Sitting of 11 July 1979

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  ORAL ANSWERS TO QUESTIONS
  Mr. Speaker: I remind the House that long supplementary questions are very selfish. They prevent me from calling other hon. Members.
  FOREIGN AND COMMONWEALTH AFFAIRS

    United States of America (Visas)
    Mr. Shersbyasked the Lord Privy Seal if he will initiate discussions with the Government of the United States of America with a view to abolishing the requirement for British subjects to obtain a visa before entering the United States of America.
    The Minister of State, Foreign and Commonwealth Office (Mr. Nicholas Ridley): Since the United Kingdom unilaterally abolished the visa requirement for United States citizens in 1948, the American Government have been well aware that we regard a reciprocal waiver of visas for United Kingdom citizens as highly desirable. A recent recommendation by the United States Senate that their visa requirement should be waived for certain visitors is under consideration by the United States Government. It is to be hoped that this will produce the result which we have long sought.
    Mr. Shersby: Is my hon. Friend aware that the House is grateful for that reply? Will he press the United States Government on this matter? I am sure that many hon. Members find it objectionable that British subjects are required to queue daily in Grosvenor Square to go through this bureaucratic procedure. I hope he agrees that it is about time that British
    444
    subjects were treated on the same basis as United States citizens.
    Mr. Ridley: My hon. Friend's question will contribute to that which he seeks. We in the Government will certainly add what we can.
    Mr. Emery: Will my hon. Friend bear in mind that the delay often experienced at the United States Embassy by British citizens requesting visas is, if not considerable, at least worrying? That contributes also to the annoyance. That is quite wrong when we have many friends here from America, and it should be corrected.
    Mr. Ridley: As American citizens are not required to obtain a visa to come here, I hope that the United States Government will be able to waive the requirement altogether, as requested in my hon. Friend's question.

    Rhodesia
    Mr. Whiteheadasked the Lord Privy Seal if he will make a statement about Zimbabwe-Rhodesia.
    Mr. Mylesasked the Lord Privy Seal when he intends to make a visit to Zimbabwe-Rhodesia.
    Mrs. Knightasked the Lord Privy Seal if he will now afford recognition to the new State of Zimbabwe-Rhodesia; and if he will make a statement.
    The Lord Privy Seal (Sir Ian Gilmour): I have nothing to add to the statement that I made yesterday. I have at present no plans to visit Rhodesia.
    Mr. Whitehead: Has the Lord Privy Seal had an opportunity to heed Lord Carver's words in another place yesterday, that Bishop Muzorewa was shielding himself from the African sun with a white parasol? If the Government profess major admiration for the bishop and his Administration, should not they be helping him by insisting on the removal of the white parasol in the form of Mr. Ian Smith?
    Sir I. Gilmour: With all respect to the hon. Gentleman, who I know takes a great interest in the matter, that was a bit contrived. I have not yet seen Lord Carver's remarks. I shall read them. I made our position clear yesterday. We

    445
    look forward to having most useful talks with Bishop Muzorewa later in the week.
    Mr. Myles: In seeking the widest possible international support for bringing Zimbabwe-Rhodesia to legal independence, will my right hon. Friend ensure that he has regard for the stability of the Government in that country so that everyone may continue in a civilised existence?
    Sir I. Gilmour: I entirely agree with both prongs—if that is the right word—of my hon. Friend's question. The two things are equally important. It is vital that there should be wide international acceptance and that the stability and continuity of the Government should be preserved.
    Mrs. Knight: Will my right hon. Friend bear in mind, first, that all the conditions laid down on HMS " Tiger " for a return to legality have now been met and, secondly, that when Bishop Muzorewa's Government came to power thousands of black Rhodesians voted and refused to be intimidated by terrorist threats? Does he appreciate that delay in recognition not only amounts to moving the tape while the race is still on but seriously weakens the opportunity for the Muzorewa Government to succeed in peace and gives a strong push to the power of the terrorists?
    Sir I. Gilmour: I confess that I no longer have in my head exactly what was decided on HMS " Tiger," but I accept what my hon. Friend has said. Of course I follow the force of my hon. Friend's argument, but I am sure she will concede that it is deeply in the interests not only of this country—we should not neglect the interests of this country—but of the people about whom my hon. Friend is concerned who live in Zimbabwe-Rhodesia that a settlement should be as widely accepted as possible and that it should take place in a context that brings forward the likelihood of an end to the war. Surely that is in the interests of the people now living in Rhodesia.
    Mr. Alexander W. Lyon: When the Lord Privy Seal meets the Prime Minister of Zimbabwe-Rhodesia at the weekend, will he inquire why the people of that country are not allowed to buy a copy of
    446
    the bishop's book because it was banned by the previous Government?
    Sir I. Gilmour: That may or may not be an interesting question. I do not guarantee to answer it, because it is arguable that I may have more important questions to deal with.
    Mr. Murphy: Does my right hon. Friend agree that, although consultations with other nations are extremely important, we, as the colonial Power, have the right to lead in these matters, that many other nations are waiting for that leadership and that this is the prime concern of Her Majesty's Government?
    Sir I. Gilmour: What my hon Friend says is true. That is why I said in my statement yesterday that when our consultations have been completed we shall make proposals designed to bring Rhodesia to legal independence on a basis which we believe to be acceptable to the international community. I believe that it should be done based on British proposals, and that will be done.
    Mr. Ioan Evans: As we had a thin statement yesterday, although there was a thick statement from the Prime Minister in Australia, may we have clarification, before we have a debate on Rhodesia, of the Government's attitude to maintaining sanctions after November? As North Sea oil will be exported to South Africa, is there any guarantee that that will not get through to Rhodesia while sanctions are maintained?
    Sir I. Gilmour: The position with regard to sanctions was made clear by the answers of my right hon. Friend the Prime Minister in the House on 3 July. The second part of the hon. Gentleman's question is quite untrue. There is no question of North Sea oil going anywhere near South Africa.
    Mr. Temple-Morris: I appreciate the importance of the talks that are at present proceeding, but may I ask my right hon. Friend to avoid, at all costs, any undue delay or impression of indecision in this matter which will make it far more difficult to deal with Black Africa in particular and all parties generally? Also, does my right hon. Friend acknowledge the danger if he were to delay, because he runs the risk of falling into

    447
    a policy indistinguishable from that of the previous Government?
    Sir I. Gilmour: Of course we shall not delay unduly. Equally, as my hon. Friend suggested yesterday, we shall not proceed with undue haste. This is a matter of the utmost gravity which concerns the lives of a great many people. It is only right that we should proceed through consultation with our allies and others concerned and, indeed, with Bishop Muzorewa. That is what we are doing.
    Mr. Shore: I should like to ask the Lord Privy Seal one question arising from an interesting passage in the speech of his right hon. Friend, the Foreign and Commonwealth Secretary, yesterday. The noble Lord refers there to making proposals for Rhodesia
    " comparable with the terms on which we have granted independence to other countries in the Commonwealth."—[Official Report, House of Lords, 10 July 1979; Vol. 401, c. 763.]
    What, in the Government's view, was the essence of the terms that were used on those earlier occasions?
    Sir I. Gilmour: Basically, that we should set up an independent Government enjoying majority democratic support.

    North Atlantic Treaty Organisation
    Mr. Frank Allaunasked the Lord Privy Seal if the pilot scheme for political education on the value of NATO for 17 to 19-year-old pupils sponsored by the European Atlantic Movement, partly financed by the Foreign and Commonwealth Office, has been published; if not, whether it will be published; which schools are taking part; if local councillors and parents have been consulted; and if he will make a statement.
    The Minister of State, Foreign and Commonwealth Office (Mr. Douglas Hurd): This scheme, which is part of an international experiment, is still being tested. The organisers have not yet decided whether it merits publication. Six educational institutions in this country are taking part in the experiment. I am writing to the hon. Gentleman with further details.
    Mr. Allaun: As brainwashing of youth by a pressure group is unprincipled, will
    448
    the Minister immediately ban this blatant exercise in indoctrination? How can we, or the Minister, expect objectivity on NATO from its foremost advocates?
    Mr. Hurd: I find that a most extraordinary approach. NATO is a organisation to which Britain has belonged for 30 years, with the support of all parties in this House. Surely there is everything to be said for the widest possible discussion of its purpose and policy.
    Mr. Whitney: The remarks of my hon. Friend will receive the support of all Members on this side of the House and all those in the country who recognise the contribution to peace that NATO has made in the past 30 years and hopes to make during the next 30 years, provided that the hon. Member for Salford, East (Mr. Allaun) does not have his way.
    Mr. Hurd: I quite agree. It is up to the schools to decide whether they wish to pursue this. It is not for the Government. I entirely endorse my hon. Friend's remarks.
    Mr. Hal Miller: Will the Minister ensure that these proposals are judged on their merits? Will he bear in mind that it is the responsibility of all politicians and political parties in this country to ensure that our young people understand all the angles and differing views about Britain's participation in NATO and the vital part that our participation plays in maintaining freedom?
    Mr. Hurd: I quite agree, and I am grateful for my hon. Friend's support.
    Mr. Cormack: Will my hon. Friend tell the hon. Member for Salford, East (Mr. Allaun) that he would not have the opportunity to make the nauseating statements that he makes regularly if it had not been for NATO over the last 30 years?
    Mr. Hurd: That is, of course, entirely true.

    Latin America
    Mr. Flanneryasked the Lord Privy Seal if he has any plans to visit Latin America.
    Mr. Ridley: My right hon. Friend has no such plans at present. I hope shortly to visit the Falkland Islands and a number of countries in Latin America.
    Mr. Flannery: Will the Minister assure the House that there is no intention on the part of the Government to send an ambassador to Chile? Does he remember the brutal torture of Dr Sheila Cassidy? Is he aware of the thousands of people who have disappeared, many of whom are dead, and that many such cases are known to hon. Members? Will he assure us that the policy of the Labour Government on the appointment of ambassadors will continue?
    Mr. Ridley: We are considering our relationship with Chile. On the other hand, whether we have ambassadors in various countries does not imply condonation or condemnation of a regime. After all, we have an ambassador in Vietnam.
    Mr. Neubert: Does my hon. Friend agree that despite South America's enormous economic potential and immense good will towards the British that area is inexplicably neglected by us? Will he, on his tour, be seeking to arouse us from our indifference? Does he think, for example—to take last night's television programme as an illustration—that the fact that our man in Caracas operates the British embassy from a suite of offices in a tower block represents a sufficient commitment to that oil-rich country?
    Mr. Ridley: I shall do everything that I can, as will my right hon. and hon. Friends, to improve relations between this country and Latin American countries, but that must be contained within the need to keep public expenditure under control.
    Mr. Rowlands: Does the Minister realise that if we sent an ambassador to Chile it would be seen and interpreted by the Chilean regime as a significant change of policy? Does he realise that the policy of the Labour Government was supported by democratic opinion in Chile, both Right and Left, as well as the Church? Will the Minister confirm that he will maintain the arms embargo on the Chilean regime?
    Mr. Ridley: If the Government of the hon. Gentleman considered the withdrawal of ambassadors and the need to express political disapproval, why did they not withdraw our ambassador from Vietnam?

    Uganda
    Mr. Cyril D. Townsendasked the Lord Privy Seal if he will make a statement on Great Britain's relations with Uganda.
    Sir Ian Gilmour: The British Government recognised the new Ugandan Government on 15 April. We are maintaining normal relations with the Government of President Binaisa.
    Mr. Townsend: Do the Government know the whereabouts of Idi Amin? Does my right hon. Friend agree that Uganda is a special case for aid? Finally, will he do all in his power to make sure that all necessary humanitarian aid is given to Uganda as it tries to break away from the disastrous years of Idi Amin?
    Sir I. Gilmour: We have no knowledge of the whereabouts of ex-President Amin. I entirely agree with my hon. Friend about the change of Government and the beneficient results flowing therefrom. Discussions with the Ugandan Government are proceeding on the allocation of the emergency aid grant already agreed. I had discussions with the Ugandan Foreign Minister when he was here, and we intend to resume a full Uganda aid programme when circumstances permit.
    Mr. McElhone: Is the right hon. Gentleman aware that in April, after talks between British officials and the new Uganda Government, £1 million of aid was immediately offered, with a commitment of £10 million of aid? I am aware that £1 million has been given, but does the right hon. Gentleman agree that, to give the Prime Minister some degree of credibility before the Lusaka conference, that commitment should be honoured?
    Sir I. Gilmour: As the hon. Gentleman knows, we are reviewing the aid programme. I had useful talks with the Ugandan Foreign Minister. I am sure the hon. Gentleman will accept that it is not altogether easy at present exactly to decide how aid should be spent. However, we are in touch with the Uganda Government.

    Helsinki Agreement
    Mr. David Atkinsonasked the Lord Privy Seal if he is satisfied with

    451
    the progress being made in the implementation by the Soviet Union and its allies of the provisions of the Helsinki Final Act.
    Mr. Hurd: Progress on implementation by the Soviet Union and her allies has in general been slow and uneven. For detailed comment on the record of implementation during the last six months, I refer my hon. Friend to the reply given by my hon. Friend to my hon. Friend the Member for Chislehurst (Mr. Sims) on 25 June.
    Mr. Atkinson: Does my hon. Friend agree that the forthcoming trial of the 10 members of the Charter 77 group in Czechoslovakia is totally incompatible with the Helsinki agreement? Does he agree also that there is no point in holding the Madrid review conference next year if the Soviet Union and its allies continue to harass and persecute human rights campaigners in the way that they are doing at the present time?
    Mr. Hurd: I entirely agree with my hon. Friend's first point, and we have so told the Czechoslovak Government. On the whole, we believe that the review conference in Madrid, and similar occasions, offer a means that would not otherwise exist for pressing for the carrying out of the Helsinki agreement in full. We believe that the right course is to go to Madrid and to make good use of that opportunity.
    Mr. Greville Janner: Is the hon. Gentleman aware that we all applaud his intention of continuing to press the Soviet authorities to implement the final act of the Helsinki agreement in Madrid and elsewhere? Before Madrid, will he emphasise to the Soviet authorities that while they continue to keep people in gaol, and people such as Slepak, Nudel and Begun in exile, there is very little prospect of our regarding their compliance as anything other than minimal?
    Mr. Hurd: Of course, it is the existence of the Helsinki agreement that gives us the standing to make that kind of point.
    Mr. Nicholas Winterton: Is my hon. Friend aware that the Soviet Union is one of the biggest and strongest backers of the Vietnamese Government? What representations have we made to the Soviet Union to try to bring pressure upon
    452
    the Vietnamese Government to stop implementing one of the most racialist, barbaric and brutal policies in the exploitation of their own people that the world has ever known?
    Mr. Hurd: I agree with my hon. Friend's phrase. My right hon. Friend has made these points to the Soviet Government, and so did the Prime Minister when she stopped over in the Soviet Union on her way to Tokyo.
    Mr. Heffer: I agree totally with those hon. Members who oppose what is happening in Czechoslovakia and Eastern Europe, but may I appeal to Conservative Members to stand up and speak out as loudly as they do on the Soviet Union on countries such as Chile and others in Latin America?
    Mr. Speaker: Order. That is not a question.
    Mr. Hurd: That is almost the oldest argument in the House. However, I point out to the hon. Gentleman that we now have in Vietnam a quite exceptional and appalling case, and it is pathetic to read in the Tribune newspaper attempts to excuse what is going on.
    Mr. Sproat: Does my hon. Friend agree that it makes a total mockery of the spirit of the Helsinki agreement when the Soviet Government continue to persecute and imprison their own citizens for doing no more than monitoring the activities of of their own Government in carrying out the Helsinki agreement? What further steps does my hon. Friend propose to take to increase the free flow of information, as set out in basket 3, so that, for example, the Daily Telegraph and Daily Mirror can be as freely available in Moscow as Pravda is in London?
    Mr. Hurd: My hon. Friend, who follows this matter very carefully, knows that we continually press these points, and that from time to time there have been occasional signs of progress. I would not put it higher than that.
    Mr. Shore: We, too, of course attach great importance to the Helsinki final act and its implementation. We share the view that the Madrid review is bound to be helpful in giving us the occasion precisely to press the defects and shortcomings in its implementation so far. Is

    453
    the Helsinki final act being kept under close monitoring by the Foreign and Commonwealth Office? What information does the hon. Gentleman have about the flow of Jewish people from Russia and other Eastern European countries?
    Mr. Hurd: With regard to the right hon. Gentleman's last point, this is an area in which there has been some improvement, although there is a long way to go. Of course we are keeping the implementation of the Helsinki agreement under close review. If we were not, the House of Commons would rightly insist that we did.

    United Nations High Commission for Refugees
    Mr. Goodladasked the Lord Privy Seal when he next proposes to meet the United Nations High Commissioner for Refugees.
    Mr. Ridley: My hon. Friends the Ministers of State—the Members for Mid-Oxon (Mr. Hurd) and Blackpool, South (Mr. Blaker)—have recently met Mr. Hartling, and further meetings are planned by Ministers.
    Mr. Goodlad: In anticipation of those meetings, can my hon. Friend tell the House whether there has been any response from the Government of Vietnam to the representations that have been made to them to desist from their present policy, which is barely distinguishable from genocide? Can he further say whether recent reports in the press that the Government intend to accept for permanent resettlement into this country no fewer than 10,000 refugees a year are true—as I am sure this House would wish—or whether it is intended to make such an announcement? Thirdly, what response has there been from other countries—such as Japan, which has shown very little inclination to take refugees—to be more responsive to their international responsibilities?
    Mr. Ridley: The strongest possible representations have been made to the Government of Vietnam, but, instead of desisting, it appears that they are even increasing the export of their citizens in this cruel and barbarous way. The Government hope that the conference convened by the United Nations on 20 and 21 July will help greatly to find both
    454
    finance and homes for the refugees. To that extent my right hon. Friends are considering the number that can be taken into this country, and a statement will be made in due course.
    Mr. Ennals: Does the hon. Gentleman agree that this is probably one of the most serious refugee problems that the world has had to face since the 1930s? Will he go further on the attitude that the Government ought to take? Is he aware that many other Governments have announced what numbers they will take? Is he aware of the great pressure from voluntary organisations that there should be a more positive, humane and constructive attitude on behalf of the Government?
    Mr. Ridley: I agree that this is one of the greatest refugee problems that there has ever been, although I am disappointed that the right hon. Gentleman did not see fit to condemn the reasons for its existence.
    Mr. Ennals: I do.
    Mr. Ridley: As I said earlier, the Government are considering the number of refugees that can be accepted into this country, and in due course a statement will be made.

    Vietnam
    Mr. Hordernasked the Lord Privy Seal whether he will now bring the conduct of the Government of Vietnam before the Security Council of the United Nations.
    Mr. Ridley: The Government have made clear their abhorrence of the conduct of the Vietnamese authorities in forcing so many of its population to flee the country, causing tragic loss of life amongst the refugees and serious problems where they land. These problems will be considered at the special meeting called by the United Nations Secretary General in Geneva on 20 and 21 July.
    Mr. Hordern: Does my hon. Friend agree that that will be a suitable opportunity to take the conduct of Vietnam to the Security Council? It is difficult to see a reason for delay. If the argument is that the Soviet Union may reply with a veto, it will stand to be seen by all as a direct supporter of a most repressive and racist regime.
    Mr. Ridley: It is likely that the Soviet Union would veto discussion of that matter in the United Nations. For that reason, it is much more desirable to attend the special conference on 20 and 21 July that has been called for the express purpose of discussing the matter and, I hope, placing the blame fairly and squarely where it should be placed.

    Strategic Weapons
    Mr. Churchillasked the Lord Privy Seal what reassurances Her Majesty's Government have received from the Government of the United States that articles XII and XIII of the Salt II agreement will not preclude any further Nassau-type agreement between the United States of America and Great Britain for the sales of strategic launch vehicles or the transfer of strategic weapons technology, including cruise missile technology.
    Sir Ian Gilmour: President Carter has already made it quite clear in public that Salt II will not affect existing patterns of co-operation and collaboration within the Alliance, nor will it preclude co-operation in modernisation. We have also discussed this confidentially with the Americans. I cannot give details of confidential exchanges, but we are satisfied from the assurances we have received that British interests are safeguarded.
    Mr. Churchill: The House will wish to consider at greater length the important reassurances that the Government have received from President Carter and the United States Administration on the matter. Will my right hon. Friend tell the House what articles XII and XIII prevent, if it is not a circumvention of the SALT II agreement by the sale or transfer of strategic weaponry to third countries?
    Sir I. Gilmour: With respect to my hon. Friend, he is confusing the non-circumvention clause with a no-transfer clause. He will remember that there was a no-transfer clause in the antiballistic missile treaty of 1972. I am glad to say that the United States resisted successfully the Soviet demands for a no-transfer clause in SALT II.
    Mr. Cryer: Will the Minister accept that we do not want another Nassau-type agreement in which Polaris-type weapons are adopted? Will he also
    456
    accept that this country is a subscriber to the non-proliferation treaty and that, from that point of view, we should be considering phasing out Polaris rapidly? That would provide a practical demonstration to other nations which may be considering adopting nuclear weapons that they are totally irrelevant, expensive, deter nobody and should be scrapped completely.
    Sir I. Gilmour: I do not agree with any part of the hon. Gentleman's question. We have clearly stated that part of our defence policy is to maintain the effectiveness of our nuclear deterrent. We intend to do that as a high priority. Moreover, as we already possess nuclear weapons, in no sense can we be said, by continuing to possess them, to be in any way circumventing the non-proliferation treaty.
    Mr. du Cann: Do not these exchanges indicate that there is a plain need for the House to debate the subject? Will my right hon. Friend be good enough to consult the Leader of the House, who has recently entered the Chamber, with a view to ensuring that that is arranged before the Summer Recess?
    Sir I. Gilmour: I have no doubt that my right hon. Friend the Leader of the House has heard what my right hon. Friend has said.

  EUROPEAN COMMUNITY

    Foreign Ministers (Meetings)
    Mr. Meacherasked the Lord Privy Seal when he expects next to meet his EEC counterparts.
    Mr. Strawasked the Lord Privy Seal when he expects next to attend a meeting of EEC Foreign Ministers.
    Mr. Skinnerasked the Lord Privy Seal when he expects to meet the other EEC Foreign Affairs Ministers.
    Mr. John Evansasked the Lord Privy Seal when he next expects to meet his European Economic Community colleagues.
    Sir Ian Gilmour: At the next Foreign Affairs Council in Brussels on 24 July.
    Mr. Meacher: Will the right hon. Gentleman indicate what proposals the Government are bringing forward to reduce our share of the EEC budget? Will he acknowledge that price freezes would still leave an open-ended commitment to pay for excess production? The only way to stop a further disastrous escalation of the budget is to limit financial support to production quotas, which are then steadily reduced.
    Sir I. Gilmour: The hon. Gentleman will be aware that at the European Council last month the Commission was invited to submit to the Council a description of the financial consequences of applying the budget system on the situation in each member State, especially in 1979 and 1980. The Commission will subsequently put forward proposals for a solution. That is an important step in the right direction. I believe that there is a strong case for saying that member States with a below average gross domestic product per head should be net beneficiaries, but I do not wish to go into that in detail at present.
    Several Hon. Members—
    Mr. Speaker: Order. I propose to call first those hon. Members whose questions are being answered.
    Mr. Straw: Is the right hon. Gentleman aware that, following the Strasbourg Council of Ministers, and in stark contrast to the British Government's euphoria about the outcome of that meeting, President Giscard d'Estaing said that all that has been agreed is to see whether the budget anomalies are inequitable or excessive? Does that not represent a failure of British diplomacy to convince the French even that our present budget contributions are excessive? In the light of that, what serious chance is there of securing French agreement to a reduction of the British contribution?
    Sir I. Gilmour: I do not believe that that is right, but in so far as it is the hon. Gentleman is condemning the efforts of the previous Government to bring home that problem to our partners. We found that there was not a proper realisation of the inequities and difficulties. We are now fully confident that those inequities have been brought home. The results of the Strasbourg Council were satisfactory.
    Mr. Skinner: Will the right hon. Gentleman tell those other people across there that on 7 June the British people, and the working class in particular, rejected the Common Market by their massive vote of no confidence in the election? Will he tell his colleagues in the Conservative Party as well as those over there that there will be no moves towards parity of those Westminster MPs elected on the miserly one-third vote of the British people on that date? If he does that, he will be acting in the interests of the British people and of most hon. Members.
    Sir I. Gilmour: The second part of the hon. Gentleman's question did not make sense. I do not know what he means by " parity ". On the first part of his question, he seems to be incredibly ignorant of the laws of mathematics. At that election the Conservative Party, which favours the European Parliament and membership of the European Community, won three-quarters of the seats. The hon. Gentleman seems to be under the misapprehension that his party won the election. It did not.
    Mr. Evans: If the Commission brings forward proposals to reduce Britain's contribution to the EEC budget, will any of the other member Governments have power to veto them? More importantly, does the right hon. Gentleman think that they will exercise the veto?
    Sir I. Gilmour: The agreement to alter our budgetary contribution will have to be reached by the European Council and will entail general agreement. The facts will first be put forward by the European Commission. These will be commented on by the European Finance Ministers and the matter will be discussed and, we hope, decided at the Dublin summit at the end of the year.
    Mr. Amery: My right hon. Friend told us yesterday that he would be consulting our European partners as well as America and Africa about Zimbabwe-Rhodesia. Will he tell his European colleagues that in the opinion of Lord Home, who devised the six principles, these have been fully met by the Muzorewa Government? Will he also tell them that in the opinion of Lord Boyd, with his vast experience of Africa and his recent experience of the election, it would be dangerous to tamper with the existing constitution?
    Sir I. Gilmour: I hope that our partners study the proceedings of both Houses of this Parliament with the care and attention that they deserve and that I shall not have to draw those important points to their attention. As my right hon. Friend knows, we are in constant consultation with our partners on that important subject.
    Mr. Winnick: Are the right hon. Gentleman's colleagues in other EEC countries aware that our membership of the Common Market remains equally unpopular here? Most people believe—and with a great deal of justification—that Britain is getting a raw deal from our membership. Can there be any doubt of what the result of a further referendum on membership would be?
    Sir I. Gilmour: The hon. Gentleman was not here in the last Parliament when his Government allegedly renegotiated the terms and presided over a referendum that showed the British people two to one in favour of our membership continuing. I do not believe that the British people would wish to go back on that decision.
    Mr. Dykes: Has the Lord Privy Seal noticed the interesting fact that in the general election the acknowledged pro-European party, namely, the Conservative Party, had a sweeping victory, having presented positive European themes in that election campaign?
    Sir I. Gilmour: My hon. Friend is perfectly right. We won that election decisively, and we won the European elections even more decisively. The evidence indicates the exact opposite of what the hon. Member for Walsall, North (Mr. Winnick) said.
    Mr. Shore: The right hon. Gentleman must be aware that in order to get any changes in the system of financial contributions that are so disproportionately heavy on this country there must be agreement with all the other countries of the EEC. Will he at least assure us that in seeking to register—and more than register—the serious complaint that we have about these arrangements he does not try to win some minor modification in our budget contribution by making concessions on such matters as steel, food prices and agriculture? We have already seen far too much of that.
    Sir I. Gilmour: I do not accept the right hon. Gentleman's premise. Now that he has studied it, he knows full well that the agricultural settlement last month was much the best that has been achieved since we entered the Community. It was far better than anything the Labour Government ever achieved. I agree that the budget problem is serious, but we have already made considerable progress. Our positive approach to the Community has already produced far greater results than the rather questionable hostility of the Labour Government over several years.

    Lomé Convention
    Mr. McNamaraasked the Lord Privy Seal whether he will make a further statement on the renegotiation of the Lomé Convention and the role being played by Her Majesty's Government.
    Mr. Guy Barnettasked the Lord Privy Seal if he will make a statement about the negotiations to renew the Lomé Convention agreement.
    Mr. Spearingasked the Lord Privy Seal if he will make a statement on the progress of negotiation of the Lomé Convention.
    Mrs. Dunwoodyasked the Lord Privy Seal if he will make a statement on the outcome of the talks between the ACP countries and the EEC on the successor convention to Lomé.
    Mr. Hurd: The text of a new and improved convention was substantially agreed at a ministerial negotiating conference in Brussels from 25 to 27 June. We now await the final decision of the African, Caribbean and Pacific States concerned. On the content of the new convention, I have nothing to add to the reply I gave to my hon. Friend the Member for Wycombe (Mr. Whitney) on 29 June.
    Mr. McNamara: Is the hon. Gentleman aware that one reason for the delay in acceptance by the ACP countries is their profound regret at the niggardly contributions that have been made to the expansion of the Lomé Convention? Will he and his ministerial colleagues be reconsidering some of the provisions that they have made in the light of the great increase in oil prices and the disastrous

    461
    effect that that will have on some ACP countries?
    Mr. Hurd: No. The financial package put forward by the Community updated the aid figure in the first convention by allowing for price increases since then, and it also added to that. In all the circumstances, it was a reasonable proposition.
    Mr. Barnett: Does the Minister recognise that the stance of the British Government in these negotiations was foot dragging? The British Government were one of the hard-line Governments in these negotiations. Does he also recognise the degree to which developing countries suffer as a result of the operation of the CAP? What contribution will the Government make in the negotiations to ensure a much greater access of primary products into Europe, particularly beef and minerals?
    Mr. Hurd: I do not agree with the hon. Member's criticism. In the new convention, for the first time there is help to mineral producers whose production is interrupted. For the first time there is a clause about investment protection. Aid is increased and there are new commodities in the STABEX scheme, including rubber, and there is better access to the EEC for certain important Commonwealth commodities, such as beef and rum.
    Mr. Spearing: Will the Minister confirm that there are related but distinct negotiations concerning the 1·3 million tonnes of Commonwealth sugar which are at present imported under the ACP arrangement? Will he tell us the date on which the negotiations or renegotiations will begin? Also, will he recall to the French members of the EEC Council that under the Departments Outre Mer arrangements that they made for Ascension, Martinique and Reunion the cane sugar from these colonies is counted as part of that of metropolitan France? Should not the same arrangement apply to ACP countries?
    Mr. Hurd: The hon. Member knows that the sugar arrangements are quite separate from the convention that I have mentioned, and they run on in relation to quantity well beyond the date of expiry of the existing convention. I should like notice of his specific second point.
    Mrs. Dunwoody: Is the Minister aware that the rum and banana protocols are very important, and there is clear evidence that the ACP countries are not content with the arrangements that have been agreed or with the advances that have been made? Why have they gone back to the ACP council to get its agreement if the arrangements are as marvellous as the Minister says?
    Mr. Hurd: I am not saying the arrangements are marvellous. They are the results of very tough negotiations, and obviously the ACP countries wanted more. My point—and it applies particularly to rum—is that, subject by subject, this new convention is an improvement from the point of view of both the ACP and the EEC.
    Sir Derek Walker-Smith: Can my hon. Friend say whether any further consideration is being given or is proposed to be given to the incorporation into the renegotiated Lomé Convention of a reciprocal undertaking to observe fundamental human rights, particularly those expressed in articles I to XIV of the universal declaration?
    Mr. Hurd: At the last meeting the Community tabled a specific reference of this kind, but it was vehemently rejected by the ACP countries as out of place in an economic convention. That is a pity. But we should not confuse the shadow with the substance. The substance is that the Community should be willing and able to ensure that its aid is not given in circumstances in which it injures the real interests of the people in the recipient countries, and the Council of Ministers has agreed to consider how this should be achieved.
    Mr. Hooley: Is the Minister saying that the package on the table is on a take-it-or-leave-it basis? Is there not any opportunity for the ACP countries to make further representations or further claims in relation to this treaty?
    Mr. Hurd: The draft convention is the result of many weeks of long negotiation, including an all-night session at the end. After this was over the Community made it clear that it had reached the end of its negotiating position. We are now waiting to hear from the ACP

    463
    countries whether they accept the convention with the improvements that I have mentioned. I very much hope that they will do so.
    Mr. Emery: Does my hon. Friend agree that it ill behoves Labour Members to urge a further increase in products coming into Europe when they had five years to do that and failed? Will the Minister take account of the serious point that many of the ACP countries suggest in their domestic press that the actual money terms of the new arrangement represent major cuts compared with what was previously allowed? This is untrue, and it is important that our Government and European Governments get this message across to those nations.
    Mr. Hurd: I quite agree. I have tried to do that today. The financial part of these new arrangements is an improvement in real terms. These arrangements, if they are accepted, are a step—I do not put it more strongly than that—towards making the European Community a more open and outward-looking institution.

    Foreign policy
    Mr. Knoxasked the Lord Privy Seal if he will make a statement on progress towards a common EEC foreign policy.
    Sir Ian Gilmour: As I told my hon. Friend on 13 June, the Government expect and hope to play a leading role in the co-ordination of EEC foreign policies. We are working towards a common approach to a wide range of problems. Areas of agreement exist on issues as diverse as the Middle East, Vietnamese refugees and Nicaragua.
    Mr. Knox: What progress has been made towards the setting up of a political secretariat for the nine member States of the EEC? Will my right hon. Friend give an assurance that the Government are pursuing this enthusiastically?
    Sir I. Gilmour: There is no permanent secretariat for political co-operation. At present, national presidencies take it in turns to provide the necessary services, and that has been adequate so far. It is cheap and efficient, and measures have recently been taken to strengthen national presidencies by loans of staff from the preceding and succeeding presidencies.
    Mr. J. Enoch Powell: Why should it be assumed that the people of the nations in the EEC necessarily want the same policies on foreign affairs?
    Sir I. Gilmour: It is not necessarily assumed, but practice has shown that there is a wide measure of agreement on a number of issues.
    Mr. Churchill: Will my right hon. Friend discuss with his EEC counterparts the effects on Europe of the SALT II agreement, and in particular article XII of that agreement? If it does not mean the non-circumvention of the treaty by the transfer or sale of strategic weapons to third countries, what does it mean?
    Sir L Gilmour: I am in some difficulty, because I was just about to answer a substantive question from my hon. Friend on that point. I am sure that that question will be reached.
    Mr. Robert Hughes: While unreservedly condemning the expulsion of people from Vietnam on ethnic grounds, may I ask the right hon. Gentleman why, if he believes that the Vietnamese regime is barbaric, he is insisting that these Chinese people remain in Vietnam? Why is he not persuading his colleagues at home and in other parts of the EEC to take as many of these refugees as possible in the shortest possible time?
    Sir I. Gilmour: The hon. Member is confusing two fundamental issues. Almost everybody in the House agrees that people who do not wish to remain in a country should be allowed to leave it. That is very different from a Government systematically expelling about 1 million of their own people by treating them in an intolerable manner.

    ACP Countries (Beef and Veal Exports)
    Mr. Nelsonasked the Lord Privy Seal what changes in the regulations governing beef and veal imports from ACP countries were made as part of the conditions attaching to renewal of the Lomé Convention.
    Mr. Hurd: The present regulations provide for duty-free access with a 90 per cent. levy abatement for just over 27,000 tonnes of beef and veal, the quantity being subject to annual negotiations.

    465
    Under an exchange of letters to be annexed to the new convention, the African, Caribbean and Pacific countries will be entitled to export to the Community up to a fixed ceiling of 30,000 tonnes—compared with 27,000 tonnes—each year for the duration of the convention, with the same levy abatement. We welcome this modest improvement.
    Mr. Nelson: Will my hon. Friend assure the House that the United Kingdom beef and veal producers will not pay the price for the renewal of the Lomé Convention? Will he assure the House that their returns in prices will not be affected unduly by such a concession?
    Mr. Hurd: I give the House that assurance. The new arrangement is a modest advance. About 30,000 tonnes of beef is not a great quantity, but it will be of considerable help to Botswana, which is particularly dependent upon it.
    Mrs. Dunwoody: Although it is an advantage for Botswana, which has always supplied us with cheap beef from which the British housewife has benefited, is there no way in which that country can be given a longer period to plan production in the way that it was carried out under the old Commonwealth arrangements?
    Mr. Hurd: There has been an improvement. The fixed ceiling is for 30,000 tonnes each year, as opposed to the quantity being reviewed annually.

    Greek Accession
    Sir Bernard Braineasked the Lord Privy Seal if he is satisfied with the progress of Greek accession to the European Communities; and if he will make a statement.
    Sir Ian Gilmour: Yes, Sir. An important and historic step was taken on 28 June 1979 when the Greek Parliament approved a Bill for the ratification of the Treaty of Accession. The Government warmly welcome this development. We believe that Greece's accession will enrich the Community and strengthen further the excellent relations between our two countries.
    Sir B. Braine: I thank my right hon. Friend for that reply, but is he aware that, immediately following the ratification by the Greek Parliament of the
    466
    Treaty of Accession, nearly 200 hon. Members signed an early-day motion expressing their pleasure at the decision and warmly welcoming Greece into the Community? Is he aware that the strong wish behind that early-day motion was that the Government should move with the utmost speed to introduce legislation or initiate other necessary action to ensure that Greece enters the Community as quickly as possible? Will he give the House some information on the matter?
    Sir I. Gilmour: I warmly welcome my hon. Friend's remarks. He will appreciate that whatever is done in this Parliament will not delay the entry of Greece into the EEC. I assure him about that. We are considering how the accession should best be dealt with in this Parliament, and we should like to ratify as soon as possible. At the same time, we must be satisfied that the most suitable procedures are followed for parliamentary action prior to application.
    Mr. Palmer: Will the right hon. Gentleman say when a British Minister will go to Athens to discuss with the Greek Government the many questions of special interest to this country and to Greece that will arise out of Greece's entry into the EEC?
    Sir I. Gilmour: I hope to visit Greece before long. However, I cannot say whether I shall be the only one to do so—or, indeed, the first.
    Mr. Hill: Does my right hon. Friend agree that the accession of another country into the EEC will bring greater pressure to bear on the common agricultural problem in Europe? It should expedite the decision that is to be made in renegotiating the CAP.
    Sir I. Gilmour: There is a great deal in what my hon. Friend says. However, our first priority is a reform of the EEC budget.
    Mr. Carter-Jones: Will the new development assist the Greek Cypriots and the refugees in their difficulties over the loss of property?
    Sir I. Gilmour: That is another matter. That question was put down today, but the hon. Member in whose name it was tabled was not present. However, I do not believe that it is necessarily concerned with the present matter.

