads and recreation which must be satisfied. The policy of successive Governments has been to steer development away from higher quality land on to land of a lower quality whenever possible, and to prevent too much land being taken for any one development.
Lord SANDYS: My Lords, arising out of that reply, and recognising what the noble Lord has said, may I ask him whether he would not agree that paragraph 70 of the report, in regard to call-in powers, is particularly relevant in this context, and that the association between the Ministry of Agriculture and the Department of the Environment seems particularly significant? Could the noble Lord say whether his right honourable friend is taking this matter further?
Lord STRABOLGI: Yes, my Lords; I am glad to say that MAFF is generally sympathetic to Strutt's recommendations on call-in procedures, and indeed to many of the other proposals.
Lord LOVAT: My Lords, would the Minister consider that more attention should be paid to land reclamation? We have talked a lot about the loss of land, but in this country we lag far behind the Dutch and other nations who have reclaimed, in the case of Holland, about one-third of their very high quality agricultural land, which is second to none in the world. We have estuaries that wash down alluvial mud all along the East Coast, which if properly plodded—the plodder bank system, which is no longer expensive in relation to the cost of land—would reclaim a large amount of the 50,000 acres of agricultural land which are being lost every year.
Lord STRABOLGI: Yes, my Lords. While our problems are rather different from Holland's, all the same that is a very important aspect which is taken into account.
The Earl of LAUDERDALE: My Lords, would the noble Lord not agree that the inexorable demand for land for industry, housing, recreation and the rest really applies to the Midlands and the South-East, and that the proper answer is a more vigorous policy in relation to the relocation of industry in favour of the Highlands and Borders of Scotland and, for that matter, the noble Lord's country of Wales?
Lord STRABOLGI: Yes, my Lords; I am sure that is a very interesting and important suggestion which will be considered by the Ministry of Agriculture, Fisheries and Food and my right honourable friends the Secretaries of State for Scotland and for Wales.
Lord SANDYS: My Lords, there are 36 recommendations in the report. Would the noble Lord's right honourable friends give consideration to the publication of a White Paper on this subject?
Lord STRABOLGI: My Lords, I will certainly put forward that suggestion to my right honourable friend.
Lord BARNBY: My Lords, would the Minister feel that the increasing efficiency of the National Health Service will achieve longevity to a greater extent than at present and lessen the pressure on land for new cemeteries?
Lord STRABOLGI: Yes, my Lords; and one of my ambitions is to live as long as the noble Lord.

CHILE: ROLLS-ROYCE AERO ENGINES
11.10 a.m.
Lord ORR-EWING: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps they are taking to ensure
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that a small number of unrepresentative union members in Scotland do not continue to hold four aero-engines not belonging to them and in respect of which a writ has been issued.
Lord WINTERBOTTOM: My Lords, with the issue of an export licence on 20th July the next steps are a matter for the parties directly concerned—namely, the Chilean Government and Rolls-Royce—and for the ordinary processes of the law.
Lord ORR-EWING: My Lords, is it not true that Rolls-Royce supply military and civil engines to some 70 overseas countries, and is not Britain's reputation for honouring commercial contracts gravely damaged when a few Left-Wing trade unionists at East Kilbride are allowed, over a period of four years, to prevent goods from being delivered to their rightful owners? Can the Government now say what steps they are going to take? They really cannot opt out of this. They are the people who uphold law and order in Britain. What steps are they now going to take?
Lord WINTERBOTTOM: My Lords, the Government have not opted out: they have granted an export licence. I would agree with the noble Lord that there has been a long period of bitter debate on this subject, but the whole of that bitter debate has been constrained within the framework of the rule of law, and the processes of law are now about to play their part. A writ was granted by the Hamilton Sheriff Court some months ago, to establish the ownership of the engines; Her Majesty's Government have issued an export licence; and I believe that within the rule of law a satisfactory solution will be found.
Lord TREFGARNE: My Lords, would the noble Lord not agree that the issue of an export licence in this matter is rather like legislating against sin—wholly ineffective? Why do the Government not offer to lend or sell engines of their own to the Chileans to replace these that they are unable to deliver?
Lord WINTERBOTTOM: My Lords, it is only a few days since the export licence was granted. Let us see how things develop.
Lord MURRAY of GRAVESEND: My Lords, would my noble friend not agree that, without supporting or condoning any illegal actions in this matter, many people, including such reputable organisations as Amnesty International, are very concerned about what is going on in Chile, particularly the fact that there are still 2,500 missing political prisoners; and will the House take note of this?
Lord WINTERBOTTOM: My Lords, as I said in answer to an earlier question, the world is full of regimés of which we do not approve. May I say that I believe that the trade union movement as a whole support the rule of law as firmly as does this House.
The Earl of LAUDERDALE: My Lords, the noble Lord said that the export licence had been given a few days ago, or quite recently. Since this matter has been going on for a long time, could he tell us when the export licence was given and why it was not given a long time ago?
Lord WINTERBOTTOM: My Lords, as I said a few moments ago, it was given on 20th July this year. The period of delay is about eight or nine months, but the law's delays are well known.
Baroness EMMET of AMBERLEY: My Lords, may I suggest to the noble Lord that to have to go to court in order to get one's property back if one is trading with this country will not do any good to our reputation as a trading nation?
Lord WINTERBOTTOM: My Lords, the noble Baroness has reinforced what was said by the noble Lord, Lord Orr-Ewing.
Lord HALE: My Lords, could my noble friend say, as a representative of a Left-Wing Government, whether he accepts the use of "Left-Wing" as a pejorative term and a term of condemnation in this House, and whether the Government of Chile is regarded as Left-Wing?
Lord WINTERBOTTOM: My Lords, this is a very theological point. I am still discovering in political terms what is "Left" and what is "Right". In some
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areas I think that I myself am far to the Left and in others far to the Right.
The Earl of LAUDERDALE: My Lords, could the noble Lord explain why it was not until 20th July that this export licence was given? This matter has been going on for ages.
Lord WINTERBOTTOM: My Lords, the noble Earl obviously has never been involved in legal procedures. Eight or nine months is a short time in a delicate matter like this.
Lord ORR-EWING: My Lords, would the noble Lord not agree that this is unrepresentative of the trade union movement and that the sooner pressure can be brought on these extreme Left-Wingers to release these goods, the better for the reputation of Britain, of the trade union movement, and of Rolls-Royce? Would the Government think, if they are not able to disentangle this issue during the Recess, of taking up the suggestion from my noble friend Lord Trefgarne and sending some of the many Avon engines they have in stock until this difficulty has been overcome? Four years is a long time to wait for servicing of an engine and return of goods.
Lord WINTERBOTTOM: My Lords, the Chilean Government obviously wants back the engines it has purchased. I agree with the noble Lord about the trade union movement, which I believe as a whole supports the rule of law in this country; and the rule of law will be obeyed.

NAMIBIA: UN SPECIAL REPRESENTATIVE
11.12 a.m.
Lord BROCKWAY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will make a Statement on the progress of the discussions on the future of Namibia, and particularly on the decisions of the Security Council of the United Nations.
The MINISTER of STATE, FOREIGN and COMMONWEALTH OFFICE (Lord Goronwy-Roberts): My Lords, the Security Council met this week and adopted a resolution yesterday calling on the Secretary-General to appoint a Special Representative for Namibia and to submit his recommendations for United Nations involvement. My right honourable friend the Foreign and Commonwealth Secretary participated in these discussions and welcomes the adoption of the resolution. The way is now open to rapid implementation of the steps necessary to bring Namibia to independence on a basis which will he acceptable to the international community.
Lord BROCKWAY: My Lords, is the Minister aware how deeply relieved many of us were last night to hear of the decisions of the Security Council? Did they not adopt other resolutions than those which have been mentioned in his concise reply? Is he aware that many of us want sincerely to congratulate the Western delegations—and particularly Mr. Don McHenry, the American leader—on their success, with the support given by the OAU and the front-line African countries to this proposal? Will it not be a magnificent precedent to settle the particular problem of Zimbabwe without force? Walvis Bay has been the difficulty; but has not South Africa forfeited its right to it by its occupation of Namibia? Is it not absolutely necessary for Namibian independence and would it not be like England without London if it did not have the Walvis Bay enclave in its Administration?
Lord GORONWY-ROBERTS: My Lords, may I, in reply to my noble friend's supplementary question, pay tribute to him personally for the constructive helpfulness he has shown in this matter. He certainly made a contribution to what I believe is probably a durable and peaceful settlement of the future of this territory. This brings me to the third point that he made. I agree entirely that it is perfectly possible that this solution of what we used to call South West Africa, of Namibia, may well help a similar solution in Rhodesia. Let us hope so! He also raised the question of the participation of Africa, its succession to and its support for the Western proposals. This is true. I think
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it fortifies what I said yesterday about the need, in solving these constitutional and territorial problems in Africa, to get the Africans as a whole on your side. This has happened in regard to Namibia and we are working to achieve a similar result in Rhodesia. As to Walvis Bay, it is true that the South African Republic rejected the resolution on the Walvis Bay. Their attitude is well known, but they have made clear their willingness to negotiate on the basis of a voluntary act. I think that the whole House, including my noble friend, will welcome South Africa's attitude in this respect.
Lord CARRINGTON: My Lords, I think we must keep our fingers crossed. While agreeing that this is a notable success and break-through, might I ask the noble Lord to pursue a little more energetically the suggestion made by the noble Lord, Lord Brockway? There are points of similarity between Namibia and Rhodesia and there are those of us on this side of the House who are increasingly concerned by what seems to be the Government's concentration wholly on the Anglo-American proposals, while the situation is deteriorating very rapidly, when a new departure on the lines of the successful intervention by the United Nations in Namibia might very well be appropriate.
Lord GORONWY-ROBERTS: My Lords, I do not think we disagree with that. More energetically than what?
Lord CARRINGTON: Than you have so far.
Lord GORONWY-ROBERTS: My Lords, the energy shown in seeking a solution in Namibia is part of the energy with which we are pursuing a similar solution for Rhodesia. I am very glad for the noble Lord's support in this policy. I hope it will not be impaired or disturbed by somewhat ill-considered proposals in the next few weeks which may throw hack the entire progress in Southern Africa. I agree with him, let us build on the Namibian precedent. If we do that, we have greater hope than previously—I make no promises—of a similar solution in Rhodesia.
Lord HALE: My Lords, while I agree with all that has been said on both sides,

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may I ask my noble friend to bear in mind that time after time it has been argued that the problem of Rhodesia, or Zimbabwe, is an internal matter concerning the relationship of the British Government to a colony, and it is therefore outside the normal jurisdiction and the normal interference of the United Nations. In my time, it has been argued forcibly that this is so. It would be very useful if the noble Lord would add one word to what he said and would say that no academic point will be allowed to hinder or to cause misunderstanding, in the general hope that slaughter may be avoided and peace restored in Zimbabwe and that Namibia will prosper and have all the international assistance possible.
Lord GORONWY-ROBERTS: Yes, indeed, my Lords. As the noble Lord, Lord Carrington, rightly said, we must continue to keep our fingers crossed. We are within sight of a peaceful and durable solution, and an equitable one, with a successor State based firmly, we hope, on democratic procedures and continuing its commercial and other relationships with the West, as with other parts of the world, in a civilised and constructive manner. Nevertheless, as my noble friend Lord Hale said, there are still snags on the way. Anybody who has been dealing with these questions will never be assured of the final solution until it is finally promulgated.
What my noble friend had to say about the involvement of the United Nations is of extreme importance. The Security Council recorded only two abstentions, by the Soviet Union and Czechoslovakia, but no veto. The two abstentions by those countries are common form on their part in regard to peace-keeping operations, and one must expect this. Here is the Security Council adopting a resolution to ask the Secretary-General to prepare a plan very much on the basis of the five Western Power proposals with the Schedule with which the House is familiar.
I say this in reply to my noble friend: the Secretary-General will now produce this detailed plan, sending his special representative, a citizen of Finland. He will co-operate with the South African administrator in preparing free and fair elections which will elect a constitutional assembly on the basis of which a con
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stitution enshrining independence will be adopted. The United Nations is very much present in this and in a very practical and essential way.
Lord ORR-EWING: My Lords, as we are about to have a three months' recess, and, as the position in Rhodesia is deteriorating so fast, will the Government give their assurance that, should it be necessary, they will not hesitate to reconvene Parliament in order to have a report on what is happening in Rhodesia in this long period of Summer recess?
Lord GORONWY-ROBERTS: My Lords, as the noble Lord knows, I can only undertake to convey what he said through the proper channels to the proper authorities.
Lord BOSTON of FAVERSHAM: My Lords, so far as Walvis Bay is concerned, can my noble friend say anything about any plan in the immediate future for further talks involving the South African Government about this? Would he agree that their willingness to negotiate with a future independent Namibia gives grounds for considerable optimism? In case it should be overlooked, would my noble friend also accept that probably in all parts of your Lordships' House the very considerable care that he has taken over a long period of months to keep your Lordships' House fully informed about this matter is very much appreciated. Also, the cautious optimism which he has repeatedly and consistently shown has so far been borne out. Would he also agree that, apart from the members of the five Western Governments involved over a long time in the negotiations, much thanks are also already due to the contact group which has put in a great deal of work?
Lord GORONWY-ROBERTS: My Lords, I very strongly agree about the five Western Powers. It is an example of how European Powers can co-operate very effectively in the interests of peace and an equitable settlement. I am very pleased to join with my noble friend and the noble Lord, Lord Carrington, in once more paying necessary deference to the willingness of South Africa to negotiate. Not everybody agrees with the internal policies of South Africa in its own country or indeed in South-West Africa. It needs

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to be repeated that they have shown a willingness which has been helpful for the total result. I want to say that and repeat it.
Lord SEGAL: My Lords, now that there has been—
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, yesterday we reached the horrific figure of 34 minutes for Questions. I hope that I have the House with me when I say that we should now pass on.

MISS ANN CHAPMAN
11.27 a.m.
Lord BROCKWAY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will propose to the Governments of Greece, Turkey and the United States that a joint investigation be made into the circumstances of the murder of Ann Chapman in Athens in 1971.
Lord GORONWY-ROBERTS: No, my Lords. Responsibility for inquiry into the circumstances of the death of Miss Chapman in Greece rests solely with the Greek authorities.
Lord BROCKWAY: My Lords, is the noble Lord aware that, at the time of the murder of Miss Chapman, many of us who were concerned rejected rumours that foreign intelligence services were involved. But has not the person who was the Deputy Prime Minister of Turkey at the time of the assassination now provided a prima facie case for investigation? Has he not indicated in his memoirs that Ann Chapman was murdered by the Greek secret service on the instructions of the American CIA? In view of the fact that this girl was a British national, is it not desirable that there should be some investigation into these serious charges?
Lord GORONWY-ROBERTS: My Lords, it is for the Greek authorities to
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decide whether this book, or any other book or document which may appear, retrospectively affects their attitude to this matter, just as it is for any other individual, including my noble friend, to give his own assessment of the position as he sees it. As I see it, it is not for the British Government to intervene in this matter.
Lord BROCKWAY: My Lords, does that answer really mean that when a British national is murdered abroad Her Majesty's Government have no responsibility to investigate the circumstances? Could not the Government at least do this: cannot a British citizen who was her adviser and who has the documents which are involved, be asked to volunteer evidence? Cannot he be traced so that the circumstances of this murder may be discovered?
Lord GORONWY-ROBERTS: My Lords, of course, the British Government and everybody in this country are concerned when a British national meets this kind of tragic fate. But, unless there is any evidence that due process was not followed, it is not for one country to interfere, upbraid and dictate to another country how it shall conduct its investigations and proceedings. There is absolutely no evidence of any such circumstances in this case. I repeat that it is highly improper, on what is known to us, for us to interfere in the processes of another country. It is as improper as it would be for another country to interfere in our own processes in this country.
As to the second point he made, it is for the Greek authorities to consider whether they should call any new witness or recall any witness such as my noble friend has mentioned. If they had difficulty in that and we, as a friendly country in relation to them on these matters, found it possible to help them, we certainly would. But it is an initiative for the Government of the country where the crime was committed.
Viscount HANWORTH: My Lords, does the noble Lord not think that after an interval of seven years it is unlikely that any useful purpose would be served by an investigation, even if one were conducted? The people concerned are probably no longer in power and what

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happened seven years ago may bear no relation to views that would be taken today.
Lord GORONWY-ROBERTS: I could not say, my Lords. It may be that an inquiry would commend itself to the Greek Government even after six years, which I think is the time-scale involved here. What I am saying is that it is not, in the circumstances known to us, a matter for the British Government or for any other Government except the Greek Government.
Lord NOEL-BAKER: My Lords, may I press the Minister, in spite of what my noble friend has just said, about the lapse of time? Is it not open to the Government, in view of the sinister allegations which have been made, to press the Greek Government to make a full investigation themselves and to publish the results? Is it not in the interests of everybody, including the Greek Government and the United States Government, that the full facts should be known, in view of what has been said?
Lord GORONWY-ROBERTS: My Lords, I think my noble friend has put it in proper perspective. It may well be, after looking at certain statements now or in the future, that it would seem proper for our Government or perhaps some other Government such as the American Government, to make friendly representations to a friendly Government. I see no reason for this to be done now. However, the book will no doubt be examined and the facts assessed, and the possibility of friendly intimation from one country to another remains. The possibility of intervening or having a "self-starter" investigation into another country's conduct of its own processes is what we cannot do. We can consider what my noble friend has said.

BRITISH RAILWAYS (SELBY) BILL
The CHAIRMAN of COMMITTEES (Lord Aberdare): My Lords, I beg to move the Motion standing in my name on the Order Paper. This is another purely procedural Motion, similar to those I have been moving recently, to allow Private Bills to continue their
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progress through Parliament in the next Session: in this case the British Railways (Selby) Bill, which has not yet reached us from another place. I beg to move.
Moved, That this House do concur with the orders made by the Commons set out in their Message of Thursday last.—(The Chairman of Committees.)
On Question, Motion agreed to.

DIVIDENDS BILL
11.34 a.m.
Brought from the Commons; read la.
Then, Standing Order No. 43 having been suspended (pursuant to Resolution):
The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey): My Lords, I beg to move that this Bill he now read a second time. This short Bill forms a significant part of the Government's counter-inflation policy. That policy is set forth in the White Paper (Cmnd. 7293) which was published last week. The intention to publish this Bill was announced in paragraph 30 and I should like to quote, if I may, two sentences from that paragraph:
"The Government intends to introduce a Bill to extend the statutory control for a further 12 months from 1 August 1978 on the present basis and with the present provisions for exceptions and with one addition. That is that from 1 August 1978 no company will be required by the controls to increase its dividend cover above the highest level achieved since the current controls began.".
In amplification of that, may I remind your Lordships as to what the current position is and what the present machinery is. The machinery which this Bill is to continue in force was brought into being by the Counter Inflation Act of 1973, and it has been continued in force by successive Statutes since that time. Under the Act of 1973 an order was made (Order No. 659 of 1973) which was an order made by the previous Government. The policy which was administered under that Act and that order was the policy set forth in a White Paper published by that same Government in October 1973, with guidance from time to time given by the Treasury—guidance which I think invariably indicated some relaxation which was necessary in the light of experience. I know this Bill has been much criticised

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in another place and it may well be criticised today; but I should like to say to the critics that they have to explain why it is that they now criticise a system which is essentially a continuation of the system which they introduced when they were in office in 1973.
What the Government propose is that dividend controls should continue for a further 12 months. The limit will be 10 per cent. and all the existing provisions relating to exceptions will be maintained, such as take-over defence, recovery from an adverse trading position and raising new capital for investment. In the economic debate earlier this week in another place, the Government's general economic policy in relation to inflation, as set forth in that White Paper, was endorsed. I think it is right to say that the other place has endorsed the Government's proposals for a further stage of counter-inflation policy on the lines set forth in the White Paper, so it is as part of that that the Government propose the extension for a further 12 months of the statutory controls on dividends. Successive Governments have taken the view that when pay is being restrained income from dividends should also be controlled. Indeed, as I have indicated, very few changes have been made in this regard from the scheme which was introduced in 1973.
The Bill itself requires no detailed explanation, but I think it is right for me perhaps to anticipate points that may be made, and certainly to deal with points that were raised during the proceedings in another place and which indeed have been raised outside. A number of questions were asked by the right honourable gentleman Mr. Maudling in another place; I believe they are questions which it was proper to ask and questions that the Government must face up to.
Mr. Maudling asked, first, why it was necessary, in order to achieve voluntary wage restraint, to have statutory control of dividends. That way of putting it does suggest an attractive symmetry: that you have it either voluntary in both fields or statutory in both fields. Indeed, the policy of the previous Government was to have statutory wages control and statutory dividends control. But, my Lords, it did not work, and that is the essence of the matter. It failed; and the
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present Government believe, as indeed I think noble Lords opposite now believe, that a statutory wages policy would not work.
On the other hand, the present Government have demonstrated that a voluntary wages policy can and does work. I know there are criticisms of the way it has worked in terms of the out-turn of earnings over the last 12 months and I can, if necessary, deal with that. But I think our experience over some three years has shown that one can combine a voluntary wages policy which works with a statutory dividend control. So that, in a sense, the proof of the pudding is in the eating and that, I think, is the answer to that question.
The same right honourable gentleman then asked another appropriate and pertinent question. He asked the Government what reason they had to believe that they could not get voluntary dividend restraint. Of course, the history of dividend restraint shows many attempts to get voluntary restraint, but the real answer is that many companies have indicated, and have indicated publicly, what they would do if there were no legal controls. It is clear that a large number of them would make very large payments indeed, some of the order of 200 per cent. increases or more, and if that were to happen—and it surely would, because they have said that it would—then people whose only income was earned pay or earned salary would be bound to be angered.
I ask the critics of statutory control: do they really believe that, if this Bill were to fail or were not to be passed and all dividend restraint were to be removed, the result would not simply be that company after company would declare dividends of 15 per cent., 25 per cent., 75 per cent., 200 per cent. or more; that the publicity given to such increases would be enormous, and that many people who are wage earners and salary earners would feel betrayed? That sense of betrayal would give a considerable boost to those who want to destroy the Government's successful drive against inflation by excessive wage increases.
Lord CARR of HADLEY: My Lords, will the noble and learned Lord allow me to intervene for just one moment? How