  OVERSEAS DEVELOPMENT

    Developing World (Voluntary Organisations)
    Mr. Brocklebank-Fowlerasked the Lord Privy Seal what consideration he has given to continuing financial support for voluntary organisations with projects in the developing world.
    The Minister of State, Foreign and Commonwealth Office (Mr. Neil Marten): I intend to continue the joint funding scheme for overseas projects carried out by British voluntary organisations.
    Mr. Brocklebank-Fowler: I thank my hon. Friend for that reply. However, has he had time to read the report of the Select Committee on India, which shows that there is immense scope for increased effective activity by voluntary organisations in that country? Will he discuss with those organisations the means whereby they can be given additional Government support?
    Mr. Marten: Yes, Sir.
    Mr. Sever: Does the hon. Gentleman accept the argument that if a nation is to be judged on whether it is a member of a civilised society, one of the bench marks for that judgment is the way in which it assists those nations which are less fortunate than itself? Does he agree that the withdrawal of money from overseas aid is thoroughly reprehensible, and that it should be reinstated?
    Mr. Marten: There has been no withdrawal of overseas aid. The projected amount for the current year has been reduced, but the volume of aid has been increased by 2 per cent.
    Mr. Nicholas Winterton: Is my hon. Friend aware that one of the most economic ways to give aid to the developing world is to channel funds through voluntary organisations? Those organisations are held in considerable respect in many countries within the developing world. Will he take the point on board to ensure that whatever money and funds are available from the Government for overseas aid will be channelled in a higher percentage through the voluntary organisations? They have the technical know-how and ability to give great assistance to those countries. I have a vested interest, and I
    468
    refer particularly to the Duke of Edinburgh award scheme, which carries out valuable work in many developing countries.
    Mr. Marten: My hon. Friend has stated clearly Conservative policy on the use of voluntary agencies.
    Mr. Dalyell: Does the Minister recollect that in response to a letter from four of my hon. Friends and myself about the appalling situation in Kampuchea he said that the British Government could do virtually nothing to help because of the recognition problem? Will anything be done to help Kampuchea, through voluntary organisations?
    Mr. Marten: Yes, Sir. That matter is being considered. Help will probably be provided through the Red Cross.
    Mr. Budgen: Does my hon. Friend agree that the best way to help the Third world is not through increased financial support but by conducting freer trade? Will he condemn the practice by which the EEC dumps on world markets over-subsidised primary products?
    Mr. Marten: I should like to look into the latter point that my hon. Friend makes.
    Mr. McElhone: In any consideration by the Government of financial support to voluntary organisations, will Chile be included? Will the hon. Gentleman assure the House that the £1 million scheme run by OXFAM, Christian Aid and other charities, which was financed by his Department, to help the poorest in Chile will continue?
    Mr. Marten: Yes, Sir.

    QUESTIONS TO MINISTERS
    Mr. Dykes: On a point of order, Mr. Speaker. I ask for your guidance and apologise for not giving you notice of my point of order. It may be that there is still some confusion in the House about the order of Foreign Office, EEC and Overseas Aid questions. There is some feeling of dissatisfaction. It is felt by some that the slot for Foreign Affairs questions is too short, as is also the slot for EEC questions, and that it may be possible to take Overseas Aid questions on a separate occasion. I ask for your

    469
    guidance, Mr. Speaker, now that my right hon. Friend the Leader of the House is in the Chamber. There is still some disquiet about these matters.
    Mr. Shore: Further to that point of order, Mr. Speaker. We have had exchanges with the Leader of the House. It is on the record that he is considering these matters sympathetically and intends shortly to make a statement. May we have some clarification?
    Mr. Stoddart: Further to that point of order, Mr. Speaker. I do not want to prolong the argument, but I feel that it is right to point out that Foreign Affairs questions deal with the world, which is a large place. Bearing in mind that questions Nos. 2, 3 and 5 were taken together and that two hon. Members were absent, we dealt with only nine questions to a Department that is concerned with the whole of the world. I urge the Front Benches to get together and to do something.
    Mr. Flannery: Further to that point of order, Mr. Speaker. Why cannot we have the Secretary of State for Foreign and Commonwealth Affairs in this place instead of in the House of Lords? It is totally undemocratic that we cannot question directly the Secretary of State—[Interruption.]
    Mr. Speaker: Order. I cannot hear the hon. Member for Sheffield, Hillsborough (Mr. Flannery). Is the hon. Gentleman raising a point of order for my attention?
    Mr. Flannery: Yes, Mr. Speaker. Why cannot we have the Secretary of State for Foreign and Commonwealth Affairs in this place to question instead of the totally undemocratic—
    Mr. Speaker: Order. That is a matter for the Prime Minister and not for me.
    I explain to the House once again, in case there were hon. Members not present when we had a similar situation the other day, that when Overseas Development questions finished—[interruption.] Order. I am not competing with the hon. Member for Keighley (Mr. Cryer). When Overseas Development questions finished, I returned to EEC questions because they would have run to 3.30 pm if Overseas Aid questions had not been on the Order
    470
    Paper. When I exhausted EEC questions, I returned to Foreign Affairs questions, which would have run to 3.30 pm if the other questions had not been on the Order Paper.
    Mr. Farr: It seems to some of us to be unfair that about 30 or 40 questions were tabled to my right hon. Friend the Lord Privy Seal, to which only 25 minutes were allocated, and that less than half of them were reached while 30 minutes were allocated to EEC and overseas development questions, all of which were reached. That is not an irregular occurence. It places those who have tabled overseas development and EEC questions in a privileged position as they may be almost certain that their questions will be answered. I suggest that time is reallocated so that the EEC allocation is properly reduced.
    Mr. Speaker: Mr. Winston Churchill.
    Mr. James Johnson—
    Mr. Speaker: Order. I think that the Leader of the House is trying to catch my eye to speak and illuminate further the points of order that have been made.
    The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): I am grateful to you, Mr. Speaker, for singling out my eye. These are rather complicated matters. I am trying to take into account the wishes of hon. Members and also the wishes of Ministers concerned. We are pursuing the matter, and I hope to have something to say shortly.
    Mr. Churchill: Questions on foreign affairs slipped in the course of the previous Parliament from once every three weeks to once every four weeks, and we have seen Question Time on foreign affairs reduced from 55 minutes to 35 minutes, and now to 25 minutes. Surely the present position is unsatisfactory.
    Mr. James Johnson: Will you kindly confirm, Mr. Speaker, for my sake if for the sake of no others, that the EEC and the Commonwealth are part of the world and part of foreign affairs?
    Mr. Speaker: I am grateful for that information.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, notwithstanding the provisions of Standing Order No. 3 (Exempted Business), if proceedings on the Motions relating to Members' Salaries and Pensions (Expression of Opinion), Members' Salaries and Pensions, Members' Office, Secretarial and Research Allowance, Office Holders' Salary Supplement and the Ministerial and other Salaries and Pensions Order 1979 have not been disposed of by Ten o'clock, any Amendments to the first Motion, which have been selected by Mr. Speaker, may thereupon be moved, the Questions thereon shall be put forthwith, and Mr. Speaker shall then proceed to put forthwith the Question upon the said Motion and any Questions necessary to dispose of the other Motions and of any Amendments moved thereto which have been selected by him.—[Mr. St. John-Stevas.]

STATUTORY INSTRUMENTS, &c.
Ordered,
That the draft lob Release Act 1977 (Continuation) Order 1979 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. St. John-Stevas.

CO-OWNERSHIP OF FLATS
3.36 p.m.
Sir Brandon Rhys Williams: I beg to move,
That leave be given to bring in a Bill to give powers to residents of purpose-built blocks of flats in private ownership jointly to purchase the premises of which their flats are part; to specify the procedures to be adopted; to make consequential provisions as to the management and upkeep of premises so purchased; and for connected purposes.
I am seeking the leave of the House to introduce a Bill on co-ownership of flats that is similar to the Bills that I have introduced in previous Sessions. The purpose of the Bill is to provide a convenient statutory means by which the tenants of purpose-built blocks of flats may combine to purchase their landlords' interest in the property at a fair valuation. I recognise that the principle of my Bill involves an extension of the use of compulsory powers. As such it is obviously a proposal that the House will wish to consider with care.
There are two reasons why the Bill is now especially appropriate. The first reason is that the Leasehold Reform Act 1967 stopped short at housing and left the occupants of flats in the position of second-rate citizens unable to exercise the powers that were conferred under the Act on those people living in houses. That omission has become a matter of particular importance because of inflation and the operation of the fair rents principle.
The second reason is that the Government are currently proposing to give those who are living in the public sector the right to purchase their flats. The House must recognise that there is no valid reason why that power should be given to those living in council houses and council flats and not be extended to tenants in the private sector who live in flats.
Council tenants have security de facto. That is being recognised by the Government. However, protected tenants in blocks in private ownership have rights de jure. That is important, and their rights must not be allowed to be whittled away.
This is an urgent matter because in the constituency that I know best—Kensington—and in a number of other constituencies in inner London and in other

473
parts of the country money is seeking quick profits at the expense of the permanent residents in mansion blocks.
That tendency is especially inspired by those advising investors abroad who have no interest in protecting the fabric of society in Britain but who are hoping to make quick profits at the expense of the established residents. If they employ techniques that upset the residents, they can, in effect, make a mockery of tenants' security of tenure.
There are all too many examples already in central London of mansion blocks which were in regular private occupation by British citizens but which are now little better than long-stay hotels or service suites. The process is continuing, and the House should take note of it and act without delay to put a stop to it.
There is, of course, a conflict of principles here. The House is right to recognise the sanctity of contract and to be unwilling to introduce anything that appears to have the character of retrospective legislation. At the same time, we all recognise the benefits of home ownership and the importance of the self-respect which comes to people who know where they live and own their bricks and mortar. I do not believe that people living in flats should be turned into second-rate citizens.
My Bill requires investors in mansion blocks simply to reshuffle their portfolio without loss; but where the occupants are concerned, the Bill's aim is to ensure that they do not lose their homes, but have the opportunity to buy them.
I cannot examine, within the confines of a speech under the Ten Minutes Rule, all the points with which I would hope to deal if the House allowed me to take the Bill to Committee stage. I should like to mention, however, that the Bill would apply only to purpose-built blocks. I am not competent to frame a Bill, even if this was desirable, to extend the principle to very small conversions or to houses in owner-occupation and so on. It is best to tackle the mansion blacks, which are the particular target of foreign speculators at this time.
The powers could be used only by a tenants' association which had formed itself
474
into a company operating under rules which I aim to set down, or which, I hope, would be set down clearly in the Bill. There should be no doubt as to who would be liable and who would be responsible for the management of the block after the purchase had taken place.
The valuation of the block, at the time of purchase by the tenants, should be carried out on a basis that is plainly fair to the owner. I am not interested in introducing any element of confiscation or in providing some sort of bonus for the tenants at the owner's expense.
I do not like the concept of a windfall profit for the tenants: thus a provision should be entrenched in the Bill that if a tenant, having newly acquired his share of the block, sought to leave with a view to realising an immediate profit by giving vacant possession, the profit should accrue on a sliding scale to the company over a period of years, rather than to the tenant. Without this provision, the effect of the Bill might be to destabilise the very residents to whom one was trying to give security.
The Secretary of State for the Environment has shortly to decide on a compulsory purchase order issued by the Kensington and Chelsea borough council. I understand that other compulsory purchase orders have been issued by other borough councils in inner London facing the same situation as the Kensington and Chelsea council. I hope that the Secretary of State will support the initiatives taken by these local authorities. We hope to hear his view within a few weeks.
But even more useful than such action by the Secretary of State in these specific cases would be endorsement by the House of the general principle by approving my application to introduce this Bill today and by allowing it to make progress. In that way, the House would be issuing a warning to the speculators that we have taken note of the problem and that we are determined to act.
Question put and agreed to.
Bill ordered to be brought in by Sir Brandon Rhys Williams, Mr. Kenneth Baker, Mr. Tony Durant, Mr. Nicholas Scott, Mr. Martin Stevens, Mr. John Wheeler, Mr. Frank Allaun and Mr. Shephen Ross.

CO-OWNERSHIP OF FLATS
Sir Brandon Rhys Williams accordingly presented a Bill to give powers to residents of purpose-built blocks of flats in private ownership jointly to purchase the premises of which their flats are part; to specify the procedures to be adopted; to make consequential provisions as to the management and upkeep of premises so purchased; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 20 July and to be printed. [Bill 41.]

MEMBERS' SALARIES AND PENSIONS
Mr. Speaker: Before I call the Chancellor of the Duchy to move his motion, it might be convenient if I were to explain the course that we shall follow in the light of the business motion to which the House earlier agreed. Debate on the motions will continue until 10 o'clock tonight and during the course of it, it will be open to any Member to discuss the various amendments which stand on the paper. At 10 o'clock, the debate will conclude and I shall call on hon. Members in succession to move formally the first of each group of amendments shown on the selection list that has been published.
When the last of these amendments has been disposed of, I shall put the main Question, or the main Question, as amended. If any of the amendments that I have selected for Division is agreed to, I shall call the hon. Member concerned formally to move any consequential amendments within the group in the order in which they appear on the paper. I shall then call the Chancellor of the Duchy to move the second motion, to which the Queen's recommendation has been signified, and thereafter the three remaining motions.
Mr. Bob Cryer: On a point of order, Mr. Speaker. Are you saying that you will take only the first of a group of amendments and that if an hon. Member wishes to move to a Division on a second or third amendment within a group of amendments, that will not be possible?
Mr. Speaker: The main principle will be decided on the first amendment in each group. If the House decides against it, that is the end of the story. I should tell the House that I will ensure, to the best of my ability, that, in the course of the debate, everyone who has put down an amendment—that is the first name on each group—will be called. There are, of course, right hon. and hon. Members wishing to participate who have not tabled amendments.
Mr. James Wellbeloved: Will it be in order for hon. Members to discuss motion No. 5—the draft Ministerial and other Salaries and

477
Pensions Order—during the course of the main debate on the first motion?
Mr. Speaker: Yes. That is right.

1

That, in the opinion of this House, the following provisions about salaries and pensions of Members of this House should be made:—

(1) The salary payable to Members of each of the descriptions in the first column of Table 1 below—

5

(a) in respect of service on and after 13th June 1979 and before 13th June 1980 shall be at the yearly rate specified in relation to that description in the second column of that Table; and

10

(b) in respect of service on and after 13th June 1980 and before 13th June 1981 shall be at the yearly rate specified in relation to that description in the third column of that Table; and

15

(c) in respect of service on and after 13th June 1981 shall be at the yearly rate specified in relation to that description in the fourth column of that Table.

TABLE 1

20

Description of Member

Yearly rate of salary from 13th June 1979 to 12th June 1980

Yearly rate of salary from 13th June 1980 to 12th June 1981

Yearly rate of salary from 13th June 1981

1. Member not within any other paragraph.

£9,450

£10,725

£12,000

25

2. Member receiving a salary under the Ministerial and other Salaries Act

£5,820

£6,410

£7,000

30

1975 as Comptroller or Vice-Chamberlain of Her Majesty's Household, junior

35

Lord of the Treasury or Assistant Government or Opposition Whip.

40

3. Officer of this House or Member, other than Member of the Cabinet, receiv-

£5,650

£6,325

£7,000

45

ing any other salary under the Act of 1975, or receiving a pension under

50

section 26 of the Parliamentary and other Pensions Act 1972.

55

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

£5,265

£6,130

£7,000

60

(2) The ordinary salary of every Member in respect of service on and after 13th June 1979 shall be regarded for pension purposes as being at the rate of £12,000.

60

(3) Members of each of the descriptions in the first column of Table 2 shall be credited—

65

(a) by way of supplement to their salaries payable in respect of service on or after 13th June 1979 and before 13th June 1980 with amounts at the yearly rate specified

3.47 pm
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): I beg to move,

in relation to that description in the second column of that Table;

70

(b) by way of supplement to their salaries payable in respect of service on or after 13th June 1980 and before 13th June 1981 with amounts at the yearly rate specified in relation to that description in the third column of that Table.

TABLE 2

75

Description of Member

Yearly rate of supplement from 13th June 1979 to 12th June 1980

Yearly rate of supplement from 13th June 1980 to 12th June 1981

1. Member within paragraph 1 or 2 of Table 1 who draws the whole of his salary.

£153·00

£76·50

85

2. Member within paragraph 1 or 2 of Table 1 who does not draw the whole of his salary.

£153·00 plus 6 per cent. of the amount forgone, but not together exceeding £173·59.

£76·50 plus 6 per cent. of the amount forgone, but not together exceeding £97·09.

90

3. Member within paragraph 3 or 4 of Table 1 except one in whose case no deduction is required to be

£173·59.

£97·09.

95

required to be made under section 3 or 4 of the Act of 1972.

By common consent, the question of salaries for Members of Parliament is not an easy one to resolve. The most successful Government that I can recall in this sphere was that of the then Sir Alec Douglas-Home, in 1963. The proposals were made before the election and implemented by the successor Government. It is fair to say that the House of Commons is not always at its best when considering these matters. There is a paradox here which I think explains the difficulties. The House of Commons is virtually the only body in the country with power to determine fully the salary of its own Members. It is in that very fact that the source of the difficulty lies. The House is naturally reluctant to assert the fullness of its powers in matters which benefit itself directly.
There is another factor that we have to take into account. It is a cultural one. The tradition in this country is of unpaid and voluntary public service. Members of Parliament were not paid anything at all until 1911, when payment of £400 a year was first introduced. That tradition, although it is not sustainable in the conditions of today, dies hard. It influences public attitudes. It seems to me that the contemporary manifestation of it is that Members should be paid, but not
480
paid adequately. That is not a principle of great logical merit, but it is a principle of powerful effect.
I would make clear at the outset, both to the House and the country, that the Government's view is that Members of Parliament should be adequately paid. Hon Members occupy a position of prestigue, influence and responsibility and that position should be reflected in their remuneration.
Furthermore, the Government believe that ad hoc arrangements by which hon. Members' salaries are reviewed once in each Parliament are no longer satisfactory by themselves in inflationary periods. It is therefore the Government's intention that if the proposals that I have put before the House command support Lord Boyle's committee should be requested to find one or more professional analogues to which the pay of hon. Members should be linked between reviews.
That statement of Government policy has to be balanced against other considerations, including the economic needs of the country. Hence flow the Government's proposals for the phasing of the increase—three instalments over a two-year period. That is the phasing adopted

481
with other analogous groups—for example, senior civil servants, members of the Armed Forces and the judiciary, nationalised industry board members, doctors and dentists.
The principle that I enunciated in the House on 21 June when I put the Government's original proposals to hon. Members remains. It would be entirely wrong if we were to treat ourselves more favourably than we have treated others. That principle has been observed both in the Government's original proposals and in the motions before the House.
Mr. Michael Neubert: Will my right hon. Friend give way?
Mr. St. John-Stevas: I shall be listening to the debate and I hope that hon. Members will make their points, in the main, during the debate. I shall reply to them at the conclusion of our discussion.
It must also be borne in mind that hon. Members do not seek election for the money. The primary motivation of all hon. Members, though there may be an accretion of lesser motivations, is to give service to the country through the legislature. Anyone who enters the House hoping to make any sort of financial profit will be rudely disappointed.
The words of Bagehot 100 years ago are still applicable. He said:
"If a man of ability wishes to make money he had better go anywhere else than into Parliament for there is much more to be spent than made there."
I am sure that that is the experience of all hon. Members. It is certainly my experience. I have been an hon. Member for 15 years and I have never been offered anything—not even a day trip to Southend. I have never been able to decide whether that is because I am thought incorruptible or not worth corrupting, but those are the facts of my experience.
There is a further consideration. Hon. Members are free to undertake other employments. How they discharge their dual duties is a matter for them, but the parliamentary salary should be such as to enable those who do not wish to have an outside occupation not to have to seek it.
My belief is that the House benefits from having hon. Members actively engaged in other professions and interests,
482
but I recognise that the House could not discharge its work unless other hon. Members were prepared to forgo that option in the interests of Parliament. I note from the report of Lord Boyle's committee that when Parliament is sitting all hon. Members devote more than 40 hours' work a week to their parliamentary duties. That compares favourably with any other occupation.
There is another relevant matter. We cannot remunerate hon. Members by a system of payment by results. In that sense, an hon. Member is rather similar to a member of the clergy. He can do more than anyone else, or less, although, of course, we have no parson's freehold here. If an hon. Member neglects his duties the remedy is in the hands of his constituents, and they have exercised that ultimate deterrent.
There is a related point. Hon. Members are practically the only people who can be sacked nowadays. We enjoy a degree of job insecurity which is shared by no one else. An hon. Member in middle life, perhaps with heavy family responsibilities, may find himself literally penniless at three months' notice, and that is something to which the press and the public do not give sufficient weight.
I conclude my general considerations on the matter by saying that the public must be prepared to pay their legislators reasonable salaries. If they do not, a heavy price will be exacted elsewhere through the activities of dubious people, which will increase in order to take advantage of the straitened circumstances of hon. Members for those people's ends. In addition, men and women of high ability and dedication who should have the opportunity to enter the House will be debarred or discouraged from doing so.
Lord Boyle's committee concluded that a suitable salary—there can be no absolutes in this matter—was £12,000 a year; and, as I made clear on 21 June, the Government accept that recommendation. It is an increase of about £5,000, which looks like a large sum. However, if one considers it against the background of what has happened to hon. Members' pay over the past four or five years, or the past seven years, it appears in a different light.

483
It is more than seven years since a salary recommendation was fully implemented. Since 1972, prices have risen by 160 per cent., earnings have risen by 200 per cent. and the pay of hon. Members has risen by 53 per cent.
Lord Boyle's recommendations in June 1975, of a salary of £8,000, was not implemented then and has never been implemented. Instead, the then Government, for reasons that I understand, substituted the figure of £5,750 and, with various increases allowed by the succession of pay policies, we now have a parliamentary salary of £6,897. Hon. Members are still being paid £1,100 less than the figure recommended by Lord Boyle in 1975. A great deal has happened since then. Retail prices have risen by 56 per cent. and average earnings have risen by 60 per cent.
If ideal rules of justice prevailed, hon. Members would be looking for substantial back payments, because they were not given the level of salary recommended by the independent Review Body. In fact, if the £8,000 recommended in 1975 had been given to Members, and had the various increases been followed, as they have in the case of pensions, the salary today would be £9,372, and the increase proposed by the Government would be 28 per cent.
I hope that those figures put the matter in its proper perspective, and I hope also that those who comment on these questions will take them into account when they make their comments.
It is that background which has led to the expression of feeling in the House over the Government's proposals to stage the increase. The Government have accepted the figure of £12,000, in contradistinction to the action taken in 1975, when the figure then recommended was not accepted. But Members felt—anyone looking at past experience can hardly blame them—that if the staging was accepted just like that we should fall behind again and an anomaly would be perpetuated. That, I believe, lay at the basis of the protest that the House in general made, and on this point, while keeping to the principle outlined, we have been able to do our best to meet the wishes of Members.
Instead of a division in three stages of 33 per cent. we have substituted a first stage of 50 per cent., which will date
484
from 13 June, and two further stages of 25 per cent. each. Furthermore, it is agreed that the proposed second payment should be updated by the normal processes used in these matters in a manner analogous to that adopted in the case of other Review Body groups. It will be referred to the Boyle committee for its recommendation. Again, this does not break the principle, for it is precisely what was done for doctors and dentists. I hope, therefore, that what we propose will be found satisfactory by the House.
After the second stage, what about the third? I must make plain that the Government have not given a guarantee of updating in relation to the third stage. It was not given to doctors and dentists and it has not been given to other groups. But it is equally clear that it has not been ruled out by the Government. What they propose is a reference to Lord Boyle and his committee with the request that they make recommendations about one or more analogues in the professions to which Members' salaries may be related from 1981 onwards.
That arrangement will still mean that there will be periodical reviews, but it means also that there will be a linkage between the reviews, or, rather, that consideration will be given to a linkage between the reviews, according to the recommendations made by the Boyle committee.
I cannot go into more detail on that matter until we have the recommendations of the Boyle committee before us, but what the Government are seeking to do is to meet two real objections to the present system. First, if Members' pay is allowed to fall far behind they then have to receive what look like large increases, which conceal the fact that Members have been making real financial sacrifices in the interim. Secondly, we want to avoid or reduce the embarrassment that these parliamentary occasions undoubtedly cause to Members.
I must make plain that the Government are not proposing index-linked salaries. That is not so, although the matter has been presented by some people as though that were the proposition. The salary is not to be linked to the prices index, and neither is it to be linked to an earnings index. The review remains, but consideration is to be given to an interim

485
professional link. That is the proposal that the Government make.
Mr. Nick Budgen: But this House is the body which ultimately creates inflation, so is it not right, when we have to take account of what we have done, that we should feel embarrassed?
Mr. St. John-Stevas: I do not consider that the House of Commons governs this country—
Mr. Budgen: Ultimately.
Mr. St. John-Stevas:—so I cannot accept my hon. Friend's conclusion. The Government take decisions in these matters, and perhaps the argument could be applied there, but I am afraid that, simple and attractive though that point may sound to some people, it is not one that could be made into a practical policy.
Not only Members' salaries but Ministers' salaries are to be increased. Here again, the increases look large, but, of course, they have been even more distorted by the passage of time. Lord Boyle's recommendations on ministerial salaries were not implemented at all. Cabinet Ministers were excluded—no recommendations of the committee of 1972 were acted on in their case—and in respect of other Ministers the recommendations were acted on in only a minor way.
It cannot be right in our system that a Cabinet Minister, who bears responsibilities for the government of the country, should be paid less than an assistant secretary in the Civil Service is paid. That is the position that we have reached, and it must be put right. The position of junior Ministers—I am thinking here of Parliamentary Secretaries, in particular—is exceptionally difficult.
I should make plain that all the changes will be subject to staging. The staging for Ministers will be the same as that for Members of Parliament, and it will apply to that part of the parliamentary salary which is drawn by Ministers. Furthermore, it is proposed that there should be a biennial review of Ministers' salaries.
That sets out, I hope with reasonable clarity, what lies behind the Government's
486
proposals, and I turn now to the details of the motions themselves.
Hon. Members will have noted that there are two broadly similar motions relating to Members' salaries, one being subject to the Queen's recommendation. The reason for this is rather technical, but basically it derives from the fact that, unintentionally, the Ministerial Salaries and Members' Pensions Act 1965 removed the right that Members traditionally enjoyed to move or to amend abstract motions on their own salaries. Under that Act and the 1972 Act that replaced it, every resolution of the House to increase Members' salaries automatically leads to an increase in Exchequer contributions to the pension fund. Accordingly, any motion or amendment leading to such an increase formally requires the Queen's recommendation.
However, a provision in the Parliamentary Pensions Act of last year has ensured that the operation of the 1972 Act will be dependent on effective motions rather than motions framed as expressions of opinion, and this therefore restores to Members their freedom to propose salary increases by the use of abstract motions. The procedure now is that a motion with the Queen's recommendation on which the Accountant can act will be moved immediately following the corresponding abstract motion if that finds favour with the House.
The first paragraph of these motions increases parliamentary pay from £6,897 to the half-way point of the recommended increase—that is, £9,450—with effect from 13 June. The 1980 and 1981 stages also are given in the table, although, as I have explained, the intention is that the 1980 figure will be subject to updating by the use of the review body process. Corresponding increases are given in the abated parliamentary salaries of Ministers and office holders.
Paragraph 2 ensures that the full recommended salary of £12,000 will be used for pension purposes. The table in paragraph 3 prescribes the supplements payable as previously to cover the 6 per cent. pension contribution on the difference between actual and pensionable pay. For ministerial salaries the corresponding supplement is provided for in the third motion on the Order Paper.

487
The fourth motion simply increases the reimbursement limit for the secretarial allowance from £4,300 to £4,600, in line with the Review Body's recommendation, but it is essential that that recommendation be recognised as an interim one pending the more detailed study and recommendations that we have been promised by the Review Body.
The final motion seeks approval of a draft Order in Council to implement increases in Ministers' and office holders' salaries for this year on the same basis as that proposed for Members. The order also specifies the full recommended salary levels for use for pension purposes. As I announced previously, the Prime Minister and the Lord Chancellor have said that they will not currently draw any increase in salary. Consequently, the order does not provide for an increase in their case.
Mr. Christopher Brocklebank-Fowler: When does my right hon. Friend expect Lord Boyle to report on secretarial and research allowances, and what undertaking will the Government give that they intend to implement the Boyle recommendations without delay?
Mr. St. John-Stevas: I cannot bind Lord Boyle to a particular date, but his review on these matters has begun and I hope that it will be completed soon. Once we have the recommendations we shall proceed to a decision expeditiously, although I cannot bind the Government to accept the recommendations before we have seen them.
Mr. Michael English: I may have misheard the right hon. Gentleman, but we all understood that the right hon. Lady the Prime Minister did not intend to take the increase recommended by Boyle. However, the right hon. Gentleman said that the order would not provide for the increase in her salary or that of the Lord Chancellor. There is a difference. Any hon. Member is entitled not to take a salary—that is within his or her discretion—but not to increase the salary of an office may cause difficulties for one's successor.
Mr. St. John-Stevas: It is intended that the reduction in salary will apply only to the present holders of the office.
Mr. Eric S. Heffer: Will Boyle also examine pension rights and redundancy payments for secretaries? I regard those matters as far more important than our salaries. I believe that the way in which we treat our secretaries in this House is a scandal. Will the right hon. Gentleman assure the House that that aspect is also being examined?
Mr. St. John-Stevas: I am sympathetic to the hon. Gentleman's comments and I shall answer the point more fully in my reply.
Several Hon. Members Several Hon. Members rose—
Mr. St. John-Stevas: I cannot give way to everybody, but I give the Floor to the hon. Member for Erith and Crayford (Mr. Wellbeloved) the third Member of the trinity who were originally on their feet attempting to intervene.
Mr. Wellbeloved: The right hon. Gentleman said that Ministers' salaries would be on the same basis as those of hon. Members. Will he confirm, however, that if one takes the parliamentary element of the Minister's salary and adds it to the Minister's salary as such, Under-Secretaries of State will enjoy an increase of 50 per cent. and Members of the Cabinet marginally under 40 per cent.? In the case of Cabinet Ministers the sum is marginally higher than that to be awarded to hon. Members, but for Under-Secretaries of State it is substantially higher. How does the right hon. Gentleman justify the claim that they are all on the same basis?
Mr. St. John-Stevas: I was making the point that they would all be subject equally to staging. I do not want to get into deep waters about abated salaries for Ministers. I have always thought that that rests on a questionable basis. I believe that as a Minister one is expected to do more parliamentary work than less, for the reason that people fear that they may be neglected.
Mr. Dennis Skinner: I do not believe it.
Mr. St. John-Stevas: I do not expect the hon. Gentleman to believe it, but I hope that he will. My hope may be greater than my expectation.
I hope that these propositions will commend themselves to the House. I

489
understand, as does the Cabinet, the strong feelings that have been aroused on this subject. The Government are responding. Following my last statement, representations have been made to me by hon. Members on both sides of the House. I express my appreciation to hon. Members. I wish particularly to express appreciation to the right hon. Gentleman the Leader of the Opposition and to the Shadow Leader of the House for the constructive part that they have played.
This is not a party matter. I do not claim that the Government have behaved impeccably, but neither have their predecessors. However, as Leader of the House, my responsibility is not to represent the party view in the Cabinet—that task belongs to the sphere of the Chief Whip—but to present to the Cabinet the view of the House as a corporate body. I have done my best to discharge that duty.
Money is always a difficult problem. When one is discussing one's own finances, the difficulty is particular. In an ideal society no doubt everybody, whatever his occupation, would be paid exactly the same.
Mr. Skinner: Hear, hear.
Mr. St. John-Stevas: But we do not enjoy that ideal state of society.
Mr. Skinner Mr. Skinner Where are the Tory ideals?
Mr. St. John-Stevas: I am saying that it is an ideal society in which everybody is actuated by heavenly motives. That society is not yet with us. I hope that we may have a balanced, restrained and dignified debate.
There are different views on these matters. They have been expressed in the amendments that have been tabled, and no doubt other views will be expressed. I shall endeavour later to reply to all the points, but in the end it is the House of Commons that must decide this matter.
I wish to say a final word about this House. We are all extremely lucky to be here. We should remember that the problems of not being here are very much worse than the problems of being here. We all know the advantage of being a Member of this House. There is scarcely anybody who has been in Parliament and
490
lost his seat who is happy until he has won it back again. But there is a price to be paid for the privilege of being a Member of this House. I do not believe that the public have any idea of the vortex of conflicting demands, long Committee work, constituency requirements and late hours into which every hon. Member is plunged.
The pay problem is a pest. The proposals that we have put forward are a great improvement on present arrangements. I hope that they will be a contribution to solving this problem in the short term, and that at last we are on the way to a long-term solution. I believe that the Government proposals meet the needs, traditions and dignity of Parliament, and I commend them to the House.
4.20 p.m.
Mr. Frederick Willey: This is one of our rare thanksgiving days when hon. Members normally congratulate themselves on their own parsimony. The Chancellor of the Duchy of Lancaster has made it clear that there are no glittering prizes. We can thank the Government only for small mercies—no more.
On behalf of the House I pay tribute to the right hon. Member for Taunton (Mr. du Cann). As the Chancellor of the Duchy of Lancaster said, this is not a party matter. The right hon. Member for Taunton took the lion's share of representing the general views of the House and has borne the brunt in trying to persuade the Government to accept, not the views of the House, but those of the Boyle committee.
He has largely succeeded. He has certainly done better than Cledwyn Hughes, my colleagues and I did when we were on the Government Benches. We have worked together for some time. It is good that we can cross party boundaries and express the view of the House.
I also thank my right hon. Friend the Member for Ebbw Vale (Mr. Foot). When responding to similar representations he agreed to set up the Boyle committee. I congratulate the Chancellor of the Duchy of Lancaster on the obscurity and ambiguity of his first unsatisfactory statement. The ambiguity allowed him to be able substantially to accept the Boyle report and he has explained lucidly the proposals to the House today. In the light of

491
his earlier statement, he has certainly discharged his duty to the House.
I intend to deal mainly with Back-Bench Members. The Ministers are remunerated pro rata and ride home on our backs. I have always held the view that Ministers should be affected as little as possible by financial gain. When we consider the question of pay we should put Back-Bench Members first.
When I first became a Member Mr. Chuter Ede told me that it was really the officials and administrators in Whitehall who benefited from the divorce between Ministers and Back Benchers. The smaller the distinction between Back Benchers and Ministers, the greater the strength of Parliament. The House of Commons matters most.
The Chancellor of the Duchy claimed in his original statement to be evolutionary. I commend that so long as he is not too static. He has evolved since his first statement to the House.
I can include you, Mr. Speaker, in my votes of thanks because we are celebrating a jubilee. Just 25 years ago the House adopted a resolution on Members' salaries. That was in 1954 when Mr. Speaker proposed a motion that the House, having asked a committee on salaries to report and having received that report, should accept the report. That remarkable proposition was agreed and accepted mainly because of a revolt by Conservative Government Back Benchers who supported the motion. It was carried by a large majority. It did not impress itself upon the Government, but it established the view of the House that if an inquiry is sought its conclusions should be accepted. It is, therefore, not for us to argue about what is or is not adequate.
At that time the difficulty was caused by the form of the inquiry. Our remuneration was investigated by a Select Committee. However great the virtues of Select Committees—they are popular today—they are not appropriate to determine our salaries.
After agreeing that we should accept the decision of an inquiry, we formed a general view that such an inquiry should be independent, competent, knowledgeable, experienced and have authority. In 1963 the Lawrence committee was set up and was chaired by the chairman of the
492
National Incomes Commission. In 1970, after Douglas Houghton had introduced a Private Member's Bill, the Government referred our salaries to the Boyle committee. Both committees' reports were accepted. It seemed that we had succeeded in removing the question of Members' salaries from the political arena. The remaining problem was what to do in the interval between the awards.
In 1976 we suffered a severe setback. There was a further reference to the Boyle committee, but its report was not accepted by the Government. We are still back, largely because of the reaction of the Chancellor of the Duchy, to the position that we were in before the House agreed that it should accept whatever conclusion was put to it as a result of an independent investigation.
I mention the right hon. Member for Taunton again because before we received the report we agreed between ourselves that whatever the report recommended it should be accepted by the House. That is why we have been in dispute with the Chancellor of the Duchy. It is regrettable that there was not a simple, straightforward acceptance, especially when the Boyle report provided for a second best. It said that if the Government had doubts about the recommendation its ultimate recommendation on staging should be accepted.
However, I accept that the Government package goes a long way. In some respects it goes further than the Boyle recommendation. We should recognise what it does. The Government propose that we accept and dispose of, not the latest Boyle report, but the previous report. That is some advance. It ignores any question of back pay. However, it wipes the slate clean and there is an acceptance of the earlier report.
The Government also propose that we should receive the 1980 instalment and that it should be updated. I agree with the right hon. Gentleman. This merely accepts the principle which has been applied in other Boyle reports. It would be discriminatory not to accept the principle in this case.
We must recognise that the Boyle committee recommended that we should receive the whole amount. It would be unfair if that instalment were not updated.

493
The final recommendation goes beyond Boyle. It is that we should seek an analogue with a profession or professions. This is the vital part of the present recommendation. This is a deliberate effort, which I believe will succeed, at getting over the difficulty that has faced Members of Parliament arising from the interval between reviews. I believe that we shall then very largely have got the question of Members' salaries outside the political arena.
Mr. John Bruce-Gardyne: Does the right hon. Gentleman agree with me that the Boyle committee considered specifically the proposition of what he described as an analogue and specifically rejected it? In view of the fact that he thinks that this House should pay treat to the recommendations of the Boyle committee as virtually gospel—which I would not—how does he reconcile the two propositions?
Mr. Willey: The House itself took a view. It was specific. It made the reference to the level of assistant secretary. It took the view that there should be a linkage. Now the Government are supporting this view, and I think that Boyle will respond to this.
What we must face is that there is the problem that we have this indeterminate period between the awards, and we must make some provision for that. I am certain that Boyle will respond to this. It will mark a real advance in trying to provide that our salaries are taken out of public controversy.
I believe that we are being very modest. I remind the House that in 1963, when we had the first independent inquiry, I, at any rate, was shocked to learn that at that time the Lawrence committee—not ourselves—established that our remuneration then fell short of the standard initially adopted in 1911; and it was that committee's judgment, and not ours, that the hardships that we endured impaired the efficient performance of our duties and detracted from the dignity of the House.
Then in 1976 the Boyle committee—not ourselves—concluded that our earnings were
" significantly lower than the level generally available to men and women of the caliber
494
and ability essential to the proper execution of a Member of Parliament's function in a parliamentary democracy."
It was the Boyle committee, and not ourselves, which again this year found as a fact that Members of Parliament were seriously underpaid.
Mr. Skinner: Will my right hon. Friend give way?
Mr. Willey: My hon. Friend will have a chance to contribute to the debate. I wish to conclude my remarks.
We should not think merely about ourselves as Members of Parliament. We should think of the institution of the House of Commons itself. We must realise that when we have carried this motion today, as we shall, we shall still compare—I quote from Boyle once more—
"very badly with what has happened in the major European and Commonwealth countries."
When we have carried the motion, we shall still be pretty well at the bottom of the league in parliamentary salaries.
I remind my hon. Friend the Member for Bolsover (Mr. Skinner) that this does not apply to the Administration or to the Civil Service. If we are really concerned about democracy, we should be concerned about this lack of balance. We should ensure democracy by seeing that those who are democratically elected have an effective voice in running the country.
4.34 p.m.
Mr. Edward du Cann: I am sure that the House will be grateful for the thoughtful speech of the right hon. Member for Sunderland, North (Mr. Willey) . As he very rightly said, chiefly by implication, there are a number of lessons to be learnt from this last episode—indeed, from the whole history of the matter, to which I shall refer in a moment.
I hope that the House will allow me to make a personal comment to the right hon. Gentleman to say how much I appreciate the kindly things that he was good enough to say about me. If there is any merit in the work that has been done over the last two years on this subject it is due to others, notably himself, who have shared the burden and have given their support.