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can he really suggest that dividend levels of that kind might arise, when he and the whole Government know that the return on capital in this country, the profits in relation to capital employed, are at the very low ebb that they are? It really is serving no purpose for the Government to make exaggerated statements of that kind.
Lord LEATHERLAND: My Lords, may I—
Lord McCLUSKEY: My Lords, if I may answer that, there are two points that I want to make. First, a number of companies have said that that is what they will do, and we can only go on what the companies have said. If we thought that the companies were just shouting something that was not true and not possible, then one might be able to ignore it. But, in fact—and this is the second point—what has happened over the five years of statutory dividend control is that those companies which could have paid over the limit, whether it was 5 per cent. as it was at one time, 12½ per cent. as it was at another or 10 per cent. as it was at another, have accumulated substantial sums of money—in one case, of the order of £600 million. Such companies are certainly able, whatever the return on capital may be, to make a considerable payment and to make that payment, if they were free to do so, on 1st August. So that we have good grounds for our fear. I believe that I have answered the noble Lord's question.
Lord ORR-EWING: My Lords, we are most grateful as a House to the noble and learned Lord. He is taking a great deal of trouble in dealing with the points raised in another place; very much more trouble than the Chief Secretary to the Treasury was prepared to take. But will he not concede that the longer we go on with either dividend limitation or the control of wage increases, the worse the case becomes? In the case of wages, is it not true that the differentials are increasingly narrowed and the incentives at top levels of management get less and less; while on dividends we get more and more out of touch with reality, and pension funds and other institutional investors seriously suffer as a result? What was right in 1973 surely cannot be accepted as right in 1978–79.
Lord McCLUSKEY: My Lords, may make two points here? First, the Chief Secretary did not reply to the debate last night.
Lord ORR-EWING: He opened it.
Lord McCLUSKEY: Yes, my Lords, but the question that I am dealing with were asked by Mr. Reginald Maudling in the course of the speech which followed that. The reply was made by the Financial Secretary, Mr. Robert Sheldon, who dealt in considerable detail with these points in column 1921 through to column 1923. So that it is quite unfair to suggest that the questions were not faced up to in another place. On the other matter, it is certainly the case that if one has a statutory policy of this kind, whether it relates to this matter or to something else, it becomes very difficult to break out of that. Governments—not only in this country—of whatever political complexion have found that that is so, and we recognise that.
But noble Lords must recognise, at the end of the day, that the Government have a real choice to make about how to pursue their counter-inflation policy. Of course, there will be casualties of one kind or another on the way, but the Government's economic judgment, which I believe to be right, is that one has to have controls of this kind to accompany and to bolster the voluntary restraint on wages, and this is the only way in which we can continue our success in fighting inflation.
The third question that was asked by the right honourable gentleman—and, again, I think it was a fair question—was this: If pay policy breaks down, what then? Will the Government abandon statutory control of dividends? We do not believe that the voluntary policy on pay will break down. I mentioned a moment ago the success of that policy. May I remind your Lordships, as briefly as I can, that the first phase of the policy, the £6 limit, was almost 100 per cent. successful. Equally, one can say that of the second phase, the 5 per cent. with a cash limit phase. That, also, was very nearly 100 per cent. successful. The most recent phase, the 10 per cent, guideline, cannot be said to be 100 per cent. successful, because when one looks at the out-turn, the annual rise in total earnings, one finds that it is of the order

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of 13 to 14 per cent. But one has to recognise as well that that includes self-financing productivilty deals. So what one can say is certainly this, that it has been much more successful than any of its critics would have predicted a year ago.
Another criticism which the Government must face in presenting this Bill is that the existence of dividend control inhibits the operation of the capital market and makes investment less attractive. We concede that there is some substance in this point, and indeed the Treasury said so in evidence to the Wilson Committee. But the effect should not be exaggerated. The 10 per cent. statutory limit with the other provisions, including the new one on cover, still allows a good deal of freedom to companies. During the period of controls—that is, since 1973—over £3,000 million of new capital has been raised, mostly by rights issue, and, as your Lordships will know, when it comes to rights issues there is a possibility of relaxation in the dividend control, if the company can demonstrate that that is necessary in order to promote the rights issue successfully. But the essential point is that, in the Government's view, dividend control must be regarded as part of the counter-inflation policy as a whole and, as I indicated a moment ago when the noble Lord, Lord Orr-Ewing, intervened, the disadvantages are worth accepting in the interests of the larger aim of controlling price increases.
The noble Lord, Lord Orr-Ewing, also mentioned the effect on pensioners, and it was certainly said in another place that dividend control hurts people other than the rich. We are not concerned about trying to hurt the rich. We are concerned about trying to protect everyone against the ravages of inflation, which attack everyone. There is certainly something in the point that dividend control affects people who, by no standard, can be said to be rich. Nearly half of all dividends go to pension funds and life assurance companies, and they represent the savings of millions of workers. We acknowledge that fact. In addition, there are millions more who save direct. The Government accept that these people will be, or may be, affected by the continuation of dividend control. But the essential point, again, is that they would be much worse affected by uncontrolled
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inflation, which is quite arbitrary in its effects and redistributes income away from the poorer sections. Accordingly, we defend dividend control upon that general ground, too.
Lord ROBBINS: My Lords, it seems a shame to pester the noble and learned Lord, who is so temperately expounding the case for this Bill. But might I ask him about a matter of increasing perplexity in my mind, as he has developed his argument? How does the noble and learned Lord conceive the modus operandi of the payment of dividends in regard to inflation? Does he believe that the payment of dividends, which are a residue after costs have been met and provision has been made for depreciation, has a direct influence on the increase in the volume of spending, or is he relying, which I should have thought was perhaps the more reasonable position, on the indirect psychological effect of the payment of dividends?
Lord McCLUSKEY: My Lords, I am not advancing an economic case. It would be foolish of me to pretend that I was, and I shall not do so. I am advancing the case that one pay settlement is looked at by others and that if a breach is opened in a guideline or a control then others will seek to go through that breach. That principle applies equally here. I know that in economic terms it is much more difficult to make a case for it, but in psychological terms this is the case. Politics and the control of the economy is a Party political exercise. I am not talking about Party politics, because this policy was introduced by the prevous Government and was continued by us. However, politics is the art of persuading people to accept economic policies and other policies which are seen to be necessary and in the general interest. I make that point unashamedly. Those who propose to attack me on the ground that the economic case is weak because of the relatively small part played in the economics of this country by the two or three per cent. of income that comes from this source, may feel free to do so, but I shall not attempt to reply. I make the point that I make and no other.
The control of inflation requires that incomes be restrained. That is the Government's view, and I think that it is

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a view which the country widely shares. The great bulk of incomes takes the form of earned income, and the Government look for and expect to get voluntary restraint. That expectation, I believe, is soundly based on the experience of the success of voluntary policies over the last three years which I have outlined. To win the continued assent of wage and salary earners to income restraint, the Government's policy must be, and must appear to be, even-handed. This measure continues in the field of dividends a restraint which parallels the restraint in ordinary earned incomes. I believe that it will be seen by the people, by wage negotiators and even, by those who are most directly affected by it, as a measure which helps the battle against inflation to be continued and to be continued with success. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord McCluskey.)
11.54 a.m.
Lord CARR of HADLEY: My Lords, the noble and learned Lord, Lord McCluskey, as we have become used to, advocates the Government's case in your Lordships' House with great reasonableness and consideration, and with as much persuasion—indeed, more persuasion—than the case which he is advocating deserves. We are grateful to the noble and learned Lord for his manner of approach and for his consideration to us, but the case which he is dealing with this morning is a nonsense.
Before I come to that, may I first take up the challenge when he asked my noble friends and I how we can justify opposing now what we ourselves introduced when in Office in 1973. I think that the answer is many sided, but let me give to the noble and learned Lord just two sides of it. First, conditions are not the same in 1978 as they were in 1973—nor, to pick up a word used by the noble and learned Lord in his closing remarks, is the policy even-handed in 1978, as it was in 1973. In 1973, whatever one may think about the economic rights and wrongs, statutory control was evenhanded on pay increases, on price increases and on dividend increases.
What is the position today? Employers are required to suffer strong but arbitrary sanctions if they fail to keep within the
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5 per cent. guideline, even though they may he forced to go beyond it by industrial action—perhaps even by industrial action taken in breach of agreements which the trade unions concerned had entered into with employers. They have no remedy. If employers are forced to go beyond the guidelines for those reasons of force, then the Government still impose arbitrary and penal sanctions upon them.
Employers are also required still to operate under a statutory price control régime. Most shareholders, as I shall come to in more detail later, are not wealthy men. Either they are pensioners or people in insurance schemes or they are small savers. Shareholders are to be required to continue under statutory restraint, but the trade unions are not now required to do anything. They are not required to accept any statutory restraint. They are not even required or prepared to give the most general term voluntary acceptance to the guidelines which the Government have placed before the country. Is that even-handed as between the different sections of our community? Is that what social justice and non-divisiveness in our society is about? That is the chief difference between 1973 and 1978.
The noble and learned Lord tried to answer the question put by Mr. Reginald Maudling, that if voluntary incomes control is sufficient, why not voluntary dividends control, if such control is needed? The noble and learned Lord did not answer that question, with respect. He merely asserted that voluntary control is working. He gave no evidence of proof of any kind that the existence of the statutory control of dividends is one of the conditions of voluntary control working, and why, indeed, dividend control is one of the conditions of it working. And still less did the noble and learned Lord say why voluntary control would not work at least as well as, if not better than, statutory control. The noble and learned Lord did not, with respect, reply to that question in any way at all.
The truth is that this Bill is a nonsense, and it is a damaging nonsense. It has been put forward, again as we heard from the noble and learned Lord, on grounds of social justice. He said in other words

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what, in effect, the Prime Minister said in another place earlier this week: that it would be wrong, when the working people are being asked to exercise moderation in their pay settlements, for the Government to fail to do all in their power to see that moderation is exercised on dividend payments. But this is nonsense, except in terms of the political mythology of a few dinosaurs in the Labour Party and in the trade union movement—and I do emphasise "a few". It is not true, in the case of the general impression, feeling and sense of what is right and wrong, of the great majority of employees—"of working people", to use the Prime Minister's phrase—in this country.
What is true, I believe, however unpleasant it may be economically, is that if the Government of the day feel that it is necessary in the national interest to impose restraint on pay increases—to put pressure on those who can bargain for pay increases to restrain themselves in using to the full their bargaining power at a given moment to get the biggest increases they might be able to win—then I do understand, and I do think that it is fair to impose an equivalent pressure and restraint on those who can settle prices. That is a proper and a fair trade-off for asking people to accept, on the one hand, restraint in pay increases and, on the other hand, restraint in price increases. One can argue about the economic effects of those two, but, if we are talking about social justice, price restraint is the proper trade-off for pay restraint, and it is nonsense to say, as the noble and learned Lord and the Government say, that there is a trade-off in social justice between pay and dividends.
I know it is some years ago now—too many years ago—but I have had, as I am sure many noble Lords have, experience of working on the factory floor. I never encountered, except among a tiny minority of political activisists, this sort of emotion as regards dividends. It just does not exist among the great majority of our people. The noble and learned Lord says people are bound to be angered. What evidence is there that people are bound to be angered? I do not believe there is any evidence for it at all, not unless a tiny minority of these dinosaurs I spoke of set about a deliberate
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attempt to whip up emotions on this subject.
I apologise to the noble and learned Lord for interrupting him; I really could not restrain myself, because it is most unlike him to whip up false emotions and damaging emotions of this kind. Really, to give that exaggerated picture of what would happen to the general level of dividends if either compulsory or voluntary dividend restraint were removed today is so ridiculous as to be nonsensical. The noble and learned Lord says that companies have said that they will do this. It would be very interesting if he would place in the Library a list of companies which have said they will raise their dividends to these fantastic levels. I am sure thare will be the odd one which would do so. But while there is the great generality—which the Government quite understandably make a lot of—of acceptance among working people, again to use the Prime Minister's description, of pay restraint, we all know that there are the odd cases where that restraint has not been shown at all. But the Government, quite rightly, do not argue that the odd exceptional case of irresponsibility and lack of restraint on the pay side should therefore cause the whole thing to be put under statutory control. Why should they say that the odd exceptional case on the dividend side should impose this statutory control on the 99 per cent. of honest, responsible, efficient companies?
Lord McCLUSKEY: My Lords, I am obliged to the noble Lord for giving way. I did not suggest and do not suggest that the general level of dividends would rise by the kind of figure I mentioned of 200 per cent. What I did suggest was that there were certainly going to be some such cases, or so the companies themselves have announced. I do believe—and I do not think the noble Lord could contradict me on this—that it is the exceptional case that is going to get the headline publicity, and if it appears to the great mass of people who are prepared to accept some kind of voluntary restraint that in some cases very substantial increases are being paid in this form then I think that will be resented and will cause anger.
Lord CARR of HADLEY: But, my Lords, so will the odd case of irresponsi

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bility on the incomes side get publicity, and what is sauce for the goose is sauce for the gander, in this field of psychology at least. But, anyway, why do we suppose that the great majority of working people in this country are such fools, and so incapable of understanding what are their own true and honourable self-interests in matters of this kind? First of all, as indeed the noble and learned Lord admitted, about half of all shares are now owned not by individuals at all but by pension funds, insurance companies, unit trusts and similar institutions, including trade unions, providing for the mass savings and social benefits of the whole population. Therefore, the main role of dividends in modern society is to provide the pensions and other benefits not for a tiny number, a few rich people, but for the whole mass of the population. So rising dividends equal rising pensions for millions of employees; restrained dividends equal restrained pensions for millions of employees. In what way is it fair or sensible at one and the same time to restrain the pay of million of employees, and then, in the extraordinary name of social justice, on top of that to restrain their pensions as well? What hypocrisy it is to call that social justice! I repeat that I do not believe that the millions of employees, ordinary working peeople in this country, are such fools as to believe or feel that for one moment. I know from my own past experience that they do not.
However, my Lords, the unfairness is even greater than that when one considers the effect as between one class of employee and another. If you are an employee in the public sector nowadays your pension is automatically inflation-proofed, but, if you are an employee with an occupational pension in the private sector, or if you are self-employed and providing your own pension, your pension can only move towards being inflation-proofed if your fund is being fed by rising dividends, or, of course, alternatively if you yourself, out of your restrained weekly income, pay a much increased weekly contribution.
So, from the pension point of view, whether you are already a pensioner or whether you are still of working age and building up a pension for your retirement, dividend restraint separates society into privileged and disadvantaged groups. If you are a public servant, your pension is
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automatically inflation-proofed; if you are a private sector employee or a self-employed person your pension is held down below what it would otherwise be. Again, I ask how this can possibly be described as promoting social justice between individuals and different groups in our community. Let me remind your Lordships, for perhaps too many times, that this is the basis on which this Bill is presented to us; it is presented on a social justice basis.
Look at that case from a different angle, the angle from which the Government apparently looks at it—the alleged need to prevent the rich shareholder from benefiting when, in the Prime Minister's phrase, "working people are being forced to accept restraint in pay". I have dealt with it from the working people's point of view and shown how they are going to suffer from dividend restraint. Are there in fact, on the other hand, very many rich beneficiaries to whom dividend increases will give much, of a size and on a scale to create some crying scandal of unfairness? Will this be on a scale of unfairness to justify holding back the pensions and insurance benefits of the very employees in whose name it is suggested that these restrictions should be introduced? Of course there are not, my Lords. It is a ludicrous suggestion. No doubt there are still some very wealthy and large shareholders, but the richest ones will have all but 2p out of every extra £1 of dividends taken back by the Chancellor of the Exchequer, and the not so rich ones will lose over 50p out of every extra £1 they get. It is the taxation system, not dividend control, which looks after this aspect of fairness in our community.
What about the general body of individual shareholders? Here I would like to turn to evidence brought forward by the Diamond Commission, the standing Commission set up by the Labour Government under the chairmanship of the noble Lord, Lord Diamond. That Commission has pointed out that there are about 2·1 million individual shareholders in this country at the moment. In 1972–1973, which is the latest figure they can produce at the moment, 50 per cent. of shareholders had a total statutory income from all sources of less than £2,000 a year; that is, with their pensions and interest on savings;

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while as many as 25 per cent. had a total statutory income under £1,000 a year. In other words, 50 per cent. of the individual shareholders in this country whose dividends have to be restrained in the name of social justice are personal shareholders of very limited means, and a large proportion of them are people like widows and elderly single ladies. Is this social justice? Is this the sort of sacrifice that the working people of this country require from their fellow citizens in return for pay restraint? I do not believe it; at least, not if they are honestly led on these matters.
In conclusion, I should like to say a few words about the economic effects. The noble and learned Lord, Lord McCluskey, at least admitted that they were present. His argument was a de minimis argument—the illegitimate baby was going to be a small one and therefore could be disregarded. It seems to us, on this side of the House, to be rather ludicrous, at a time when there is a large measure of agreement running, right across Party boundaries, shared by managers, employees and trade unions alike, about the urgent need to increase investment in order to improve the competitive efficiency of British industry and to create the only base upon which we can hope to build fuller employment in this country in the future. It cannot be denied that dividend restraint inevitably makes new venture capital more difficult, and not less difficult, to raise. Therefore, it discourages a growth in new investment and that means future unemployment will be, to some extent, higher than it need otherwise have been.
The noble and learned Lord may say that the effect is small. But why do something which has even a small effect in the opposite direction from that which the whole country perceives to be necessary and to its advantage? Of course, another connected disadvantageous effect of dividend restraint is that it tends to a levelling down rather than a levelling up between different companies with different levels of efficiency. The majority of companies may not be much affected by dividend restraint, but one suspects that one effect of dividend restraint may be to drive some companies to pay higher dividends than they might otherwise have paid if there had been no control at all, because
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if you do not reach the minimum someone will think that there is something wrong and that you are about to go bust. We cannot be sure, but it may actually lead some companies to pay higher dividends than they would otherwise do. What is certain is that a small number of companies—but a small number of really efficient and expanding companies—will pay less than they could and should pay on the basis of their achieved results.
So the most thrusting and efficient companies with the greatest capacity for growth, doing the most to improve productivity, will, to some extent at least, be held back. Therefore, one cannot help asking when, if ever, will the Government learn that you cannot cure inflation and unemployment by holding back the companies in Britain which show the greatest potential for growth, the greatest efficiency, the highest productivity and the greatest readiness to put enterprise into practical effect?
To sum up: statutory dividend restraint exerts a downward pressure on new investment and an upward pressure on the long-term level of unemployment. It unfairly penalises the widow and the small pensioner from professional and self-employed backgrounds. It favours one class of pensioners in the public service against all the other pensioners in the country. It holds back the future pensions of millions of employees at the same time as those same employees are having their increases in pay held back. Is that fair? Does all that encourage greater social justice? Is all that conducive to greater national wealth and prosperity? Of course it is not. It is government by ritual sacrifice to false idols. How much longer are we to be governed by myths of that kind? Is this national leadership? Not so long ago some of the Prime Minister's acolytes were likening his role as leader to that of Moses. Moses indeed!—The Duke of Plazator, perhaps!
12.15 p.m.
Baroness SEEAR: My Lords, the noble and learned Lord, Lord McCluskey, is a very distinguished member of a profession which is highly skilled in putting the best possible face on the worst possible case. We realise from his presentation this morning how well justified is his high standing in that profession. Many of

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the reasons why we, on these Benches, oppose the Bill have already been put forward by the noble Lord, Lord Carr of Hadley. In the first place we do not believe that the way to compensate for holding down pay is by holding down dividends. We take that view for many of the reasons which the noble Lord, Lord Carr, has put forward, and for some other reasons too. It is far more appropriate to avoid the few cases—and surely they will be a few—in which excessive dividends are paid out by having some continuing control over prices, whatever the disadvantages of that may be. That would be a far more satisfactory way, in terms of inflation control, than attempting to institute this control by the continued limitation on dividends.
However, the Government's case and the case put forward by the noble and learned Lord, Lord McCluskey, this morning has rested primarily on the argument that what the Government wish to do is to be evenhanded. There is no even-handedness in the way in which investors in industry, through the dividends which they receive, are treated as against other sections in the community. The failure of even-handedness goes back a very long way and I suggest that it is one of the reasons why we, in this country, are in our present economic mess.
As the noble Lord, Lord Carr, pointed out, the percentage of people who will gain very greatly—very wealthy people—from increased dividends is, in fact, small and the amount that they receive is greatly cut back by the level of tax that they are paying, plus the investment surcharge, which we alone of all countries impose on the investment income. So those who have a high level of income are really paying back to the Government to the tune of 75 per cent. or more of any dividend they receive.
On the other hand, as the noble Lord, Lord Carr, has pointed out, there are a very considerable number of individuals who, during their working days, accumulated a little capital, were foolish enough to invest it in industry and are now trying to augment their pensions by the dividends that they receive. I suggest that there can be no one in your Lordships' House who does not know someone of that kind. I shall quote only one example, that of a widow of 80 who was left with an
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income of £1,200 when she was widowed 15 years ago, an income which then enabled her to live a reasonably comfortable life. Dividend control for people of that kind means that what has become penury pushes her into absolute poverty. That kind of case is typical of what is happening to a very large number of older people.
I suggest, as I said a moment ago, that there can be no one in your Lordships' House who does not know people of that kind. Is it really to such people that we would deny the opportunity of a somewhat increased dividend? Surely, as the noble Lord, Lord Carr, has said, it is very improbable that there will be a great outburst of dividend payments throughout the whole of industry given the low levels of profitability that we know are experienced throughout the mass of industry.
Let us look at even-handedness so far as it affects other groups—even-handedness towards the investor in industry as opposed to people who receive income in other ways. In particular, let us look at the case of pensioners. In my view, there are two groups of people in this country who have no business to be critical of an increase in dividends in terms of fairness. The first group is those of us—and I say "us" because I move into this group—who benefit from indexed pensions. For all those people who are drawing and expect to draw indexed pensions to be critical of dividend limitation, on which the pensions of all those not so fortunate depend, is hypocrisy. The second group which is highly privileged in relation to people who are expecting to draw dividends in return for money invested in industry, is the very large number of people in this country who benefit from tax concessions in relation to mortgages. People who have chosen to put their savings into buying a house, as distinct from putting them into industry, receive concessions on tax when they draw out their mortgage and pay no tax on their notional rent; they also have high concessions when it comes to selling a house in terms of capital gains.
Let us compare their position with that of the person who made the decision, which is still a perfectly reasonable decision to make, to live in rented accommodation, if he or she had the opportunity to get it—and there are cases where this

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is much the wiser and better thing to do, apart from tax concessions—and to invest savings in industry. They save income which has been taxed; they pay tax, plus investment surcharge, on every dividend that they receive: and of course, if they sell their investments, they pay capital gains on them. What even-handedness is there between those two groups?
The approach is based on a totally outdated and highly uneconomic point of view; that is, that somehow or other—and it is a point of view which has been developed over decades by the Party in power today—there is something rather discreditable about putting money into industry and creditable about owning one's own house. I am not against people owning their own houses, but I fail to see why they should be given so greatly preferential treatment as against those who choose to invest in equities. It is high time that we altered our attitude towards the idea that, if people are foolish enough to put their money into equities, that is their own lookout but they should not be given any encouragement, and others are given very preferential treatment. Therefore, the inequality of holding down dividends at present is a very strong argument against the Bill before your Lordships' House today.
But there are also, of course, the economic arguments. It is quite absurd that those companies which are making large profits are encouraged not to distribute them. We are getting a very bad distribution of capital because, of course, it pays companies—and they are encouraged to do this at the present time—to make investments inside their own concern—to plough hack inside their own concern—when, in fact, they may well not be using that money as wisely as it could be used if it was distributed and reinvested elsewhere. We are getting a distortion of capital investment by a continuation of dividend control.
The Government's whole argument rests on the belief that people are incapable of understanding the disadvantages of dividend control at the present time. The noble and learned Lord said that, if a large dividend contribution is seen, people will be angry. Of course, they get angry about all sorts of things. We have to learn to stand up to people being angry.
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They get angry because they think that it is very inequitable. I do not believe that people are as ignorant as the Government think. I think that the Government are caught in a set of attitudes that was developed some 50 years ago, and that change in the country has proceeded much faster than people who are boxed-up in Westminster are altogether aware. If they are not aware that people are now better educated and are capable of understanding the folly of continuing dividend control, then I believe that a really intensive educational campaign to explain the economic facts of life—and I have asked for this again and again—should be mounted so that people can understand how industry is best financed and what the function of the dividend is. They are perfectly capable of grasping these facts, and I believe that a great many of them have already done so.
But why do not the Government embark on a much better programme—or encourage other people to do so—of enlightenment so that the real economic facts of the situation can be understood. The noble and learned Lord, Lord McCluskey, himself admits that those facts are on the side of getting rid of dividend limitations; let the people understand and let it be explained to them. They are capable of realising it and I believe that the Government would find that the opposition to it was very small indeed.
12.25 p.m.
Lord BOYD-CARPENTER: My Lords, almost as extraordinary as this Bill is the procedure which the Government have followed in respect of it. They have known all along that the power to control dividends lapses at midnight next Monday. They have known—at least I assume that they have—that the ordinary practice with public companies is to declare dividends through the normal procedures of the Companies Acts many months before those dividends are paid. The Government have repeatedly been begged to make clear what their intentions would be after 31st July. I was one of those who table a Question in this House and was told that the matter was under consideration as recently as 10th July.
Then at the beginning of this week alone they introduced this Bill; they pushed it