495
I now proceed to thank my right hon. Friend the Chancellor of the Duchy of Lancaster and to congratulate him on tabling the motion. As the right hon. Member for Sunderland, North said, it is a very different motion from that which we might have seen and would have seen if the House had not made its opinions clear. However, we are grateful to my right hon. Friend for his part in achieving a settlement of what he very rightly said is perennially a difficult matter, although on this occasion I think that all of us feel that it is a matter that was made very much more difficult than it need have been.
If there has been a special problem over the last few weeks, the fault is exclusively that of Governments past and present. I am one who believes that Governments interfere in these matters far more than they properly should. Admittedly, as my right hon. Friend said, as we fix our own remuneration, and that is the constitutional position, we must act with a special responsibility and carefulness, and we have to see that all that we do is done in the open. But there is something unhealthy about a scene that dictates that it is never" repeat, never ", as the say in the Navy—a convenient time to attend to the matter.
As my right hon. Friend admitted, one of the problems has been that Governments have consistently fought shy of attending to the matter—though there are honourable exceptions to that. He cited the example of the Government led by Sir Alec Douglas-Home. I add to that the example of the Government led by Mr. Attlee, as he then was. My right hon. Friend, with his sense of occasion, may remember that Coleridge remarked that in politics what begins in fear—as this matter so often has—usually ends in folly. The recent occasion was no exception to that general rule.
The history of the matter, as has been indicated, is that the Boyle report No. 7 recommended that the remuneration of Members of Parliament should increase to £8,000 a year. That was four years ago. Pay was restricted, however, to £5,750. Therefore, the shortfall over the last four years in the pockets of those Members of Parliament who draw the full salary must aggregate not less than £10,000.
496
There was a nice piece of hypocrisy attached to all this, in that the figure of £8,000 was, none the less, accepted for pension purposes. As the House has a contributory pension scheme, higher payments were called for out of a consistently lower real salary.
But that was not the only Boyle recommendation that was ignored. As my right hon. Friend pointed out, there were recommendations that the parliamentary salary of Ministers should be increased. The Cabinet would not have that at all. I do not know why that should be so. I have never understood why Ministers should not draw the full parliamentary salary, and why it has to be cut in their case and in the case of Ministers outside the Cabinet and others. Only a portion of what was recommended was allowed.
Therefore, over these four years or so, for members of the Cabinet there has been a shortfall of some £8,000 each. That is a very real sacrifice for devoted persons in public life to accept, and there have been smaller but none the less substantial cuts in the case of other Ministers.
Report No. 8 made recommendations on Members' allowances and ministerial salaries. They were not implemented. Report No. 9 made recommendations on the expenses of Members of another place. They were not implemented, either.
Now we have the twelfth report, which contains the statement, which right hon. and hon. Members will have seen:
" Our work began in the knowledge that Members of Parliament and Ministers were seriously underpaid."
I do not think that any Member of Parliament would ask for thanks or praise for that. However, that is the fact. It is the starting point for this debate.
Many of us were struck by the comments made by journalists and others when the Boyle recommendations were announced. Governments have usually been frightened of dealing with this problem, yet journalists' comments acknowledged that there was a real problem and that it must be dealt with. For example, The Daily Telegraph said " deferred too long ", The Guardian said " fallen painfully behind ", and The Observer said " woefully underpaid ".
It was most noticeable that in the country at large there was not one word

497
of informed criticism—none that I saw, anyway—of Boyle and the recommendations, with one exception, which I shall mention later, which was due largely to a misunderstanding. I suggest that this is the first lesson that the House should draw from this unhappy business. We should not have been in this position. We should not have allowed ourselves to get into it.
Like my right hon. Friend, I want to say a word about work outside the House. Some people believe that no Member of Parliament should have another employment. A number of amendments deal with that point. A few hon. Members believe that there should be no increase in the salary of Members of Parliament. There is an irony in that which my right hon. Friend went some way to point out. The lower we artificially keep the remuneration of Members of Parliament, the more it is necessary for them to seek work outside the House. In addition, the allowances become more significant. I do not know what is the general opinion in the House, but for a long time I thought it unsatisfactory that people in salaried employment in industry—and now, apparently, in the House—should be so preoccupied with allowances. I am against the disease of perks. It is an insidious, spreading thing. It is much better if Members of Parliament and those outside insist on straightforwardness in matters of remuneration.
There are great dangers if Members of Parliament are obliged to depend either on allowances or on outside remuneration. Parliament should not consist only of those rich enough to be able to afford to be here, or the hacks, the place-men, the creatures of the Whips, who cannot afford to be anything else. I strongly believe that outside experience—contemporary as well as past—is invaluable to the work of the House.
I do not support the amendment that suggests that there should be two categories of Members of Parliament and different classes paid in different ways. If individuals do not wish to draw their salary, or any part of it, that is a matter for them. It is not for the House to force decisions on them.
We in the United Kingdom have a fine tradition of public service without
498
thought of personal gain. My right hon. Friend delighted us with an apposite quotation from Bagehot. He is an expert on his work. The tradition of public service without thought of personal gain applies inside and outside the House of Commons. It is fine and valuable. The nation is richer if people have an urge to contribute. Indeed, that is the stuff of democracy. The reality of democracy is that none can escape responsibility for contributing to the public weal, but it is unfair if that urge is exploited.
My right hon. Friend is entirely right in saying that Members of Parliament should be properly paid at all times. We have special privileges. It is right for us to be proud and glad to be here. But we face special risks and difficulties, too. There is a striking phrase in paragraph 9 of the Boyle report:
" Parliament itself must bear the whole of the responsibility for this situation."
That is true. During the previous Parliament the more I contemplated the situation, the more unsatisfactory it appeared to be. I am not the only Member of Parliament who is aware of cases of genuine hardship among hon. Members on both sides of the House that resulted from our parsimony and cowardice. In the matter of salaries, both words are not too strong. If the right hon. Member for Ebbw Vale (Mr. Foot) will allow me to say so, inquiries that others and I made indicated that there would be no proposals from the Government of the day or from the official Opposition. They both took the same negative attitude. It seemed that nothing would happen unless someone made it happen.
There is always a risk of vulgar abuse if one is a protagonist of salary increases for Members of Parliament. It seemed to me high time to look at the situation with realism and good sense and put it into order. The more that I spoke to rank and file Members of Parliament and Ministers, the more I discovered that that was the general view. I was delighted that the Parliamentary Labour Party and the 1922 Committee made common cause on the matter. I pay a tribute to Mr. Cledwyn Hughes, who supported the idea, as the right hon. Member for Sunderland, North will recall.
I discovered something else. When the matter was properly explained to the

499
public, no one from inside or outside my constituency whom I met thought that what we were trying to achieve was in any way unreasonable. There were many meetings. The right hon. Member for Ebbw Vale could not have been more courteous or helpful. I pay a tribute—as did my right hon. Friend, speaking from the Front Bench—to the Leader of the Opposition. I was grateful for the courtesy I received. The right hon. Gentleman, the then Leader of the House, introduced legislation to implement the outstanding parts of the eighth Boyle report dealing with Members' pensions. I thank him for that. Boyle was reestablished. I thank him for that also.
So far so good. It is worth spending a moment to discuss our aims, to which the right hon. Member for Sunderland, North referred.
My hon. Friends and I thought that we should first endeavour to get this subject taken out of the political arena. We invited the then Prime Minister and the then Leader of the Opposition to enter into a commitment that the Boyle recommendations would be accepted by the Government, whatever their political complexion, after the election. We also wanted to get away from the perennial difficulty of regular examinations of this scene. Like the disgusting spectacle of a man examining his own navel, there were these constant unhappy debates. That is why it was considered that we should perhaps find some form of linkage.
There was never any suggestion that we were looking for an index against which to measure ourselves. There are obvious public misunderstandings on that point. I do not agree with the amendments which seek that end. However, I strongly support my right hon. Friend's suggestion that we should ask Boyle, in spite of his previous examination of the matter, to find what my right hon. Friend called an analogue.
In my opinion this is by no means the end of the matter. There is a whole series of other untidinesses with which, in one way or another, we should deal. I hold the view that Minister's salaries, even after these improvements, will still he lower than they should be, particularly when one considers the substantial responsibilities of Ministers outside the
500
House. London residence, which is assumed on the part of Ministers, requires examination. As was said during an intervention from the Opposition Benches a moment ago, we also need to consider further the position of secretaries to see whether it is possible to organise some kind of pension scheme for them. Let us be quite clear that today we are dealing with only part of this whole matter. There are other aspects that will require attention.
I thought it utterly deplorable that the contents of the Boyle report were leaked to the newspapers during the general election campaign. It is an insult to the House, when parliamentary papers, so to speak, are made available to the world at large before they are made available to Members of the House. I thought that it was even more deplorable—I am sure that this is not a matter for which my right hon. Friend was responsible—that many of us were asked questions in the Lobby about what we understood were the Government's proposals in relation to the Boyle report before we had seen it. That is one reason why my right hon. Friend faced a hostile audience when he rose to address the House on 21 June.
If I may reiterate something that I said at the beginning of my speech, I believe that it would have been very much better if this whole matter had been dealt with on this last occasion by the House's being consulted before the Government made up their mind about the best way to proceed.
The advice that I gave, for what it was worth, was very simply put. As the right hon. Member for Sunderland, North said, we should accept Boyle, and accept it speedily, for there is no point in arbitration unless we accept the award. If we do not accept an arbitrator's award, why on earth should distinguished people such as Lord Boyle and his colleagues agree to serve and take up their time? Why should we waste our time giving evidence to Lord Boyle? All the facts are known to Ministers?
The Boyle report recommended also that if there were to be phasing it should be as rapid as possible. Both those pieces of advice were valid. Thirdly, we recommended that it should be a non-party matter, and last, but by no means least, that the decision should be one for the

501
House without the influence of Ministers, Under-Secretaries or anyone else. I still believe that those were the right views to give.
We are now at the moment of decision. I hope that all right hon. and hon. Members will support the motions tabled by my right hon. Friend. If I may attempt to please him with a second quotation—if I pleased him with my first—I remind him of the words of John Pym, who said:
" A Parliament is that to the Commonwealth which the soul is to the body. It behoves me, therefore, to keep the facility of that soul from distemper."
The truth is that this Parliament is the base of our democracy. If it is healthy, we have not merely something to be proud of; we have, perhaps, something which, in its way, is an inspiration to the nation as a whole. If this place is unhappy the nation suffers, too, and its affairs will be less well attended to than they might be.
It is easy to make sardonic remarks or cynical observations about our past failures. I dare say that all right hon. and hon. Members are only too painfully conscious of them. The reason why I believe some of us argue so strongly for improvements in our procedures, such as the establishment of Select Committees and so on—my right hon. Friend has set a splendid example—is that we love this place and wish to see that it is effective.
Let it not be assumed outside this place that there is any note of selfishness in arguing that Members of Parliament and Ministers pay themselves the proper rate for the job. It is a small step, I believe, in an attempt to see that our democracy and its systems are more effective than they otherwise might be.
4.55 p.m.
Mr. Robert Mellish: I have had the privilege of being a Member of this House for over 30 years. I have lost count of the number of times I have spoken on problems concerning the salary, conditions and pensions of Members of Parliament. I remind myself, if I need reminding, that it seems only yesterday that I went round with a piece of paper asking Members of Parliament if they would be kind enough to contribute, following the death of Wilfred Fienburgh, the then Member for Islington. Mr. Fienburgh died in a motor
502
accident, leaving behind a wife and four children. All Members of the House were generous. We collected about £400, which I gave to the widow. Following the death of Mr. Fienburgh my party set up a special benevolent fund to deal with the appalling individual cases of poverty.
Again and again we have had instances of difficulties suffered by individual Members of Parliament, and when we have had debates on whether Members' salaries should be increased people outside have referred to the selfishness and greed of Members of Parliament and comparison has been made between Members of Parliament and old-age pensioners. I remember once I went on television with a very well known Member of the House, whose name I shall not mention. I argued at that time that Members' salaries should be improved and I received hundreds of letters from old-age pensioners who described me as a mean, loathsome and despicable person. Although I tried—I do so again tonight—to assure old-age pensioners that if Members of Parliament had no salary at all, and did everything free, it would make not the slightest difference to their pensions in the sense that overnight the old-age pension would go up, I had little success. However, it is not as simple as that, otherwise we would not be talking the way we are tonight.
I remember that the man originally responsible for Boyle was the then right hon. Member for Sowerby, now Lord Houghton. The noble Lord, together with the present Home Secretary, decided that the most distasteful thing that could happen would be for Members of Parliament to debate and argue their own salaries, conditions and pensions, because of the reaction of the press. The press exploited the subject on every possible occasion. I understand that this scared some Members of Parliament either from speaking or voting on these issues. As a result of the attitude of the press towards individual Members of Parliament talking about their salaries, this independent body—Boyle—was set up.
The membership of Boyle was impressive. Lord Boyle was himself a Member of this House and he knows a great deal about the procedures and the job. He has been surrounded by representatives of some of the best firms and institutions in

503
the country and also by the trade union movement. There could not be a better body to decide and consider what Members should receive.
When we talk about a rate of £12,000, I remind the House that no Member of Parliament suggested that figure. The present Leader of the House did not suggest that figure, nor did my right hon. Friend the Member for Ebbw Vale (Mr. Foot). It was suggested by Boyle. It argued the case lucidly and expressed its view as to why this should be the rate paid for the job.
The right hon. Member for Down, South (Mr. Powell) recently wrote an article in The Guardian. I have not brought a copy with me, but I read it. It was in line with a thought that the right hon. Gentleman has had for a long time, as I understand it. The right hon. Gentleman has said that he will not receive any increase in pay that the House may vote should be given to Members of Parliament. That is a matter entirely for him. No right hon. or hon. Member has to take this increase in pay. There is no law that says that we must take it. All that is necessary is to write to the Fees Office and refuse the increase.
Mr. J. Enoch Powell: With one exception. Apparently the Prime Minister has made it obligatory upon members of her Government to take the increases—including, presumably, the parliamentary increases—whether they want to or not. That is the remarkable exception to the rule which the right hon. Gentleman is discussing.
Mr. St. John-Stevas: I am sorry to intervene on an intervention, but the right hon. Member for Down, South (Mr. Powell) is not quite right. The principle applied to Cabinet Ministers is the principle mentioned by the right hon. Member for Bermondsey (Mr. Mellish). They have voluntarily agreed to take the full amount of money. If they had not wished to do so, they would have reached a different decision.
Mr. Mellish: I am obliged. I do not quarrel with the point of view of the right hon. Member for Down, South. This is entirely a matter for individual Members. The right hon. Gentleman has as much right to his point of view as I have to mine. I repeat my view again: hon.
504
Members do not have to take the money if they do not wish to do so. Of course, there is nothing to stop Members from taking the increase and publicly informing their local press that it is being sent to their old-age pensioners' association.
We have had in the past this argument about old-age pensioners and the rest. It is sickening to find afterwards, perhaps long after, that those who have used that argument have received the increase but without any of the odium associated with it. I have received hundreds of letters stating that, because I believe that these increased rates of pay should be applied, I am in a special class, or that I am extremely greedy and all the rest, and do not give a tuppenny damn for old-age pensioners, the trade unions and the rest.
Mr. Budgen: Does the right hon. Gentleman agree that we are in a special class? We may or may not be greedy, but it cannot be said that we are in any way comparable with any other profession in the country.
Mr. Mellish: With respect, I do not think that the hon. Gentleman has been listening to what I have said. In the past, we argued that somehow we were special and that we deserved certain rates of pay. I was present when that argument was used. All we could do then was to put down a motion of our own. I was very much involved in a Private Member's motion for which the Government found time. By the way, it was destroyed by Lord Shawcross—Sir Hartley, as he then was—who came into the House in full evening dress regalia, medals and all that nonsense—
Mr. Powell: Not medals.
Mr. Mellish: I am probably wrong. I withdraw " medals ". Anyway, he came into the House and made a great speech on behalf of the poor Back Bencher. Of course that was a disastrous evening.
What I have been saying is that we put this matter to an outside body. What I have said has nothing to do with what I think Members of Parliament should or should not get. Nothing that I have said has not been said by Boyle, and the Boyle committee was the outside body.
That brings me to my main argument. I do not believe in linkage. I do not agree with it, because one must first

505
decide to which salary grade a Member's pay is to be linked. It was mooted that there be an assistant secretary rate of pay. The trade unions have a point of view about that. Why should they have to put up with a situation in which every time the Civil Service unions moved in and argued for civil servants some bright character said " You had better watch it, because if you give it to civil servants you will have to give it to MPs."
Frankly, there will always be opposition to this question. There will never be agreement on how our salary should be linked. It follows logically that our salary should be linked only with Boyle, because that was the body which was set up. If hon. Members do not agree with the constitution or membership of the Boyle committee, let them sack it and find some other form. But when the Boyle committee spent all those months arguing the way that it did, I do not understand how Members of Parliament can say that Boyle is a madman whose proposals should not be implemented.
Dr. Jeremy Bray: If one agrees with my right hon. Friend's argument about accepting Boyle as a useful periodic review, and because of the time that the House wastes on the matter, is there not a case for letting it run for three or four years, with linking in between the increases?
Mr. Mellish: There is much in what my hon. Friend has said. I should like to deal with several other matters and then I shall return to it. That will be my great peroration.
Some hon. Members argue that Members of the House should have no employment outside. I do not have outside employment, but I do not understand why hon. Members say that. At the end of the day, whatever the income of an individual Member, the Inland Revenue will deal with it. If an hon. Member has outside employment as a lawyer and receives £20,000 a year on top of his Member's salary, I assume that the Inland Revenue will take its share of that.
I ask hon. Members to stop conveying the impression that this place does not need—I believe that it does—Members with a wide experience. I claim to have some specialist knowledge. I was born
506
into the trade union movement at the ripe old age of 15. I think that I have some knowledge of the dock industry, when we had a dock industry. I believe that I can make a contribution in my own way.
Like the right hon. Member for Taunton (Mr. du Cann), I have come to love this House a great deal. Its democratic base and standard is the pride of the world. I have always bitterly resented the fact that the salary of Members was considered to be among the lowest in the world.
I therefore believe that Boyle should be the basis upon which all future increases should be given. I believe that the Government of the day should accept on an interim basis—every two or three years, or whatever the House may decide—that Boyle should report. When Boyle has reported, the Government of the day must stop the nonsensical arguing over Boyle. Up to a point, the Leader of the House has since his previous statement extricated himself from that charge, but only up to a point. I believe that Boyle should be implemented. I hope that this is the last time that I shall ever have to argue in this House that Members of Parliament should be given the rate recommended by Boyle. I am sick of it, and I do not want it to continue.
I appeal to all my hon. Friends. All my life I have been a trade unionist, and I believe in one simple principle—the rate for the job. The rate for our job was decided by an outside body, and never will I, as a trade unionist, black that principle.
5.7 p.m.
Sir Derek Walker-Smith: It is a privilege and pleasure to follow so respected a Member of this House as the right hon. Member for Bermondsey (Mr. Mellish). I always enjoy his contributions. Today, not only have I enjoyed it but I am in substantial agreement with virtually everything he has said. I agree with what he said at the end of his speech—that he hoped this was the last occasion on which he would have to address the House on this matter. I certainly hope and, indeed, expect that it is the last occasion on which I will have to address the House on this subject.

507
It is not my favourite subject. I do not suppose that it is the favourite subject of any hon. Member, because of the invidious implications for an assembly that must be the judge in its own cause and fix its own emoluments without any precise guidance, at any rate, until it had Boyle.
I am, therefore, reluctant to speak on this subject, but there are three reasons that constrain me to make a short intervention. First, this is basically a House of Commons matter, and I have been a Member of the House of Commons longer than most. The second and related reason is that in so far as financial benefit will, or may, ensue from our proceedings, I am likely to enjoy it for far less a period than most hon. Members present. The third reason is that by accident of history I have been connected a good deal—again, somewhat unwillingly—with these controversies in the past.
In particular, I was connected with the great controversy on these matters in the 1950s, at a time when I was chairman of the 1922 Committee.
In that context I should like to pay tribute to my right hon. Friend the Member for Taunton (Mr. du Cann), who today discharges so much better the duties that I then sought less successfuly to discharge. I also pay tribute to the right hon. Member for Sunderland, North (Mr. Willey) in his office in the Parliamentary Labour Party.
My right hon. Friend probably finds the 1922 Committee an easier body to deal with than I did 20 years ago. In those days there was a lingering attachment to the amateur status, particularly on the part of what the press used to call the " Knights of the Shire ". That is a nice expression and I put it that way because they were nice people. People less enviably placed, however, might have tended to ascribe to them something of the philosophy of " I'm all right, Jack ". In my personal as opposed to my representational capacity, I was sympathetic to that case. More importantly, the then Prime Minister, Sir Winston Churchill, was also personally sympathetic. In conversation he dilated to me with that unforgettable mixture of grandiloquent gravitas and impish illustration on some of the cases of hardship that had been retailed to him.
508
In February of this year, before the general election, I identified my continuing approach to the matter. I said:
" I have always taken the view from the beginning of this controversy that I am in a fortunate position because I have been able to practise a profession which has given me a living outside the House. I know that there are many occupations to which that does not apply. We should think of that when we consider what is the appropriate level of remuneration for Members.—[Official Report, 20 February 1979; Vol. 962, c. 309.]
I made that clear before we went to the polls.
One important lesson that I learnt from the controversies in the 1950s is that there is no disinclination on the part of the public to agree to a proper remuneration of Members of Parliament and no feeling of hostility on the part of the electors to those whom they elect. It would be strange if that were so, considering that it is they who elect us. Indeed, there is hardly any interest among the public on the question of Members' remuneration. In so far as it is or was an issue, it exists primarily in the minds and fancies of the media.
My hon. Friend the Member for Knutsford (Mr. Bruce-Gardyne) shakes his head from his long experience of these matters inside and out Parliament. When we came to the general election 18 months after these controversies, there having been an increase—albeit a modest one but not so modest for those days—I thought it more seemly and appropriate, as I was identified in the newspapers with that controversy in my representational capacity as chairman of the 1922 Committee, not to take the increase for the duration of that Parliament. I had then as I have now a great number of electors. In those days I had a great many meetings at the election as well as informal exchanges. Not once in the course of that election by any of these tens of thousands of electors was the subject raised—and from beginning to end not one of those tens of thousands of constituents of mine ever knew that I had not drawn the extra emolument for that Parliament. That is a decisive answer to the uncharacteristic cynicism of my hon. Friend the Member for Knutsford.
Mr. Bruce-Gardyne Mr. Bruce-Gardyne rose—
D. Walker-Smith: I shall give way to my hon. Friend because he has rejoiced

509
us all in coming back to the House after many days.
Mr. Bruce-Gardyne: I assure my right hon. and learned Friend that it is not a question of cynicism. I can only tell him that my experience is different.
Sir D. Walker-Smith: My hon. Friend must have an unfortunate aptitude for attracting criticism. Those of us who are more old-fashioned and less scintillating think that it is part of the function of a politician to try to avoid criticism where we honourably can. My experience now, 20 years later, is the same as it was then. I have received only one letter criticising the matter from my 95,000 constituents.
The salient questions are these. Is the level of remuneration, judged objectively, inadequate, having regard to the nature of the work and the requirements of the position? Is there a possibility that suitable candidates may be deterred from coming forward because of that circumstance? Is there a possibility that once elected hon. Members may be constrained to turn to unsuitable activities or undesirable connections by way of necessary implementation of an inadequate income? If the answer to all those questions is " Yes ", the House must recognise the implications and take the necessary action not only in its own interest but in the interest of the public as a whole.
On the basic question of the inadequacy or otherwise, there can be no doubt that the level of remuneration has been consistently low. It has been said that there is no case for change because the erosion of the real value of parliamentary remuneration has not been significant over the years. That was stated in the article in The Guardian by the right hon. Member for Down, South (Mr. Powell) on 9 July, to which the right hon. Member for Bermondsey referred. In that article he said this:
"The real value of the Members' salary today is not less than it has been during most of the last 35 years."
That may be, but it does not prove much. If it has always been too low, consistency is at best but a doubtful virtue. It only means that rectification has been an unconscionable time in coming.
I can illustrate the inadequacy of parliamentary and ministerial pay in the context
510
of my experience. When I entered the Government as a junior Minister I drew the princely emoluments in gross pay of £2,000 a year—£1,500 ministerial emoluments, £500 parliamentary emoluments. I went to the Board of Trade to the accompaniment of a chorus of press comment and conjecture as to how many times my income as a Queen's Counsel exceeded that which I was about to get as a Minister of the Crown. Five years later, when I returned to my practice as a Queen's Counsel, it was to the accompaniment of a corresponding chorus of conjecture and computation.
In law, in valuation, rating and compensation cases, comparables are indispensable. In the absence of comparables here we must seek to define principles to guide us. First, I suggest that these emoluments should be reasonable but not lavish, echoing what my right hon. Friend the Leader of the House said earlier. What is here recommended in any event falls short of the remuneration of other legislatures, which after all, are the best comparables that we have in this idiosyncratic situation. Secondly, we should accept the guidance of Boyle. We are fortunate to have what was lacking in the 1950s—a review body of authority, experience and objectivity.
We should if possible seek to find an appropriate relativity or analogue—and I know that is more controversial. I agree with my right hon. Friend that it will not be easy. If the fairly modest position of an assistant secretary that has been suggested as an analogue be the right one, what is recommended here today falls substantially short of it.
Finally, I believe that we should avoid inflation-proofing. On this matter I agree with the amendment put down by my hon. Friend the Member for Knutsford. Inflation-proofing will not really do for the House of Commons. After all, it would be inflation-proofing for those whose primary duty it is to keep inflation at bay. There would be bound to be scepticism in the assessment of our determination to ward off the enemy of inflation if the Praetorian Guard itself were exempted from the consequence of defeat. The question would inevitably be raised, in substance if not precisely in these terms—quis custodiet ipsos custodes.

511
I still feel that it might, and probably would, have been better to implement Boyle without frills. I believe that the present proposal, although not objectionable, and indeed to be welcomed in so far as it follows and gives effect to Boyle, courts a charge of being complex and circuitous. In order to escape from a criticism which probably would never have been directed and would have been demonstrably misconceived if it had, a course has been taken which may be open to legitimate criticism on the score of complexity and potential misunderstanding.
Subject to that, I believe that these proposals make a satisfactory end to a very long and invidious saga. They can be welcomed as a tardy act of justice, and as being in the interests of the House and the country alike.
5.22 p.m.
Mr. J. Enoch Powell: In a period of inflation every discussion of a proposed increase in remuneration contains two distinct elements between which it is, especially in the case before us today, important to distinguish.
One element is the offsetting of the erosion in the value of money since that remuneration was last fixed or agreed. The other element, technically called the " real element ", is whether the relative remuneration should be altered, and that normally means whether it should be increased.
I am grateful to the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) because he has given his weighty support to the view that in this proposition before the House we are not, to any appreciable extent, concerned with offsetting the effect of past inflation. Indeed, it is impossoble for an hon. Member to study without prejudice the figures which were set out in a written answer from the Leader of the House on 25 May without concluding that, broadly, the present rate of remuneration has the same value as the remuneration of hon. Members during most of the past 60-odd years.
Although the monetary figures in themselves do not quite bear that out, I am sure that the case is made by the substantial importance of the reimbursements, which is the accurate title for the allowances,
512
which we receive for parliamentary expenses, some of them heavy. For most of the past period hon. Members incurred these expenses and bore them out of their income before tax. If we can get it clear that today we are concerned, not with rectifying the deterioration in our position, but with the proposition of a substantial and, indeed, major increase in the real remuneration of hon. Members, that will be a point gained.
Although I sympathise with the argument of the hon. Member for Wolverhampton, South-West (Mr. Budgen) that we should not be the first people in the world to press for the effect of inflation to be offset in our own case, it would be thought reasonable that if there were a severe deterioration in the value of money, even during the life of a Parliament, that should be taken into account by an adjustment of the going remuneration of hon. Members. We are in a very different position if what we propose to do is to make a major increase in the real salary.
If that is what we are proposing to do, there is only one honourable and proper way in which we can do it, a way which would leave us free from all cavil or criticism. If we decide that the real remuneration of hon. Members should have been 50 per cent. greater than the remuneration for which we contracted when we sought election, there is nothing to prevent us from passing a resolution that it be so from the beginning of the next Parliament. That is the normal way for this House to use its powers to confer benefits which might inure to hon. Members themselves, so that they free themselves from all suspicion of self-interest in such matters. It is the only way of decency; and if there were no other arguments against the proposition I would vote against it tonight on the ground that any such change should date from the beginning of the next House.
Mr. Mike Thomas: I stood for Parliament in May of this year on the understanding that when I was returned I would be paid what the Boyle committee recommended. Now I am being asked to settle for less than I contracted for, not more.
Mr. Powell: That might have been the hon. Member's expectation, or it might

513
have been his speculation, but there has been no resolution or announcement. There was no such announcement as that in 1964 to which the Leader of the House referred. There was no acknowledged intention, though there might have been various conjectures as to what would or would not be done. We came here for the going rate. If we now wish to increase that going rate by 50 per cent. let us do so; but let us ensure that we are not seen to do it for the benefit of those sitting in this House at present.
There is another humbug of which we should free ourselves. That is the pretence that this is not really a decision that we are taking, the pretence that we can shelter behind an outside body. It ill becomes those who laud and magnify the status of this House to say that we should implement what an external body that we have set up recommends, whether we like it or not.
The fact is that this House is taking the decision, and taking it on its own responsibility. Whatever committees are set up, and whatever those committees recommend, that responsibility stays with us. What Government is there, and what House of Commons is there, which would admit that there are certain bodies whose decrees we exist only to register without alteration?
Even the business of finding an analogue, which is supposed to get us out of difficulties that have worried tender consciences, offers no escape and no recourse from the responsibility which we hold. Presumably, we are settling the analogue ourselves: it is our chosen analogue. In any case, in choosing it, we know well that any analogue outside this place will adjust automatically over the years to the progress of inflation. The notion that by asking the Boyle committee to hit upon an analogue we are not indexing our remuneration is a mystification. The responsibility lies with the House. We take that responsibility upon ourselves in whatever form we do so.
We should also address ourselves to the question of remuneration without confusing it with the question of full-time service or otherwise. I am aware that some hon. Members believe that service in the House should be full-time for all.
514
That is a matter which could be properly argued. However, I hope that those Members would agree with me that the proper way to argue it and the proper way to deal with it—if it is to be dealt with—is not by a side wind under cover of an increase in remuneration, but by saying, if we think it fit and practical to do so, that in future we have decided to become a full-time House. That is a separate and substantive matter that is not seriously in debate in today's proposition.
The proposition simply is that, whether for this Parliament, as I believe it should not be, or for the next Parliament, as I believe would be allowable and decent if the House so thought fit to resolve, the remuneration should be increased by about 50 per cent. in real terms.
Mr. Neubert: I am hesitant though grateful to interrupt the right hon. Gentleman because he brings great clarity and cogency to our debates. However, I cannot understand the claim that we are seeking by the proposals an increase in real terms. In an answer to me on Monday of this week it was shown that, if we were to earn the same amount in real terms as the amount fixed in 1964 to which the right hon. Gentleman has referred, we would now be receiving in excess of £12,400, without any increase.
Mr. Powell: I am aware of that and I remember the matter. However, it takes no account of substantial reimbursements which have been introduced since that date.
Mr. Nicholas Winterton: This is disgraceful stuff.
Mr. Powell: Is it disgraceful to refer to the fact that 100 per cent. reimbursement is now made of expenditures which were met by hon. Members in past years out of their net salary? Is that not a consideration which should be taken into account?
The House is less than fair to itself if it is not willing to allow matters of fact which bear upon the question, however they bear upon it, to be referred to and ventilated. Reimbursement is no doubt the reason why I found myself in agreement with the right hon. and learned Member for Hertfordshire, East that our present real remuneration is at least as

515
high as it has been during most—but not at every point—of the past 60 or 65 years. That is the statement I made, and it is the statement with which the right hon. and learned Gentleman concurred.
Mr. Phillip Whitehead: Does the right hon. Gentleman not appreciate that part of the problem is that the maintenance of the real value of the terms he has set has been carried out only because of a growing imbalance between the salary, which is a public figure that the public have in their minds, and the allowances to which he has referred?
Mr. Powell: The hon. Member for Derby, North (Mr. Whitehead) confirms my point of view and reassures me in my general proposition. The real value of our remuneration has remained virtually stable because matters which had to be met out of it before are not met out of it now.
Two grounds have been urged in favour of the proposed 50 per cent. increase in our remuneration. First, we are told that it is due to our status, secondly, we are told that it is necessary for the maintaining the quality of the membership of the House.
The question of status has several times been referred to in the debate. If it was not the actual word used by the Leader of the House it was implicit in his arguments. He said that our prestige and influence should be reflected in our remuneration. So, in his view, the status, worth, prestige and influence of hon. Members is not adequately represented by our present remuneration and therefore this should be increased by 50 per cent. and thereafter we should be put on the same level as certain analogues at which he hinted—county court judges or assistant secretaries. Indeed, the right hon. Gentleman said that it was absurd for the Minister as head of a Department to receive no more than an assistant secretary in that Department.
Where does that argument lead? It leads to a Minister's salary being higher than that of his permanent secretary. Otherwise, the argument is worthless. So let us consider the proposition carefully. We are stating that our prestige and influence must be reflected in our
516
remuneration. That is a statement that can be read backwards. When we have awarded ourselves the remuneration of an assistant secretary, I hope that we shall be proud to know that that represents our prestige and influence.
It is an absurd notion that the prestige, influence and responsibility of hon. Members can be reflected in monetary remuneration and that the remuneration which will reflect it can be read off by examining, as the Boyle committee does, the various scales of pay in various professions and callings. If we are jealous for our prestige, influence, and status, we should be most careful that our remuneration is not such as could be misunderstood to reflect our status.
Again, is it seriously contended that the quality of potential hon. Members pressing forward to enter the House, the dedication and unselfishness which, if elected, they would show in the discharge of their duties, the readiness to sacrifice if necessary in the maintenance of their opinions—to sacrifice their seat itself, if necessary, rather than bow to the wind of popular prejudice—will be enhanced by making them £12,000-a-year men instead of £8,000-a-year men? If there is any result from that change, other than to lower the House in the estimation of the people by appearing to give them a monetary equivalent of what we are, it will be that there will be rather more people in the House of about the £12,000-a-year mark, people whose principal aim and object in life is a salary of £12,000 a year.
I agree that all this is a matter of status and quality, and for that very reason I say that it is against the interests of the House to resolve that its real remuneration should be increased by 50 per cent.—whether over two or three years or not. Those whom we represent should be represented, as I believe they have mostly been represented in the past, by men of pride; and here I address what I am about to say more to hon. Members on the Benches around me than to the rest of the House.
Mr. Alan Clark: Why?
Mr. Powell: In the past the pride of hon. Members has often been derived from birth, from nobility, from wealth.

517
from the possession of broad acres. It has been that which has given pride and status—a status that they brought into the House as well as finding in the House—to Members of Parliament in past generations.
That is no longer the sort of pride that will serve in our own time. [Interruption.] I do not wish to discount it, but it will not by itself serve. There has to be another sort of pride in this place. There has to be another sort of status, that of being in a sense set apart, of having dedicated ourselves to a unique function. That is not entirely new. Throughout the history of the House there have been men—men such as Richard Cobden—who gave everything that they had, materially as well as otherwise, to the service of the House. They were the better regarded for it in their time and subsequently. It is that status that even the poorest, even the humblest of us, can bring to the House and maintain it. It is this status which we shall prejudice and weaken if we pass the motion that is before us.
5.42 p.m.
Mr. John Bruce-Gardyne: The right hon. Member for Down, South (Mr. Powell) never ceases to surprise us. I was rather amazed to hear him appear to indicate at the beginning of his remarks that he found nothing especially reprehensible about the concept of linking the salaries of Members of Parliament with inflation. On that ground I profoundly dissent from him, as I shall try to argue. Thereafter I am bound to say that the right hon. Gentleman advanced some arguments which seemed to have considerable power and with which I have some sympathy.
I am not all that enamoured of the motions. First, I dissent from the argument of my right hon. Friend the Member for Taunton (Mr. du Cann), as I hold the view that the Government have a perfect right to put a proposition on these matters before the House. It is for the House to decide what the conclusion on the proposition shall be. I am not sure that my right hon. Friends were entirely wise to bow to the pressure that was put upon them and to change the proposition that they put before us. As Lord Rhyl Whip is a summons to attend. I see no said on a famous occasion, a three-line
518
reason why my right hon. Friends should not have put before the House a proposition such as my right hon. Friend the Leader of the House originally suggested, to submit it to the judgment of the House. However, that has not been done.
It must follow from what I have said that I dissent from the argument advanced by the right hon. Member for Sunderland, North (Mr. Willey) and others that we should find a way of removing the argument from politics. Of course we all feel the embarrassment that the subject arouses. However, I do not see how we can escape it.
Mr. Michael Shaw: Or should escape it.
Mr. Bruce-Gardyne: Indeed.
On the other hand, the idea that we should hand the matter over to Lord Boyle and his eminent colleagues, and accept whatever they say regardless of our circumstances, and regardless of the circumstances of the nation, is one that I find unacceptable. Even if we did that, we would still face the obligation formally to endorse the proposition presented to us by, for example, Lord Boyle. That being so, we would not entirely escape the embarrassments involved in the discussions of these matters, although we would perhaps like to feel that we had covered ourselves with an alibi—an alibi for which I do not have much enthusiasm.
Another anxiety that I have about the nature of the motion is that in several respects it fails to offer what I would regard—perhaps it is too much to ask for—as an ideal solution, or anything approaching it. First, the remuneration proposed for Ministers, especially junior Ministers, remains grossly inadequate. Ministers, unlike other hon. Members, have no permission to exercise any form of outside income. We should not delude ourselves. For many hon. Members the acceptance of office in Government involves a substantial financial sacrifice. It is one which I suspect increasing numbers of hon. Members are not prepared to make. It is not satisfactory or desirable that the choice of the Prime Minister in making appointments to her Government should be diminished by the limitation of financial considerations. I doubt whether Lord Boyle's proposals, or those in the motions, go far enough for Ministers.