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through another place in one day and here we are in such a hurry in this House that we do not even have a Lords print of the Bill in front of us. The procedure was such that even the noble and learned Lord, Lord McCluskey, at the beginning of the debate was rather foxed by it. This shows an extraordinary lack of forethought by the Government or lack of understanding of the significance of dividend control, particularly to those who have the responsibility of operating public companies. It is not made any better when the noble and learned Lord says in the blandest of ways that, of course, there is no economic case for the measure. Indeed, I understood him to admit that economically this would he counter-productive.
I think that he accepts—he will deny it if he wants to—that this is a measure which, to some degree, will discourage investment; that it is a measure which, therefore, will help to increase unemployment. To come forward with such a measure at a time when the Government are presiding over 1½ million unemployed, the number of whom actually rose at the last count, really argues a very remarkable insensitivity—certainly the noble and learned Lord may interrupt.
Lord McCLUSKEY: My Lords, I was invited to interrupt by the noble Lord and I am grateful that he allows me to. If one looks at this measure in isolation it may, indeed, be seen to have certain effects upon investment and, therefore, upon job opportunities; but one looks at it as part of the platform, or part of the apparatus, of the Government's fight against inflation. If this apparatus were not used, and not used as a whole, inflation itself would lead to such a reduction in jobs and in investment that the result would be very much worse.
Lord BOYD-CARPENTER: My Lords, I shall come in a moment to the noble and learned Lord's belief—if he will allow me to say so, his illusion—that this is an apparatus calculated to restrain inflation. I shall suggest in a moment that it is the opposite. At present I am basing my argument on the initial proposition that in the present position of the country, with unemployment high and showing signs of rising, with the Government in their own White Paper (to which
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the noble and learned Lord referred) saying that we need more investment, it is astonishing to come forward at this stage with a measure about which we can argue to what extent it will do this, but, it is apparent beyond dispute, will to some extent be damaging to the aim of promoting investment and employment.
It is a very remarkable situation for us to come upon right at the end of the Session. The noble and learned Lord's view about the effect of this economically is sustained by the evidence, to which he referred but did not quote, given by the Treasury to the Wilson Committee last summer. I think that the House may be interested to hear it. Last summer the Treasury said:
"even with the rights issue relaxation, there can be little doubt that dividend control has tended to distort the equity market, making it less attractive to private investors, and has thus to some extent increased the cost of raising new capital."
That is the Treasury, under the directions of Her Majesty's Government, giving evidence with all its authority to the Committee which the Government set up. It and the noble and learned Lord agree that, from the point of view of an economic analysis, this is a damaging measure. That, given the state of the national economy at this moment, is an immensely serious admission to have to make. It must be unsound, if you are trying to operate a still predominantly private enterprise capitalist economy, to undermine the dynamic which makes it work. I thought that the Financial Times yesterday summed it up extremely well when it said:
"A thorough-going opponent of private capitalism could argue in favour of turning over the equity to the State or to the workers themselves. But to maintain a substantial privately owned sector and prevent its proper functioning is the kind of stupidity into which otherwise sensible people are led by the obsession with pay controls."
I come now to the point at which the noble and learned Lord interrupted me. He says that this will help to check inflation. He says that it will help to check inflation because if it is not done the unions, and those they represent, will not exercise restraint in their pay demands. I think that that is, as my noble friend Lord Carr said, an insult to the intelligence and the knowledge of the shrewd and able men who lead our trade union movement

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today. I cannot believe that they are so rooted in the prejudices of the 1890s and the early 1900s that they are really going to let their decision on pay restraint be affected by the question as to whether or not statutory control of dividends is imposed.
I do not want to weary the House by repeating it but I shall summarise what has been said already: the private shareholder now holds not much more than one-third of the equity in quoted companies. The great mass of these holdings is in the pension funds, in the insurance companies, in the trusts (including investment trusts), in the unions, in the pension funds of the nationalised industries, including those which put a certain amount of funds in works of art. That is where they are held in the interests throughout of those who are earning wages and are being asked to exercise wage restraint.
Why on earth should people be induced to exercise wage restraint because pressure is also being applied in other ways in areas where they also have interests? Let me take an extreme example, because it arises: this is the position where employees hold shares in the companies in which they work. It so happens that a company of which I have the honour to be chairman has 2,555 direct United Kingdom employees, and that of those over 80 per cent. hold shares in our company. What on earth is the inducement to those men to exercise restraint in wage demands if you cut back their dividends? Surely it must be wholly counterproductive.
The irony of this is that this process of worker participation in employee shareholding in companies is something which, quite rightly, the Government are seeking to encourage. I think there are nine clauses in the Finance Bill designed—in my own view not very effectively—to facilitate the development of employee shareholdings. This is the declared policy of the Government. To their credit, it has been urged on the Government strongly by the Party of the noble Baroness, Lady Seear. But how do you reconcile encouraging employees to take shares in these companies while at the same time making it less attractive to them by restricting the dividends?
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I think it goes deeper that that. This example of what the Sunday Times the other day called "envious égalitarianism", this old-fashioned attempt to create antagonism, is particularly harmful at a time when it is too transcendentally important to get across the idea that the shareholders who provide the capital, and the workers who provide the skill and effort, are partners in the enterprise and not opponents. It is setting them and their interests against each other. This is not only harmful itself but it is not true in fact, and it is particularly untrue in the kind of example that I gave to the House a moment ago, where the employees are a substantial section of the shareholders themselves.
I say to the noble and learned Lord that of course we all wish to see inflation restrained—indeed, we wish to see far more effective measures taken to do that than the Government show any signs of taking. However, he is not entitled to assume that a measure of this kind is going to increase that restraint in the pressing of wage demands which, I agree with him, is an important element in the restraint of inflation. Any intelligent and sensible trade union leader, or member of a union, must realise that in one way or another, through shares in a company in which he works, through the pension funds, private or public, in which he is involved, if you restrict dividends you are hitting him again and are depriving him of possible gains and benefits. The noble and learned Lord accepts that the Bill fails as an economic measure. It is a harmful one. It is only on the most out-dated assumptions of old fashioned out-dated prejudices still existing that it can have any helpful psychological effect on wage restraint. Even if there were anything in the noble and learned Lord's point, then the answer is the one given by the noble Baroness on the Liberal Benches: for heaven's sake! go out and educate people in the realities of economic life instead of, as the Government are doing by bringing forward this measure, seeking to perpetuate harmful legends which can do nothing but create ill will and disruption.
This is a Bill introduced in strange circumstances at the end of the Session in the light, no doubt, of all sorts of discussions outside. It is one that will do

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no good, and it is one that will do some harm. It is a mean little Bill which will be covered with contempt, and the Government will not escape a good deal of that contenpt.
12.38 p.m.
Lord ROBERTSON of OAKRIDGE: My Lords, as a stockbroker I have a personal interest in the decision on this Bill. I am grateful for the opportunity to put the personal observations of one who is not only a junior Member of your Lordships' House but also a junior member of the Stock Exchange. It is not my aim either to recommend this Bill or to oppose it, but rather to emphasise how the cost of a continuation of dividend controls for another year will be borne.
I think it is widely agreed, as has been apparent in this debate, that the reason for this Bill is the psychological one rather than economic arguments. I personallyam unconvinced that the psychological arguments are based on anything else than illogicalities, but nevertheless the fact does exist. If to beat inflation it is considered necessary to have an incomes policy, and if, in order to make an incomes policy work, it is considered necessary to have dividend controls, that is a political decision on which I do not feel that I am qualified to comment. I would put in one thought here which is a personal one, and that is that the stock market, and investors in general, do not like uncertainty. Therefore, they may feel that there is little difference, if there has to be dividend control, between the certainties of a statutory policy on dividend control and the uncertainties and the backroom pressures of a voluntary policy.
We should not exaggerate the role of dividend control in keeping dividends down. There are many other factors, probably the chief of which is the hopelessly inadequate profitability of most of British industry and commerce, which should be of great concern to us all. Nevertheless, a large number of companies would otherwise have increased their dividends considerably. Looking at the Financial Times, one can see well-known companies whose dividend cover is in double figures, when previously anything over two, or possibly three, times cover for a dividend was considered high. Therefore there is
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a cost in dividend control and it does not necessarily fall where one would think it falls.
In the first place, of course, it falls on investors, and the man in the street naturally thinks of shareholders as rich people. Undoubtedly some of them are, but, as has been stated many times in this debate, many shareholders are not rich and many shares are held on behalf of pensioners and people with very ordinary means. I understand that it has been calculated that 17 out of every 20 families in this country have savings invested in risk capital of industry and commerce, either directly or through such institutions as pension schemes, life assurance policies or friendly societies. As a light alternative to more statistics, perhaps I may share with noble Lords an incident, I am afraid a humdrum one, that brought home to me how widely shares are held.
A few years ago we moved into our house and somebody was putting up cupboards in our kitchen. One evening after work I came home and went outside to the back door to clean my shoes. I heard this man talking to my wife about what I did, and my wife said that I was on the Stock Exchange. "That's just a gambling casino", he said. Perhaps I polished my shoes a little harder, but at that point I did not intervene; naturally I did not agree. There is of course risk in all investment, whether one puts one's capital under the mattress or invests it in industry; and most of the investors I know are more concerned with security—security of capital and the maintenance of income in the face of inflation—than anything else. My wife then asked this man where he put his savings and he replied that he put them in a friendly society. I asked him which friendly society and he gave me the name, and I said, "That is very interesting because that friendly society invests its money through my firm", the firm I was then working with, "and whether or not you like it, your money is being channelled into industry through the stock market". That sort of person, among others, is being affected, as is his income, present and future, by dividend control.
The second sector to bear the cost of dividend control is industry itself, and we have the evidence of the Diamond

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Commission and the Treasury submission to the Wilson Committee last year that they recognise that dividend controls distort capital markets and make it more difficult for companies to raise new equity capital. This is all the more serious because for some years it has been virtually impossible for companies to raise new capital by means of fixed interest issues; there has hardly been a fixed interest issue worth its name since 1973. With interest rates as they are at present, companies subject to commercial restraints cannot, unlike perhaps the public authorities, afford to borrow long-term capital at present rates.
For a number of factors, of which dividend control is therefore one, industry's supply of lifeblood is being restricted and this bears with particular force on those well-managed and successful companies which have the capability otherwise of expanding and whose success means so much to the future of this country. Some of these companies will of course benefit from the dividend cover concession which was mentioned in the Statement put out by the Treasury earlier this week; but figures have been produced to show that this concession will apply to only about 25 per cent. of companies, and the other 75 per cent. will still be restricted to 10 per cent., apart from the existing concessions on rights issues and so on.
All this leads me to two main conclusions. The first is that we should see that dividend controls are not accepted as a permanent feature of the economy, and in this respect the remark of the Financial Secretary in the debate in the other place, reported in The Times today, is encouraging. The second is that priority should be given to relaxing further the control of dividends for those companies which have consistently shown themselves to be successful. That, unless I am wrong, could be done under the position as it will be under the new measure, if it becomes law. It seems perfectly possible that the Treasury could say they would give sympathetic consideration to companies whose dividend cover would otherwise rise over a figure of, say, five times, to raise their dividends more than the statutory 10 per cent. I hope this will be investigated by the Government following this debate.
12.47 p.m.
Lord COCKFIELD: My Lords, the noble and learned Lord, Lord McCluskey, in commending the Bill to the House, started by saying that it was incumbent on the Opposition to explain why they now criticised a system which was a continuation of a system which they introduced in 1973. My noble friend Lord Carr of Hadley referred to that, but as I was directly involved in these matters at the time perhaps I may answer the noble and learned Lord even more directly.
The 1973 legislation was emergency legislation of limited duration which was expressed to expire on 31st March 1976, two-and-a-half years ago, and, if Lord McCluskey doubts that it was emergency legislation, I will read him the words of the noble and learned Lord, Lord Justice Roskill, in the GEC case in 1974:
"One main purpose of the 1973 Act was to confer what were virtually emergency powers to deal with an emergency which, unhappily, still subsists".
Those words were uttered in 1974. If Lord McCluskey's argument is that this economic crisis still exists, it is really up to him, not the Opposition, to explain how they succeeded in keeping an economic crisis going for another four years.
The history of this matter is well known. The Bill starts by referring in the first line of the Title to the Counter-Inflation Act 1973, which, as Lord Carr said, instituted strict statutory control on pay, prices and dividends. The first act of the Labour Government when they came to office in 1974 was to abolish not only statutory control over pay but all control over pay. We entered into a period of complete and irresponsible free collective bargaining. That was succeeded by a whole series of quasi-voluntary pay controls, none of which was fully adhered to and the last one, which was supposed to be a 10 per cent. control, has ended up at 14 per cent. If we look at the whole of this period—and we are entitled to do so because this legislation is based specifically on the 1973 Act—what has happened is that between 1973 and 1977 dividends on ordinary shares have increased by £581 million, or 35 per cent. Wages and salaries have increased during the same period by £35,000 million, or 94 per cent. The noble and learned Lord based his case on what he described as even-handedness.