519
There is another aspect of the argument concerning Back Benchers that worries me somewhat. I think that I am right in saying—my right hon. Friend the Leader of the House will correct me if I am wrong—that last year approximately half of the total cash received by the totality of hon. Members was in the form of what the right hon. Member for Down. South accurately described as reimbursed expenses. I question whether we, who are responsible for deciding the taxation that the rest of the nation shall be required to pay, are well advised to move gradually into a position in which up to 50 per cent. of the total cash that we receive comes in a form that is not subject to tax.
I am not suggesting that reimbursed expenses involve great abuse or impropriety. I am not saying that those in other walks of life do not receive similar reimbursements. I recognise that those reimbursements are accepted as legitimate expenses. That is all true. But we are in an exceptional position. It is not helpful that we should gradually move into a position where an increasing proportion of our total cash remuneration comes in a form that does not bear the taxes that we have the obligation to impose upon the rest of our fellow citizens.
That brings me to the whole issue of indexation. I was delighted to hear my right hon. Friend the Leader of the House, in his opening remarks, assure the House that it was not his intention, and had not been his intention, that the future steps in the salary scales that are proposed in these motions should be directly linked to inflation. Indications to that effect seem to have circulated and to have gained some credence. I am delighted that those indications are without foundation.
My right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) said that we, in this House, were supposed to be the defenders against inflation. I am bound to say to my right hon. and learned Friend that we are also the main sinners. We seem to come here determined to do all in our power—
Sir Derek Walker-Smith: Some of us.
Mr. Bruce-Gardyne: My right hon. and learned Friend says " Some of us." I would say " Too many ". I have always believed, as my right hon. Friend the
520
Leader of the House said, that Governments are the motor of inflation. God knows, this place provides the spirit. It would be totally intolerable if we in this House, with the power that we possess to generate the inflation that the rest of the nation must suffer, sought to exclude ourselves from the consequences of our own behaviour in this way. I am delighted to hear that my right hon. Friend rules out that course. Instead, we have an analogue.
I am not happy with this analogue. The right hon. Member for Down, South drew attention to the status implication of this analogue. I hope that we shall bear in mind that this famous analogue—an assistant secretary, or whoever he may be—is, in turn, the subject of a system of comparability, so we pull ourselves on to the coat-tails of the vortex of inflation. Before long, I suppose, we shall be referring ourselves to Professor Clegg, over and above Lord Boyle.
I understand the motive and the anxiety that we should exonerate ourselves somehow from the embarrassment of this argument in future years, but it still seems a dubious process for us to undertake. We cannot escape from the responsibility of deciding this matter for ourselves. Nor should we try to do so.
The last point that I wish to make is more a matter of interrogation than anything else. I am concerned that, once again, we should be deciding to relate our pension entitlement to a salary that we are afraid to pay ourselves. I realise that this is not an innovation. It was done in the previous Parliament. Had I been a Member of that Parliament, I should have been reluctant to support it. I am reluctant to support it now. This is another sympton of the way in which we have tried to fudge the issues. I do not believe that they should be fudged.
I should have been far happier if my right hon. Friend had come to the House and said " These are, perhaps, the substantial increases that are necessary, in our estimate, for the good functioning of Parliament, both at ministerial and Back-Bench level. They are increases that enable us to eliminate the growing incidence of reimbursed expenses and enable us to relate our pensions on retirement to the scale of remuneration that we actually receive."

521
That would be the perfect world. We cannot expect all that to happen. The proposals before the House, in some respects, fall short of what might have been hoped. We should think long and hard before accepting this concept of an analogue for our salaries with some distinguished gentlemen in the Civil Service.
5.55 p.m.
Mr. Reg Race: Later this evening I shall formally move amendment (a) to the Leader of the House's motion. I shall, however, read the amendment so that it is on the record. It states:
(1) the salary payable to Members shall be increased on 13 June 1979 in respect of service on and after 13 June 1979 and before 13 June 1980, by an amount equal to the percentage increase in money wages in the current pay round at average earnings for the male full-time worker, as measured by the New Earnings Survey and the Department of Employment's index of average earnings, and expressed as a percentage of backbench Members' pay.
(2) that this House rejects the findings of the Boyle report and refers them back to the Committee for further consideration.
(3) that the Boyle Committee be instructed to report again by June 1980, and in its report to have regard to:

(a) the need to compare Members' pay not only with outside comparators thought to be at the same level of responsibility, but also to the generality of earnings in the economy;

(b) the need to increase substantially the secretarial and research allowances of Members and improve back-up services; and

(c) the need to secure a living wage for full-time service as a Member of Parliament.

The motivation behind the amendment is clear. Both my hon. Friend the Member for Birmingham, Handsworth (Miss Wright) and I believe that this is a question of political and social judgment. We do not believe that Members' salaries can be, or should be, considered in an atmosphere divorced from political and social judgments, in particular political and social judgments about the range of income differentials in society and the extent to which hon. Members want to see large groups of people, including themselves, paid salaries which are out of line with the general level of salaries in the economy as a whole. This point is particularly relevant when we consider some of the speeches that have been made.
Hon. Members on the Conservative Benches have talked about the lack of
522
comparison that is possible between Members of Parliament and people working at the higher levels of the Civil Service. I agree with that. If there is no real and no classic comparison to be made, it seems that there is a political and social judgment to be made. The political and social judgment that I make is that the increases proposed by Boyle are far too high. They lead us into a situation where Members of Parliament are seen to be anxious to increase substantially the pay of people who are already paid relatively highly in comparison with the earnings of male full-time workers in the economy as a whole. Parliaments and Governments in the past have given similar generous treatment to groups of people such as senior civil servants, heads of the Armed Forces, judges, and so on. The treatment is different from that meted out to the generality of people in the economy as a whole.
Mr. Peter Bottomley: What does the hon. Gentleman regard as a living wage? Will he say whether he believes that, say, the deputy head of a comprehensive school, or the general secretary of a trade union, should suffer a substantial reduction in pay if elected to the House?
Mr. Race: I shall be coming to that point. I did not expect to get away without having to refer to such matters.
We believe that the comparison between the pay of hon. Members and the generality of pay in the economy ought to have regard to the basic principles laid down in the Labour Party's programme published in 1973. The point is related particularly to Labour Members, and I feel that the credibility of the Labour movement is at stake.
How can it be possible for hon. Members to support a political programme that favours reductions in the inequalities in income and wealth in society and yet overtly to call for substantial wage increases for themselves? That is a serious question for my hon. Friends, and I hope that they will consider it carefully before voting.
Our 1973 programme said that we wanted
"to bring about a fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families ".

523
It went on to state that we wanted
" to achieve far greater economic equality in our society—in income, in wealth, and in the living standards of everyone."
That is an objective which I and many of my hon. Friends support. It is crazy for hon. Members to support the increases proposed by the Government and, at the same time, to be critical of those on lower incomes who want to raise their pay substantially, especially if they are among the low-paid earning between £40 and £60 a week. There is an element of hypocrisy in that and the House should be aware of it.
The increases provided by the Boyle committee are clearly far too large in the view of any hon. Member who takes into account the considerations that I have outlined. We do not believe that hon. Members should be treated differently from other groups of workers. We agree that there ought to be a pay increase for hon. Members in the current round. The question is how we are to calculate that increase.
Mr. Mike Thomas: My hon. Friend is right to suggest that hon. Members should not be treated differently from other groups of workers. Does he agree that since other groups were getting a 60 per cent. rise in their incomes while hon. Members were getting a rise of 17 per cent., that is an inequality that ought to be put right?
Mr. Race: It was made clear by the right hon. Member for Down, South (Mr. Powell) that the present level of hon. Members' salaries is little different from the real level over most of the past 60 years. The point about a 50 per cent. real increase is a substantial one. That is what we are talking about.
How are we to calculate this year's pay increase for hon. Members? If we believe that the Boyle committee has got it wrong and that there is a case for telling the committee to do its sums again and to have regard to the generality of earnings in the economy, how should we calculate our increase for this year?
If the amendment is accepted and we ask the Boyle committee to report back by June 1980, it is clear that we shall need a holding operation to ensure that hon. Members have an increase that is related to pay increases in the current
524
round. That is why the amendment suggests that we should take the figures in the New Earnings Survey and update the average male worker's wage by the increases shown in the Department of Employment's average earnings index and apply that, as a percentage increase, to the pay of Back Bench Members. In that way, we would increase the pay of hon. Members in line with the increases that have been enjoyed by other workers in the economy. That would produce an increase for hon. Members of £813·84 per annuni—£15·65 a week—which is a substantial increase.
Mr. Skinner: Before my hon. Friend moves on from that point, there is another matter that I should like him to consider.
Mr. Deputy Speaker (Mr. Bernard Weatherill: Order. Will the hon. Member for Bolsover (Mr. Skinner) please address his remarks to the Chair.
Mr. Skinner: Before my hon. Friend gets on to the new calculations, may I take him back to what he said about referring the whole matter back to the Boyle committee? There is a flaw in that argument. The Boyle committee is, by and large, a representative body of the elite and its members have an interest in seeing that hon. Members are well paid, in order that they may also be well paid in their jobs. They have no old-age pensioners or hospital workers on the committee, and it therefore does not represent a cross-section of the British public.
If we send the matter back to the Boyle committee we shall end up in the same position as before. My hon. Friend must take on board the fact that the Boyle committee, or some other committee, must have a wider representation of the various groups in our society.
Mr. Race: I do not disagree with that. The first step that we must take is to change the terms of reference of the Boyle committee. If we are serious about that, we must do it on the basis of comparing hon. Members not with civil servants but with the generality of earnings in the economy, and particularly with the average earnings of skilled workers. If hon. Members receive a wage that is way out of line with the earnings of the average worker it will become increasingly

525
difficult for hon. Members, no matter what their attitudes may be, and no matter from what walk of life they may come, to continue an adequate form of representation for their constituents. The facts are clear. We must consider the question in relation to what the Boyle committee has recommended and to what the average worker receives.
Back-Bench Members receive £138 a week, which includes basic pay and London weighting. I remove the pence, for the sake of simplicity. We receive nearly £49 a week more than the pay of the average worker, as last measured by the New Earnings Survey. That relationship should be maintained at the present level.
Mr. Jack Straw: Does my hon. Friend agree that in making comparisons we should also take into account the number of hours worked? I am certainly working more hours than ever before. Average earnings are based on a 40-hour week, and hon. Members work considerably more than that.
Mr. Race: That also is a point I was coming to. The question of the hours of work is, of course, very serious, and hon. Members have raised it already. Working hours for the average full-time male worker are just over 42 a week, according to the New Earnings Survey. I know that there are many hon. Members who work considerably longer than that, but we all know that there are others who do not work 42 hours a week. Therefore, the argument about the number of hours worked does not, I think, stand up to close scrutiny.
The reason why I say that is that it the average hourly rate of the average male worker of nearly £2 per hour at plain time rates is grossed up to the 60 hours a week level, which, I suppose, would be an average time for a Member of Parliament to spend doing his constituency and parliamentary activities, one comes to a gross pay figure not very different from the figure proposed in the amendment, after the increase set out in it.
Mr. Alan Clark: I am interested in the hon. Gentleman's obsession with the average and his desire to relate us to the
526
average. Why not fix it below the average?
Mr. Race: I believe that a Member of Parliament has to be related to a wide range of other occupations and not necessarily to one or two occupations. If it is a question of political and social judgment, who is to say that a Member of Parliament is worth more than a nurse, a hospital ancillary worker or a doctor? Some of these occupations will be on above average pay, as is a doctor at the moment, and some will be below, as nurses and ancillary staff are. Therefore, the only practical and reasonable course is to take the average for the New Earnings Survey as a whole.
Mr. Mike Thomas: I am sorry to interrupt my hon. Friend again, but I wonder whether in his previous occupation as, I understand, a research officer for NUPE, he was paid the average wage earned by NUPE workers.
Mr. Race: When I was elected to the House I received an extremely substantial wage increase because precisely that point applied. The pay of those who worked at my union head office was related, in part, to the pay that our members received. If my hon. Friend would like to see me afterwards I shall prove that point to him.
Several Hon. Members Several Hon. Members rose—
Mr. Race: I have given way on many occasions in the last few minutes, and I hope that hon. Members will forgive me if I continue with the brunt of what I wish to say.
There is a serious question in comparing Members' pay to earnings in a range of other occupations. It is a question of social and political judgment, and I do not wish to see a situation where Members of Parliament, and especially Labour Members, are calling for a comparison to be made between those who serve the Labour movement and senior judges and people at senior levels in the Civil Service and elsewhere.
The question of the back-up services to Members also must be considered. I take issue with Conservative hon. Members who have said that there is no public concern about the level of Members' pay. I believe that there is great public concern about that. But there is considerable public support for the idea that

527
the services that Members receive, in terms of secretarial allowances, research allowances or other facilities, should be improved to a level consistent with best practice in industry and the trade unions.
Looking back to the way in which this question was handled at the beginning of this Session of Parliament over the allocation of desks, telephones and so on, one can see the way in which Members are treated—sometimes in a quite disgraceful fashion. For that reason, the amendment calls on the Boyle committee to look again at the relationship between Members' pay and the allowances received. Hon. Members will recall that Boyle dismisses that relationship. He dismisses the idea of a trade-off between the two as being unimportant. That is not the view expressed in the amendment, for the reasons I have given.
If they vote for the Government's proposals tonight, hon. Members will be regarding themselves in a different way from anybody else in the public service at the present time for the very reason that, to my knowledge, there have been no proposals to change the cash limits for the central services of the Palace of Westminster and our other facilities as a consequence of the pay increase for Members of Parliament.
Everyone else in the public sector, whether he be a doctor, local government worker, water worker, university worker or anyone else, will have the whole question of increases in his pay traded off against jobs and services in the next pay round. Already we have that in the present pay round, with the refusal of the Government to increase the cash limits to take account of the Clegg increases. Therefore Members would be placing themselves in a different and, I submit, invidious position in relation to everyone else in the public service since the cash limits on our activities will not be affected by the very substantial pay increases proposed in the Government's motion.
My hon Friends and I believe that the amendment, in calling for the Boyle committee to look again at the whole nature of the relationship between Members' pay and outside comparisons, is highly germane. In my view it will rebuild the credibility of the Labour movement in regard to this issue, and it will also provide for an increase this year that will
528
prevent Members salaries from being eroded further.
6.18 p.m.
Mr. Hugh Fraser: I do not wish to intervene in the almost internecine struggle that has broken out on the Labour Benches in the wake of the speech of the hon. Member for Wood Green (Mr. Race). I wish to turn to the main proposition put forward by the Government, and, having listened to the hon. Member for Wood Green and to the right hon. Member for Down, South (Mr. Powell), I am more than ever impressed by the need for an outside body that can take an objective and general view of the position. I offer my praise to Lord Boyle and his eminent colleagues for what they have attempted to do. He still retains the characteristics of a very smart Secretary to the Treasury who does not give money away easily. I can assure the House of that.
I hope that both Front Benches will have learnt something not just from, the debate thus far but from the positive series of excitable exhibitions and really most unfortunate incidents that at some points almost reminded one of the Suez debate in the House. I hope that in future hon. Members will behave in such a way as to lead to more decorous behaviour in the House as a whole.
The fault of the Labour Government was that they simply sat on the Boyle report, and, in accordance with the other Boyle's law of the natural expansion of forces, matters finally burst out, as all pay controls do, in a revolt against a totally unjust and unfair position imposed on the House of Commons.
The present Government have tried to divide the Boyle recommendations into three parts, and apparently this has not worked very efficiently. If one examines the analogues developing between phases 1 and 2 one sees a curious situation. Indeed, the word " analogue " is an odd one in this context because I thought that it had something to do with long-range weather forecasting. Such analogues in that context are of great rarity, uncertainty and unspecified magnitude. If Boyle had been carried out in two parts as was recommended, the second part to be completed by November 1980, the loss to public funds would have been £400,000 or £500,000. Therefore, there has been

529
a tremendous row in the House over a comparatively small sum of money.
My right hon. Friend the Leader of the House said that he hoped that we could move on and that things would now flow smoothly in regard to Members' pay and ministerial remuneration. I, too, hope that that will be the case, but the House must consider wider issues than merely Members' pay. The level of public remuneration and expenditure certainly falls to the House of Commons and the Government to consider, but perhaps it is only right to raise at this point a wider issue—namely, the size of the House of Commons. The number of such Members is totally relevant to this question. This matter needs to he re-examined by a Speaker's Conference because there have been great changes in the last 25 years since the Boundary Commission recommendations and certainly since two Acts of Parliament laid down the maximum number of Members of Parliament.
There are three changes that have not been properly considered. The first is that some of our sovereignty has gone to Europe. There are now 81 European Members of Parliament, who undoubtedly deduct something from the sovereignty and power of this House. We must then consider the subject of modern communications, ranging from the moped to the local radio station. It is now possible for a Member of Parliament in an urban or semi-urban constituency to deal with 100,000 constituents. Of course there are exceptional areas, such as Northern Ireland where there is a special system of direct rule. There are also regional areas in the North of Scotland where rural weighting makes constituencies far smaller in numbers.
These are facts which the House of Commons must bear in mind. It is no good giving the House more work to do if it is of a meaningless nature. I consider that many of our Committees are meaningless. Surely the power of the House of Commons relates to the power to control Supply. There is no other way in which a Government can be controlled. Therefore, we must examine whether we can reduce the size of the House of Commons. I believe that we should consider bringing it down from 632 to 400 or 500 Members.
530
I believe that there is an even more important point to be considered. Even more serious for the Government is the fact that the list of Ministers continues to grow. It is Ministers who comprise the points from which Government spending automatically flows. Let us consider the size of the Foreign Office. In 1914, when we were a great power, there was in that office one Secretary of State, one Under-Secretary and fewer than 350 clerks. Today in the Foreign and Commonwealth Office there are two Cabinet Ministers, four Ministers of State and one Under-Secretary. Incidentally, the term Minister of State was invented by Sir Winston Churchill and bestowed on Lord Beaver-brook when he was dismissed from the post of Minister for Aircraft Production. It was a title which Beaverbrook never fully grasped, unless it was to show that he was a different man from his father, who had been a minister of religion. The number of civil servants in that office is now 9,450. That is an idea of how a swollen Ministry can become the driving force behind Government expenditure.
The time has come to think in broader terms of the function of the House of Commons. We must consider how constituents can best be served and Governments can best be controlled. We must also consider how money from the public purse can be reduced.
I hope that this is a radical Government. I consider that the Boyle committee is the right system for regulating Members' pay, but that there is something much more fundamental that needs to be considered. Before we examine the organisation of the House of Lords and the decentralisation of minor powers in respect of regional assemblies, I believe that we should examine the composition and size of this House. I believe that there is a strong and urgent case in this Parliament to set up another Speaker's Conference.
6.27 p.m.
Mr. Phillip Whitehead: The fact that I intend to speak to the amendments in my name and those tabled by hon. Friends means that I cannot follow the remarks of the right hon. Member for Stafford and Stone (Mr. Fraser) in the larger considerations which he pursued.

531
I begin by saying a word or two to my hon. Friend the Member for Wood Green (Mr. Race) and the right hon. Member for Down, South (Mr. Powell). The first is a newish Member of the House and the second is of course a very senior Member, but both spoke with considerable courage against the grain of the debate. The fact that I do not wholly agree with them does not diminish my admiration for their speeches. My remarks are relevant to the amendments tabled by my hon. Friends and myself, and it is for that reason that I wish to draw together the two speeches which I have mentioned.
The right hon. Member for Down, South said that we were in this Parliament voting ourselves a 50 per cent. increase. He based that statement on the fact that in the previous Parliament, since the Boyle recommendations were not implemented, and since in successive years we had to take increases in other ways, rather than in salary, the real income of a Member of Parliament, taking into account all the allowances, had not significantly fallen back.
My hon. Friend the Member for Wood Green thought that these allowances should be further examined and perhaps raised. In the course of the previous Parliament I felt that it was not a good thing that we shirked acceptance of the Boyle recommendations and then, through the back door, increased allowances. The public know little about such allowances, and in some cases they might well have been used in part to alleviate the hardship which hon. Members had otherwise suffered. The allowances should be paid on the basis that we are, effectively, full-time Members of Parliament. That does not mean that we should not have outside interests. It means that we are working here as a full-time occupation.
The allowance should go entirely upon the services which we have to employ or on other expenses. The public should not be under an illusion that the allowances are a supplement to our income. It is better for hon. Members to have the courage to say that they believe that there is a given salary which they think the job is worth. They should argue that in their constituencies. We should not wear hair shirts and say that we do not think that
532
we should be paid this, that or the other because that would not be popular outside the House.
We must take the starting point of Boyle and the salary that that committee nominated and then examine the premise upon which the recommendations were based. That premise represents the substance of the amendment tabled by my hon. Friends and myself. The premise is that we should be considered as full-time Members. The Boyle report states:
" In basing our salary recommendations on the 'full-time MP' we do not mean to imply that Parliament should consist entirely of Members who have no interests outside Parliament, whether remunerated or not."
Paragraph 18 of the report states:
"An alternative open to us would be to recommend different levels of payment for full-time' and for part-time' MPs."
However, as in the 1971 report, the Boyle committee declined to do that.
My right hon. and hon. Friends and I believe that that is a mistaken view. If we are to move towards the concept of a full-time Member of Parliament, we must accept that that means a remuneration for the full-time Member of Parliament which is somewhat different from that of the hon. Member who, for reasons of his own, chooses to spend large parts of his time elsewhere. However, fewer hon. Members do that now.
The figures in the Boyle report show that the average number of hours which hon. Members claim to have worked in the working week in the last Session is 67. That is many more hours than the 42 mentioned earlier. Even if one allows for a little exaggeration and reduces that number by 10 hours, we are still talking about a considerable number of hours. We should look to this place as the prime occupation of hon. Members—not their sole occupation. An hon. Member could have an outside interest or occupation without expecting remuneration for it. If an hon. Member has no other remuneration, he is in a better position to argue for the full salary recommended in the Boyle report. In a couple of years' time that will be £12,000 per year.
We believe that we should work upon one of the examples in the appendices of the report. Since there is a large Conservative majority there is likely to be little sympathy for the notion of the full-time MP with no outside earnings or

533
interests. The example involves the Dutch Parliament. Dutch MPs are paid generously. Their standard of living is higher. A Dutch MP's rate of pay is £20,500 if he has no outside interest. If he has outside interests in excess of £2,500 his salary is reduced by half the amount which exceeds that, given that the final deduction cannot be more than £7,500. That means that the minimum salary for all Dutch MPs is £13,000.
The point is that all hon. Members must be paid, whether they are monks or millionaires. We pay a parliamentary allowance to ministers, although the idea that a Minister is caused hardship when earning £12,000 a year is absurd to those who move in political circles. The figure that we should take as the parliamentary allowance, or that part of the parliamentary salary that is paid to everybody regardless, should be set roughly at the figure which the House has estimated should be paid to Ministers of State and others, in the third section of table 1 to the motion.
My hon. Friends and I have taken that principle in setting out a suggested process of deduction which should find favour in the House, even among those who would not necessarily agree with my hon. Friend the Member for Keighley (Mr. Cryer), who has tabled a tougher and more Draconian amendment to cover those with outside interests. We recommend that for those earning over £2,000 in outside income half of that declared outside income for the last tax year should be deducted from the parliamentary salary up to an initial maximum of £3,800, a maximum of £4,400 during stage 2 and £5,000 during stage 3. That is a more modest suggestion than the notion that one should simply take away from a parliamentary salary every last penny earned outside. That would not work, in any event.
That suggestion would mean that an hon. Member who earned £3,000 outside in the previous year would have a deduction of £500 in the first stage or a pre-tax parliamentary income of £8,950. A member earning £6,000 outside would draw a parliamentary salary of £7,450. A Member earning £12,000 outside would draw £5,650, and that would involve the maximum deduction.
Hon. Members may say that everyone should take the £12,000 because they all
534
have constituency responsibilities. It is easier to argue the case that we should be paid the rate for the job when we can illustrate that that rate is based on the notion that most of us are doing this job and are receiving no other remuneration. Ministers can take no other remuneration. When a Member becomes a Minister, all his outside income must cease. According to the codes that govern the lives of civil servants, they are not able to take outside remuneration.
Some hon. Members say that our salaries should be linked to those of assistant secretaries in the Civil Service. They should remember that such civil servants cannot earn the amounts which Members of Parliament can earn outside. If we are to link and say that the job, as a full-time job, deserves the going rate, we must accept the principle of deduction. This is an important stage along the route which I hope we shall take in the next Parliament to when our occupation is seen to be full-time. I am not saying that hon. Members should not be able to do things outside, but that they should not take remuneration for it. I accept that that will not happen in this Parliament, but I hope that it will in the next. We are considering part I of the Boyle report. We have not seen Boyle part II. We do not know whether we shall see it before the summer. I hope that we shall and that we shall hear that the Government intend to honour it and act upon it as soon as it is published.
The chairman of the Committee which in the previous Parliament looked at the conditions of secretaries and research assistants came to the conclusion that some are badly treated. It would be odious to go into detail, but there are cases of real hardship. I pay tribute to the Accountant and to the officials of the House who have attempted to assist. However, we should not treat those who serve us less well than we treat ourselves. It is ridiculous that secretaries here should be in this curious relationship with hon. Members, which is not at all regulated as is any other secretarial occupation outside this place. According to the figures in the motion, they are being given less than a 10 per cent. increase in the secretarial allowance. That is nothing like the figure which has been given as the increase for secretaries in the

535
Civil Service, which has recently been announced.
The secretaries council—with some reason, I think—is indignant that we have come to look at Boyle part I without looking at Boyle part II, without trying to put on a more regular basis the conditions of the secretaries. Looking at the nonsense of the so-called secretarial allowance, one finds, first, that it covers three different things, secretaries, research assistants and office equipment, and, secondly, that it is not always used solely for those three purposes. I shall not go into that matter any more.
However, it is wrong that we have allowances which are not clearly delineated for the particular job that we need —in the first instance, a full-time secretary working for us here, with decent office conditions, a regular pension and all the expectations that people have outside.
I do not believe that hon. Members would wish to leave this debate without hearing from the Government this evening what they intend to do when they get the second part of the Boyle recommendations. I do not believe that we should simply take the money and run, at the end of the summer now, and vote tonight in favour of this statement of opinion, or whatever it may be. I earnestly commend the amendments that have been put forward by my hon. Friends and myself. I hope that, at least on my side of the House, they will find some favour.
6.41 p.m.
Mr. Nick Budgen: On the first point that concerns the House, the question of what is the proper remuneration at present for either Members of Parliament or Ministers at various levels, I do not wish to trouble the House very much, because it seems to me that the decision that we take about our own remuneration is inevitably a value judgment. It is inevitably a judgment of the whole House, a judgment from which we cannot be shielded by any report, no matter how eminent the authors of that report may be. The responsibility is ours. We must take it openly. We must shoulder the embarrassment that comes from taking the decision. We must not, in any circumstances, try to shift it on to someone else or some other body.
536
Before I leave that initial point, I should like to say how much I disagreed with the peroration of my right hon. Friend the Leader of the House. He seemed to suggest that the status and honour of an individual was dependent upon the size of his income or his wealth in some way. He said that the salary of Members of Parliament must be adjusted upwards in order to be commensurate with their status and their honour.
That seemed to be a quite extraordinary proposition to come from one whom I have long admired as a Tory romantic. Would he, for instance, say that the status of his cardinal was diminished because that cardinal earns a great deal less than a coal miner? Or would he say that the Archbishop of Canterbury is a person who has a lower status because he, the archbishop, certainly earns, net, after tax, a great deal less than a prostitute? It really was the most extraordinary expression of view.
Indeed, even the arch-Tory romantic of all time, the right hon. Member for Down, South (Mr. Powell), seemed at one stage almost to be led into the same heresy. Although he referred, with his usual passion, to the past when he was talking about those of broad acres who used to be proud of those broad acres when they represented them in this House, I believe that they were not respected just for their broad acres. Men in this House were respected for many other things. Men of broad acres were also respected for their independence of view. Other men of broad acres were respected for their scholarship. Others were respected because of the honour and decency of their family life.
A man is respected for many different things other than money. I hope that we are not suggesting this evening that a Member of Parliament is to be respected in proportion to the size of the income which he necessarily has to vote for himself.
I devote most of my short speech to the question of these two tranches that are proposed by the Government. When my right hon. Friend announced last Friday the new deal which had been so ignominiously forced upon the Government, he talked, it was reported, in terms of indexation. But the Government and their advisers are sophisticated people. They

537
have now thought up a new word. It is not " indexation "; it is " analogue ".
If there is any justification for the expensive employment of all those gentlemen with first-class degrees, it must clearly be demonstrated by their having thought up this splendid new word " analogue ". But I say that it is indexation by another word.
The two new tranches will be paid by reference to two criteria. One is that of comparability. I dispute the theory of comparability. There is no greater honour than to be a Member of this House. It is a unique honour. I do not wish to diminish the role of either a doctor or a dentist in our society, but their jobs or professions are not in any way comparable to that of a Member of Parliament. We may be less well paid or better paid than either a doctor or a dentist; but there is no proper comparison between ourselves and a doctor or a dentist.
Mr. Tristan Garel-Jones: Or anybody else.
Mr. Budgen: Or anybody else. It is unique. Therefore, I regret the concept of comparability.
The second basis on which these two tranches are to be paid must be in order to keep up with the rate of inflation which occurs between now and the time when these two tranches are paid. A clever chap may call it an analogue. Another chap, perhaps from the Opposition Benches but with a trade union interest, may call it a cost of living increase. But it is indexation—and it is indexation by the people who are ultimately causing inflation.
There is no class in this country that to a greater extent ought not to be indexed than ourselves. By our persistent demands for higher public expenditure, our persistent disinclination to tax, our persistent deficit financing, our persistent requirement of Government after Government to have lower rates of interest, we have caused the inflation which is the scourge of this country, which is distorting the social fabric of our society, which is even giving rise to the most discreditable trade union activity on the part of Members of Parliament concerning their own pay.
538
There is no scourge that we should regret more. It is the scourge from which every one of us ought to be primarily committed to saving this country. To suggest that we should be in any way guaranteed against the effects of our own folly is the most damaging thing that we could possibly do.
The third reason for these two additional tranches is, as it is smoothly put, to save us embarrassment. What a thing to say! I think of some of my relatives who lived for 30 years on a fixed income, who felt embarrassment every time they looked at their purse and every time they went into a shop, and I think of the comparatively well-heeled people in this House saying " Let us have two more tranches without having the gaze of the public upon those two more tranches because we do not want embarrassment." That, surely, is the ultimate in cowardice.
If we are to safeguard ourselves against the consequence of our own folly, let us do it openly. Let us have the courage at least to say to the country " We have made terrible mistakes but we hope that you will, out of the kindness of your hearts, at least safeguard us a little, in spite of those terrible things that we have done to you." But embarrassment there will be, and embarrassment there must be.
6.50 p.m.
Mr. John Parker: When I first became a Member of this House, the salary was £400 a year. It was not considered a salary but was intended to meet the expenses of a Member. A large number of Members at that time either had a job outside or private means. As the right hon. and learned Member for Hertfordshire, East (Sir D. Walker-Smith) said, there were many Members who had private means and who could sit in Parliament because they had private means. There was a large number of farmers, a large number of lawyers, and there were many business men who ran their own businesses. Sometimes these businesses were big and sometimes they were small. There were certain exceptions. There were the sponsored trade union Members. In their case, the £400 was considered as expenses and they were paid a salary by the union, which also provided them with secretarial and research assistance.

539
A great many of the Labour Members who were not sponsored in that way were small business men. George Lansbury was a master builder. A great many Members had been set up in business, running small shops for the sale of cigarettes or as newsagents or working for themselves in the building trade. Very often they had been set up in business by friends, after having lost their jobs owing to a strike.
That was largely the way in which Parliament was financed in the 1930s. The salary was regarded simply as expenses. People had to have other jobs in order to earn their living while they were in this House. I had been secretary of the New Fabian Research Bureau. When I came into the House, I at once went on to half-salary, £150 a year, which I received in addition to the £400 a year salary for Members. That was done so that I should have a reasonable amount of money on which to live. It was considered to be right at that time.
Two years later, Attlee, who was then the Leader of the Opposition, came to the conclusion, after discussion with many of his Back Benchers, that " salaries " ought to be raised because they were inadequate. He had budgets kept by various hon. Members, such as Mr. Ellis Smith. They prepared a good many figures showing what were the expenses of Members. On the strength of this information, Attlee went to Baldwin, who was then Prime Minister, and asked for discussions. It was agreed that the salary should be raised to £600 a year, and that the Leader of the Opposition should be provided with a salary of his own. Attlee had small private means, but his research assistants had to work for him for nothing. He could employ only research assistants who had an income of their own. Baldwin agreed on condition that " it would not bring clever young men like Dick Crossman into the House ".
With due apologies to the right hon. Member for Down, South (Mr. Powell), I point out that there was no question of this matter being voted upon not to come into operation until after the next election. Parliament decided that it was right to make the changes there and then. The Government put down a motion, it was passed by the House, and it operated from that time onwards.
540
Having, seen what salaries were like in those days, I support the proposals put forward by the Government to try to provide an adequate salary for Members, to enable them to do their job properly.
There is one important aspect which has been neglected in the debate so far. I refer to the 130 Members who ceased to be Members of this House after the last general election. There were 61 Members who retired, and 65 Members who were defeated. Many of them retired on pensions which were provided by the House. I have the honour to be a trustee of the pensions fund of this House. We apply the rules laid down for the fund as generously as we can in order to meet the needs of Members and of the widows of Members. But it is still a fact that the majority of Members sit in this House only for an average of 10 years. Many young men and young women, therefore, come into this House and go out again. That point has to be borne in mind when we are thinking of the remuneration of Members.
To my own knowledge, no fewer than six Members who were in the last House are in receipt of social security payments. That is a disgrace to this House. There is certainly redundancy pay for three months when a Member leaves the House, but some better arrangements ought to be made to enable people to come into this House from all sections of the population—something that we do not have at present. It is necessary if we are to have a democratic House of Commons. It ought to be made possible for a young man or woman with a family to be able to take the risk of fighting a marginal seat, coming into the House, losing the seat at a subsequent election, and then trying to get back again. There are no arrangements to cover young men or women in those circumstances, and they ought to be made.
Lord Carr, who was a Member of this House and at one time Home Secretary, was asked by the Confederation of British Industry to chair a working party, with the object of trying to find out whether it would be possible to get into this House more Members with practical experience in business. As a result of the inquiry, various recommendations were made to the CBI which were of very considerable importance. He took the view that all

541
firms of any reasonable size should allow their employees to stand as parliamentary candidates for whatever party they chose, and that the time should be provided to enable them to do the work of a prospective candidate. He also suggested that at least three weeks' leave should be provided if they wished to fight an election. Most important of all, it was recommended that anyone who got into this House and subsequently lost his seat should be taken back into employment by his firm. Obviously, anyone in such a position could not expect to be reemployed in the position that he might have attained in the firm. The working party felt that there would be no difficulty whatever in placing these obligations on firms employing more than 500 persons with the normal large turnover of staff.
There is nothing new about that. The railways had such a rule long before they were nationalised. Some hon. Members may remember Archie Manuel. Before entering this House he had been an express engine driver. When he lost his seat he resumed his work as an engine driver, driving trains between Glasgow and London. Later he won back his seat and returned to the House.
Michael Stewart was a sixth-form master at the Coopers' School in the East End of London. The old London County Council had a long-established rule by which persons who had worked for the LCC and then entered this House could come back into employment again if they lost their seats. Michael Stewart always paid his contribution as a teacher to the pension fund of the council. Had he lost his seat at any time before the retirement age for teaching, he would have been able at once to resume his occupation with the council.
I recall that Fred Montague, who was a Member in the 1930s, lost his seat in 1931 and was reduced to selling stockings in the street. That sort of thing is not to the honour of this House.
I think, therefore, that we ought to take up the question of ensuring that there is an obligation on all public authorities and large firms to take back into their employment any former employee who, having got into the House of Commons, later loses his seat. I do not suggest that
542
people should necessarily go back into the job they held before becoming Members. This obligation ought to apply to all firms or organisations employing more than 500 people. It obviously could not be made to apply to small firms.
If we are to have a democratic House of Commons, in which there are men and women from all walks of life—and particularly young men and women with families—we shall have to make arrangements of the kind that I have suggested. They should not have to worry all the time about what will happen to them and their families if they lose their seats. Some such law or rule should be imposed by the House. I look forward to seeing whether something of that kind can be referred to the Boyle committee for suggestions.
There was a good report to the CBI, which supported the recommendations. I should like to know whether anything has been done to implement the recommendations of the report and what is the Government's attitude to the proposal. Something must be done about the problem if there is to be a democratic House of Commons. There has been talk of the re-election of Members of Parliament. It is more important from a democratic point of view to ensure that men and women with family responsibilities can come here—given the risk that they may lose their seats at the next election.
7 p.m.
Mr. Alan Clark: I am glad to follow the hon. Member for Dagenham (Mr. Parker), the Father of the House. I listened with great care to what he said. I regard his point about pensions as important. I hope to refer to it when I deal with the amendment of the hon. Member for Wood Green (Mr. Race), for which I have a certain sympathy.
I rise principally to speak to the amendment in my name and that of my hon. Friends, which totally opposes the whole principle of indexation. It is utterly inconsistent with our constitutional role and our duty to the people who send us here that we should allow our emoluments to rise in step with the conditions which we oppose, or to which we all pay lip-service of our intention to oppose.
I refer to the acceleration of inflation. We have already indexed the salaries of

543
those who spend the money. If we index the salaries of those who allocate the money, and who vote the money that is spent, the electorate will have no confidence in any of our avowals of our intention to get rid of inflation, because the three parties to its aggravation will all benefit from it.
The pay of the Civil Service and Members of Parliament will be indexed. If the Government ever reduce inflation below 5 per cent. they will have to meet the coupon on hundreds of millions of pounds worth of gilt-edged stock that they sold at 14 per cent., and higher, interest rates. It will be totally impossible to pay the national debt. It will cripple the country if the Government pay those coupons in real money. All three pillars of the administration—in the widest sense—of the country will stand to benefit, or at any rate will not suffer from continuing inflation. Parliament remains the only unit in that administrative structure—I use the term in its broadest sense—that has so far not protected itself against inflation. It would be fundamentally destructive and corrupt if we indexed our salaries.
My right hon. Friend the Leader of the House said that our salaries should reflect the prestige and influence of a Member of Parliament. It is unfortunate to subscribe to those bourgeois and materialist concepts. To say that a man's prestige and influence are primarily related to the money that he earns is grossly degrading. Members of Parliament have always stood back from that. They pretended that their prestige and influence were not related to their salaries. The moment that we relate prestige to a salary we are categorised. Once we subscribe to that principle, all those who earn more will regard Members of Parliament as being subordinate to them in prestige and influence. Not only that. It is completely untrue. Members of Parliament are not subordinate to anybody—except, perhaps, indirectly to their constituents, and at intervals. They are not subordinate, nor should they ever be.
The reference to an assistant secretary seems highly dangerous. Once we relate ourselves to an assistant secretary according to a scale, all those of a rank above will feel justified in bossing us about or ignoring us because they earn more.
The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): They already do.
Mr. Clark: My hon. Friend says that they already do. At the moment a determined and dedicated Member of Parliament can put the fear of God into any member of the Civil Service. It is simply up to him how far he presses. Once a Member of Parliament is categorised and attached to a Civil Service rank—especially if the attachment is grounded on the assertion that his prestige and influence are related to his salary—his prestige and influence will be set in a niche. In that case it may be said that assistant secretaries are equal to Members of Parliament, those below are subordinate and those above have a right to call the odds as their superior prestige and influence are reflected in their greater salaries.
Mr. Budgen: My hon. Friend may agree that it goes further than that. On occasions it is the duty of all Members of Parliament to exercise pressure, and sometimes even to frighten members of the Government. If our status is to be decided by the comparative incomes of Members of Parliament and Ministers, we shall have no right to criticise any Minister.
Mr. Clark: We could extend the argument to that. I am grateful to my hon. Friend. I agree with him. I intended to put the point in a slightly different way. However, thanks to his intervention I shall not need to do so.
I have sympathy with the amendment in the name of the hon. Member for Wood Green. I hope he did not think that the interruption that I made to his speech was frivolous. I was trying to illustrate that it is not desirable to regard the status of a Member of Parliament as capable of being assessed in financial terms. The hon. Gentleman used a term that was somewhat comparable to that used by my right hon. Friend the Leader of the House. Amendment (a) refers to
" the need to compare Members' pay not only with outside comparators thought to be at the same level of responsibility ".
I do not think that that level can be established. It cannot be identified.
My right hon. Friend dodged the principle of indexation. He was probably

545
forewarned that a number of hon. Members on both sides of Parliament were unhappy about it. He used the terms " comparability " and " analogue ". The position of a Member of Parliament, his status, prestige and level of responsibility cannot be compared. There are 630 Members of Parliament.
They may be compared with one another in their output, quality and the way they complete their tasks, but they cannot be compared with anyone else. This House will make a tremendous error if it tries to fit them into a category that can be compared with others.
It has been said that Members of Parliament should receive the rate for the job. That can be argued. The last occasion on which this matter was debated I said that if we looked at the hours that we worked, the conditions of work, the unsocial deprivations in not seeing our families and not having our weekends to ourselves, and going without sleep, and determined a rate we should be well into £50,000 to £60,000 a year, or a figure, such as I chose somewhat flippantly last time, of £130,000. But the argument about the rate for the job cannot feasibly be considered outside the other element that must be taken into consideration, and that is how many applicants there are for the job. We cannot say that people should be paid a specal rate unless it is only by paying them that rate that we can keep them in the job.
For example, why are miners asking for only 60 per cent.? Why do they not ask for £1,000 a week? I cannot think of a level of pay for which I would go down the mines, but there are plenty of people who would take our jobs. I suspect that there are people who would not only take our jobs for nothing, but who would actually pay to have our jobs. If we look back to the eighteenth century, we see that people actually bought their way into society and then worked for nothing. I am not a member of any board or a director of any company, but I understand that a Member of Parliament can be placed at the masthead of certain companies.
Mr. J. W. Rooker: London and County.
Mr. Clark: As a form of investment, it is an interesting exercise, is it not, to
546
think that we could probably buy a seat in Parliament for £X and very quickly pick up that amount and a lot more by selling our names around various boards and companies. However, I do not want to go into that. If it were legitimate under the selection procedures, people would buy their way in here, not because they would be compensated by serving on company boards, and so on, but because of the prestige and influence. That is the factor mentioned by the Leader of the House.
People would want to come to this place because of the prestige and influence attached to the job of Member of Parliament. The very fact that this would happen is a clear indicator that to try to quantify that prestige and influence in terms of salary would be quite wrong. It would be degrading and would lead to a lowering of the esteem in which we are held not only by the public but by all those immediately around us, because of the salary they are earning, or those above us, because they are earning more.
If we peg ourselves, as has been suggested, at a particular level of comparability, thus demeaning the position that we have always held, and if, at the same time, we index our salary—or index it at one stage removed, as is now suggested—by guaranteeing that demeaning little slot that we have allotted ourselves, thus protecting ourselves against inflation, we shall do a great disservice to our status and to the position that our constituents expect us to uphold. At the same time, we would do great damage to the economic tasks which our constituents expect us to discharge.
7.14 p.m.
Mr. Bob Cryer: It is interesting to note from the debate that the tax concessions which the Government continually claim will galvanise the economy have not worked in this respect. All those Government Members who have spoken seem to think that they need more money to cope with the present economic situation. The Secretary of State for Industry, the Secretary of State for Employment and the Prime Minister have all come to the Dispatch Box and answered question after question about unemployment and increases in the cost of living because of the higher rate of VAT. They said that in the country at

547
large a great surge of energy would be released because all those wonderful people who put their money into shabby property companies in the early 1970s would now put it into British manufacturing industry as a result of the tax concessions. That does not seem to have penetrated to the Conservative Party Members who have spoken so far.
Those of us who were in this place before the last election can indulge in another reflection. We can look back to the months during last winter when the Conservatives were in opposition and people such as lorry drivers, earning £50 a week, were asking for an increase to about £60 a week because they could see that the new EEC regulations would limit their overtime—overtime, incidentally, which precluded any moonlighting by those lorry drivers so that they could obtain a decent wage.
What happened? What was the contrast then? Were Conservatives getting up to say that these lorry drivers were very important to the economy? Did any of them say that these lorry drivers were decent fellows who did a difficult job and worked long hours? Not a bit of it. The Conservatives called for a state of emergency because these naughty people were actually demanding a decent living wage because the EEC, with which so many Conservative Members are besotted, would limit their hours of overtime.
Moreover, the Government are now putting forward proposals for legislation on picketing. When the boot was on the other foot and the Conservatives were in opposition, what expression of regret did we hear about the lorry driver who was killed in Aberdeen? Not one official Tory spokesman expressed any regret. The Conservatives talked about intimidation. The only intimidation ever shown was by those who fired shotguns at pickets. That was the only intimidation that was proved. There were many stories in the press—of course there were—by people who were sympathetic to the kind of scare-mongering that was expressed by Conservatives. It is a very interesting comparison to make when we hear a lot about the hours that Members of Parliament work and the difficulties they face. That was not considered to be the plight of those in rather more mundane occupations.
548
There was an occasion when the then Secretary of State for Employment sneered at the attitude of Liverpool gravediggers who brought their difficulties to this House. They did not write a letter, because that would not have enabled their plight to be discussed here. They did not lobby their Members of Parliament because that would not have got their plight discussed in these hallowed premises. The Liverpool grave-diggers went on strike and dead bodies piled up in empty factories on Merseyside. One after the other, Members stood up in a " me, too " consensus and said what a terrible deed these unthinking gravediggers were committing.
That is the way in which some people have to act. That is the way in which they feel that they have to act to get recognition and understanding in this hallowed assembly of the difficulties which they face. It is very interesting that when we talk about our own salaries we devote many hours to the subject and many hon. Members stand up, including the right hon. Member for Taunton (Mr. du Cann), who leads the onslaught on the difficulties which Members of Parliament face and the remuneration which they should have.
This House cares little about many people in more mundane occupations until they go on strike. For the vast majority of men and women strike action is the weapon of last resort. They seek to use every alternative but strike action. They do not want to go on strike, but in many instances they are forced into it by the indifference and delaying tactics of management. That same philosophy can be applied to the amount of debating time which the House sometimes gives to their difficulties.
I want to refer particularly to amendment (g), standing in the names of myself and my hon. Friends. It states:
" Line 97, at end add—
(4) The ordinary salary of every Member in respect of service on and after 13th June 1979 shall be subject to a deduction of an equal amount to that earned from any other occupation or profession followed by the Member."
I raised this matter with the Leader of the House previously, who retorted in rather sneering tones—this is the general platitudinous approach—that Members who can engage their wonderful talents outside have the right to do so, and that

549
it benefits those organisations as well as the House of Commons. That is a slighting and sneering attitude to those of us who choose to work full time in the House of Commons, and implies that we have no talent whatever. I object to and resent that attitude.
Amendment (g) meets that point of view, because all these wonderfully talented people who want to spread their brilliance outside the House as well as inside would be able to do so. However, those people who are naive about this and say that they are not talented or brilliant, except at lining their own packets—they are actually greedy people who are paid an adequate salary but cannot keep their hands off money—use the prestige of membership of this House to garner company directorships. Moreover, and I believe slightly worse, they use their position as Members of Parliament to give parliamentary advice to organisations in exchange for money.
If people want to do that, and if there is any validity in the argument that this is true and that people ought to be able to go outside and earn money, they can do so under amendment (g) without being accused of being greedy. They can do so simply by contributing to the sum total of national good will. They can spread their wonderful brains and talent around without invoking any remuneration, because it will be deducted from their salary. To me that is an extremely fair compromise.
Mr. Kenneth Lewis: Does the hon. Gentleman apply what he said to ex-Ministers on the Labour Front Bench and to Conservative Ministers? Of course, Ministers do two jobs. They are Members of Parliament, although they do not get the full Member's salary, and they have salaries as Ministers. Is there any reason why Back Benchers, if they can do their jobs as Members of Parliament, should not do a secondary job just as Ministers do?
Mr. Cryer: Because Ministers are a clear adjunct of this House, and because the election is based on obtaining a Government, one therefore expects that someone elected as a member of the majority party would seriously consider accepting ministerial office. No one would seriously
550
argue to the electorate that he should not do so. Therefore, this is not a separate or secondary job but is part of the concept of being a Member of Parliament. It is part of the platform that one places before the electorate. Therefore, I do not regard that as being an exact parallel, because it is part of one and the same job.
By and large, when we talk about outside jobs we do not mean people nipping down a mine for a morning's shift. We do not mean people doing a bit of night work in a hospital. We do not mean people entering an engineering factory and knocking out a few components before coming to this House. By and large, we mean the sort of administrative jobs that do not involve too much dirt or sweated labour. Therefore, such jobs are very much one stage removed from the vast majority of ordinary people's lives, including teachers and lecturers. In fact, teachers and lecturers who become Members of the House do not nip out to give a morning's lecture at the local polytechnic or college of further education. Such people tend to devote their energies and attention full time to the House of Commons.
We also tend to tell the electorate that we shall devote our energies full time to our parliamentary work. Certainly I do. Labour Members tend to make a comparison with factory workers. By and large, factory workers cannot get time off to go to board meetings. In many factories workers must go to the foreman to ask to go to the toilet. If those attitudes prevail among people who support and believe in the Labour Party, I believe that similar attitudes should prevail throughout the House of Commons.
Mr. John Carlisle: What is the hon. Gentleman's opinion of the man I beat in the election, Mr. Brian Sedgemore, who wrote a novel while he was in the House? Would that remuneration come within the scope of his argument?
Mr. Cryer: The modest amount that he received from writing that novel would, under amendment (g), be deductible. I am very sorry to see the hon. Gentleman here. I express my deep regret that Brian Sedgemore, who was an outstanding Member of this House, should have been defeated by the swing at Luton.
Mr. J. Enoch Powell: Can the hon. Gentleman clear up another point? I gather that unearned income is all right.
Mr. Cryer: That is dependent upon the honour of an hon. Member, just as the operation of the amendment would be. We have not laid down any detailed administrative procedures in the amendment. It would be dependent entirely upon the honour of Members. If, because unearned income is not specifically covered by the amendment—
Mr. Powell: It should be.
Mr. Cryer: Yes, it should be; the right hon. Gentleman is absolutely right. I accept the spirit of the suggestion. If the amendment is passed, I expect that it will be carried out in practice. But since they are not subject to detailed administrative scrutiny, all these arrangements would depend on the honour of Members. We would expect them to undertake this matter with the usual assiduity applied by hon. Members.
I must tell the House that the forms required to declare financial interests have not yet been completed and that a resolution of the House has not been adhered to by about 30 hon. Members. I therefore hope that the spirit of my amendment would be adhered to. About 600 hon. Members have completed the forms received from the Registrar of Members' interests, but some queried the resolution, and that was when the forms were a month overdue.
Mr. Keith Wickenden: What is the difference in honour between an hon. Member who draws a salary from outside and does not divulge that fact under the terms of the amendment, and one who does not draw a salary from outside but spends long periods not pursuing his task as a Member but in the Tea Room or elsewhere?
Mr. Cryer: The hon. Gentleman has not been here very long, but the House is conducted according to the generality of resolutions—[HON. MEMBERS: " What does that mean? "] It means that if the House decides that the conduct of a Member is not suitable, there is a long debate followed by a vote. I imagine that a similar procedure, with an investigation by the Committee of Privileges, would be undertaken. If necessary, if the breach
552
of the amendment was grave, the House might want to take suitable action.
Therefore, the answer is the same as the answer which Mr. Speaker frequently gives. The responsibility for action is in the hands of hon. Members. It covers a multitude of sins. If there are any immediate administrative inadequacies in the amendment, they are certainly paralleled in many other day-to-day activities of the House. By and large, as Mr. Speaker frequently points out, we get by reasonably well.
Hon. Members' outside interests bring the House into disrepute. If, for instance, as is the case, an hon. Member has a directorship of a firm of public relations consultants with 38 major clients and he votes in a way that would favour one of them, although he does so with integrity, the best of intentions and good will to all men, it is difficult to persuade the public that he did not vote with that financial interest uppermost in his mind. It would clarify the position for the benefit of the population at large and improve the reputation of the House if it were made clear that that financial interest would be deducted from the hon. Member's salary.
Mr. John Carlisle: Should hon. Members sponsored by trade unions also have these sums deducted?
Mr. Cryer: I am grateful to the hon. Member for Luton, West (Mr. Carlisle) for raising that. It enables me to make clear that hon. Members sponsored by trade unions do not receive direct financial privileges. The benefits go indirectly to their constituency party and there is a donation at an election. It is entirely different. It is subject to the Hastings agreement, which is openly published and can be examined.
It is only within the past five years that the House has had a Register of Members' Interests, and that has fallen into desuetude in part at least through the lack-lustre support of the right hon. Member for Down, South. I hope that the Register of Members' Interests will be more rigorously applied. It came into existence through outside pressure—from people reading the press and seeing on the television the financial arrangements between certain hon. Members and financial corporations. Many people regarded them as extremely undesirable. Before

553
there is a further scandal hovering round the corner, the House should pass the amendment to prevent it. The amendment meets the criticisms advanced by the Leader of the House and those from outside. People feel justifiably anxious about the way that hon. Members with financial interests vote. I urge the House to support the amendment.
The Leader of the House mentioned the link between salaries of hon. Members and Ministers and prestige. The hon. Member for Plymouth, Sutton (Mr. Clark) dealt adequately with the question of Members' salaries. Our prestige is not linked to our salaries. Local authority and Government bureaucrats do not act on what we say because our salaries are at a certain level. An executive of a local authority who may be earning £14,000 a year will not take careful note of what an hon. Member says because of that hon. Member's salary. He knows that behind every hon. Member is a substantial body of the electorate. Our strength lies in that factor. An hon. Member can publicly appeal to his electors. This place is a focus of opinion and an hon. Member can see that matters are fully discussed.
I am surprised that any one could imagine that the prestige of Ministers is linked to their salaries. When a Minister resigns, although his salary may decrease, his prestige can increase, as the right hon. Member for Down, South implied. As my hon. Friend the Member for Derby, North (Mr. Whitehead) said, the notion of Ministers being in difficulty when they earn £20,000 a year it totally absurd. It will be laughed to scorn by those struggling along on £50 to £60 a week.
Two changes would give Ministers greater stature. The first is the erosion of patronage—and in that context I refer mainly to the Labour Party. The Conservative Party has an entirely different philosophy and believes in a hierarchical system with a leader handing down orders. Labour Members believe in a more democratic organisation, and we must implement that so that we depend on an elected system rather than on patronage.
Because of the aura of patronage in the House, the prestige of hon. Members sinks in direct proportion to the amount that they grovel to their Front Bench.
554
There are hopeful hon. Members on the Government Benches, and, as we hear them putting pliant and willing questions to their Front Bench, we know that they are seeking to catch the glad eye of patronage. That should be taken away and we should have a more democratic system. The Government, instead of looking inward, should look outward, even to their own party. That will diminish patronage and enhance the respect and dignity of Ministers.
We need more open government. The 100 or so hon. Members taken out of the majority party to form the Government should not look inwards across all those classified documents. They should look outwards across the nation at large. The Labour Party is engaged in a debate on that, and we believe that that is the way to enhance the leadership of Ministers in a Labour Government. We are a democratic party and believe in the application of a democratic system. One of the illusions from which the Government and the Leader of the House are suffering is that ministerial prestige is linked with money.
7.37 p.m.
Mr. Ian Lloyd: It has proved an interesting debate, and it has some curious qualities. There has been agreement, at least in part, across the Floor of the House, and I developed considerable compassion for the hon. Member for Keighley (Mr. Cryer). Clearly the era of saints has not yet arrived. It will be a long time before the House will draw its membership from other than ordinary mortals—humble men, sinners in practically every respect. Hon. Members will come here expressing the usual ambitions and involving themselves in the usual affairs. The hon. Member for Keighley will not see his ideal state for a long time.
I disagree with him on a fundamental point, namely, that there is a basic incompatibility between democracy and hierarchy, whether it be the hierarchy of office or wealth. That is a fundamental misconception. In our brief perspective of human affairs we see that where there is democracy in which all forms of hierarchy, whether of rank or wealth, have been completely abolished there is invariably, and without exception, tyranny. I should not like to see that here or anywhere else, and the ideal is bogus.

555
It is always a privilege to follow the Father of the House, the hon. Member for Dagenham (Mr. Parker), and I am sorry that some hon. Members who have just arrived were not here to hear his speech. I found certain aspects of his speech particularly interesting, and I wish to give my support to some of them. I wholly share his expression of the ideal that this place should always be open to the greatest diversity of origin. It is essential to the representative character of parliamentary democracy that we should not be confined either to full-time Members or to those who have landed acres, to those who give up their professions to come here or to anyone else. This House should draw its representation from the whole spectrum of humanity in this country to the extent that the electorate is prepared to choose and send them here.
I endorse an appeal that the hon. Gentleman made for better provision for our retired legislators. This provision could be greatly improved, and the whole House will be grateful to him for having drawn our attention to this matter.
I turn to the remarks of the hon. Member for Wood Green (Mr. Race). He made a serious mistake in his attempt to assess the character of this place and those who serve in it. He sought to draw a comparison between those whom he described as workers and those whom he described as Members of Parliament. He implied that in some way we were also workers, and therefore we had to have all the considerations applying to us sieved through the criteria that applied to workers. I challenge this fundamentally. Members of Parliament are not workers. They may work very hard, and a great many of them do, on both sides of the House, but they are not workers. Some may have been workers before they came here. Some of their experiences as workers are, without doubt, of immense value to the House, but once they arrive here they are legislators, and they have something that workers cannot have in the same degree, namely an immense responsibility for the affairs of State. If remuneration is connected at all to this matter, it is connected to responsibility.
I do not argue for one moment that many occupations outside this House do not involve great responsibility. Even
556
the humble worker can have immense responsibility. The director of landing aircraft, for example, the man sitting at the radar set, or the man who decides whether a fishing boat shall come into harbour during a storm—these are humble occupations but they are occupations in which responsibility for life is exercised. No one would dispute that. Nor would anyone attempt for one moment to say that because we are legislators we are in any sense more important ethically than workers. No one would suggest that we are anything other than equal in the sight of God. No one wishes to lose sight of that. But workers we are not, and legislators we are. We carry responsibility, and that responsibility demands a degree and width of experience, with specialised knowledge at times, which, in many cases, the average worker in this country is simply incapable of giving. It is a statistical and observable fact that the average worker is not in this House of Commons, and never will be, for that fundamental reason.
The right hon. Member for Down, South (Mr. Powell) always makes a most perceptive and interesting contribution to our debates. My reaction to what he says is too often the reaction of the curate to his egg—I agree with what he says in parts, but not altogether. One point that he raised must be analysed more carefully, and that is the matter of Members' expenses. He said that since 1964 there had been a substantial and appreciable alteration in the expenses which are carried by the State on behalf of individual Members. Of course there is not a Member of the House who would not concede that that is so. Certainly, when I first arrived here I thought it was astonishing that Members of Parliament, in the discharge of their duties, were expected to pay out hundreds of pounds in stamps for letters to constituents, and their own travelling expenses when they went to see factories or other activities. To a considerable extent that load has now been taken from us. There is a very real and important explanation for that.
Within the last four or five decades, as a result of our egalitarian and fiscal taxation, the opportunity for a significant percentage of Members arriving in this place with substantial private means as the basis on which they discharge their

557
legislative duties has largely changed. Whereas in the early part of this century, even up to the 1930s, perhaps 60 to 70 per cent. of hon. Members came from landed acres or had great wealth, today I should be surprised if that percentage was higher than 10. Therefore this is a necessary change which is wholly justifiable, and I do not believe that it should affect our consideration of the other more important matters.
The right hon. Member for Down, South went on to argue that we should not in any sense consider that there is an important relationship between the status of a Member and his remuneration. I do not think that any hon. Member seriously considering this point would argue otherwise. We all know that this place makes its own judgments about all of us, and usually they are pretty accurate. They are not related in any way to our outside incomes or earnings. That is as it should be, and we all realise it when we come here. No one would argue that because the Prime Minister is paid what she is, or because a Back Bencher is paid what he is, that reflects the difference in their status. No one would argue that, because it would be absurd.
I draw here from my experience as a member of the delegation to the Council of Europe. I was on that delegation towards the end of the 1960s and in the early 1970s. It was already becoming apparent that Members of the House of Commons found that they could not keep up the standards that were expected of the other legislators they were meeting in the European environment. This became a considerable embarrassment. We could not return hospitality, and when we travelled we went economy class. Other legislators and our senior civil servants travelled first-class. These are trivial things, but I do not believe that they enhance the standards of our legislature or support the dignity which it is essential for all Members of this House, irrespective of party, to carry with them when they discharge their representative roles.
I turn to a few points that were made by the Leader of the House. He made an interesting statement when he said that the House of Commons did not govern the country. Of course, this is pure Bagehot, and we know its origins, and
558
we know the great force of the logic behind it. But is the House of Commons really making this decision tonight? We have been told that this is a free vote. On Monday a week ago we were told that the equally important decision on the Select Committee structure of the House would be taken on a free vote. It was a free vote in theory only. I suspect that tonight as well there is a free vote in theory only.
I want the Leader of the House to tell us whether he really has, in all honesty, implemented the undertaking that he has given that every individual Member will be allowed to exercise his judgment, free of any pressure whatsoever. I want that answer because it is important that we should know, and that the country should know. What has been done in the last 24 hours about the " payroll vote "? Has it been whipped in this evening and told to support the motions on the Order Paper? If it has, I want to know. I want it said loud and clear, because we cannot go on pretending that there are certain situations in which we genuinely have a free vote and certain on which we do not and on which we accept the whole Whipping apparatus. This point must now be established very clearly.
I should like to turn to a matter which I hope will be of interest to hon. Members. It offers support for accepting the proposals before us. Some hon. Members have argued that a Member of Parliament is singularly fortunate and that we should consider carefully before we adopt the course that is suggested this evening. I thought that it would be interesting to make a brief comparison across a small spectrum of British industry. I did not choose the most successful sections, because had I done so I would have exposed myself to the argument that people who are serving highly successful institutions deserve exceptional rewards.
I chose two major national institutions which are in receipt of considerable public support—British Leyland and British Steel. It is general practice and it is law in the United Kingdom that the annual reports published by major public companies list the senior salaries with the breakdown and distribution of those salaries. However, salaries below £10,000 per year are not listed because they are no longer regarded as senior

559
incomes. That is true in the case of British Petroleum, Shell and every major company in the country.
Mr. Rooker: They were never regarded as senior incomes.
Mr. Lloyd: It is so much more interesting if they were never so regarded. British Leyland received £200 million of public money in the form of subsidy. There are 518 employees who are paid more than Members of Parliament, 222 who are paid more than Under-Secretaries of State—including the Under-Secretary who is responsible for the motor industry—59 who are paid more than members of the Cabinet, including the Minister who is responsible for British Leyland, and 22 who are paid more than the Prime Minister. Is that to be regarded as a logical, sane and defensible state of affairs? It may be argued that it is, but that argument would demand a considerable burden of proof.
In British Steel, 1,309 employees of that vast loss-making organisation are paid more than Members of Parliament, 415 are paid more than Under-Secretaries of State, 149 are paid more than members of the Cabinet and 14 are paid more than the Prime Minister. I ask all hon. Members, in considering the proposals before us tonight whether that information suggests that the Government are right to advocate the decompression of incomes, as they have been advocating for a considerable time? If it is advocated anywhere, it must be advocated and applied here, because we set a national example. It is ludicrous that these figures should exist and that the facts that support them should be allowed to continue. We should not be inhibited from what we are doing: on the contrary, we should be encouraged.
We constantly preach to the country that increases in income should be associated with increases in output and productivity. Have the Government, in putting forward the proposals, suggested that the productivity of the House of Commons can be increased conspicuously? That suggestion has not been made because the productivity of the House of Commons is a highly political matter about which there are varied judgments. Some would like to put forward large masses of legislation, and others
560
would like to stop it irrespective of what the legislation is.
None the less, it could be argued within that context that the productivity of this place could be dramatically improved. It could be improved by the use of a number of devices which we have considered tentatively from time to time but which we are reluctant to consider in any depth. That is largely because there is not enough time—it is a vicious circle. We do not reorganise ourselves, and therefore there is not the time to discuss these matters. A brief beginning has been made with the setting up of Select Committees. Doubtless, in the view of some hon. Members, that is a contribution to the increased productivity in this place.
Mr. George Park: Does the hon. Gentleman concede that time limits on speeches might help?
Mr. Lloyd: Yes, time limits on speeches would be a help. However, I occupy the time of the House on comparatively few occasions.
There could be fewer Ten-Minute Bills and far fewer late nights which reduce the quality of legislation and do not improve the quality of those hon. Members who have to exercise judgment on the following day. However, much more important is that the time has now come when a smaller House of Commons should be considered. There are 635 Members, who represent 53 million people. We have representation in Europe as well, which is an additional burden on the taxpayer. The United States Congress represents about 230 million people and yet it manages to discharge with about 400 people the responsibilities which I am sure no one regards as inferior to those that are discharged by this august assembly.
It will be argued immediately " Who is to go? " Who will say to his constituents that the constituency will merge with the one next door? That is a practical and realistic argument, and I think that the time has come to start thinking in that direction.
Mr. Alan Clark: In his interesting speech my hon. Friend has already drawn attention to the ever-present and overhanging threat of the payroll vote. Unless the payroll is reduced concomitantly with

561
the reduction in the size of this House—all the signs are that it would not be—by reducing the number of hon. Members not on the payroll there will be a further reduction in the limited powers that we exercise to restrain or discipline the Government on occasions.
Mr. Lloyd: My hon. Friend makes an excellent point. The balance between the size of the Government and the size of the House is a critical factor. My right hon. Friend the Member for Stafford and Stone (Mr. Fraser) drew our attention to one way in which the size of Government has increased beyond all recognition at the same time as the power, influence and prestige of the country have diminished in the sphere to which he referred.
The hon. Member for Keighley believes firmly that we should be almost a monastic order in this place and that we should know Parliament only and nothing else. He suggests that we should bring to Parliament whatever experience life has offered us up to that point, but from then onwards we should be denied the opportunity of enlarging that experience by other contact.
Mr. Rooker: That is not so.
Mr. Lloyd: The full-time Member implies that to me, at any rate.
The one thing that outside interests offer to a Member of Parliament is the opportunity to enlarge and widen his experience. If there is one asset which hon. Members bring to this place which is of unique value, it is the quality of their judgments. That is what the House of Commons is all about. I do not see that the quality of that judgment will be enhanced by a voluntary process of isolation, however that may be applied.
Mr. Cryer: The amendment to which I was speaking would not preclude the gaining of experience. Hon. Members could gain experience to their hearts' content to improve their judgment. The amendment would merely stop them from gaining money to their hearts' content.
Mr. Lloyd: We come back to the real world versus the artificial world. As Adam Smith reminded us long ago, in the real world we must appeal to the strongest of motives as well as the highest
562
if we are to improve human affairs, whereas the hon. Gentleman wants us to appeal only to the highest motives. Human nature, not having changed very much since Adam Smith, still requires an appeal to both. The hon. Gentleman has forgotten that all incomes additional to an hon. Member's income attract taxation and that the rates are increased as a consequence. There is an automatic process of adjustment operating now, and that has always been so. I argue strongly that that should not be altered.
I regret that the Government have not shown the courage to bite the bullet. We have caused ourselves unnecessary embarrassment. The justification for what was proposed by Lord Boyle is complete. However, we and we alone should carry responsibility for our own affairs. I do not understand the logic of passing on that responsibility, especially on this issue, despite the embarrassment that it causes, to outside committees. To do so would only create all the complications and the obfuscation of argument that we have witnessed this evening.
I am in favour not of returning the issue to Lord Boyle but of the House accepting responsibility for its own finances, including the remuneration of hon. Members. We should stand up for what we believe to be right. We should justify that stance whenever necessary. If we knew that we had to face and apply that responsibility we would handle the issue with more skill, and possibly with such skill as Lord Boyle pointed out in his report is obviously displayed in other legislatures.
8.3 p.m.
Mr. Ron Brown: Two weeks ago I said in this place that the Government's strategy and their policies would inevitably turn moderates into militants. I am no prophet, and I am not especially clever, yet that has happened. It has happened with a vengeance, but not in the way that I expected. It has provided us with an object lesson.
There is a strange unity of Left and Right. I expected to witness on the Labour Benches a different type of morality, but that is not so.
I am not saying that a rise is not justified. I agree that we must have the rate for the job, although some dispute that

563
Members of Parliament are workers. Unfortunately, so many hon. Members have two, three or even more jobs. How are they able to carry out their duties as Members of this place? That is something that we should think about.
We all know that moonlighting is a problem. If hon. Members engage in moonlighting, what do we expect from those outside? There are many who are low-paid. If we say that we are low-paid, obviously there are many others in a worse position, so possibly some of the bosses' ideas should be put into effect in this place. Let us have some of the capitalist medicine. Let us have PBR, watch-study and job evaluation. Those are all the " in " things in industry. I have only recently left industry, as only recently was I elected to this place.
Conservative Members argue as representatives of the capitalist system. Why not introduce capitalist practices in this place? I believe in full-time MPs. Who among us—this applies to both sides of the House—told his electorate that he was standing as a part-time Member of Parliament? I doubt whether any hon. Member said that. We know that if we want to be elected we do not always say exactly what we shall do when we come to this place. That is one of the unfortunate aspects of parliamentary life.
As a Socialist, I believe in the average wage being paid. I believe that the elements of overtime, unsocial hours and working away from home should be added to our salaries. That follows from what Brother Race, my hon. Friend the Member for Wood Green, said earlier. I see no reason for MPs being treated differently. It may be that hon. Members think that they are different and particularly important, but no one should be in politics for the money or the perks.
I address myself especially to my hon. Friends when I say that we are here to do a job. Outside this place in the Labour movement there are many dedicated activists. They do not ask for money for the work that they do for the movement. Many of them give up their very lives for the movement. We should not demean the movement by advancing the arguments that we hear from Conservative Members. I am against elitism.
564
I should be happy to place the determination of salaries before the annual conference of the Labour Party. Some Labour Members may say that that is carrying democracy too far, but I consider that approach to be valid. If we are to ask for an arbitrator to decide who is right and who is wrong and the rate for the job, I believe that it should be the Labour Party conference.
Clearly, Members of Parliament have a role to play. It is ironic that there has been such strength of feeling on both sides of the House. Only a few months ago many of the low paid in the public sector were struggling against the 5 per cent. policy. They were existing on about £30 a week, their wages being supplemented by overtime. They were struggling, and they are still struggling. That is one of the reasons why the Labour Government lost the election. I hope that the Labour Party will wake up to that fact and that in the days to come, perhaps at the Labour Party conference and elsewhere, it will consider the position of the low paid.
A few days ago there was a meeting in the House of certain hon. Members and leaders of the engineering unions. I am a member of an engineering union. The leaders of the engineering unions are moderate men, but they believe that the Government's policy and the argument for a substantial increase of the pay of Members of Parliament will mean that there will be no stopping their members from pressing for increased wages. We know that the engineering unions are in dispute with their employers and that the engineers will be hard to stop. Many groups of workers will follow the engineers. If Members of Parliament set an example and substantially increase their own wages, we cannot blame the working class in general for following that lead.
I may be asked " What will you do if the rise comes through?" I shall accept the rise. I shall do so not because I particularly want it but for the use to which I shall be able to put the extra money. It would be rather foolish of me to reject it. I urge my colleagues to accept the rise and to use it generously. Give it to the Labour movement. Our movement needs it. It needs it because its struggle continues and because the increasing cost of living affects it.

565
Many electors think about what is going on in this place. They are concerned about Labour Members being paid off. We know that the Prime Minister bought off the Army and the police. They will be concerned that Labour Members are being bought off. I am concerned not with Conservative Members but with Labour Members and their credibility. It would be foolish to enter a common cause and to enter into capitalist agreements. We know that in the coming months the capitalist system will be shaken to its very foundations.
We should not fall for the arguments of Conservative Members. We must give a lead. Whatever happens about the increase I hope that colleagues on the Labour side will continue the fight inside the House and elsewhere for Socialist policies. We are surely thinking of a better deal not for ourselves but for the working classes—those who put us here to represent them.
8.10 p.m.
Mr. Peter Bottomley: The hon. Member for Edinburgh, Leith (Mr. Brown) should try to consider a House of Commons matter on a basis which brings in all hon. Members of the House, whichever party they represent. The idea that any Conservative Member would give any part of the increase to the Labour Party or to any Labour organisation goes too far. The reason why the Labour Party is short of money is probably that its policies have not proved popular. Those activists to whom the hon. Member referred probably deter potential members from joining the Labour Party.
Mr. Ron Brown: On a point of order, Mr. Deputy Speaker. I was not suggesting in any way that Conservative Members contribute to the Labour Party. I was suggesting that my colleagues contribute. That is what is important.
Mr. Bottomley: It is true that many Conservative trade union members contribute to the Labour Party through the political levy. Perhaps we may have the benefit of the views of the hon. Member for Leith on that matter on a future occasion.
Before giving my views on what should be the level of remuneration for Members
566
of Parliament, I would like to take up a point made by the right hon. Member for Down, South (Mr. Powell). The right hon. Gentleman talked about the normal procedure for raising the pay of Members of Parliament. I am not sure whether it was a slip of the tongue or whether he actually meant what he said. He referred to a written answer to a question I put down on 25 May which listed the dates and the amount of each Member of Parliament's increase in pay since 1911. The answer showed that nearly all the increases did not occur just before an election. There was no vote on those amounts just before an election. In no way can it be called a normal procedure. I could understand if the right hon. Gentleman was suggesting that it would be a proper procedure. In that case I would fully agree with him. As part of the " washing up ", or whatever one might profitably call the end of the Parliament, the question of the remuneration of Members, elected following the general election, should be raised. It is no argument to say that because we failed to discuss the matter at the end of the last Parliament this is not the time to deal with the question.
In anticipation of this debate, I made inquiries of a number of trade unions, which kindly sent me information about the level of pay of a number of leading trade union officials. I believe that trade union officials generally should be higher paid. It is as important to attract people of all kinds and talents to lead our trade unions as it is to attract them to other professions. Many of the replies were confidential, which I had suggested might be appropriate.
I can summarise my findings. In half the unions with which I was in correspondence one or more of the senior officials was paid at the rate of £12,000 a year or more. I discovered this figure in advance of the Boyle report, although it was clear that Boyle would make a recommendation of £12,500. It is important to remind the House that if the level of pay which obtained in 1964 was increased to take account of the rise in prices—earnings would have produced a higher level—the figure would have come to about £12,500. The Boyle report, which is the basis of this debate, has recommended £12,000, a reduction on the level thought to be appropriate 15 years ago.

567
I accept the argument that many people have independent means or can live like church mice and manage with no pay at all. They can survive on their BBC money for appearing on the " Today " programme or obtain other supplementary income as bright-eyed Members of Parliament who can be relied upon as " rent-a-quote " orators. I accept also that many people would happily survive on a living wage, like the brother to whom the hon. Member for Leith referred. The amendment proposed by the hon. Member for Wood Green (Mr. Race) referred to a living wage at the average level for male workers or skilled workers. I do not understand why the reference should be to male skilled workers if we want to know the average amount of hours worked by the average person at average earnings.
Mr. Race: That figure was chosen because the Department of Employment measures wages by sex, male and female workers, and between part-time and full-time workers. The reason why male full-time workers were chosen is that they have the highest pay between men and women. We are talking about full-time work. There has been talk about the need for Members of Parliament to spend long hours at their desks or in this Chamber. That comparison therefore seems appropriate. The figure for national average earnings, whether one appears on the " Today " programme or anywhere else, is always the figure for male full-time workers.
Mr. Bottomley: That does not necessarily make it right, does it? One could have a sex balance of 95 per cent. of male earnings and 5 per cent. of female earnings to reflect the general balance of the House. It has not been established that full-time Members necessarily do a better job as Members of Parliament in the House or in the constituencies than part-time Members. When the hon. Gentleman has had the opportunity of considering both ways of working, he will perhaps give us the benefit of his experience rather than his advice.
Mr. Race: I am full-time.
Mr. Bottomley: My view, like that of George Bernard Shaw, is that there is no way of comparing the value of a bookmaker and a bishop. One can only be
568
certain that a successful bookmaker would be earning more than a bishop.
I do not believe that the argument that associates money with status, either from my own Front Bench or from the Labour Benches, holds water. To try to use that as a logical argument seems a good way of entertaining the House but does not necessarily show any valid result. If the pay of hon. Members was put up to £12,000 this year, or in two years' time, I do not believe that those hon. Members and those candidates who failed to get elected would withdraw from the political competition. It would bring in others who are deterred from attempting to become Members of Parliament by the money they would earn if elected. This still leaves the problem for political parties in constituencies of selecting a candidate and still leaves the election open to the constituency voters.
If an increase in hon. Members' pay made a number of hon. Members say that they would not stand for election because they would be earning too much, it would be a surprising argument. I do not think that it has been put forward. The logical consequence has been to put forward an argument against the raising of the pay of Members of Parliament.
I am most concerned about those who are willing to accept the job insecurity of becoming a Member of Parliament but are unwilling to accept a severe drop in their standard of living. One can go to the logical extreme and say that because someone is earning £60,000 a year as chairman of the British National Oil Corporation—although I suppose he is disqualified by membership of the other House—that person would come to the House of Commons only if he could earn £60,000. The logical consequence of my argument is that pay should be put at the highest level at which any marginal potential candidate would be willing to put himself forward. But that extension of argument is clearly ridiculous. One wants to establish a level at which a skilled professional could transfer to the House of Commons if elected without suffering a severe drop in his standard of living. There would be an alteration to family life due to the hours in this House and the need to work in the constituency and travel round the country putting forward political views.