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The Chief Secretary to the Treasury in his speech on the Bill yesterday in another place went further than that. He said in his peroration
"We need an even-handed and fair policy".
I quote from column 1816 of the Official Report. Whether the noble and learned Lord regards any of this as "even-handed and fair", I question most seriously.
If the Government wish to implement what they have said both here and in another place, assuming that one accepts that they need statutory control—most of us on this side do not agree with it, but giving them that point as a matter of argument—surely the absolute minimum they ought to do is to provide either in the statute or in the regulations that dividends since 1973 should not be increased by a greater percentage amount than wages and salaries have been increased. That would be "even-handed and fair" treatment.
I want to turn from that to what I might describe as a broad constitutional point. I have raised this point in your Lordships' House before and I propose raising it on this Bill. If one turns to Section 10 of the Counter-Inflation Act, which is what this Bill continues, it reads as follows:
"The Treasury shall have power to restrict the declaration or payment of ordinary dividends by companies at any time when this Part of this Act is in force."
In subsection (2):
"The powers conferred by subsection (1) above shall be exercisable by order,"—
and note these words—
"or by notice given to the company, or each of the companies, affected by the notice."
It is, I suggest, thoroughly objectionable that an Act of this kind does not specify the rights or obligations of the subject but leaves them to the unfettered discretion of the Treasury. That may be defensible in emergency legislation which is introduced for a short period of time and which has written into it its own demise. But it is quite intolerable that this sort of thing should be continued indefinitely, particularly when the power has been renewed again and again and again.
The present Bill says that the powers shall continue until 31st July 1979, "and shall then expire". What faith can we
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really place upon that? The 1973 Act expired on 31st March 1976 and the Act said—and I quote from Section 4—
"this Act shall cease to have effect ".
The Remuneration, Charges and Grants Act 1975—and I quote from Section 2—provided for the continuation of the control
"not later than 31st July 1977".
The Price Commission Act 1977 continued the control until 31st July 1978 and then said it
"ceased to be in force".
The present Bill says it is to last
"until the end of July 1979 and shall then expire".
What faith can we possibly have when this has happened not once, not twice, but three times and is now proposed for a fourth occasion?
These are points that I hope we shall explore further when we come to the Committee stage of this Bill. May I make another point to the noble and learned Lord? In case he is tempted to reply that the powers of the Treasury are exercisable only by order and that the order has to be laid before the House, there are two points to notice. The first one is that this is subject to a Negative Resolution only. It is well known that this is a means of slipping things through this House and another place when nobody is looking. But, secondly and much more importantly, the powers can be exercised by notice, which is why I referred to those words. So far as I can see, there is nothing either in the 1973 Act or in the present one requiring any such notice to be laid before your Lordships' House or laid anywhere else.
May I turn now to the question of who receives ordinary dividends. They go to two main sources, to private individuals and to the institutions. So far as the private individuals are concerned, the point has already been made that the private investor is not only subject to the scourge of dividend control but is also subject to the whip of the investment income surcharge. A point which has not yet been made to your Lordships, but which is important, is that the investment income surcharge is a much heavier and more savage charge than it was in 1973.
The noble and learned Lord is fond of referring to what was done on these

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Benches in 1973. May I remind him, therefore, that the rate of the investment income surcharge in 1973 was 10 per cent. The general rate now is 15 per cent. The threshold in 1973 was £2,000. The threshold now for people below the age of 65 is only £1,700, in pounds which have been halved in value by the activities of his own Government. The top rate of income tax and investment income surcharge combined has gone up from 85 per cent. to 98 per cent. There might be an argument for saying the private investor ought to be subjected to dividend control; there might be an argument for saying that the private investor ought be subject to the investment income surcharge. But to subject him to both of these is absolutely intolerable, and anyone who suggests that this is what is meant by "fair" treatment, if I may use the words of the Chief Secretary in another place yesterday, really does not understand what the word "fair" means in ordinary English usage.
What about the institutions? The biggest investors now in the pension funds field are the inflation-proof pensions of the nationalised industries—the Post Office, the Coal Board, the Railways Board, and others. The effect of dividend control in depressing both income and capital values is one of the factors which contributes to the enormous deficiencies that these funds show every year. What happens to these deficiencies? They are either passed on to the public in terms of higher prices, or we have Bills brought along to your Lordships' House asking the Government to produce subsidies for them. If the noble and learned Lord is not aware of that, may I ask him to examine the accounts of the Post Office or to examine the terms of the Transport Bill which comes back to your Lordships' House on Tuesday. Every letter which is posted in this country ought to be franked with the words: "Dividend control means higher postage charges". Every gas bill and every electricity bill ought to have printed on it: "Dividend control means higher charges". Every sack of coal produced in this country ought to have tied around its neck a label which says: "Dividend control means higher prices".
This is the truth of the matter. It is argued on this side of the House, and it is
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admitted on the Government Benches, that there are no economic arguments at all in favour of these proposals. On the contrary, what they do is to cause distortion, to damage investment, to harm industry, to prejudice the pension funds, to hit savings, and to put up prices. This is a catalogue of what these proposals do. Is this seriously what the Government mean by even-handed and fair policies?
1 p.m.
Lord MONSON: My Lords, in view of the challenge thrown out by the noble and learned Lord, Lord McCluskey, at the beginning of his speech, I should like to say that he cannot accuse me, at any rate, of double standards in this matter. Whenever the opportunity has arisen I have consistently voted against wage control, against price control and against dividend control, year in, year out, whether a Conservative or a Labour Government have been in power. I suppose that, technically, I ought to declare an interest, but I do not believe that there is any particular significance in this, as I suspect that at least half the population of this country would have to declare an interest, direct or indirect, in this matter.
I hope that the noble and learned Lord, Lord McCluskey, will accept that I make absolutely no personal criticism of him whatsoever, particularly in view of the moderate, and indeed even rather apologetic, manner in which he introduced this measure, when I say that this is a cynical and contemptible Bill, imposed upon this country by an unholy, though perhaps predictable, alliance between two forms of extreme Socialism—extreme by the standards of social democratic Parties on the Continent of Europe, that is. I refer of course to Labour Socialism and to Nationalist Socialism. It only shows how right 61 of us were to vote only a few weeks ago against the iniquity of the continuing over-representation of Scotland at Westminster. Perhaps this business will at last open the eyes of the English —the non-Marxist majority of the English, that is—as to the real reasons why this Tribunite-influenced Government insists upon continued Scottish and Welsh over-representation.
The tragedy of it all is that, as that well-known and much respected economist

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and author Mr. Sam Brittan pointed out only the other day, there is no demand at all on the shop floor, or from the man-in-the-street, for dividend limitation—. understandably so, as they perceive (without necessarily understanding the precise reasons why) that these controls may very probably damage their own long term economic interests. Indeed, the noble Baroness, Lady Seear, made much the same point. The only people who really want these controls are those who were described by that famous socialist weekly the New Statesman—in a much publicised article by its former editor, Mr. Paul Johnson—as "the laughing stock of Europe", by virtue of their economic illiteracy; in other words, the Left-Wing trade union bosses.
Their "economic illiteracy", which the New Statesman ascribes to them, is illustrated by their assumption that dividend limitation will cause "the rich to squeal"—to use, I think, Mr. Healey's elegant phraseology—which is, presumably, what they are seeking. Of course this is simply not so, as a simple example will illustrate. Leaving aside the factor of a 98 per cent. marginal tax rate, the fact is that an individual with a few hundred pounds or a few thousands pounds to invest will have no difficulty whatsoever in doubling his income over night without risk to his capital, either in monetary terms or in real terms.
Let us suppose that his investments were all in unit trusts, which for an individual would be quite a sensible arrangement. By switching, for example, from M & G Magnum Fund to M & G High Income Fund he can overnight raise the return on his capital by no less than 127 per cent., and without any risk to the capital value of his investments either, because since December 1972 the capital value of the higher yielding fund has risen by 44·8 per cent., whereas the capital value of the lower yielding fund has fallen by 12·1 per cent. Nor is this an isolated example. If he were to switch from Schroder Capital Fund to Schroder Income Fund, he could raise the return on his capital by no less than 187·5 per cent., again with no risk to his capital, because the value of the Income Fund has risen by 29·4 per cent. since December 1972, whereas the value of the Capital Fund has fallen by 17·3 per cent.
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Insurance companies and pension funds have millions of pounds—not hundreds or thousands of pounds—to invest, and they, or rather their beneficiaries, are the ones to suffer, as there are simply not enough secure high-yielding shares to go round, as the noble and learned Lord, Lord McCluskey, himself conceded. It is all very well for those with inflation-linked pensions to be supercilious, because their pensions will be met by the taxpayer of the day in 20 to 25 years' time dipping into his or her pocket, but most of us do not, and are not likely to, have inflation-proof pensions.
The Government have totally disregarded the fact that dividends have lagged far, far behind wages, especially since 1972. The noble Lord, Lord Carr of Hadley, referred to the noble Lord, Lord Diamond; and I am sure that no one would deny that Lord Diamond is a staunch member of the Labour Party. Yet the Diamond Commission pointed out that dividends had fallen in real terms by no less than 20 per cent. between 1963 and 1973. How much farther they must have fallen since that time!
The Government have also totally disregarded the risk element inherent in equity investment, which makes the case for dividend restriction even less valid. My own bottom drawer is full of worthless share and loan stock certificates, and if there are many more company failures like those of Court Line, Fairey, or Town and Commercial Properties, I shall have enough worthless share and loan stock certificates to wallpaper the proverbial "loo".
I do not think that we should constantly be looking over our shoulders, or that we should worry overmuch about our image. We should do what we believe to be right—and we shall be respected for so doing—rather than what may appear, superficially, to be expedient. Convention demands that we should not throw out the Bill this afternoon, however much one should like to do so. However, we must amend it next Monday so as to reduce both the scope and the duration of the harm that it does.
1.8 p.m.
Lord BRUCE of DONINGTON: My Lords, the origin of the Bill that your Lordships are discussing today is in the