569
The level I would choose is that approximating to a general practitioner. I would not want to choose one particular analogue. But a level of £12,000 to £13,000 a year is a level that disqualifies relatively few people and does not leave the House of Commons open as a financial inducement to the sort of person who might be a research officer in a trade union or the activist who provides the door-knockers for the Labour Party in a number of constituencies.
If we put up our pay to £12,000, we will certainly get the support of one Labour candidate, Jimmy Reid, who, in an answer on " Any Questions ", said he thought that Members of Parliament should be worth £12,000 a year. He did not mean that that should be done in order to give them status, but that they should be worth a higher salary. If it is considered that an hon. Member is not worth £12,000 a year, I should like to know what small range of deficiencies he could have that would make him worth, say, £8,000 or £9,500 a year. I do not think that we can make such gradations. We need to pick a figure almost out of the sky, and I believe that the figure picked out in 1974 is the right one.
I hope that the House will vote for the Government's motions. It is right that the question of what is to happen during the next two years should be referred to the Boyle committee and I hope that the Government will put the committee's recommendations to the House for decision, although I do not think that the House should automatically accept them. We need to get Governments into the habit of putting Boyle committee recommendations, or their equivalent, to the House for decision. I believe that the House will always have sufficient wisdom to make the appropriate decision. We may not always get it right, but I believe that we have the interests of the House and the country at heart.
8.21 p.m.
Miss Sheila Wright: Hon. Members have probably, reasonably and understandably, become frustrated and irritated over the past few years with the effect of inflation and being caught by part implementation of various wage recommendations.
570
As the Leader of the House said, the House is in an exceptional position because it is the only body which decides its own remuneration, and is in an even more exceptional position because it is also the body which can, as a result of its deliberations, considerably affect the remuneration of large numbers of other individuals. In such a situation, Caesar's wife is not in it when it comes to the need to appear to be above suspicion.
The comments of the Leader of the House about the need to bolster the status of hon. Members by increasing salary levels have already been savaged enough by his hon. Friends, without mentioning the contributions of my hon. Friend the Member for Keighley (Mr. Cryer) and the right hon. Member for Down, South (Mr. Powell). They have dealt most adequately with that aspect.
I wish to go into a little more detail about the effect that our decision will have on the people of this country. As a new Member, I am told that once one is safely esconced here it is easy to get out of touch with the feelings of the electorate. Obviously I am not in a position to comment sensibly on the possibility or probability of that, but, in common with other hon. Members, I am kept reasonably in touch with the opinions of the electorate.
I regret to have to say that as a result of some of our recent debates, particularly the original debate on this subject on 21 June, the picture of the House that is held quite widely is that of part-timers who spend a good deal of time indulging in a level of debate sometimes considerably below that of a good sixth form and who are extremely concerned and vocal about the level of their own remuneration.
Question Time has certainly not proved to be the best possible public relations exercise, but hon. Members must not forget that it is not something made up and put out by the BBC. It is a record of how hon. Members have spoken and reacted, and there has been wide comment on the reactions of hon. Members in the original debate on the Boyle recommendations.
Most people outside the House consider that the job that we try to do is one of sufficient importance to justify full-time attention by those who have

571
been given the trust of a majority of their electorates. Most people also accept that there should be an income attached to that full-time job that enables hon. Members to have a reasonable standard of living, but not an income that gives us the equivalent of a top-flight professional or industrial standard of living.
Most people will agree that the situation where the necessary updating of a reasonable salary may be delayed because of political pressure and where it is, in any case, dependent on the votes of the people concerned is anomalous and should be put right.
Most people will agree with the provision of much better secretarial and research services for hon. Members, and I ought to make clear that neither I nor my hon. Friend the Member for Wood Green (Mr. Race) is trying to make a case for additional secretarial allowances. Our emphasis is on the word " provision" and, in common with many other hon. Members, we would be happy if adequate secretarial and research assistance were provided without allowances.
I find that most people do not agree that hon. Members should be part-timers or that our salaries should be related to top levels in industry or the Civil Service. That is certainly one of the least liked suggestions. I speak with some diffidence as a new Member, though my circle of acquaintances seems to be a little wider than that of the right hon. Member for Taunton (Mr. du Cann). I cannot help feeling that Pym, who was quoted by the right hon. Gentleman, would be dismayed at being quoted in support of salary increases to hon. Members.
I suggest that hon. Members need to be very careful about what they do to-night, in order to make sure that we do not give the impression to the country that we are falling over ourselves to climb aboard the gravy train.
8.29 p.m.
Mr. Julian Critchley: When I was first elected to the House in 1959, as a member of the thrusting and aspiring middle classes, it was true of the Conservative Party as a whole that we went into politics as an extension of our social obligation. Quite clearly there was money in land, money in property or father had money. That was the basis
572
on which Conservative Members entered politics.
What has happened since 1959 to the Conservative Party is quite apparent. I am now told that newly elected Members can be distinguished as Labour or Conservative only by the fact that if they are Labour they have beards, and if they are Conservative they wear rotary badges in their lapels. I am making the general point that the Conservative Party and Conservative Members of Parliament are no longer in politics as an extension of their social obligation. We want money, a salary, like everybody else.
In 1960, as a very new member of the Conservative Party, I went upstairs at 6 o'clock on a Thursday evening to the 1922 Committee when somebody—not me, as I did not have the courage—raised the question of Members' salaries. Believe it or not, the person called upon to reply for the Conservative Government was none other than " Rab " Butler himself, whose message to the assembled Conservatives was "We do not want professional politicians ". What was " Rab " Butler if he was not a professional politician? As far as I know, he was a most admirable and successful politician, but I do not think that he was a politician who ever earned a penny outside politics. However, because of inherited money he was able to have a political career of great distinction and success. I shall never forget in 1960 being rebuked by " Rab " Butler on the ground that we do not wish, in the Conservative Party, to become a party of professional politicians.
My own view about Members' salaries can be very simply put. The Cabinet has made a monumental mess-up, if I may put it that way, over the whole business of Members' salaries. I hope that that is not an indication of what is likely to happen in future, because the Cabinet has got it wrong from beginning to end, and at the end of the day, if we are to have an increase next year which is index linked, not only will the Government get the worst of all possible worlds, but so shall we.
It is extraordinary that the Cabinet should have made so elementary a mistake at the start of what I trust are to be five years of successful Conservative government. We have always suffered

573
from the prejudices of our Prime Ministers. In 1970 my right hon. Friend the Member for Sidcup (Mr. Heath), when he was faced with a similar problem, made a gesture, which was that hon. Members should do without £500 of their salary. I am all for gestures, I am all for magnificent gestures, but I like to make my own gestures in my own time. For somebody else to dismiss £500 of my salary as a gesture against inflation is impertinence, and it should have been described as impertinence at the time. What was impertinence in 1970 has been followed in 1979 by incompetence.
My view of Members' salaries is this. I think that the Germans have got the matter right. They began their system from scratch in 1945, and decided to pay their Members a salary that I believe is now the equivalent of £19,000 or £20,000 a year, but no German Member of Parliament is allowed to earn or be in receipt of a single pfennig outside his parliamentary income. Therefore, for £19,000 or £20,000 a year the German Member of Parliament devotes himself full time to the purpose for which he was elected.
What do we do? We have a moderate salary—equivalent to that of a Ford car worker with overtime before the last increase—and that is the basis upon which we all scratch around for some additional income, whether it be through journalism, consultancy or a directorship of whatever company, if one is particularly lucky.
The result is that we do no job as well as we could. We are energetic—by God, we are always 10 minutes late for every appointment that we have on the hour every day for six days a week—but what do we achieve? We are not industrious; we are just energtic. We are energetic because we have a low basic salary and we have to supplement that by writing unreadable articles for newspapers, if they exist, by being consultants to various adverising agencies, directors of companies, or representing the police, or whatever.
The answer is that our great electorate does not get the service from its Members that it should do because we are far too busy making ends meet. The Government have not the courage, and we have not the courage, to state clearly that what we need as Members of Parliament
574
is to be paid a decent and proper salary at an international level and not be expected to earn a single penny over and above that, and then to devote our time to the job to which we were elected.
8.35 p.m.
Mr. Michael English: The Leader of the House was less than kind to one of his Conservative colleagues who is now in another place. He said that no Government of any party had ever done the right thing by Members of Parliament. He has forgotten the noble Lord Home of the Hirsel.
Mr. St. John-Stevas: That was the exception that I made.
Mr. English: In that case the right hon. Gentleman must recognise that Lord Home agreed with the right hon. Member for Huyton (Sir H. Wilson) before the 1964 election—
Mr. St. John-Stevas: I said so.
Mr. English: I hope that the right hon. Gentleman will allow me to finish. The right hon. Member for Huyton implemented the Geoffrey Lawrence report. The interesting thing to note is that that happened in a period when the Gevernment had only a narrow majority. How-over, it did not lose my right hon. Friend a single vote. My right hon. Friend then departed from the path of virtue and did not fully implement later reports, including Boyle. It seems to be the case that when Governments have a large majority they are frightened of the electorate, but that when they have a small majority they are prepared to pay Members of Parliament the right amount. The reason appears to be that Governments with large majorities believe that they can get away with it with their Back Benchers, whereas when they have small majorities they know that they have to pay Members of Parliament a proper salary.
I asked the right hon. Gentleman in an intervention about the prospective salary of the office of Prime Minister and the office of Lord Chancellor. The right hon. Gentleman explained that it was only the present incumbents of those offices who did not intend to take their salaries.
I went to the Vote Office and obtained the draft statutory instrument which we are asked to approve in the last motion

575
that is before the House. I quote from article 1(4):
" The revocation of the Order of 1978 does not affect the amount, as substituted by the Order, of—(a) the salary of the Lord Chancellor "—
and it continues in (b)—
"the salary of the Prime Minister and First Lord of the Treasury ".
I wish to ask the right hon. Gentleman whether his earlier answer was correct.
Mr. St. John-Stevas: It was correct, but not wholly complete.
Mr. English: I have part of an answer, and no doubt the right hon. Gentleman will give me the fuller answer later. The present order seems to reduce the salary of the offices. Every Member of this House is entitled—and many so decide—not to take the salary due to him. Indeed, two members of the previous Cabinet did not take salaries. However, there is a vast difference between that and reducing the salary of an office. That only complicates the life of one's successors.
I am sorry that I cannot follow the excellent speech of the hon. Member for Aldershot (Mr. Critchley). I belong to a school of thought that disapproves of both beards and Rotary badges. Perhaps we could discuss that matter on another occasion. However, I approve of reality and I do not understand why the Leader of the House intends to refer to Boyle the question of updating so that Boyle can make his recommendations. I have tabled an amendment which Mr. Speaker has kindly selected but which will not be voted upon because it is selected only for discussion. That amendment makes clear that in the appropriate chapter of the present Boyle report there are recommendations relating to the method of updating. One may disagree with that. It is possible for anybody to disagree. It would have been possible for the Government to say that they did not agree with that method of updating and that therefore the House should decide for itself.
The Leader of the House did not say that. He said that he was referring that question to the Boyle Review Body so that it could give its recommendations. The Review Body has already done that. What is the point of asking that body to do that when it has already made recommendations
576
and said that we should be linked to the appropriate percentile of the New Earnings Survey? I cannot think of a more tongue-twisting phrase. Why do not the Government directly say that they approve, or that they do not, instead of going back to the same institution to give recommendations which it has already given? That is foolish.
There is another foolishness. It is possible that the rate of inflation will cause the second tranche of our salary, updated, to exceed the third tranche, un-updated. One has only to look at the recommended levels to realise that if one puts 20 per cent. on the second tranche the sum involved will be more than the third tranche, although by a small amount.
In 1981, theoretically, we may receive £12,000 a year at that day's values. That could be the equivalent of £8,000 or £9,000 at today's values. The last Boyle report was not implemented by my right hon. Friend the Member for Huyton and his colleagues simply because of the possibility of an incomes policy. There was no such policy at the time. If we had been treated the same as the rest of the country, we would have been allowed an increase before phase 1 of the incomes policy came into effect. We were not allowed that increase perhaps because we were a means of persuading people to accept the policy. What a strange, stupid, carping way successive Governments handle these matters.
I make a few suggestions to the Leader of the House. In the United States Congress a simple and straightforward practice has been adopted. No civil servant may be paid more than a Member of Congress. The object is simple. It expresses that Congress is the legislature. The two Houses, plus the President, are the legislature. The President is an elected person and the Cabinet is appointed. It is accepted that they should be paid more. It is accepted that justices of the Supreme Court should be paid more. It is accepted that those people whom we would call junior Ministers, called in the United States assistant secretaries and appointed by the President, should be paid more. There is a clear differentiation between the politicians who are supposed to be ruling the United States, and who probably are, and their subordinates.

577
Until about 1830, in this country there was a simple and straightforward system. Those with the largest incomes sat in the House of Lords. The people with the second tranche of incomes elected representatives to sit in the House of Commons. That was not necessarily the best way, in one respect. It did not allow for the participation of the majority of the community. However, it ensured that those who sat in the House of Commons were remunerated adequately. Such a situation would not be inappropriate today. We cannot say that we are more successful in our system of government than were those who were involved in the nineteenth century. We cannot say that we have a more successful system than the United States.
It is just possible—I put it no higher—that, whatever my hon. Friend the Member for Birmingham, Handsworth (Miss Wright) said about the level of salary, reducing the salaries of Members of Parliament may not be conducive to the efficient running of the country. It is just possible that the country, like the individual, gets what it pays for.
8.44 p.m.
Mr. Michael Shaw: I take up a point made by the hon. Member for Nottingham, West (Mr. English). What he was saying in the early part of his speech was that it was a thousand pities that we had not agreed new salary scales before the general election. I think that nearly all hon. Members agree about that, but arising out of that comes the point that has been made once or twice in this debate, namely, that people who fought the last election could not rely on having increases in salary. There was an understanding. Whether it was official or unofficial, it was generally accepted.
Mr. English: The correct analogy is that Lord Home, when he was in this House, and my right hon. Friend the Member for Huyton (Sir H. Wilson) did not agree upon a salary before an election. They agreed to implement the Geoffrey Lawrence report, whatever it contained, and it was implemented.
Mr. Shaw: I am grateful to the hon. Gentleman, but very definite rumours were floating around, and there was a general
578
understanding. I think that we can agree on that. The climate of opinion was that something would be done about this matter. I agreed with that climate of opinion.
I hesitate to take the House back to when I first became a Member, which was a long while ago. At that time one was proud to come here just for the sake of being a Member, but one had to admit that one had other means which assisted one to come here and in looking after one's family and the education of one's children, and so on. As circumstances have changed over the years, one has asked oneself whether the conditions originally in one's mind in relation to coming have continued to apply.
I think that the changes have been fundamental. Increasingly, more work has been put upon those in this House who are prepared to accept it, and this has made it more and more difficult for them to accept meaningful employment outside this place—unless it be in certain specialised fields, which is not always advantageous to membership of the House.
Mr. English: Or desirable.
Mr. Shaw: Exactly—not all, but some. There is this danger.
I have seen the enlargement of the number of committees and the work generally. I am not pleading for my own case because I am more fortunate, perhaps, than some others. However, I have given up my practice because of commitments to the House. I have agreed to go to the Continent of Europe on a voluntary basis, and, frankly, because of trying to take part in running Europe and this place, I have found it impossible to do any outside work. Therefore, I have had to rely on what I have earned here. If one commits oneself to work in this House, more and more one must look to the House itself for one's main source of income. Therefore, it is right that our salaries should be reviewed in a realistic manner.
I have been rather upset by listening to people who have talked about our allowances, and the fact that we get them, as though we get the money shoved at us. Perhaps some regard it in that way, but I do not. I am prepared to justify my expenses allowances before any court. They are spent on secretarial work, on

579
living in London, on moving between my constituency and this place, and on various other things. Just as in any other form of business, this money is spent.
I put the question here and now to my right hon. Friend the Leader of the House. If allowances are granted to Members of this House, are they not subject to scrutiny by the Inland Revenue—in the same way as any other allowances given to any other people in any other walk of life—so that it can be decided whether they have been properly spent? In my own case, they have always been justified, and I have every reason to believe that that is the case with every other Member of Parliament. I do not want anyone to get the idea that we are living on a series of slush funds—I sometimes feel that this is Socialist philosophy—because I do not believe that to be true, and I should like to have that confirmed—if not now, on some future occasion.
We are working more and more closely—rightly, I believe—with Members of the Parliaments of other Community countries. We are doing ourselves and the country a disservice if we appear all the time as the poor men of Europe. Time and time again I have had constituents saying to me " This is nonsense. Why are you making such a fuss about Members' pay? Frankly, the country deserves the type of Member that it is prepared to pay for." I am bound to say that I agree with that.
We do not want superlative salaries, but for heaven's sake let us have a reasonable standard of salary so that we can do our work properly. It may he that some of us are better positioned than others, but all Members of Parliament, no matter where they sit, are entitled to be able to do their job properly and to live at a reasonable standard which does not demean either themselves or the country as a whole.
Perhaps I should not say this, but I remember that when I first came into this House I saw a Member entertaining in the House some people from abroad and having to be given the money by the visitors to pay the Bill at the end of the meal. That sort of thing is disgraceful and a discredit to this House and to the country. Any danger of that sort of thing happening ought to be removed for ever more. This is one of the finest
580
Chambers, if not the finest, in the world. We work here far harder than Members of Parliament do elsewhere, and it should be reflected in a proper salary scale for all of us.
I support the general concept of what is proposed. I regret, however, that we should be seeking to tie ourselves to other professions or to particular grades of the Civil Service. I believe that, unpleasant though it may be, we should be prepared to have the salary scale reviewed periodically by Boyle and to have conclusions produced by Boyle for our consideration in this House. We have, after all, some say in many areas of pay negotiations, and it would be wrong for our salaries, however indirectly, to be tied to the salary scales of people outside this House. The Boyle committee should review our salary scales periodically and recommend changes to the House. We should have the guts to accept periodic recommendations. That is the way forward.
8.55 p.m.
Mr. Frank Haynes: I listened carefully on 21 June when the Leader of the House made a statement on the salaries of Members of Parliament. I felt for him. I was embarrassed for him at the way in which Government supporters reacted to his statement.
Until three months ago, I worked in a pit in the bowels of the earth. Much has been said over the years about the House of Commons, especially by those who work outside Parliament. I gave a guarantee to my constituents in Ashfield that I would serve them all the time in the House. Anyone visiting the House at any time will probably see me listening to the debates. If I wish to make a contribution I indicate that to Mr Speaker in the hope that I shall be called.
Our constituents laugh like hell at some of the things that go on here. I am being sincere. Members of the public sincerely believe that this is the reason why television cameras are not allowed in the House. On many occasions I have been here when there were only half a dozen Members present for a debate. That worries me sick. The people outside the House depend upon us to do a good job on their behalf.
Reference was made in the debate to part-time workers and part-time Members of Parliament. Last weekend, when

581
visiting my constituency, I went through an embarrassing period. My constituents wanted to talk about Members' salaries. I had to prove to them that what was offered in the Boyle report was justified. However, I cannot even justify it to myself.
I believe that the House is going too far. I am speaking for myself, as there is no party Whip on this matter. It is a free vote by the Opposition. I am speaking for my inner self. This is how my constituents and I feel about the matter.
I heard what was said by Ministers in the Budget debate. Tonight I heard the news. The Transport and General Workers' Union discussed the question of earnings. Recently I heard what the National Union of Mineworkers intended to do when the time came for action. I heard the Prime Minister say time and again at Question Time that the Government expected the trade unions to behave sensibly and reasonably on the question of pay increases. We are encouraging the trade unions to think that the sky is the limit, yet we are supposed to be putting the country on an even keel so that we may be fair to everybody.
Yes, the Budget was fair to some people. There are people in my constituency who pay no tax at all. They paid no tax before the Budget. Now they are landed with increases in VAT because of the Government's policies. Here we are today talking about massive increases, and when these increases are compared with the earnings of some of those whom I and other hon. Members represent they are seen as massive. I do not like what I see and what I hear. This is doing us no good at all.
If we expect people outside to be fair to the nation with regard to earnings, we are certainly not giving them the lead that I should like us to give. I do not deny for one moment that we need an increase. We need an increase, but I think we must be fair about it.
We do not have to convince ourselves or our colleagues in the House that we need an increase. We have to convince the people outside the House that we should have the increase that has been suggested. However, the Conservatives wanted to go further than that and have
582
it all at once. That is why the Conservative Back Benchers erupted—the stockbroker belt, as I would call it. [Interruption.] If I am out of order, Mr. Deputy Speaker, you will obviously have to say so, but you have not said anything yet. I am a fair man.
Mr. St. John-Stevas: The hon. Gentleman is making a most eloquent speech; I am listening to him very carefully. He says that he is a fair man. As I was one of those at the receiving end of the eruptions, I can assure him that they were fairly widespread throughout the Chamber. The strongest support I received was from the Ulster Unionists and I shall never forget it.
Mr. Haynes: I sat below the Gangway on that day, and I can assure you that there was an eruption on your side, on the Back Benches.
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. The hon. Gentleman must not use the word " you ". I have not yet entered into this debate. The term is " hon. Gentleman opposite "
Mr. Haynes: I am sorry, Mr. Deputy Speaker. As a new Member I must admit that I am still learning. There are many rules here that I have to obey. Up to now I have not broken many—just one. It will not happen again, I can assure you of that.
Mr. Alan Clark Mr. Alan Clark In deference to the hon. Member for Ashfield (Mr. Haynes) and his subscription to whole-time application to the job, I would say that he has not been in the Chamber throughout the whole debate. If he had he would have heard that the majority of speeches from the Government side have been critical of the arrangements that we shall vote on tonight.
Mr. Haynes: If the hon. Gentleman is suggesting that I have been here for only a couple of minutes, he is wrong. I have been here for quite a long time listening to the debate. Other hon. Members present in the House now can prove that. I sat here waiting for the opportunity to make a contribution.
Some hon. Members do not want to hear my contribution, but I am afraid it must be heard. It must be said, because it is the way I feel about what we are

583
debating. We must be sensible and fair to the people of this nation, particularly the workers who create the wealth. The workers are told they must increase their productivity if they are to increase their earnings. Does that apply to the House of Commons also? I hope it does. I hope, too, that we can increase our productivity in the interests of the nation.
I thank you, Mr. Deputy Speaker, for allowing me to make my contribution.
9.5 p.m.
Mr. Robert Adley: If I may say so, that was a good, populist speech by the hon. Member for Ashfield (Mr. Haynes). I think that all of us in this House do our best to serve our constituents. I just managed to scrape in by collecting 66 per cent. of the votes in my constituency, and I have not had too many complaints from my constituents that I do not do my best to serve them. I grant that they do not all agree with everything that I say, but I do not have too many complaints about my lack of diligence in doing my best to look after their interests.
One of the problems that face us in this House is how to continue to maintain the exceptionally high standard of Members of Parliament to which the nation is entitled. The simple fact is that if we underpay people and make their lives here intolerable, expecting them to devote more and more time in this place while paying them ever less and less in real terms, all that we shall have in the end will be either those who are so rich that they can afford to come here regardless of pay, or those of so little ability that they do not mind what they do to their families in order to get here, because they will not be any worse off. That is not a particularly attractive proposition for the people of this country.
My hon. Friend the Member for Scarborough (Mr. Shaw) and others have referred to the timing of Boyle. So far as I am aware, Lord Boyle's committee was given a job of work to do and was not told that whatever happened it had to produce its report before a general election. I somehow find it hard to imagine my right hon. Friend the Prime Minister standing up after the recent vote of confidence and saying " Mr. Speaker, we have had a vote of confidence in the
584
Government, the right hon. Member for Cardiff, South-East (Mr. Callaghan) has been defeated, but I do not think that we ought to have a general election until Boyle has reported ". That is an unthinkable situation, but it has to be said in the light of those who have criticised the timing of this debate.
My hon. Friend also mentioned secretarial allowances. I have had earnest conversations with the Fees Office to try to equate my overspending last year, when I had to equip myself with a new typewriter, with the need to try to pay my full-time secretary something approaching the salary that she could expect to obtain in central London. The fact is that I reached the end of the last secretarial year with a fairly substantial gap and had to fund my secretary out of my own pocket. I am afraid that that is not a situation that I regard as entirely satisfactory.
I immediately declare an interest, in that I have an outside job. Far from being ashamed of that, I am very pleased. There are two types of hon. Members. There are the political eunuchs, who either cannot hold down a job outside or who dedicate themselves 100 per cent. to politics. Frankly, they are the rather more boring Members of this House. Alternatively, there are those, of all types, shapes, sizes and sex, who have current experience of what is going on in the world outside, who occasionally are able to proffer their opinions to this House in the light of current experience—be they trade unionists, doctors or business men—and who, contrary to the debates in the House, offer practical words of common sense based on reality and a knowledge of what is going on in the world today.
I should very much regret the arrival of a situation where everyone in the House eats, sleeps and dreams politics morning, noon and night. One of the reasons why the debates along the corridor in another place are often as good as, if not better than, ours, is that there are people there who have current experience of many other areas of activity. I refuse to accept that it is somehow a crime, or even something of which one has to be ashamed, to have some active, current knowledge through having a job outside of this House.

585
The right hon. Member for Down, South (Mr. Powell) spoke, as he always does, with sincerity and with an ability to shed a different light upon our debates. He said that it was an odd and different job and that we should therefore treat ourselves differently from others. Over the past few years a change has taken place in the characteristic of the job. Our constituents now want to be able to identify with their Member of Parliament. They no longer want to look on him as something different—as someone who should be seen occasionally, put on a pedestal, metaphorically or otherwise, patted on the head, admired and gloated over. People expect that their Member of Parliament shall live in or near the constituency. That was unthinkable in the days to which the right hon. Member for Down, South alluded. We may regret that our role and our relationship with our constituents have changed, but we must come to terms with that. It is better that we pay ourselves a sensible salary than end up expecting to be paid time-and-a-half for attending civic services on Sunday mornings.
About two years ago, together with other hon. Members, I received a missive from Mr. Clive Jenkins, in which he suggested that ASTMS should represent Members of Parliament. He suggested that we were grossly underpaid and that our working conditions were at least indifferent. My response was constructive. I agreed with him and asked to join that union in order to encourage it to represent me in negotiating my pay and conditions. As I was a Conservative Member, and, as Mr. Clive Jenkins rules ASTMS according to the rule of Mr. Clive Jenkins, I was not acceptable. Many trade unionists regard us as something less than alive to the reality of life in working in the way that we do for the remuneration that we receive.
In passing, I pay tribute to my right hon. Friend the Member for Taunton (Mr. du Cann). I hope that he will not mind my saying that everyone in the House knows that the very least of the reasons why he has been so assiduous in making representations on behalf of Back Benchers is that he is putting self-interest first. We know that to be true and have paid greater heed to his words than
586
if he were merely the chairman of the 1922 Committee. With Mr. Cledwyn Hughes, a former member of the PLP, he has spent a great deal of time trying to persuade the previous and the present Government of the need to solve the problem of hon. Members' pay.
I share the view of the Leader of the House that the dissatisfaction with the present arrangement is widespread throughout the House. No section feels more strongly than any other. The Government have handled it in a less than brilliant manner, and the consultation process has been non-existent. If my right hon. Friend the Leader of the House has been left to carry the can, he has done so successfully. He has been left with an unhappy job to undertake on behalf of his Cabinet colleagues. I understand, however, that they have now taken on board the mood of Back Benchers in all parts of the House.
During the general election campaign I did not tell my constituents that in future we had to ensure that people were not paid what they are worth and that they must be paid the wrong rate for the job. As a member of the Conservative Party I campaigned on the basis that if a man is worth a good salary he should receive it. I also did not campaign on the basis that it is the job of Parliament and the Government consistently to interfere with those who have been given a job of work to do. This House gave Lord Boyle a job of work to do. Parliament passed the recommendation that Lord Boyle's committee be established to come forward with proposals for remuneration for hon. Members. As a Conservative I accepted that. It did not make sense for me to say to the Government that Boyle had done what Parliament had asked him to do but the Government should override that and interfere with it.
I am prepared reluctantly to go along with the Government this evening because they have responded to the will of the House. But, personally, I think that, having established the Boyle committee, we should have accepted its recommendations and got on with them. That would have been the sensible and courageous thing to do. One of the great problems in this country today is that people who have energy, initiative and ability are underpaid. I am not ashamed to stand up and say that. If we want a

587
good House of Commons, with Members of Parliament who are able to carry out their jobs properly and hold down significant jobs outside, we must be prepared to pay ourselves properly. On that basis, we should have accepted Boyle.
9.16 p.m.
Mr. George Cunningham: First, I should correct something that the hon. Member for Christchurch and Lymington (Mr. Adley) said. He seemed to believe that the Boyle committee produced its reports to this House, and was invited by the House to do so. That is not the case. The Boyle committee was invited by the Government to produce a report for the Government. The Government then bring the suggestions in that report to the House and it is up to the House to decide what to do with them. The Boyle committee does not report to us and has never been invited to do so.
On a previous occasion when we debated this subject I said that I must have a higher embarrassment threshold than many other hon. Members because I did not feel particularly embarrassed about the decision falling on us to decide our own salaries. However, I feel some embarrassment today because we are taking the whole of a normal day of the House's time to discuss this subject. It might be better if we found some way of discussing it upstairs, in public of course. It is certain, however, that we cannot escape the decision, and on that point I strongly agree with the right hon. Member for Down, South (Mr. Powell) and others who say that there is no way of passing the buck to Boyle or any other institution so that in the end we do not need to take the responsibility for what we decide. But I still think that there is something rather wrong about our taking a whole day to discuss this matter on the Floor of the House.
I rise to rebut the principal part of the case stated by the right hon. Member for Down, South, both in his speech today and in the article that he wrote the other day in The Guardian. I refer to that part of his case in which he says that it is right for the House to decide at any given time what the proper salary for a Member of Parliament should be but then only to implement that salary after the next election. He claims that since
588
we did not do that in the last Parliament we are not entitled to make the increases that are proposed tonight.
It so happens that what the right hon. Member says we should do is exactly what we did in the previous Parliament for the first time ever. In July 1975 when we discussed this subject the then Labour Government brought a motion to the House to test the opinion of Members whether the salary of a Member should be linked in future to something or other. An amendment was moved, providing that not only should there be a linkage but that the linkage should be to a specified grade in the Civil Service. We supplied the grade in the amendment, which was then carried by a majority of one. Then the amended motion was passed by a majority of 90 to 100.
The motion that was passed on 22 July 1975 stated:
" in the opinion of this House it is desirable in principle that the salaries of Members should be regulated to correspond with a point on the scale paid to an Assistant Secretary in the public service, not later than three months after the next General Election ".—[Official Report, 22 July 1975; Vol. 896, c. 511.]
It continued to state what should happen between July 1975 and the following general election, but that is irrelevant to my present purpose.
Therefore, public and definite indication was given of what the last Parliament thought was the proper salary for an hon. Member. At that time, we said that it was our intention to implement that within three months of the following general election. Here we are within three months of that general election and no one can be in any doubt that that was what was in Parliament's mind. In so far as any specific decision was taken on the matter, that was the decision.
The proposals that are brought forward tonight are not precisely in the form that was suggested at that time. They do not suggest linkage to the salary of an assistant secretary. If they did, I estimate that they would be a minimum of 40 per cent. or 50 per cent. higher than the present proposals. Therefore, we are well within the indications that were given in the last Parliament as to what should take place in this Parliament.
I suggest to the right hon. Member for Down, South that, on that basis, we are behaving with absolute rectitude. The

589
public cannot complain that due notice was not given, and, therefore, that part of his argument falls to the ground.
9.22 p.m.
Mr. A. P. Costain: I regret that the hon. Member for Ashfield (Mr. Haynes) has left the Chamber. He made a provocative speech as if, having been in the House for eight weeks only, he was an expert on the matter. He says that he sits in the House and makes a speech. Nobody can deny that—he makes the same speech every time. He considers that as long as he sits in the Chamber and catches your eye, Mr. Speaker, he is properly representing his constituency. He is a new boy, and let us give him credit—he is doing the best that he can.
The hon. Gentleman criticises other hon. Members because they have not been in the Chamber all day. It might be of interest to him to know that I have been in the House since 10 o'clock this morning. Until 1 p.m. I was at a conference with shipowners, learning about the problems of shipping that affect my constituents. I came into the Chamber for Question Time, and I subsequently attended two Committees to which I have had the honour to be elected. The job of a Member of Parliament is not just to sit in the Chamber in the hope of catching Mr. Speaker's eye. Perhaps I would be accused of lèse—majesté if I asked the hon. Member for Ashfield to give me lessons in how to catch Mr. Speaker's eye more often.
There are three classes of hon. Members. There are those who could not earn as much in outside life as they earn in this place; there are those who can earn a lot more than they get here, and there is a third class, those who come here because they believe that they can make a reasonable living and, at the same time, answer a calling. My hon. Friend the Member for Plymouth, Sutton (Mr. Clark) said that it was a great honour to be in this place, and of course it is. However, is it correct that the wives of Members of Parliament should be asked to make sacrifices so that their husbands can be in this place? It cannot be denied that to be a Member of Parliament's wife is a pretty rotten job. One has only to look at the high divorce rate for Members
590
of Parliament. Divorce has almost become an occuptional disease, and that is because Members of Parliament have to make many sacrifices in carrying out their duties.
How is a Member of Parliament's salary to be assessed? A Member of Parliament represents an electorate ranging between 70,000 and 100,000. If every constituent—and constituents expect us to be at their beck and call—gave his Member of Parliament a postage stamp, we would be better off. If we were Buddhist monks and they came along with a bottle of milk and said " Here you are. Here is your food for a year ", we would be better off. How are our salaries to be assessed?
It has been said that there are many outside the House who would be only too pleased to take on the job. That is right However, are they the right people? A number of my constituents have told me that they would like to be Members of Parliament. Some of them would be jolly good Members. However, when I explain to them what would be expected of them, what they would sacrifice and what it would mean for their families, they say " That is not for me. I should love to do it but that would not be possible."
One of my constituents would make an excellent Member of Parliament. When he knew that there would be a high rate of pay for European Parliament Members, he said " That is my job. May I have that job? I could afford to live in those conditions."
I heard someone say " If we pay peanuts, we shall get monkeys." Some of them probably think that we are monkeys. I have received only two letters complaining about the proprosed increase. One was written by a constituent who writes at least once a fortnight. His writing is so well known that when my hard-working secretary sees an envelope bearing his writing she says " My God, he is writing again." He wrote to tell me that we have not earned an increase and that we do not deserve one. If I do not reply to one of his letters for a fortnight, lo and behold I am told that I am neglecting my duty.
I am glad that my hon. Friend the Member for Plymouth, Sutton is in the Chamber. He said that we receive tax free allowances. Would any solicitor or

591
business man expect his office expenses to be added to his salary and to be taxable? Would any solicitor, for example, expect his secretary's salary to be added to his for tax purposes? Of course he would not.
I had the honour to become a Member of this place nearly 20 years ago. In fact, I was adopted 21 years ago tomorrow. When I was elected, I held 14 directorships. I hold none now. My successor in what was my principal directorship is now receiving five times that which I received on retirement. When I think of what I have received as a Member of Parliament, it is clear that it is not a job to take for the money.
We must get the matter in perspective. We should have a salary—not for ourselves but for our successors—that will enable hon. Members to do their job efficiently and properly without asking their families to make heavy sacrifices.
9.29 p.m.
Mr. Michael Foot: I apologise, first, to some hon. Members whom I did not hear earlier in the debate. However, I have listened to most of the debate over the past few hours.
I was interested to hear the Leader of the House say that when he made his announcement on these matters a few days ago he had the support only of the Ulster Unionists. So skilfully has he conducted the Government's affairs that he has lost even their support. I hope that the Government will continue along these lines.
The right hon. Gentleman, at the start of his speech, naturally quoted Walter Bagehot. I was reading Walter Bagehot over the weekend. He gave some indication of his views on these matters. It is reported in one of the volumes edited by the right hon. Gentleman that Walter Bagehot never tired of telling the tale of how the burgesses of Langport petitioned Edward I to relieve them of the privilege of parliamentary representation in order to save the cost of paying their Members. I dare say that this is a widspread feeling in other quarters. It should not be thought that we are discussing a novel question.
We have to seek to follow two principles. This is not always easy. The first is that Members of Parliament should be
592
decently paid. I do not believe that they will be indecently paid if we accept the Boyle proposals. They are reasonable proposals. There have been many ways over the years in which Members of Parliament have been disgracefully treated or Members of Parliament have disgracefully treated themselves. Some of these matters are not properly understood in the country.
The most appalling aspect, over many years, was the position of parliamentary pensions. No one looking at the facts could deny that many past Members of this House, or their wives or widows, have been shamefully treated. I am glad that the Bill passed in the last Parliament, with virtually the unanimous support of the House, goes far—I do not say that it solves every problem—in helping to solve that aspect of the problem, which was the most offensive of all.
I agree with many hon. Members that we have treated our secretaries disgracefully over many years. They have nothing that approaches a proper deal. Again, in the last Parliament, principally due to the report produced by my hon. Friend the Member for Derby, North (Mr. Whitehead) and accepted by the previous Government and by the House, we made a considerable advance in improving the situation of the secretaries, although I agree with the intervention of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) that the whole problem has not been solved. I hope that we shall be able to take action on secretaries' pensions in addition to the advance made in other spheres.
Along with treating Members of Parliament fairly and decently, which I believe these proposals do, the other principle is to make sure that we do not give preferential treatment to Members of Parliament. Although not always receiving popular acclaim for my proposals, I believed that the pay policies of one kind or another that operated in the years from 1975 to 1978, when I was responsible for these matters, had to apply to Members of Parliament, just as Members of Parliament were seeking to apply them to other people.
It would not have been proper to depart from that principle. We are now in a slightly different situation. The Government, having abandoned any control