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Counter-Inflation Act 1973, as has been pointed out by numerous noble Lords. I have been very much impressed by the arguments of high principle that have been enunciated by many noble Lords opposite. The noble Lord, Lord Cockfield, for example, did not mince his words: any kind of dividend control, under any circumstances whatever, was completely wrong. He was kind enough to elaborate the evils that would flow, under all circumstances, from an adoption of a policy of dividend restraint: there would be lack of investment, lack of enthusiasm, and lack of initiative; it would inhibit company structures and all the rest of it. If that be so, if it is a bad thing in perpetuity, if it is a bad thing in principle, then it was of course had in 1973.
Noble Lords have been a little less than frank about the events that led up to the Counter-Inflation Act 1973. It has been described as an emergency situation. That, indeed, we know was true. But why? In the years 1971 and 1972, as is now ancient history, there was one big, glorious, free-for-all for everything. More-over, as the noble Lord, Lord Carr, knows quite well, there was a complete lifting of restrictions on the activities of the central banks in this country, in consequence of which there was a bonanza and in two years no less than £5,000 million was injected into the property, construction and fringe bank activities. This is precisely what happened. Indeed, the former Prime Minister, Mr. Edward Heath, complained bitterly in August 1972 that, despite the magnificent opportunities that had been offered to industry in this country under his Government, investment still lagged behind, that companies and individuals were still not investing—and this after a protracted period of free-for-all accompanied by an increase in the total money supply which, if my memory serves me correctly, was no less than 28 per cent. This is what happened.
My Lords, I am not saying that, today, we are living in the same kind of emergency as we were in during 1973. Heaven forbid that we should go through that lot again! Indeed, many noble Lords opposite, and many of the present Members of the Opposition Front Bench, have very grave reservations indeed about the policies of free-for-all that were followed in those
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days. Addressing myself for the moment to the problem of the shareholder himself, whether he participates, either directly or indirectly, or potentially in life assurance funds, and so on, I would suggest that one of the best things that we can do for those individuals (and I must say that I relish the concern that has been lavished today upon the small shareholder; I was waiting for the widows and orphans to appear, but they did not, although they will no doubt appear later, at some convenient stage) whether they be small shareholders or persons who have a direct or indirect interest in pension funds and insurance funds, is to bring inflation under control. This is the most important thing of all. What benefit does it do to a small shareholder if his cash dividend is increased marginally and then, owing to the continuance of inflation at increased rates, all that immediate cash benefit is lost? Of what benefit is it to him?
I heard the noble Baroness, Lady Seear, refer to economic realities, and it has indeed been said by many noble Lords that the Government have conceded that there is not an economic case. If that be so, then I must venture to disagree with Her Majesty's Government; because any economist knows perfectly well—I am not looking particularly at the noble Lord, Lord Robbins, but I think he would confirm this—that psychology is in fact an economic factor that has to be taken into account, and that economic judgments and indeed business judgments are made on sentiment, on fears and on optimism; and that, indeed, to some extent inflation has been increased by people making what they describe as anticipatory price increases because they think that inflation is going to continue. So do not let us imagine for one moment that individuals, whether they be members of the Stock Exchange, whether they be those people whom the noble Lord, Lord Boyd-Carpenter, described as "shrewd trade union leaders" or whether they he people on the shop floor, with whom Mr. Sam Brittan suddenly seems to be on terms of intimacy, are free from the psychological influences of fears and hopes. These are common to all people, whatever position they occupy in society. To take that out of economics is to make the whole science of economics so mechanistic, so tied up with statistics, as in fact to render it completely meaningless.

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My Lords, one thing I think we have limit. But within the normal ranks of to remember is that for most of the working people in this country their income is their capital. Never let that be lost sight of: their income is their capital. The number of people who have both capital and income is limited in comparison with those whose income is their capital, not to mention the submerged 25 per cent. of the population whose incomes are much lower than they should be anyway. Here I turn to the observation made by the noble Lord, Lord Boyd-Carpenter, concerning the shrewd trade unionist. It is funny how trade unionists suddenly get faced with their statesmanship under such circumstances. I tell the noble Lord that one thing the shrewd trade unionist knows is that if a shareholder has his dividend limited, it does not at all mean that he has lost that value. It means, of course, that the total net asset values of the company in which he has his money is larger than it would have been if the amount had been permanently alienated from the company by way of dividend.
I must also, if I may, give a word of good cheer to those noble Lords opposite who seem suddenly this morning to be stricken with misery, doom and destruction in regard to the whole of the shareholding community, and of British companies in particular. In the European Economic Community's Sixth Annual Report on Competition relating to the year 1976, I was very proud to note (I unashamedly admit it) that of the 50 most prosperous companies in the whole of Europe, no fewer than 25 were British—and they were fairly high up in the league, too. So there is hope in this matter as long as we all try to keep inflation under control.
The limitation of dividends, to which, as the noble Lord pointed out, there are going to be some exceptions in relation to performance, is psychologically necessary at this time, and I make no apology for that whatsoever—and I include psychology within the realm of economics. We are going to ask the trade union movement in this country and we are going to ask the workers generally in this country to accept some pay restraint. I do not think anybody in the House would disagree with that, apart, perhaps, from the noble Lord, Lord Monson, who is an inveterate free trader and free enterpriser throughout, and to whom the sky is the
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Limit. But within the normal ranks of political prudence, as exemplified by the two Front Benches, not least the Opposition Front Bench in another place, there has been a repeated urging that there should be restraint—unless, of course, one can get some electoral advantage out of it, and then you advocate that the police be paid in full forthwith regardless of what the particular economic position is at the time.
On the whole, therefore, I ask your Lordships to adopt a more moderate attitude to this whole matter, in common with what Lord Boyd-Carpenter described as "the shrewd trade unionist", and to realise that dividend restraint is not the end of the world but that the capital remains intact anyway. Remember always, too, that in that protracted period from 1945 right the way through to 1973, during a very large amount of which period—at least 13 years, if my memory serves me aright—we were governed by the Party opposite, when the utmost freedom prevailed, industrial investment in this country nevertheless ran at some 30 per cent. below that obtaining in the Federal Republic of Germany and some 30 per cent. below that operating in France.
I do not think the arguments of principle carry any weight. What carries weight, if I may suggest so, is our reasonableness in the whole matter. We are going to have a policy of pay restraint which is going to be very difficult to maintain, which is going to involve the exercise of the utmost goodwill between the trade union movement and the Government of the day—whichever it may be; although I suspect it will be the Government of my own Party. It is clear that restraint all around is the order of the day and it is not good, I suggest, that these efforts in moderation, which one devoutly hopes will be made by everybody in this country, should be given an exception in the form of shareholders whose money in any case will not be lost and whose dividends will be deferred.
1.21 p.m.
Lord McCARTHY: My Lords, I am mildly moved to intervene because until my noble friend Lord Bruce spoke it seemed to me that the Government had no defenders and that the Opposition

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and all parts of the House seemed to have all the arguments except the ones that matter. I would not want to say that there is any direct inflationary effect on abandoning dividend control. I do not think that anybody would say that the inflationary effect would be more than negligible. I would not want to argue that compulsory dividend limitation is a good way of redistributing income or even that it is a major plank in any move towards social justice. If we wanted to do something about social justice, we would have a capital gains tax or a capital levy and we would not muck about with the distribution of dividends or their payment.
It is the case, as has been said from all sides today, that much of the argument is about economic distortion and whether, if you have consistent dividend limitation, it is sustainable. It is true that dividend limitation may discourage investment, although I would not have thought that it was that kind of money constraint which is a major problem as far as employment in this country is concerned. The problem about employment is the marginal efficiency of capital. It is not that businesses cannot get the money to invest. The problem is that they do not believe they can invest, produce and sell at a profit. The main reason why they fear that is that they fear what may happen to wages. It is the marginal efficiency of capital which is the cause of unemployment, or fears about it. I do not think that dividend limitation has much to say about that one way or the other.
However, there is something in the argument made about the widow's mite. I do not think, however, that the widow's mite argument is so relevant when the widow puts her money in the Prudential. The large institutions know very well how to offset the consequences of dividend limitation—whether they shift into property or into foreign equity or, as my noble friend Lord Bruce said, hang around and wait for capital appreciation. Let us not exaggerate that. The main point, the real argument, is that put forward already by my noble and learned friend Lord McCluskey and later by my noble friend Lord Bruce. It is a political argument.
It depends on two assumptions, and only those who deny both assumptions
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are entitled to come to this House and decry this Bill. First, it depends on the assumption that you can do something about inflation by restraining pay, by directly restraining pay, by operating on psychology, by operating on anticipation and by operating on the collective bargaining system. If there is anybody in this House—and apparently there are still a few—who believes that inflation has nothing to do with the rate of pay, then your Lordships can cheerfully vote this Bill. But it seems to me that, as we approach nearer and nearer the date of the General Election, the Opposition are doubtful about this proposition. They are doubtful about how far they would want to say that there is nothing to do in incomes policy. I would ask, if by some miracle, or catastrophe, according to how you see it, they find themselves responsible for the government of this country and this Bill is on the Statute Book, are they seriously telling us today that their intention, their immediate announced intention to take this Bill off the Statute Book and to have freedom of dividends, including some of the bonanza dividends that we should then see, would have no consequences on pay demands?
Lord ROBBINS: My Lords, would the noble Lord be prepared to accept a view that, having regard to the pledges given to the International Monetary Fund and to our creditors, the main argument for restraint of pay is that it prevents unemployment?
Lord McCARTHY: My Lords, there are many arguments for restraint of pay. I do not see, even if the main argument for restraint (which may be the argument of the International Monetary Fund) is that it prevents unemployment, what that has to do with passing immediately this Bill about dividend limitation.
I want to pass on to the second assumption which you have to deny if you are going to deny this Bill. You have to deny what the moderate leaders of the trade union movement tell the Government. That is an easy thing to do when you are not the Government. When the Opposition are in Government we find that they listen carefully to people like Mr. Lionel Murray, and what he says and what the moderate leaders of the TUC General Council say (and the Government

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and this House have to take note of this) is that if there is not some measure of limitation of dividends they are going to find it extremely difficult to keep the policy of restraint going and give this policy a fair wind in the next 12 months. People who say that they know the way that the organised working class feel about this, do not know what the organised working class feel about this as well as do the trade union activists. I am not just talking about Mr. Lionel Murray, but about trade union activists who in trade union conferences since Easter have been seeking to fight for the continuation of a policy of restraint. They have said over and over again that there must be a quid pro quo, that there must be something on the other side. That something on the other side is the continuation of dividend limitation.
This is what the moderate trade union leaders tell the Government. There are other trade union leaders, other activists in every trade union; there are people who want to throw this policy over. Maybe they are not always Left-Wing activists; maybe they are supporters of the IMF; but they want to throw this policy over. What the moderate trade union leaders say to the Government (and would be saying to any future Government) is: "Do not give these people a handle, a weapon." This is a real, felt, policy advice. It is the one overwhelming argument in favour of this Bill, and I commend it to the House.
Lord ROBERTSON of OAKRIDGE: My Lords, before the noble Lord sits down may I ask one question. I listened to his speech with interest and learned from it, but there is one point which I did not understand. It was where he said that the insurance companies could get round dividend restraint by certain alternatives. Is the noble Lord quite sure that these alternatives are means of increasing income or, in fact, are they not just low yielding investments as a whole? Certainly foreign shares are so.
Lord McCARTHY: My Lords, much investment is low yield. We have had experience in the past of the consequences of long periods of dividend limitation. One consequence of this is that it assists capital accumulation and capital values; and the major investment companies know this very well.
1.30 p.m.
Lord NOEL-BAKER: My Lords, I rise with some hesitation to declare my wholehearted support for what I believe to be this necessary Bill. Seventy years ago this year I began to study economics at the University of Cambridge under three great men: Arthur Cecil Pigou, Maynard Keynes and Walter Layton—the last of whom became a Member of your Lordships' House. I agree profoundly with my noble friend who says that psychology is an immensely important factor in the economic working of our society. This Bill is of course concerned with the psychology of the policy of wage restraint.
I want, with due economy of words, to make two points. I want first to pay a wholehearted tribute to the courage, wisdom, patriotism and statemanship of the trade union leaders of this nation over the whole of this century. When I first came into close contact with trade unionists it was in the year before the First World War started. I had the privilege to be the vice-principal of Ruskin College, Oxford. The students came straight from the factory, the mill and the mine. I was profoundly impressed with the ability, with the spirit and with the civic patriotism of the men whom the trade unions chose to send to Ruskin College with scholarships from union funds.
After the Second World War, I had to work in very close co-operation with trade union leaders. I held the office of Minister of Fuel and Power. I took part in the tripartite consultations between the Government, industry and finance, and the trade unions which the Labour Government introduced—an extremely important reform in the conduct of our national affairs. Then, as through the past five crucial years, I felt a deep admiration for the spirit, the knowledge and the wisdom of the trade union leaders with whom I had to deal. I valued very highly the immense contribution which they made to the post-war reconstruction, the most difficult economic operation which any Government in this country has ever had to carry through. I felt a profound admiration for the contribution to that post-war reconstruction which was then carried through with such enormous success that the whole world was filled with praise for what we did.

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I say this with great respect: it is all very well for noble Lords opposite to quote the tiny minority of workers who hold shares in the companies in which they work. It is all very well for noble Lords to quote the Sunday Times about envious egalitarianism; but if noble Lords will face it frankly, we are very far from being an égalitarian society today. When the trade union leaders say, as my noble friend has just reported that they say and have been saying for a long time, that there must be a quid pro quo and that there must be restraint on dividends, if the wage restraint is to be continued, then I believe that to be a factor of profound importance, and it is in the interests of every section of society that this Bill should be passed into law.
I raise one other point which some noble Lords will think not relevant to this Bill. I want to urge upon your Lordships' attention and upon the Government that, while wage restraint is essential and, as I think, dividend restraint is essential, nevertheless the principal cause of inflation has been and is the military expenditure of the world. I know that some economists have said that it is not inflationary because taxation absorbs the purchasing power which comes from military expenditure. When I was young, there was a trans-Atlantic saying that if you took all the economists in the world and laid them out in a row end to end they would not reach a single conclusion. Since Adam Smith, economists have always said that military expenditure is unproductive. There is the factor that even if purchasing power is mopped up by taxation, military expenditure does not produce goods which the people can buy. You do not buy a minesweeper; you do not buy a mini-nuclear bomb. There is the vast sum of 400,000 million dollars a year, or more than 1,000 million dollars a day, pouring out on to world markets, and no goods to absorb them.
I hope and believe that the Special Session of the General Assembly of the United Nations, which debated the problem of armaments a month ago and to which our Prime Minister made a most remarkable contribution (which I heard), will have started a process by which disarmament is going to be brought about and by which military expansion
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will very rapidly be reduced. I know that the inflation in the United States was started by deficit financing for the Vietnam war. But the Vietnam war ended five years ago and the dollar crisis is not over. It will not be over until the 80 billion dollars spent by the United States on armaments is drastically reduced. I end what I have said by repeating that I believe this Bill to be required. I give it my wholehearted support and I hope that your Lordships will give it a Second Reading without a vote.
1.39 p.m.
Lord McCLUSKEY: My Lords, I rise to reply to the debate and, in doing so, I express my thanks to my noble friends Lord Bruce of Donington, Lord McCarthy and Lord Noel-Baker for their support. I believe the reasons they gave are reasons which I sought to outline in moving the Bill in the first place. May I pick up one point from what was said by the noble Lord, Lord McCarthy, that is, the point about the views of responsible trade union leaders. As he said, the trade union leaders have come in for a good deal of praise from noble Lords opposite today. What they have said, and said publicly, is that they want dividend controls to be continued, and what they have made plain publicly is that without dividend restraint, pay restraint is out of the question. That is a factor of very great importance indeed.
The noble Lord, Lord Boyd-Carpenter, wondered why the Bill was introduced so late. It is perfectly true that the Bill is late and we should like to have seen it earlier; but the whole House surely realises that this is an aspect of the point I have already made. Dividend control is part of a comprehensive policy and that had to be considered along with all the other factors involved, including pay policy, leading up to last week's White Paper which of course followed discussion and widespread consultation with the TUC, the CBI and others, and could not be brought to a conclusion until last week. That is why the Bill comes along at this time.
One would have thought from the contributions of noble Lords opposite that we were trying to stop dividends rising. We are not doing that in fact; we have specifically introduced a new

1115
provision to allow rises to take place. What we are trying to stop is dividends rising by more than 10 per cent. per annum. Having regard to the fact that the rate of inflation is now below 8 per cent. and unlikely to rise above 10 per cent. the point made by the noble Lord, Lord Carr, that there is indexation of public service pensions seems to be an entirely irrelevant matter, when one can see that dividends can rise by 10 per cent., despite the rate of inflation being below 8 per cent.
It was also suggested that people are being penalised. I think the noble Lord and the noble Baroness referred to penalties upon the widow and upon the pensioner: certainly the noble Lord, Lord Carr, did. In my submission, it is not a penalty to keep dividends at this kind of rate and not allow them to rise by more than 10 per cent. when wages are for the forthcoming period to be kept at 5 per cent., we hope, over the previous year and when the rate of inflation is below 10 per cent.
I referred to the new provision, but it would appear from the remarks of the noble Lord, Lord Carr, that he had not fully understood it. The new provision means that a company which does not wish to increase its dividend cover beyond the highest level achieved since the current controls began will be able to seek Treasury consent to maintain that cover in respect of a completed financial year ending after 31st July 1978. For those companies who are at their highest cover point the provision means they will be able to increase their dividends in line with profits, and the new provision will be of most interest to companies which have shown a consistently strong profit growth over the periods of controls and who expect to do so in the future. The companies to which the noble Lord, Lord Carr, referred as "efficient and thrusting companies" will certainly not he held back, because those which will benefit from the new provision are those which have consistently had a favourable profit record, with the effect that their cover has risen steadily and is now at its highest point. These companies from now on will be able to increase their dividends in line with profits. Companies whose cover position has not shown a steady increase but which have had a very high cover figure at some point in the past
1116
will have to wait until that is exceeded before being able to benefit.
Lord BOYD-CARPENTER: My Lords, I am much obliged to the noble and learned Lord for giving way: I think it is important. He said that companies which could show that their position in respect of dividend cover was as he stated could seek Treasury consent to increase their dividend. Does that mean it is still discretionary in the Treasury, or that if the conditions are satisfied the Treasury are bound to give consent?
Lord McCLUSKEY: My Lords, may I return to that when I come to deal with the point made by the noble Lord, Lord Cockfield, about the general constitutional point and the indication as to how the Treasury treat these matters, because it arises in that context too.
Just to conclude the general matter, with reference to what was said by the noble Lord, Lord Robertson of Oakridge, I think he welcomes the new cover provision to which I have referred, but he would also like the relaxation to apply to companies whose cover would otherwise he taken above, say, a factor of five. The intention of the Government is not to open a large new gateway so as to make mockery of the controls. One therefore has to bear that in mind.
In relation to what has been said by the companies about their intentions if there were no dividend control—and the noble Lord, Lord Carr, called in question my assertion that there would be a free-for-all in some cases—a large number of companies, and certainly more than 50, have given notice over the last month or two of their intentions if statutory controls were to come to an end. I am not suggesting that these statements are necessarily commercially or economically wrong, but large pay-outs would certainly follow and certainly would be damaging to pay policy if there were no such control. May I repeat the point so forcefully made by the noble Lord, Lord Bruce of Donington, because it is so important: the pay-outs in such cases, or some of them, would represent a distribution of profits earned and money set aside in earlier years—perhaps since 1973. There are examples of many big companies who have large sums which fall into that category, and

1117
when wage-earners see that there can be no payment now of pay forgone in earlier years, but that there can be in the case of dividends, they will take an extremely different view from that advanced by the Benches opposite about this relaxation of dividend control.
I should like to say, through your Lordships, to the noble Baroness that her whole argument about social justice is misdirected, because it proceeds upon a kind of assumption that dividends are being more severely restrained than earnings. That is not so, because the Government have announced their intention during the same period of seeking to restrict earnings' increase to 5 per cent. I simply do not think that the noble Baroness's main argument stands up.
The noble Lord, Lord Cockfield, referred in his speech—and the noble Lord, Lord Boyd-Carpenter, has just made an associated point—to the use of discretionary powers by the Treasury. Under Section 10 of the 1973 Act, the discretion is indeed very wide; but conceding that the powers given to the Treasury to control dividends are very general, and although the Treasury could in fact operate a discretionary system, as the laws allow, they do not in fact operate such a system. All the provisions applied are laid down in publicly available documents in as precise terms as possible. There is no question of the Treasury picking and choosing among companies in accordance with the Treasury's own judgment of what is desirable. From the very beginning, going back to the White Paper which was published by the previous Government, the Treasury have sought not to lay down precise rules in precise legal language in the way that, for example, taxation rules might have to be laid down. If I may quote from the White Paper, Cmnd. 5444, of 1973, it states:
"It is not possible to specify in advance precise rules applicable to all cases. The following paragraphs are not exhaustive but they indicate the broad areas where Treasury discretion is likely to be exercised."
Following upon that, public announcements have been made and publicly available documents have been published in order to indicate how that discretion is to be exercised: so it is not an arbitrary thing.
Lord COCKFIELD: My Lords, I am sorry to intervene, but the noble and learned Lord is replying to an entirely different point from the one which I made.
Lord McCLUSKEY: My Lords, that is why I hesitated to give way, because I had not finished the argument. The noble Lord, Lord Cockfield, made a separate point with regard to the date of 31st March 1976. He seemed to be suggesting that the 1973 Act, had there been no change of Government, would just have been allowed to fade away, whatever the circumstances in 1976. That of course is a nonsense. The most significant thing about the date of 31st March 1976 appearing in the Act of 1973 is that it was a date conveniently beyond the date of the next General Election. One would certainly see that had any Government, whatever its complexion, found a continuation of the same world crisis as this Government did when it came into office—and the crisis has since continued on a world scale—measures of this kind would have to be continued. That, I believe, is the answer to the point the noble Lord sought to make. If he wants to raise the point in Committee, he must feel free to do so and I shall endeavour to address myself more closely to it then.
Lord COCKFIELD: My Lords, if I may interrupt the noble and learned Lord, the point that I was trying to make when I interrupted him earlier was not at all the point with which he is now dealing. I had never argued that the Treasury were using arbitrary powers as between one company and another. What I was objecting to was the general rules being left to the unfettered discretion of the Treasury, and this he cannot deny. The Act contains no indication whatsoever as to the parameters within which the Treasury should operate. Indeed, it goes further. If the noble and learned Lord cares to read it, he will see in subsection (3) of Section 10 the words:
"Without prejudice to the generality of subsection (1)".
It is the handing over of what, in effect, is the law-making function on the issue of principle to the discretion of the Treasury that I was objecting to.
Lord McCLUSKEY: My Lords, of course the noble Lord was not a Member of this House when the 1973 Act was being discussed as a Bill here. But I understand that that point was not taken, or not taken with any force, here. We are not talking about the present Bill. We are talking about the 1973 Act and the noble Lord is criticising that. All that the present Bill does is to continue for 12 months an Act which has been in force since 1973, without occasioning very much serious complaint of this kind.
Lord CARR of HADLEY: My Lords, I do not want to trespass unduly on the noble and learned Lord's courtesy, but but surely he must admit, whatever Government were in power, that what might have been unpleasant but tolerable for an emergency lasting three years, would require different conditions if the emergency lasted much longer. What is tolerable for three years is not tolerable for five or six.
Lord McCLUSKEY: My Lords, of course I concede that that is a theoretical possibility, but again the point is this. Is anyone suggesting that the Treasury, having been armed with these wide powers for reasons which have been explained, has abused them? Because if the Treasury has abused them, then something ought to be done. But if no one is suggesting that the powers have been, or are likely to be, abused, this is all academic nonsense in relation to the main thrust of the present Bill. I see no benefit to companies, to shareholders, to widows, to pensioners or to anyone from rapid inflation. This Bill is part of the Government's battle against rapid inflation, and for that reason I again commend it to your Lordships.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

FOREIGN BOYCOTTS BILL [H.L.]
Report from the Select Committee that the Bill should not proceed, made and to be printed, together with the Minutes of Evidence and the Proceedings of the Select Committee.
  MYXOMATOSIS: VIRULENCE
  MYXOMATOSIS: VIRULENCE