593
over these matters in the whole range of policy, have not the same right to say to Members of Parliament that they should accept the restraints that are not being imposed on other sections. It is a different situation. I should like especially to underline the point made by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) in response to the speech by the right hon. Member for Down, South (Mr. Powell). My hon. Friend put a most important point to the House.
When all these matters were discussed at length in 1975 the House came to some important conclusions, and I do not believe that the House—and certainly we in the previous Government—thought that we had any right to set aside the votes of the House and the conclusions to which they pointed on the question of some form of linkage.
Perhaps I may embellish what my hon. Friend the Member for Islington, South and Finsbury said. The House passed the motion to which he referred and, as he said, although the first motion was carried by a majority of only one, the later motion was approved by a much more substantial majority.
It was partly on account of that vote that towards the end of the previous Parliament we made proposals to the House to be put before the Boyle committee. We gave an account to the House of what we intended to do and how we intended particularly to draw the attention of the committee to the resolution passed in the House and how we would especially recommend that the committee should seek to proceed to make recommendations on that basis.
For the reasons given by my hon. Friend the Member for Islington, South and Finsbury, and for those that I am seeking to elaborate, it is a fact that the overwhelming majority of hon. Members—some take a different view, as they are entitled to do—urged that we should proceed on that basis, and that was the recommendation to the Boyle committee.
I do not believe that the committee's response has been fully satisfactory to those of us who take that view, but there is nothing dishonourable in proposing that there should be such a linkage and there has certainly been nothing secretive
594
in proposing such a linkage. It is a view which was openly expressed by the House and was openly backed in the recommendations made to the committee.
We have not reached the full conclusion that we believe to be right in dealing with these matters, but we have made considerable progress. I shall not go into the policy evolved over the past few weeks—what the Leader of the House would call the evolutionary exercises. I am much too tender and delicate to go into those matters extensively. People sometimes talk as if the reputation of the House has been declining over generations. Some claim that that has occurred because we have to discuss such sordid matters of money. I do not believe that that is the case.
In years gone by, the reputation of the House was different in many degrees. Two or three centuries ago an announcement was made that a prominent Conservative was to take up a senior post in the Government and some of the " women of the city"—as they were described—were reported as saying " 7,000 guineas a year, my girls, and all for us ". We do not quite have Conservative leaders of that nature now, do we? And who would say that there is any improvement?
If hon. Members look back over the records, they will see that the House emerged from some of the more corrupt states. I do not believe that the House is corrupt. The standard of honour is as high as ever, though I am not quite sure about the new lot. We shall have to keep a close watch on them in other respects as well.
It gives a false impression to the country at large for the suggestion to be made that the House is concerned about getting the cash and getting it in as extensive quantities as we can lay our hands on. That is not the fact at all. Indeed, the record recited by the right hon. Member for Taunton (Mr. du Cann) of what has happened in the past five years entirely rebuts that charge, whether it be laid against individual Members or against Ministers.
Those charges have no basis whatever, and what we have to ensure is that the House of Commons shall be able to sustain that reputation and carry out its duties efficiently and intelligently, with Members being remunerated not in an

595
excessive manner but in such manner as will enable them to do their job properly.
I believe that the proposals now before the House serve those two purposes. The vote tonight is entirely free. Each Member of the House is himself responsible for the way in which he votes. Everyone is responsible. [Interruption.] I am not making any accusations. We shall save that up for even more relevant occasions when they come in the near future. I believe that every Member of the House of Commons is entitled to vote this evening for these proposals which come from the committee which we ourselves appointed.
The Government have put the proposals before us. I am not saying that they have managed the matter with brilliant skill over these past few weeks, but so charitable am I that I am willing to overlook that, at least for the moment. On that basis, I suggest that the House would be well advised to accept the Government's proposals.
9.41 p.m.
Mr. St. John-Stevas: I am grateful to the right hon. Member for Ebbw Vale (Mr. Foot) for his support. In opening the debate I deployed my principal arguments in favour of the Government's proposals, and the House will learn with relief that I do not intend to repeat them. My purpose now, having been present throughout the debate, apart from a brief interval for a little refreshment, is to reply briefly to what has been said from both sides. Some important points which need answering have been made.
I am delighted to have increased the support for my proposals since I last addressed the House on the matter. It is amazing what time and a little reflection will do. If the policy has evolved, it has evolved in the right direction. If I have lost part of the Ulster Unionists, I have gained in support elsewhere in the House. But I shall never forget the support which I received in my hour of need from the Ulster Unionists, and I hope that that is a debt which I shall be able to repay in other ways in due course.
I pay tribute to my right hon. Friend the Member for Taunton (Mr. du Cann) and the right hon. Member for Sunderland, North (Mr. Willey) for their joint work on this matter. If we have arrived
596
at a more satisfactory solution to a difficult problem, it is due to their extremely hard work and, above all, I believe, their determination and their strength of will. I congratulate them on it.
At the same time, I feel that we should be wise to listen also to the voice of the hon. Member for Ashfield (Mr. Haynes), who spoke in the debate today. He was accused of making the same speech twice. If I may say so, it is such an excellent speech that I would make it again if I were he. [HON. MEMBERS: " He will."] One never knows what may happen. If one departs into pastures new, the tried and the tested stand one in good stead.
The hon. Gentleman gave expression to an important point of view. That point of view and the interests of the House must be balanced by an assessment of the interests of the country and how the country regards the House. We have tried to retain that balance in these proposals.
I turn to the various amendments, which fall into three groups. The first group concerns the linking of Members' salaries to the annual pay round. It was eloquently proposed by the hon. Member for Wood Green (Mr. Race), but I cannot say that amendment (a) has any advantages over the Government arrangements for updating. The review bodies have commented that a link with a general index covering the country's total work force would be likely to result in an inappropriately high increase because, in percentage terms, those at the lower income levels have in recent years normally received higher increases than those at higher income levels. Therefore, I cannot commend the amendment to the House.
It is not clear whether the hon. Gentleman is referring to just one annual increase, or whether he intends that there should be a retrospective element over the last seven years. If he intended to date it back over the past seven years to 1972 and to link it with the current pay round, the increase for Members of Parliament would be considerably more than the increase that is proposed, namely, £13,500, which is what the salary would work out at.
Mr. Race: The intention of the amendment is not to link the salary of hon. Members with the New Earnings Survey

597
or with the Department of Employment's average earnings index. The intention of the amendment is simply to allow an interim increase to take place based on a comparison with the New Earnings Survey and the average earnings index, so that Boyle can report back to the House. The right hon. Gentleman may know that part of the original proposal was to have in the submissions to the Boyle committee as an instruction the fact that it should have regard to reducing income inequalities.
Mr. St. John-Stevas: I am grateful for that explanation.
I turn to amendment (b), which concerns the link with the New Earnings Survey. I accept the strength of the argument that the parliamentary salary should in future years be updated, but I would prefer to see Members' pay move, in the long term, in line with professional earnings rather than a general survey of earnings which is too broad for our purpose. For next year I remain sure that it is right for the updating to be on the basis of a further Review Body report, as has been the case for other bodies covered by the Review Body.
The second group of amendments, (c), (d), (g) and (f), all seek to reduce or restrict in some form or another the payment of the parliamentary salary in cases where Members receive outside earnings. I appreciate the view of those hon. Members who feel that we should differentiate in this way, but I am sure that the majority view of the House is that the parliamentary salary should be assessed on a full-time basis. The Review Body has found that almost all Members, whether they have outside jobs or not, devote more than 40 hours a week to parliamentary business. I think that that can be considered as work on a full-time basis. If one gets into this area and tries to find some kind of division, one enters into a morass, and I believe that we would be wise to keep out of it.
The third group of amendments, (e), (i) and (h), involve the national pensions figure. Amendment (e) seeks to remove the use of a notional figure for pension purposes. It would mean that Members' pensions would be based only on the rate in payment. I see the reasoning but I cannot support that amendment.
598
We accept that £12,000 is the appropriate rate for the job of a Member but, for other social reasons, we believe that the salary should be introduced in stages. It would be wrong to penalise hon. Members in their pension expectations and, particularly, any dependants, for those extraneous reasons. I therefore believe that it is right that there should be a notional sum for pension purposes which is operative at once. With the passage of time the anomaly will be removed.
Amendment (h) seeks to ensure that Members' salaries will not be inflation-proofed in the sense of being indexed to the retail price index. I agree with that. Since it is not the Government's intention to make such a link, it is better that payment at the second stage should be updated by the normal Review Body process. That was the case made by my hon. Friends the Members for Knutsford (Mr. Bruce-Gardyne) and for Plymouth, Sutton (Mr. Clark). They were against index linking and feared that a link with civil servants would bring that about. No decision has been taken on a link with the Civil Service, although it was the subject of a resolution which was passed in the previous Session. Even if there were such a link with civil servants, my hon. Friend's fears are groundless, because the salaries of civil servants are not index-linked. I hope that that reassures hon. Members.
The question of status was raised by the right hon. Member for Down, South (Mr. Powell). There was a considerable amount of support for his argument. The right hon. Gentleman was joined by his successor in Wolverhampton—my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen)—by my hon. Friend the Member for Plymouth, Sutton, and by the hon. Member for Keighley (Mr. Cryer). With such a combination, I was convinced that I must be right.
I suggested that the prestige, influence and responsibility of a job should be reflected in the remuneration. As an illustration, I said that Cabinet Ministers should not be paid less—as they are at the moment—than an assistant secretary. The right hon. Member for Down, South ridiculed that by saying that if my point was valid Cabinet Ministers should be paid more than the permanent head of the Department. That is what will

599
happen if the Government's proposals are accepted by the House.
This is an interesting philosophical question. I should be the last person to suggest that the only source of status is money. That is foreign to my outlook on life. I agree with my hon. Friend the Member for Wolverhampton, South-West, who gave examples of other occupations which do not depend upon money but which have a high status. He gave the example of cardinals and archbishops. There seemed to be an element of special pleading in that section.
We must face facts. Whatever the right hon. Member for Down, South may say about a society in which prestige is based on broad acres, we have moved away from that kind of society to one where money is of increasing importance and lineage is of less importance. There is a connection between social status and economic power. If Members of Parliament become a deprived class financially their status will be undermined. After all, that is what has happened to us as a country. For a certain time one can keep up appearances, but eventually the economic realities will out. I hope that that argument, which owes something, but not everything, to Marx, will appeal to the hon. Member for Keighley.
I want to deal with the important point raised by the hon. Member for Nottingham, West (Mr. English). He rightly pointed out that the fact that the salaries of the Prime Minister and the Lord Chancellor are not to be increased to the full amount will mean that this will apply not only to the existing Prime Minister and Lord Chancellor but to their successors. That is true. On the other hand, it is the Government's intention that if there were a change in those offices before the next election, a new motion would be tabled. It would certainly be the Government's intention to table a motion which would apply after the next election, at a suitable time.
Mr. English: Will the right hon. Gentleman give way?
Mr. St. John-Stevas: I am afraid that I cannot give way. I have almost no time left.
The right hon. Member for Down, South raised the important point that the electorate should know before an election
600
the salary of those whom they are to elect. I thought that that point was adequately dealt with in a practical sense by the hon. Member for Islington, South and Finsbury (Mr. Cunningham). I would only say that although one can sympathise with the constitutional doctrine which the right hon. Gentleman was putting forward, I think that that is outweighed by the injustice that would be done to hon. Members of this House if we postponed any change in the salary until after the next election.
With regard to the interesting suggestion of my right hon. Friend the Member for Stafford and Stone (Mr. Fraser) that we should have a Speaker's Conference to reduce the number of seats, I can only say that it is a good theoretical point, but it has certain practical disadvantages. It would be a move out of the frying pan into the fire, and rather like moving from museum charges to library charges. I do not intend to follow that course.
This has tended to be a somewhat egocentric debate. I am very glad that the question of secretaries was raised by a number of hon. Members, including the hon. Member for Derby, North (Mr. Whitehead) and the hon. Member for Liverpool, Walton (Mr. Heffer). The pensions of secretaries are being considered by the Boyle committee. It is also considering, at our request, the question of payment for secretaries during the period of dissolution.
What I may call another compassionate point was raised when it was stated that seven former Members who were defeated at the last election are now in receipt of social security. That is a situation that should not be allowed to arise in the future, and the Boyle committee has been requested to look at the question of severance pay for Members, and to look at it, in particular, so that severance should be related in some way to the length of service of hon. Members.
All this is a difficult subject to deal with, but I think that it has been dealt with with restraint and precision by the House today. I aroused some reaction on the Benches behind me when I said that in an ideal society everyone would be paid the same. The cries that I heard did not seem to me to be cries of support. But, of course, what I said is entirely consistent with Conservative principle. I was positing an ideal world—and an ideal world uninfluenced by original sin. A

601
belief in original sin is a Conservative precept. As I look at the Opposition Benches, I see some evidence to support it.
One could, of course, pay Members or pay people nothing at all. That is what happens in, for example, a Benedictine monastery. One day one is the abbot; the next day one is scrubbing the floor—and one is quite happy with that arrangement.
Mr. Cryer: Just like this place.
Mr. St. John-Stevas: Yes, there is a certain parallel with political life.
But we have to deal with this world and with this House. This is an imperfect world. These proposals are not perfect. I believe that they will improve the situation in both the short term and the long term. I am grateful, indeed, for the support of the Shadow Leader of the House. I hope that the House will vote for these proposals.
Mr. Speaker: I am now required, at 10 o'clock, to put the Questions on the motions and the selected amendments. Does the hon. Member for Wood Green (Mr. Race) wish to move his amendment?
Mr. Race: Yes, Mr. Speaker.

Division No. 51]

AYES

[10.00 p.m.

Brown, Ron (Edinburgh, Leith)

Holland, Stuart (L'beth, Vauxhall)

Soley, Clive

Campbell-Savours, Dale

Homewood, William

Tilley, John

Canavan, Dennis

McKay, Allen (Penistone)

Cryer, Bob

Marshall, Jim (Leicester South)

TELLERS FOR THE AYES

Ellis, Raymond (NE Derbyshire)

Mitchell, Austin (Grimsby)

Mr Reg Race and

Field, Frank

Powell, Raymond (Ogmore)

Miss Shelia Wright.

Haynes, David

Skinner, Dennis

NOES

Adley, Robert

Boothroyd, Miss Betty

Cadbury, Jocelyn

Alexander, Richard

Bottomley, Peter (Woolwich West)

Callaghan, Rt Hon J. (Cardiff SE)

Alison, Michael

Bowden, Andrew

Carlisle, John (Luton West)

Alton, David

Boyson, Dr Rhodes

Carlisle, Kenneth (Lincoln)

Ancram, Michael

Braine, Sir Bernard

Carlisle, Rt Hon Mark (Runcorn)

Archer, Rt Hon Peter

Bray, Dr Jeremy

Carmichael, Neil

Armstrong, Ernest

Bright, Graham

Carter-Jones, Lewis

Arnold, Tom

Brinton, Timothy

Cartwright, John

Ashley, Rt Hon Jack

Brittan, Leon

Channon, Paul

Ashton, Joe

Brocklebank-Fowler, Christopher

Chapman, Sydney

Atkins, Robert (Preston North)

Brooke, Hon Peter

Clark, Hon Alan (Plymouth, Sutton)

Atkinson, David (B'mouth, East)

Brotherton, Michael

Clark, David (South Shields)

Bagier, Gordon A. T.

Brown, Hugh D. (Provan)

Clark, William (Croydon South)

Baker, Kenneth (St. Marylebone)

Brown, Michael (Brigg & Sc'thorpe)

Clarke, Kenneth (Rushcliffe)

Baker, Nicholas (North Dorset)

Brown, Robert C. (Newcastle W)

Clegg, Walter

Banks, Robert

Brown, Ronald W. (Hackney S)

Cockeram, Eric

Barnett, Rt Hon Joel (Heywood)

Browne, John (Winchester)

Cocks, Rt Hon Michael (Bristol S)

Beith, A. J.

Bruce-Gardyne, John

Cohen, Stanley

Bendall, Vivian

Bryan, Sir Paul

Coleman, Donald

Benyon, W. (Buckingham)

Buchanan-Smith, Hon Alick

Colvin, Michael

Berry, Hon Anthony

Buck, Antony

Conian, Bernard

Bevan, David Gilroy

Budgen, Nick

Cook, Robin F.

Bidwell, Sydney

Bulmer, Esmond

Cope, John

Booth, Rt Hon Albert

Butler, Hon Adam

Cormack, Patrick

Amendment (a) proposed, in line 3, leave out from beginning to end of motion and insert:—
(1) The salary payable to Members shall be increased on 13th June 1979, in respect of service on and after 13th June 1979 and before 13th June 1980, by an amount equal to the percentage increase in money wages in the current pay round at average earnings for the male full-time worker, as measured by the New Earnings Survey and the Department of Employment's index of average earnings, and expressed as a percentage of backbench Members' pay.
(2) That this House rejects the findings of the Boyle report and refers them back to the Committee for further consideration.
(3) That the Boyle Committee be instructed to report again by June 1980, and in its report to have regard to:

(a) the need to compare Members' pay not only with outside comparators thought to be at the same level of responsibility, but also to the generality of earnings in the economy;

(b) the need to increase substantially the secretarial and research allowances of Members and improve back-up services; and

(c) the need to secure a living wage for full-time service as a Member of Parliament.—[Mr. Race.]

Question put, That the amendment be made:—
The House divided: Ayes 16, Noes 364.

Costain, A. P.

Howell, Rt Hon David (Guildford)

Nott, Rt Hon John

Cowans, Harry

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

Oakes, Rt Hon Gordon

Critchley, Julian

Howells, Geraint

Ogden, Eric

Cunningham, George (Islington S)

Hughes, Mark (Durham)

O'Halloran, Michael

Dalyell, Tam

Hughes, Robert (Aberdeen North)

O'Neill, Martin

Davidson, Arthur

Hughes, Roy (Newport)

Onslow, Cranley

Davies, Rt Hon Denzil (Llanelli)

Hunt, David (Wirral)

Oppenheim, Rt Hon Mrs Sally

Davies, Ifor (Gower)

Hurd, Hon Douglas

Osborn, John

Davis, Clinton (Hackney Central)

Irving, Charles (Cheltenham)

Page, Rt Hon R. Graham (Crosby)

Davis, Terry (B'rm'ham, Stechford)

Jay, Rt Hon Douglas

Park, George

Dean, Joseph (Leeds West)

Jenkin, Rt Hon Patrick

Parker, John

Dean, Paul (North Somerset)

Johnson, James (Hull West)

Parkinson, Cecil

Dewar, Donald

Johnson Smith, Geoffrey

Patten, Christopher (Bath)

Dickens, Geoffrey

Jones, Rt Hon Alec (Rhondda)

Pavitt, Laurie

Dobson, Frank

Jones, Barry (East Flint)

Pendry, Tom

Dormand, J. D.

Jones, Dan (Burnley)

Penhaligon, David

Douglas, Dick

Jopling, Rt Hon Michael

Percival, Sir Ian

Douglas-Hamilton, Lord James

Joseph, Rt Hon Sir Keith

Pollock, Alexander

du Cann, Rt Hon Edward

Kaberry, Sir Donald

Porter, George

Dunn, James A. (Liverpool, Kirkdale)

Kerr, Russell

Prior, Rt Hon James

Dunn, Robert (Dartford)

Kilroy-Silk, Robert

Proctor, K. Harvey

Dunwoody, Mrs Gwyneth

King, Rt Hon Tom

Radice, Giles

Durant, Tony

Kitson, Sir Timothy

Raison, Timothy

Eden, Rt Hon Sir John

Lamble, David

Rathbone, Tim

Edwards, Rt Hon N. (Pembroke)

Lamborn, Harry

Rees, Rt Hon Merlyn (Leeds South)

Eggar, Timothy

Lamont, Norman

Rees, Peter (Dover and Deal)

Emery, Peter

Lang, Ian

Rees-Davies, W. R.

English, Michael

Lawrence, Ivan

Rhodes James, Robert

Ennals, Rt Hon David

Lawson, Nigel

Ridley, Hon Nicholas

Evans, Ioan (Aberdare)

Leadbitter, Ted

Rifkind, Malcolm

Evans, John (Newton)

Lee, John

Roberts, Albert (Normanton)

Ewing, Harry

Le Marchant, Spencer

Roberts, Allan (Bootle)

Eyre, Reginald

Lewis, Kenneth (Rutland)

Roberts, Gwilym (Cannock)

Fairbairn, Nicholas

Lloyd, Ian (Havant & Waterloo)

Roberts, Michael (Cardiff NW)

Fairgrieve, Russell

Lloyd, Peter (Fareham)

Roberts, Wyn (Conway)

Faulds, Andrew

Lofthouse, Geoffrey

Robertson, George

Finsberg, Geoffrey

Loveridge, John

Rodgers, Rt Hon William

Fisher, Sir Nigel

Lyell, Nicholas

Rooker, J. W.

Fletcher, Alexander (Edinburgh N)

Mabon, Rt Hon Dr J. Dickson

Roper, John

Fletcher-Cooke, Charles

McCartney, Hugh

Ross, Stephen (Isle of Wight)

Fookes, Miss Janet

McDonald, Dr Oonagh

Rossi, Hugh

Foot, Rt Hon Michael

MacGregor, John

Rowlands, Ted

Forman, Nigel

McGuire, Michael (Ince)

Royle, Sir Anthony

Forrester, John

Mackay, John (Argyll)

Sainsbury, Hon Timothy

Foulkes, George

MacKenzie, Rt Hon Gregor

St. John Stevas, Rt Hon Norman

Fowler, Rt Hon Norman

Macmillan, Rt Hon M. (Farnham)

Sandelson, Neville

Fox, Marcus

McMillan, Tom (Glasgow, Central)

Scott, Nicholas

Fraser, Peter (South Angus)

McNamara, Kevin

Sever, John

Galbraith, Hon T. G. D.

McQuarrie, Albert

Shaw, Michael (Scarborough)

Gardner, Edward (South Fylde)

McWilliam, John

Sheerman, Barry

Garrett, John (Norwich S)

Madel, David

Shepherd, Colin (Hereford)

Garrett, W. E. (Wallsend)

Major, John

Shersby, Michael

Gilmour, Rt Hon Sir Ian

Marland, Paul

Shore, Rt Hon Peter (Step and pop)

Ginsburg, David

Marlow, Antony

Silkin, Rt Hon John (Deptford)

Glyn, Dr Alan

Marshall, Michael (Arundel)

Silkin, Rt Hon S. C. (Dulwich)

Gourlay, Harry

Marten, Neil (Banbury)

Silverman, Julius

Gow, Ian

Martin, Michael (Gl'gow, Springb'rn)

Silvester, Fred

Gower, Sir Raymond

Mather, Carol

Sims, Roger

Graham, Ted

Maude, Rt Hon Angus

Skeet, T. H. H.

Grant, Anthony (Harrow C)

Mawby, Ray

Smith, Dudley (War, and Leam'ton)

Grant, George (Morpeth)

Mawhinney, Dr Brian

Smith, Rt Hon J. (North Lanarkshire)

Grant, John (Islington C)

Mayhew, Patrick

Snape, Peter

Gray, Hamish

Mellish, Rt Hon Robert

Speed, Keith

Grimond, Rt Hon J.

Millan, Rt Hon Bruce

Speller, Tony

Grist, Ian

Miller, Dr M. S. (East Kilbride)

Spence, John

Grylls, Michael

Mills, Peter (West Devon)

Spicer, Michael (S Worcestershire)

Gummer, John Selwyn

Miscampbell, Norman

Spriggs, Leslie

Hamilton, James (Bothwell)

Mitchell, David (Basingstoke)

Sproat, Iain

Hampson, Dr Keith

Mitchell, R. C. (Soton, Itchen)

Stanley, John

Hannam, John

Moate, Roger

Steel, Rt Hon David

Hardy, Peter

Monro, Hector

Steen, Anthony

Harrison, Rt Hon Walter

Montgomery, Fergus

Stewart, Rt Hon Donald (W Isles)

Haselhurst, Alan

Moore, John

Stewart, Ian (Hitchin)

Hattersley, Rt Hon Roy

Morris, Rt Hon Alfred (Wythenshawe)

Stoddart, David

Havers, Rt Hon Sir Michael

Morris, Rt Hon Charles (Openshaw)

Stott, Roger

Hawkins, Paul

Morris, Rt Hon John (Aberavon)

Stradling Thomas, J.

Hawksley, Warren

Morris, Michael (Northampton, Sth)

Strang, Gavin

Hayhoe, Barney

Morrison, Hon Charles (Devizes)

Straw, Jack

Heseltine, Rt Hon Michael

Morrison, Hon Peter (City of Chester)

Summerskill, Hon Dr Shirley

Higgins, Rt Hon Terence L.

Moyle, Rt Hon Roland

Taylor, Mrs Ann (Bolton West)

Hogg, Hon Douglas (Grantham)

Mudd, David

Tebbit, Norman

Hogg, Norman (E Dunbartonshire)

Mulley, Rt Hon Frederick

Temple-Morris, Peter

Holland, Philip (Carlton)

Myles, David

Thomas, Jeffrey (Abertillery)

Home Robertson, John

Nelson, Anthony

Thomas, Mike (Newcastle East)

Hooson, Tom

Newton, Tony

Thompson, Donald

604

605

Thorne, Nell (Ilford South)

Watkins, David

Williams, Sir Thomas (Warrington)

Tinn, James

Watson, John

Wilson, William (Coventry SE)

Townend, John (Bridlington)

Wells, P. Bowen (Hert'rd & Stev'nage)

Winterton, Nicholas

Townsend. Cyril D. (Bexleyheath)

Wheeler, John

Wolfson, Mark

Trippier, David

White, Frank R. (Bury & Radcliffe)

Woodall, Alec

Trotter, Neville

Whitelaw, Rt Hon William

Woolmer, Kenneth

Urwin, Rt Hon Tom

Whitlock, William

Wrigglesworth, Ian

Vaughan, Dr Gerard

Whitney, Raymond

Young, David (Bolton East)

Viggers, Peter

Wickenden, Keith

Younger, Rt Hon George

Wainwright, Richard (Coine Valley)

Wiggin, Jerry

Wakeham, John

Wigley, Dafydd

TELLERS FOR THE NOES:

Walker-Smith. Rt Hon Sir Derek

Wilkinson, John

Mr. David Waddington and

Wall, Patrick

Willey, Rt Hon Frederick

Mr. Robert Boscawen.

Waller, Gary

Williams, Rt Hon Alan (Swansea W)

Question accordingly negatived.
Mr. Speaker: Does the hon. Member for Derby, North (Mr. Whitehead) wish to move his amendment?
Mr. Whitehead: Yes, Mr. Speaker.
Amendment (c) proposed, in line 22, after ' not ' insert:

Division No. 52]

AYES

[10.14 pm

Alton, David

Garrett, John (Norwich S)

Pendry, Tom

Ashton, Joe

George, Bruce

Penhaligon, David

Atkinson, Norman (H'gey, Tott'ham)

Grant, John (Islington C)

Powell, Raymond (Ogmore)

Bagier, Gordon A T.

Hamilton, W. W. (Central Fife)

Prescott, John

Beith, A. J.

Hardy, Peter

Price, Christopher (Lewisham West)

Bidwell, Sydney

Haynes, David

Race, Reg

Booth, Rt Hon Albert

Holland, Stuart (L'beth, Vauxhall)

Roberts, Allan (Bootie)

Boothroyd, Miss Betty

Home Robertson, John

Roberts, Gwllym (Cannock)

Brown, Ronald W. (Hackney S)

Homewood, William

Robertson, George

Brown, Ron (Edinburgh, Leith)

Hooley, Frank

Rooker, J. W

Callaghan, Jim (Middleton & P)

Hughes, Mark (Durham)

Roper, John

Canavan, Dennis

Hughes, Robert (Aberdeen North)

Sever, John

Cartwright, John

Hughes, Roy (Newport)

Sheerman, Barry

Clark, David (South Shields)

Johnson, James (Hull West)

Skinner, Dennis

Cohen, Stanley

Jones, Rt Hon Alec (Rhondda)

Snape, Peter

Cook, Robin F.

Jones, Barry (East Flint)

Soley, Clive

Cox, Tom (Wandsworth, Tooting)

Kerr, Russell

Spearing, Nigel

Crowther, J. S.

Kilroy-Silk, Robert

Stallard, A. W.

Cryer, Bob

Kinnock, Nell

Stoddart, David

Dalyell, Tarn

Lambie, David

Straw, Jack

Davidson, Arthur

Leadbitter, Ted

Taylor, Mrs Ann (Bolton West)

Davis, Terry (B'rm'ham, Stechford)

Lofthouse, Geoffrey

Tilley, John

Dean, Joseph (Leeds West)

McDonald, Dr Oonagh

Wellbeloved, James

Dixon, Donald

McElhone, Frank

Wigley, Dafydd

Dobson, Frank

McGuire, Michael (Ince)

Winnick, David

Dunn, James A. (Liverpool, Kirkdale)

McKay, Allen (Penistone)

Woodall, Alec

Eastham, Ken

McNamara, Kevin

Wrigglesworth, Ian

Ellis, Raymond (NE Derbyshire)

Marshall, Jim (Leicester South)

Wright, Miss Sheila

English, Michael

Martin, Michael (Gl'gow, Springb'rn)

Young, David (Bolton East)

Ennals, Rt Hon David

Miller, Dr M. S. (East Kilbride)

Evans, Ioan (Aberdare)

Mitchell, Austin (Grimsby)

TELLERS FOR THE AYES:

Evans, John (Newton)

O'Halloran, Michael

Mr. Philip Whitehead and

Field, Frank

O'Neill, Martin

Mr. Giles Radice.

NOES

Adley, Robert

Bowden, Andrew

Cadbury, Jocelyn

Alexander, Richard

Boyson, Dr Rhodes

Callaghan, Rt Hon J. (Cardiff SE)

Alison, Michael

Braine, Sir Bernard

Carlisle, John (Luton West)

Ancram, Michael

Bright, Graham

Carlisle, Kenneth (Lincoln)

Archer, Rt Hon Peter

Brinton, Timothy

Carlisle, Rt Hon Mark (Runcorn)

Arnold, Tom

Brittan, Leon

Channon, Paul

Ashley, Rt Hon Jack

Brocklebank-Fowler, Christopher

Chapman, Sydney

Atkins, Rt Hon H. (Spelthorne)

Brooke, Hon Peter

Clark, Hon Alan (Plymouth, Sutton)

Atkins, Robert (Preston North)

Brotherton, Michael

Clark, William (Croydon South)

Atkinson, David (B'mouth, East)

Brown, Michael (Brigg & Sc'thorpe)

Clarke, Kenneth (Rushcliffe)

Baker, Kenneth (St. Marylebone)

Brown, Robert C. (Newcastle W)

Clegg, Walter

Baker, Nicholas (North Dorset)

Browne, John (Winchester)

Cockeram, Eric

Banks, Robert

Bruce-Gardyne, John

Cocks, Rt Hon Michael (Bristol S)

Bendall, Vivian

Bryan, Sir Paul

Coleman, Donald

Benyon, W. (Buckingham)

Buchanan-Smith, Hon Ailed

Colvin, Michael

Berry, Hon Anthony

Buck, Antony

Conlan, Bernard

Bevan, David Gilroy

Budgen, Nick

Cope, John

Boscawen, Hon Robert

Bulmer, Esmond

Cormack, Patrick

Bottomley, Peter (Woolwich West)

Butler, Hon Adam

Costain, A. P.

receiving outside remuneration, nor otherwise'.—[Mr. Whitehead.]
Question put. That the amendment he made:—
The House divided: Ayes 95. Noes 273.

Cunningham, George (Islington S)

Joseph, Rt Hon Sir Keith

Rodgers, Rt Hon William

Davies, Rt Hon Denzil (Llanelli)

Kaberry, Sir Donald

Ross, Stephen (Isle of Wight)

Davies, E. Hudson (Caerphilly)

King, Rt Hon Tom

Rossi, Hugh

Dean, Paul (North Somerset)

Kitson, Sir Timothy

Rowlands, Ted

Dewar, Donald

Lamborn, Harry

Royle, Sir Anthony

Dickens, Geoffrey

Lamont, Norman

Sainsbury, Hon Timothy

Dormand, J. D.

Lang, Ian

St. John-Stevas, Rt Hon Norman

Douglas, Dick

Lawrence, Ivan

Sandelson, Neville

du Cann, Rt Hon Edward

Lawson, Nigel

Scott, Nicholas

Dunn, Robert (Dartford)

Lee, John

Shaw, Michael (Scarborough)

Durant, Tony

Le Marchant, Spencer

Shepherd, Colin (Hereford)

Eden, Rt Hon Sir John

Lewis, Kenneth (Rutland)

Shersby, Michael

Edwards, Rt Hon N. (Pembroke)

Lloyd, Ian (Havant & Waterloo)

Shore, Rt Hon Peter (Step and Pep)

Eggar, Timothy

Lloyd, Peter (Fareham)

Silkin, Rt Hon John (Deptford)

Emery, Peter

Loveridge, John

Silkin, Rt Hon S. C. (Dulwich)

Eyre, Reginald

Lyell, Nicholas

Silvester, Fred

Fairbairn, Nicholas

Mabon, Rt Hon Dr J. Dickson

Sims, Roger

Fairgrieve, Russell

McCartney, Hugh

Skeet, T. H. H.

Faulds, Andrew

Mackay, John (Argyll)

Smith, Dudley (War. and Leam'ton)

Finsberg, Geoffrey

MacKenzie, Rt Hon Gregor

Speed, Keith

Fisher, Sir Nigel

Macmillan, Rt Hon M. (Farnham)

Speller, Tony

Fletcher, Alexander (Edinburgh N)

McQuarrie, Albert

Spicer, Jim (West Dorset)

Fletcher-Cooke, Charles

Madel, David

Spicer, Michael (S Worcestershire)

Fookes, Miss Janet

Major, John

Spriggs, Leslie

Foot, Rt Hon Michael

Marland, Paul

Sproat, lain

Forman, Nigel

Marshall, Michael (Arundel)

Stanley, John

Forrester, John

Marten, Neil (Banbury)

Steel, Rt Hon David

Foulkes, George

Mather, Carol

Steen, Anthony

Fowler, Rt Hon Norman

Maude, Rt Hon Angus

Stewart, Rt Hon Donald (W Isles)

Fox, Marcus

Mawby, Ray

Stewart, Ian (Hitchin)

Fraser, Peter (South Angus)

Mawhinney, Dr Brian

Stradling Thomas, J.

Galbraith, Hon T. G. D.

Mayhew, Patrick

Summerskill, Hon Dr Shirley

Gardner, Edward (South Fylde)

Mellish, Rt Hon Robert

Tebbit, Norman

Garrett, W. E. (Wallsend)

Millan, Rt Hon Bruce

Temple-Morris, Peter

Gilmour, Rt Hon Sir Ian

Mills, Peter (West Devon)

Thomas, Jeffrey (Abertillery)

Ginsburg, David

Miscampbell, Norman

Thomas, Mike (Newcastle East)

Glyn, Dr Alan

Mitchell, David (Basingstoke)

Thompson, Donald

Gow, Ian

Moate, Roger

Thorne, Nell (Ilford South)

Gower, Sir Raymond

Monro, Hector

Tinn, James

Graham, Ted

Moore, John

Townend, John (Bridlington)

Grant, Anthony (Harrow C)

Morris, Rt Hon Alfred (Wythenshawe)

Townsend, Cyril D. (Bexleyheath)

Grant, George (Morpeth)

Morris, Rt Hon Charles (Openshaw)

Trippier, David

Gray, Hamish

Morris, Rt Hon John (Aberavon)

Trotter, Neville

Grimond, Rt Hon J.

Morris, Michael (Northampton, Sth)

Vaughan, Dr Gerard

Grist, Ian

Morrison, Hon Charles (Devizes)

Viggers, Peter

Grylls, Michael

Morrison, Hon Peter (City of Chester)

Waddington, David

Gummer, John Selwyn

Mudd, David

Wainwright, Edwin (Dearne Valley)

Hamilton, James (Bothwell)

Nelson, Anthony

Wainwright, Richard (Colne Valley)

Newton, Tony

Wakeham, John

Hampson, Dr Keith

Nott, Rt Hon John

Walker-Smith, Rt Hon Sir Derek

Hannam, John

Oakes, Rt Hon Gordon

Wall, Patrick

Harrison, Rt Hon Walter

Onslow, Cranley

Waller, Gary

Haselhurst, Alan

Oppenheim, Rt Hon Mrs Sally

Watson, John

Hattersley, Rt Hon Roy

Osborn, John

Wells, P. Bowen (Hert'rd & Stev'nage)

Havers, Rt Hon Sir Michael

Page, Rt Hon R. Graham (Crosby)

Wheeler, John

Hawkins, Paul

Park, George

White, Frank R. (Bury a Radcliffe)

Hawksley, Warren

Parker, John

Whitelaw, Rt Hon William

Hayhoe, Barney

Parkinson, Cecil

Whitlock, William

Heseltine, Rt Hon Michael

Patten, Christopher (Bath)

Whitney, Raymond

Higgins, Rt Hon Terence L.

Percival, Sir Ian

Wickenden, Keith

Hogg, Hon Douglas (Grantham)

Pollock, Alexander

Wiggin, Jerry

Holland, Philip (Carlton)

Porter, George

Wilkinson, John

Hooson, Tom

Prior, Rt Hon James

Willey, Rt Hon Frederick

Howell, Rt Hon David (Guildford)

Proctor, K. Harvey

Williams, Sir Thomas (Warrington)

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

Raison, Timothy

Wilson, William (Coventry SE)

Howells, Geraint

Rathbone, Tim

Winter ton, Nicholas

Hunt, David (Wirral)

Rees, Rt Hon Merlyn (Leeds South)

Wolfson, Mark

Hurd, Hon Douglas

Rees, Peter (Dover and Deal)

Woolmer, Kenneth

Irving, Charles (Cheltenham)

Rees-Davies, W. R.

Younger, Rt Hon George

Jay, Rt Hon Douglas

Rhodes James, Robert

Jerkin, Rt Hon Patrick

Ridley, Hon Nicholas

TELLERS FOR THE NOES:

Johnson Smith, Geoffrey

Rifkind, Malcolm

Lord James Douglas Hamilton and

Jones, Dan (Burnley)

Roberts, Michael (Cardiff NW)

Mr. John McGregor.

Jopling, Rt Hon Michael

Roberts, Wyn (Conway)

Question accordingly negatived.
Mr. Speaker: Does the hon. Member for Knutsford (Mr. Bruce-Gardyne) wish to move amendment (g)?
Mr. Bruce-Gardyne: No, Mr. Speaker.
Amendment (h) proposed, in line 97, at end, add:
' (4) No supplement shall be paid before or with effect from 13th June 1981 which contains any element of increase by reference to the retail price index or any other indication of the rate of inflation which shall have taken place up to that date.'—[Mr. Budgen.]
Question put, That the amendment be made:—

DIVISION No. 531

AYES

6.27pm

Alton, David

Field, Frank

Pollock, Alexander

Atkinson, Norman (H'gey, Tott'ham)

Fraser, Peter (South Angus)

Porter, George

Baker, Nicholas (North Dorset)

Grimond, Rt Hon J.

Powell, Raymond (Ogmore)

Bendall, Vivian

Haynes, David

Proctor, K. Harvey

Benyon, W. (Buckingham)

Homewood, William

Rooker, J. W.

Boothroyd, Miss Betty

Horam, John

Shepherd, Colin (Hereford)

Braine, Sir Bernard

Johnson, James (Hull West)

Skeet, T. H. H.

Bright, Graham

Kitson, Sir Timothy

Skinner, Dennis

Brotherton, Michael

Lang, Ian

Smith, Dudley (War. and Leam'ton)

Brown, Michael (Brigg & Sc'thorpe)

Lawrence, Ivan

Spearing, Nigel

Budgen, Nick

Lloyd, Peter (Fareham)

Speller, Tony

Cadbury, Jocelyn

Lyell, Nicholas

Spriggs, Leslie

Callaghan, Rt Hon J. (Cardiff SE)

McElhone, Frank

Sproat, Ian

Carlisle, John (Luton West)

Macmillan, Rt Hon M. (Farnham)

Stanbrook, Ivor

Cockeram, Eric

Major, John

Stott, Roger

Cocks, Rt Hon Michael (Bristol S)

Marland, Paul

Thorne, Nell (Ilford South)

Costain, A. P.

Marlow, Antony

Tilley, John

Cryer, Bob

Marshall. Jim (Leicester South)

Trotter, Neville

Dalyell, Tam

Mills, Peter (West Devon)

Wainwright, Richard (Colne Valley)

Davidson, Arthur

Mitchell, R. C. (Soton, Itchen)

Wells, P. Bowen (Hert'rd & Stev'nage)

Dobson, Frank

Moate, Roger

Wickenden, Keith

Dunn, James A. (Liverpool, Kirkdale)

Onslow, Cranley

Dunn, Robert (Dartford)

Parris, Matthew

TELLERS FOR THE AYES:

Eggar, Timothy

Patten, Christopher (Bath)

Mr. Bruce Gardy

Ellis, Raymond (NE Derbyshire)

Penhaligon, David

Mr. Alan Clark

NOES

Adley, Robert

Coleman, Donald

Glyn, Dr Alan

Alexander, Richard

Colvin, Michael

Gourlay, Harry

Alison, Michael

Conlan, Bernard

Gow, Ian

Ancram, Michael

Cook, Robin F.

Gower, Sir Raymond

Archer, Rt Hon Peter

Cope, John

Graham, Ted

Armstrong, Ernest

Cowans, Harry

Grant, Anthony (Harrow C)

Ashley, Rt Hon Jack

Crowther, J. S.

Grant, George (Morpeth)

Ashton, Joe

Davies, Rt Hon Denzil (Llanelli)

Grant, John (Islington C)

Atkins, Rt Hon H. (Spelthorne)

Davies, E. Hudson (Caerphilly)

Gray, Hamish

Atkins, Robert (Preston North)

Davies, Ifor (Gower)

Grist, Ian

Atkinson, David (B'mouth, East)

Davis, Clinton (Hackney Central)

Grylls, Michael

Bagier, Gordon A. T.

Davis, Terry (B'rm'ham, Stechford)

Gummer, John Selwyn

Baker, Kenneth (St. Marylebone)

Dean, Joseph (Leeds West)

Hamilton, James (Bothwell)

Banks, Robert

Dewar, Donald

Hamilton, W. W. (Central Fife)

Barnett, Rt Hon Joel (Heywood)

Dickens, Geoffrey

Hampson, Dr Keith

Beith, A. J.

Dixon, Donald

Hannam, John

Berry, Hon Anthony

Dormand, J. D.

Hardy, Peter

Bidwell, Sydney

Douglas, Dick

Haselhurst, Alan

Booth, Rt Hon Albert

Douglas-Hamilton, Lord James

Hattersley, Rt Hon Roy

Boscawen, Hon Robert

du Cann, Rt Hon Edward

Havers, Rt Hon Sir Michael

Bottomley, Peter (Woolwich West)

Dunwoody, Mrs Gwyneth

Hawkins, Paul

Bowden, Andrew

Durant, Tony

Hawksley, Warren

Boyson, Dr Rhodes

Eastham, Ken

Hayhoe, Barney

Bray, Dr Jeremy

Eden, Rt Hon Sir John

Heseltine, Rt Hon Michael

Brinton, Timothy

Edwards, Rt Hon N. (Pembroke)

Higgins, Terence L.

Brittan, Leon

Emery, Peter

Hogg, Hon Douglas (Grantham)

Brocklebank-Fowler, Christopher

English, Michael

Hogg, Norman (E Dunbartonshire)

Brooke, Hon Peter

Ennals, Rt Hon David

Holland, Stuart (L'beth, Vauxhall)

Brown, Hugh D. (Provan)

Evans, loan (Aberdare)

Home Robertson, John

Brown, Robert C. (Newcastle W)

Evans, John (Newton)

Hooson, Tom

Brown, Ronald W. (Hackney S)

Ewing, Harry

Howell, Rt Hon David (Guildford)

Bryan, Sir Paul

Eyre, Reginald

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

Buchanan-Smith, Hon Alick

Fairbairn, Nicholas

Howells, Geraint

Buck, Antony

Fairgrieve, Russell

Hughes, Mark (Durham)

Bulmer, Esmond

Faulds, Andrew

Hughes, Robert (Aberdeen North)

Butler, Hon Adam

Finsberg, Geoffrey

Hughes, Roy (Newport)

Callaghan, Jim (Middleton & P)

Fisher, Sir Nigel

Hunt, David (Wirral)

Campbell-Savours, Dale

Fletcher, Alexander (Edinburgh N)

Hurd, Hon Douglas

Canavan, Dennis

Fletcher-Cooke, Charles

Irving, Charles (Cheltenham)

Carlisle, Kenneth (Lincoln)

Fookes, Miss Janet

Jay, Rt Hon Douglas

Carlisle, Rt Hon Mark (Runcorn)

Forman, Nigel

Jenkin, Rt Hon Patrick

Carmichael, Neil

Forrester, John

Jessel, Toby

Carter-Jones, Lewis

Foulkes, George

Johnson Smith, Geoffrey

Cartwright, John

Fowler, Rt Hon Norman

Jones, Barry (East Flint)

Channon, Paul

Fox, Marcus

Jopling, Rt Hon Michael

Chapman, Sydney

Galbraith, Hon T. G. D.

Joseph, Rt Hon Sir Keith

Clark, David (South Shields)

Garrett, John (Norwich S)

Kaberry, Sir Donald

Clark, William (Croydon South)

Garrett, W. E. (Wallsend)

Kaufman, Rt Hon Gerald

Clarke, Kenneth (Rushcliffe)

George, Bruce

Kilroy-Silk, Robert

Clegg, Walter

Gilmour, Rt Hon Sir Ian

King, Rt Hon Tom

Cohen, Stanley

Ginsburg, David

Kinnock, Neil

The House divided: Ayes 71. Noes. 294.

Lambie, David

O'Neill, Martin

Stoddart, David

Lamborn, Harry

Osborn, John

Stradling Thomas. J.

Lamont, Norman

Page, Rt Hon R. Graham (Crosby)

Strang, Gavin

Lawson, Nigel

Parker, John

Straw, Jack

Leadbitter, Ted

Parkinson, Cecil

Summerskill, Hon Dr Shirley

Lee, John

Pavitt, Laurie

Taylor, Mrs Ann (Bolton West)

Le Merchant, Spencer

Pendry, Tom

Tebbit, Norman

Lloyd, Ian (Havant & Waterloo)

Percival, Sir Ian

Temple-Morris, Peter

Lofthouse, Geoffrey

Prescott, John

Thomas, Mike (Newcastle East)

Mabon, Rt Hon Or J. Dickson

Price, Christopher (Lewisham West)

Thompson, Donald

McCartney, Hugh

Prior, Rt Hon James

Tinn, James

MacGregor, John

Radice, Giles

Townend, John (Bridlington)

McGuire, Michael (Ince)

Raison, Timothy

Townsend, Cyril D. (Bexleyheath)

McKay, Allen (Penistone)

Rathbone, Tim

Trippier, David

Mackay, John (Argyll)

Rees, Peter (Dover and Deal)

Urwin, Rt Hon Tom

MacKenzie, Rt Hon Gregor

Rhodes James, Robert

Varley, Rt Hon Eric G.

McMillan, Tom (Glasgow, Central)

Ridley, Hon Nicholas

Vaughan, Dr Gerard

McNamara, Kevin

Rifkind, Malcolm

Viggers, Peter

McQuarrie, Albert

Roberts, Albert (Normanton)

Waddington, David

McWilliam, John

Roberts, Allan (Bootle)

Wall, Patrick

Madel, David

Roberts, Gwilym (Cannock)

Waller, Gary

Marshall, Michael (Arundel)

Roberts, Michael (Cardiff NW)

Watkins, David

Marten, Neil (Banbury)

Roberts, Wyn (Conway)

Watson, John

Martin, Michael (Gl'gow, Springb'rn)

Robertson, George

Weetch, Ken

Maude, Rt Hon Angus

Rodgers, Rt Hon William

Wheeler, John

Mawby, Ray

Roper, John

White, Frank R. (Bury & Radcliffe)

Mawhinney, Dr Brian

Ross, Stephen (Isle of Wight)

Whitehead, Phillip

Mayhew, Patrick

Rossi, Hugh

Whitelaw, Rt Hon William

Mellish, Rt Hon Robert

Sainsbury, Hon Timothy

Whitlock, William

Millan, Rt Hon Bruce

St. John Stevas, Rt Hon Norman

Whitney, Raymond

Miller, Dr M. S. (East Kilbride)

Sandelson, Neville

Wickenden, Keith

Miscampbell, Norman

Scott, Nicholas

Wiggin, Jerry

Mitchell, David (Basingstoke)

Sever, John

Wigley, Dafydd

Monro, Hector

Sheerman, Barry

Willey, Rt Hon Frederick

Moore, John

Silkin, Rt Hon John (Deptford)

Williams, Rt Hon Alan (Swansea W)

Morris, Rt Hon Alfred (Wythenshawe)

Silkin, Rt Hon S. C. (Dulwich)

Williams, Sir Thomas (Warrington)

Morris, Rt Hon Charles (Openshaw)

Silverman, Julius

Wilson, William (Coventry SE)

Morris, Rt Hon John (Aberavon)

Silvester, Fred

Winterton, Nicholas

Morris, Michael (Northampton, Sth)

Sims, Roger

Wolfson, Mark

Morrison, Hon Charles (Devizes)

Snape, Peter

Woodall, Alec

Morrison, Hon Peter (City of Chester)

Speed, Keith

Woolmer, Kenneth

Moyle, Rt Hon Roland

Spence, John

Wrigglesworth, Ian

Mudd, David

Spicer, Michael (S Worcestershire)

Wright, Miss Sheila

Mulley, Rt Hon Frederick

Stallard, A. W.

Young, David (Bolton East)

Nelson, Anthony

Stanley, John

Younger, Rt Hon George

Newton, Tony

Steel, Rt Hon David

Oakes, Rt Hon Gordon

Steen, Anthony

TELLERS FOR THE NOES

Ogden, Erie

Stewart, Rt Hon Donald (W Isles)

Mr. John Wakeham and

O'Halloran, Michael

Stewart, Ian (Hitchin)

Mr. Carol Mather

Question accordingly negatived.
Main Question put and agreed to.
Resolved,
That, in the opinion of this House, the following provisions about salaries and pensions of Members of this House should be made:—
(1) The salary payable to Members of each of the descriptions in the first column of Table 1 below—

(a) in respect of service on and after 13th June 1979 and before 13th June 1980 shall be at the yearly rate specified in relation to that description in the second column of that Table; and

(b) in respect of service on and after 13th June 1980 and before 13th June 1981 shall be at the yearly rate specified in relation to that description in the third column of that Table; and

(c) in respect of service on and after 13th June 1981 shall be at the yearly rate specified in relation to that description in the fourth column of that Table.

TABLE 1

Description of Member

Yearly rate of salary from 13th June 1979 to 12th June 1980

Yearly rate of salary from 13th June 1980 to 12th June 1981

Yearly rate of salary from 13th June 1981

1. Member not within any other paragraph.

£9,450

£10,725

£12,000

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.

£5,820

£6,410

£7,000

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.

£5,650

£6,325

£7,000

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

£5,265

£6,130

£7,000

(2) The ordinary salary of every Member in respect of service on and after 13th June 1979 shall be regarded for pension purposes as being at the rate of £12,000.
(3) Members of each of the descriptions in the first column of Table 2 shall be credited—

(a) by way of supplement to their salaries payable in respect of service on or after 13th June 1979 and before 13th June 1980 with amounts at the yearly rate specified in relation to that description in the second column of that Table;

(b) by way of supplement to their salaries payable in respect of service on or after 13th June 1980 and before 13th June 1981 with amounts at the yearly rate specified in relation to that description in the third column of that Table.

TABLE 2

Description of Member

Yearly rate of supplement from 13th June 1979 to 12th June 1980

Yearly rate of supplement from 13th June 1980 to 12th June 1981

1. Member within paragraph 1 or 2 of Table 1 who draws the whole of his salary.

£153·00

£76·50

2. Member within paragraph 1 or 2 of Table 1 who does not draw the whole of his salary.

£153·00 plus 6 per cent. of the amount forgone, but not together exceeding £173·59.

£76·50 plus 6 per cent. of the amount forgone, but not together exceeding £97·09.

3. Member within paragraph 3 or 4 of Table 1 except one in whose case no deduction is required to be made under section 3 or 4 of the Act of 1972.

£173·59

£97·09

MEMBERS' SALARIES AND PENSIONS
Queen's recommendation as having been signified—
That the following provisions about salaries and pensions of Members of this House be made—
(1) The salary payable to Members of each of the descriptions in the first column of Table 1 below—

(a) in respect of service on and after 13th June 1979 and before 13th June 1980 shall be at the yearly rate specified in relation to that description in the second column of that Table; and

(b) in respect of service on and after 13th June 1980 and before 13th June 1981 shall be at the yearly rate specified in relation to that description in the third column of that Table; and

(c) in respect of service on and after 13th June 1981 shall be at the yearly rate specified in relation to that description in the fourth column of that Table.

TABLE 1

Description of Member

Yearly rate of salary from 13th June 1979 to 12th June 1980

Yearly rate of salary from 13th June 1980 to 12th June 1981

Yearly rate of salary from 13th June 1981

1. Member not within any other paragraph.

£9,450

£10,725

£12,000

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.

£5,820

£6,410

£7,000

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.

£5,650

£6,325

£7,000

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

£5,265

£6,130

£7,000

(2) The ordinary salary of every Member in respect of service on and after 13th June 1979 shall be regarded for pension purposes as being at the rate of £12,000.
(3) Members of each of the descriptions in the first column of Table 2 shall be credited—

(a) by way of supplement to their salaries payable in respect of service on or after 13th June 1979 and before

Motion made, and Question put forth-with, pursuant to Order this day,

13th June 1980 with amounts at the yearly rate specified in relation to that description in the second column of that Table;

(b) by way of supplement to their salaries payable in respect of service on or after 13th June 1980 and before 13th June 1981 with amounts at the yearly rate specified in relation to that description in the third column of that Table.

TABLE 2

Description of Member

Yearly rate of supplement from 13th June 1979 to 12th June 1980

Yearly rate of supplement from 13th June 1980 to 12th June 1981

1. Member within paragraph 1 or 2 of Table 1 who draws the whole of his salary.

£153·00

£76·50

2. Member within paragraph 1 or 2 of Table 1 who does not draw the whole of his salary.

£153·00 plus 6 per cent. of the amount forgone, but not together exceeding £173·59.

£76·50 plus 6 per cent. of the amount forgone, but not together exceeding £97·09.

3. Member within paragraph 3 or 4 of Table 1 except one in whose case no deduction is required to be made under section 3 or 4 of the Act of 1972.—[Mr. St. John-Stevas.]

£173·59

£97·09

Question agreed to.
Motion made, and Question put forth-with, pursuant to Order this day,
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 1980, £4520, and for any subsequent year £4600.—[Mr. St. John-Stevas.]
Question agreed to.
OFFICE HOLDERS' SALARY SUPPLEMENT
Queen's recommendation having been signified
Motion made, and Question put forth-with, pursuant to Order this day,
That, if an Order in Council is made under subsection (3A) of section 4 of the Parliamentary and other Pensions Act 1972 directing that for the purposes of subsection (2) or (3) of that section any salary payable to a participant under section 2 of that Act be regarded as being payable at a higher rate, provision be made for enabling each participant to recover out of sums voted for the appropriate service an amount equal to 5 per cent, of the difference between the salary which is payable to him and that higher salary.—[Mr. St. John-Stevas.]
Question agreed to.

MINISTERIAL AND OTHER SALARIES AND PENSIONS

Motion made, and Question put forthwith, pursuant to Order this day,

That the draft Ministerial and other Salaries and Pensions Order 1979, which was laid before this House on 6 July, be approved—[Mr. St. John-Stevas.]

The House divided: Ayes 318. Noes 26.

Adley, Robert

Cowans, Harry

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

Alexander, Richard

Dalyell, Tam

Howells, Geraint

Alison, Michael

Davies, Rt Hon Denzil (Llanelli)

Hughes, Mark (Durham)

Ancram, Michael

Davies, E. Hudson (Caerphilly)

Hughes, Roy (Newport)

Archer, Rt Hon Peter

Davies, Ifor (Gower)

Hunt, David (Wirral)

Armstrong, Ernest

Davis, Terry (B'rm'ham, Stechford)

Hurd, Hon Douglas

Ashley, Jack

Dewar, Donald

Irving, Charles (Cheltenham)

Ashton, Joe

Dickens, Geoffrey

Jay, Rt Hon Douglas

Atkins, Rt Hon H. (Spelthorne)

Dixon, Donald

Jenkin, Rt Hon Patrick

Atkins, Robert (Preston North)

Dormand, J. D.

Jessel, Toby

Atkinson, David (B'mouth, East)

Douglas, Dick

Johnson, James (Hull West)

Bagier, Gordon A. T.

du Cann, Rt Hon Edward

Johnson Smith, Geoffrey

Baker, Kenneth (St. Marylebone)

Dunn, Robert (Dartford)

Jones, Rt Hon Alec (Rhondda)

Baker, Nicholas (North Dorset)

Durant, Tony

Jones, Barry (East Flint)

Banks, Robert

Edwards, Rt Hon N. (Pembroke)

Jones, Dan (Burnley)

Barnett, Rt Hon Joel (Heywood)

Emery, Peter

Jopling, Rt Hon Michael

Beith, A. J.

Ennals, Rt Hon David

Joseph, Rt Hon Sir Keith

Bendall, Vivian

Evans, John (Newton)

Kaberry, Sir Donald

Benn, Rt Hon Anthony Wedgwood

Ewing, Harry

Kilroy-Silk, Robert

Benyon, W. (Buckingham)

Eyre, Reginald

King, Rt Hon Tom

Berry, Hon Anthony

Fairbairn, Nicholas

Kinnock, Neil

Bevan, David Gilroy

Fairgrieve, Russell

Kitson, Sir Timothy

Booth, Rt Hon Albert

Finsberg, Geoffrey

Lamborn, Harry

Boothroyd, Miss Betty

Fletcher, Alexander (Edinburgh N)

Lamont, Norman

Boscawen, Hon Robert

Fletcher-Cooke, Charles

Lang, Ian

Bottomley, Peter (Woolwich West)

Fookes, Miss Janet

Lawrence, Ivan

Bowden, Andrew

Foot. Rt Hon Michael

Lawson, Nigel

Boyson, Dr Rhodes

Forman, Nigel

Leadbitter, Ted

Braine, Sir Bernard

Forrester, John

Lee, John

Bright, Graham

Foster, Derek

Le Marchant, Spencer

Brinton, Timothy

Foulkes, George

Lloyd, Ian (Havant & Waterloo)

Brittan, Leon

Fowler, Rt Hon Norman

Lloyd, Peter (Fareham)

Brocklebank-Fowler, Christopher

Fox, Marcus

Lofthouse, Geoffrey

Brooke, Hon Peter

Fraser, Peter (South Angus)

Loveridge, John

Brotherton, Michael

Galbraith, Hon T. G. D.

Lyell, Nicholas

Brown, Hugh D. (Provan)

Gardner, Edward (South Fylde)

Mabon, Rt Hon Dr J. Dickson

Brown, Michael (Brigg & Sc'thorpe)

Garrett, John (Norwich S)

McCartney, Hugh

Brown, Robert C. (Newcastle W)

Garrett, W. E. (Wallsend)

McGuire, Michael (Ince)

Browne, John (Winchester)

George, Bruce

Mackay, John (Argyll)

Bruce-Gardyne, John

Gilmour, Rt Hon Sir Ian

MacKenzie, Rt Hon Gregor

Bryan, Sir Paul

Ginsburg, David

Macmillan, Rt Hon M. (Farnham)

Buchanan-Smith, Hon Alick

Glyn, Dr Alan

McMillan, Tom (Glasgow, Central)

Bulmer, Esmond

Gow, Ian

McNamara, Kevin

Butler, Hon Adam

Gower, Sir Raymond

McQuarrie, Albert

Cadbury, Jocelyn

Graham, Ted

Madel, David

Callaghan, Rt Hon J. (Cardiff SE)

Grant, Anthony (Harrow C)

Major, John

Callaghan, Jim (Middleton & P)

Grant, George (Morpeth)

Marland, Paul

Carlisle, John (Luton West)

Gray, Hamish

Marlow, Antony

Carlisle, Kenneth (Lincoln)

Grimond, Rt Hon J.

Marshall, Michael (Aru)

Carlisle, Rt Hon Mark (Runcorn)

Grist, Ian

Marten, Neil (Banbury)

Carmichael, Neil

Grylls, Michael

Martin, Michael (Gl'gow, Springb

Channon, Paul

Gummer, John Selwyn

Mather, Carol

Chapman, Sydney

Hampson, Dr Keith

Maude, Rt Hon Angus

Clark, David (South Shields)

Hannam, John

Mawby, Ray

Clark, William (Croydon South)

Harrison, Rt Hon Walter

Mawhinney, Dr Brian

Clarke, Kenneth (Rushcliffe)

Haselhurst, Alan

Mayhew, Patrick

Clegg, Walter

Hattersley, Rt Hon Roy

Mellish, Rt Hon Robert

Cocks, Rt Hon Michael (Bristol S)

Havers, Rt Hon Sir Michael

Millan, Rt Hon Bruce

Cohen, Stanley

Hawksley, Warren

Mills, Peter (West Devon)

Coleman, Donald

Hayhoe, Barney

Miscampbell, Norman

Colvin, Michael

Heseltine, Rt Hon Michael

Mitchell, David (Basingstoke)

Concannon, Rt Hon J. D.

Higgins, Terence L.

Mitchell, R. C. (Soton, Itchen)

Conlan, Bernard

Hogg, Hon Douglas (Grantham)

Monro, Hector

Cook, Robin F.

Hogg, Norman (E Dunbartonshire)

Moore, John

Cope, John

Home Robertson, John

Morris, Rt Hon Alfred (Wythenshawe)

Cormack, Patrick

Hooson, Tom

Morris, Rt Hon Charles (Openshaw)

Costain, A. P.

Howell, Rt Hon David (Guildford)

Morris, Rt Hon John (Aberavon)

620

621

Morris, Michael (Northampton, Sth)

Rossi, Hugh

Tinn, James

Morrison, Hon Charles (Devizes)

Royle, Sir Anthony

Townend, John (Bridlington)

Morrison, Hon Peter (City of Chester)

Sainsbury, Hon Timothy

Townsend, Cyril D. (Bexleyheath)

Moyle, Rt Hon Roland

St. John Stevas, Rt Hon Norman

Trippier, David

Mudd, David

Sandelson, Neville

Trotter, Neville

Myles, David

Scott, Nicholas

Urwin, Rt Hon Tom

Nelson, Anthony

Sever, John

Vaughan, Dr Gerard

Newton, Tony

Shaw Michael (Scarborough)

Viggers, Peter

Nott, Rt Hon John

Sheerman, Barry

Waddington, David

Oakes, Gordon

Shepherd, Colin (Hereford)

Wainwright, Richard (Colne Valley)

O' Halloran, Michael

Shersby, Michael

Wakeham, John

O'Neill, Martin

Shore Rt Hon Peter (Step and Pop)

Walker-Smith, Rt Hon Sir Derek

Onslow, Cranley

Silkin, Rt Hon John (Deptford)

Wall, Patrick

Orme, Rt Hon Stanley

Silkin, Rt Hon S. C. (Dulwich)

Waller, Gary

Osborn, John

Silverman, Julius

Watson, John

Page, Rt Hon R. Graham (Crosby)

Silvester, Fred

Weetch, Ken

Parker, John

Sims, Roger

Wheeler, John

Parkinson, Cecil

Smith, Dudley (War. and Leam'ton)

White, Frank R. (Bury & Radcliffe)

Patten, Christopher (Bath)

Smith, Rt Hon J. (North Lanarkshire)

Whitehead, Phillip

Pavitt, Laurie

Snape, Peter

Whitelaw, Rt Hon William

Percival, Sir Ian

Speed, Keith

Whitlock, William

Pollock, Alexander

Speller, Tony

Whitney, Raymond

Porter, George

Spence, John

Wickenden, Keith

Prescott, John

Spicer, Michael (S Worcestershire)

Wiggin, Jerry

Price, Christopher (Lewisham West)

Spriggs, Leslie

Wigley, Dafydd

Prior, Rt Hon James

Sproat, Iain

Wilkinson, John

Radice, Giles

Stanley, John

Willey, Rt Hon Frederick

Raison, Timothy

Steen, Anthony

Williams, Rt Hon Alan (Swansea W)

Rathbone, Tim

Stewart, Rt Hon Donald (W Isles)

Williams, Sir Thomas (Warrington)

Rees, Rt Hon Merlyn (Leeds South)

Stewart, Ian (Hitchin)

Winnick, David

Rees, Peter (Dover and Deal)

Stoddart, David

Winterton, Nicholas

Rees-Davies, W. R.

Stott, Roger

Wolfson, Mark

Rhodes James, Robert

Stradling Thomas, J.

Woodall, Alec

Ridley, Hon Nicholas

Straw, Jack

Woolmer, Kenneth

Rifkind, Malcolm

Summerskill, Hon Dr Shirley

Wrigglesworth, Ian

Roberts, Michael (Cardiff NW)

Taylor, Mrs Ann (Bolton West)

Younger, Rt Hon George

Roberts, Wyn (Conway)

Tebbit, Norman

Robertson, George

Temple-Morris, Peter

TELLERS FOR THE AYES:

Rodgers, Rt Hon William

Thomas, Mike (Newcastle East)

Lord James Douglas-Hamilton and

Roper, John

Thompson, Donald

Mr John MacGregor.

Ross, Stephen (Isle of Wight)

NOES

Alton, David

Field, Frank

Rooker, J. W.

Atkinson, Norman (H'gey, Tott'ham)

Hardy, Peter

Skinner, Dennis

Bidwell, Sydney

Haynes, Frank

Soley, Clive

Campbell-Savours, Dale

Holland, Stuart (L'beth, Vauxhall)

Steel. Rt Hon David

Canavan, Dennis

McKay, Allen (Penistone)

Tilley, John

Cryer, Bob

Marshall. Jim (Leicester South)

Wells, P. Bowen (Hert'rd & Stev'nage)

Dean, Paul (North Somerset)

Pendry, Tom

Ellis, Raymond (NE Derbyshire)

Penhaligon, David

TELLERS FOR THE NOES

English, Michael

Powell, Raymond (Ogmore)

Mr James Wellbeloved and

Evans, loan (Aberdare)

Roberts, Allan (Bootle)

Mr Reg Race

Question accordingly agreed to.

RATE SUPPORT GRANT (SHIRE COUNTIES)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Brooke.]
10.53 p.m.
Mr. Tony Marlow: Hon. Members have expressed great interest in the subject of this debate. My hon. Friend the Member for East Grinstead (Mr. Johnson Smith) is most concerned that the county of West Sussex has been harshly treated. I have had messages of support from my hon. Friends the Members for Bristol, North-West (Mr. Colvin) and for Brecon and Radnor (Mr. Hooson), and I have received a great deal of support from Members from Essex, Hertfordshire, Cambridgeshire and Cheshire.
I am honoured and delighted to be able to raise this matter in the House tonight—honoured because for the first time in many years we now have a Government prepared to grasp nettles, and delighted because they are a Government who will carry out their intentions without fear or favour and do that which they find to be right. A lesser Government, of course, when looking at the allocation of Government expenditure for local authorities, would stoop and grovel in pursuit of electoral considerations.
If the distribution of rate support grant is unfair, as it is, and if to make it fair would disturb the " fat cats " in the marginal metropolitan areas, then as far as they are concerned it would be allowed to remain unfair. The skeleton rather than the ghost of such a Government rattles its chains on the Labour Benches.
I am happy to say that we now have a Government of courage, vision and determination. I know that my words will fall on receptive ears and that action will be taken and past injustices remedied.
Mr. Dennis Canavan: Get back in your cage.
Mr. Marlow: In common with many Tory Members, I have a very prudent local authority in my constituency. It is not profligate, it does not say what it will do irrespective of cost and then immediately thrust its hands into the people's pockets to find the money. It
624
asks " What can the people afford? " When it has decided what the people can afford, it cuts its coat according to the cloth available. It is the model of a modern local authority, a model of responsibility, an example to all of Conservative philosophy.
Each year since we have had a Conservative council rates in Northampton-shire have been increased at the rate of inflation only. Last year we had to raid our reserves, and now we have virtually none left. We did this because we believed there would be a Conservative Government and knew that our past prudence would be rewarded. We knew that past injustices would not be perpetuated.
We knew that we would have a Government of action and that, if we did not have such a Government, our rates would have to rise by 25 to 30 per cent. in the following year, well above the rate of inflation. We know that our Conservative colleagues in government will not allow that to happen because it would betray the endeavours we have made in the past.
Mr. Russell Kerr: It's the old pals' act operating again.
Mr. Marlow: Today I have received a letter from our county treasurer, Mr. Frank Fielding, by first-class mail setting out some very interesting statistics. The first thing to say is that in England and Wales the needs element grant for London in 1974–75 was 30 per cent. higher than that of Northampton. Now the grant for London is 100 per cent. greater than ours. What has changed?
Canavan: The Government.
Mr. Marlow: This happened when the Labour Government were in power. Where is the justice? What absurd luxuries have they been aggregating in London? The result is that the capitation sum which we can afford to spend on school books—and this applies to many counties such as ours—is half that spent in London. Do people in London read twice as avidly? Do they use twice as much paper? I doubt it.
We are a shire county, an expanding county, and a careful county, and for all those supposed sins we have been most severely punished. The first cut of the

625
lash is that mad device the resources element, where Government stand in as a phantom ratepayer for properties that do not exist. The more one spends, the more one wastes; the more one charges one's ratepayers, the more the taxpayer forks out. There is a moral in this: waste and be rewarded. It is the survival of the fattest.
The second instrument of our torture has been that profligate's charter the needs element formula, carefully designed, as I have already shown, to exclude those factors most prevalent in shire counties—a confidence trick by which Socialist Governments have held back our standards to pay for the extravagances of the Socialist empire-builders in the inner cities: the lush pastures of Camden, the no doubt gold-paved corridors of the council offices in Tower Hamlets.
The third indignity compounding our discomfiture is that we are an expanding county—
Mr. Canavan: Will the hon. Gentleman give way?
Mr. Marlow: No, I will not.
Our population relative to the rest of the county has been rising by 1 per cent. a year. Our school population relative to the rest of the country is increasing by 3 per cent. a year. I am sure this is true of many other counties, too. The rate support grant assessment is based on out-of-date population statistics. It is 2¼ years out of date and sometimes 10 years out of date. In 2¼ years the school population of my constituency has gone up by 7 per cent. As education accounts for 70 per cent. of local authority expenditure, we are 5 per cent. under-funded.
We have been twice robbed by the bent " coppers " on the Labour Benches. They have looked on smugly while they have been in receipt of the protection money of potential votes in urban marginal seats. Now the force has been cleaned up, and this criminal activity will not be allowed to continue.
The counties with new towns have extra burdens. We have to pay the first £50,000 of any undue burdens and take on 25 per cent. of the remaining undue
626
burdens. We are solving the population problems of the rest of the country. Why should we pay a penny of it? We have ignored the Mad Hatter rules. We have tried to save our ratepayers. We have spared the taxpayer. We have behaved responsibly, but we have been kicked in the teeth.
We agree that we must cut public expenditure. We have cut it savagely, We have not raided the people's pockets, as Labour Members are prone to do. We have been forced to cut, and we have cut hard. We have cut not just to the bone but halfway through it. The patient is brave but sick. We have now given so much blood that it is our turn for a transfusion. We are glad that we have an understanding Government now who will answer our needs. By that I do not mean 90 per cent. proportionate compensation which will not meet the need.
Mr. Alec Jones: Will the hon. Member give way?
Mr. Marlow: No, I shall not give way.
Not only should the Government restore an immediate sense of justice but they should provide flexibility.
Will the Government do something about the absurd pooling arrangements in further education under which status-mad authorities can set up daft schemes for which the rest of us must pick up the tab? Let us charge more or less for our services, let us spare the ratepayer and let the person who uses the service pay more towards it.
School meals cost us £3½ million a year. We are short of school books. Between £300,000 and £500,000 could put that right. Let us decide locally how much to charge for school meals. Let us reduce the temperature in the greenhouses that pass for council offices and schools.
Above all, I urge the Government not to let us down. Let them not destroy our and their own credibility. Given the chance, we could put matters right. The Government must look at the past injustices. They must not say that we shall suffer fewer injustices this year. We cannot afford to suffer any injustices. For many of us the rate support grant is the most important issue for our constituents. The Government will be aware that

627
our support will depend on the fair treatment that they intend to give us on this issue.
11.4 p.m.
Dr. Brian Mawhinney: I am grateful to my hon. Friend the Member for Northampton, North (Mr. Marlow) for allowing me to comment on the position in Cambridgeshire, the fastest growing county in the country.
Between 1973 and 1979 Cambridgeshire suffered a needs element grant decrease of £l8½ million. That represents a 28 per cent. fall in Cambridgeshire's share of the needs element grant for England and Wales. But at the same time we have experienced a 9 per cent. increase in the share of national population. Consequently, since 1973–74, the county precept has been forced up by 176 per cent., and at the same time there has had to be a 15 per cent. decrease in county council expenditure per head in relation to the national average.
Therefore, for this reason alone, expenditure per head is less than the national average in education, police and fire services, highways and transportation, and the social services. The Government grants to the county and districts in Cambridgeshire are 23·7 per cent. below the national average.
There are three things that we should like the Government to do. First, as my hon. Friend has said, we should like to see an end to politically motivated discrimination against shire counties. On this, we feel confident—
Mr. Canavan: On a point of order, Mr. Deputy Speaker. I represent West Stirlingshire. Do I represent a shire county, or are the shire counties simply the Tory places which voted for cuts in public expenditure at the last general election? Will you please give a ruling on the definition of " shire county "?
Mr. Deputy Speaker (Mr. Richard Crawshaw): Not on that point of order. The Chair has to make many rulings, but that is not one of them.
Dr. Mawhinney: We understand that it may not be possible to reverse the discrimination this year, but we shall certainly expect to see the Government stop it and move to reverse the trend in succeeding years.
628
Secondly, we should like the Government to recognise that fast-growing counties such as Cambridgeshire, which has London overspill towns, and a new town development which is in my constituency, are penalised because the calculation of resources grant is based on dates for population and rateable value which are out of step and to our disadvantage.
Thirdly, we should like the Government to replace the existing system with one which moves away from a direct link with expenditure, to which my hon. Friend has already referred. A method based on the standard unit costs of providing basic services would fulfil this objective and give a better measure of true need. It would also benefit efficiently run counties, such as Cambridgeshire.
11.7 p.m.
Mr. Nicholas Winterton: I am grateful to my hon. Friend the Member for Northampton, North (Mr. Marlow) for allowing me a moment or two of his excellent debate to advance the cause of Cheshire. Cheshire is another shire county which has suffered severe cuts in its allocation of the rate support grant under the previous Socialist Government.
Mr. Canavan: What is a shire county?
Mr. Winterton: My hon. Friend the Member for Northampton, North has made a considerable impression on the House since he came here a few weeks ago. In initiating this Adjournment debate he is serving the best interests of very large areas of the country which suffered an injustice during the period of the previous Socialist Government, which redirected—
Mr. Alec Jones: Will the hon. Gentleman give way?
Mr. Winterton: —which redirected—
Mr. Jones Mr. Jones rose—
Mr. Deputy Speaker: Order. The hon. Member for Macclesfield (Mr. Winterton) is obviously not giving way. The right hon. Gentleman must resume his seat.
Mr. Winterton: I am not giving way, Mr. Deputy Speaker.
Mr. Canavan: What is a shire county?
Mr. Winterton: The previous Government redirected increasing sums of money to the inner city areas and the metropolitan counties and the metropolitan boroughs and districts. I would advise my hon. Friend the Minister that there are many towns in shire counties—
Mr. Canavan: What is a shire county?
Mr. Winterton: —which suffer from the same problems as the inner city areas of Birmingham, Manchester and London, and where money is required very urgently if the infrastructure is not to break down.
Therefore, I make this plea to the Minister. I believe that the criteria upon which the RSG is decided and the sums granted to the various counties and authorities in this country must be reassessed in order to restore the justice which was sadly done away with by the previous Government for political purposes.
Mr. Alec Jones: Absolute rubbish!
Mr. Winterton: Although it is not a fast-growing county, Cheshire has an expanding population and a new town. I make this plea in support of the views that have been expressed by my two hon. Friends. The Government should show a sympathetic understanding of the very grave problems that are facing these authorities—which took the advice and answered the request of the previous Government to cut public expenditure, but have suffered as a result.
11.10 p.m.
The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): May I first congratulate my hon. Friend the Member for Northampton, North (Mr. Marlow) on a very forceful and interesting speech—in spite of the babbling brook with which he had to contend, and which has now apparently run away from us—and also for providing the House with an opportunity of discussing this very important and controversial topic. If I may say so, Mr. Deputy Speaker, I think he is to be congratulated on initiating a debate on a key subject so soon after winning his seat and coming to this House.
Rate support grant is a notoriously complex and difficult area. As one who has served for 25 years in local government
630
I still do not believe that many of us understand it in enough detail. But we should not be in any doubt about its real importance. At more than £7,000 million in the current year, it is one of the largest blocks of central Government expenditure. The distribution of the grant is therefore always a matter of interest and controversy.
I am certainly not here to try to justify the pattern of the grant distribution we inherited from the previous Administration; far from it. Indeed that might be described in the last five years as sheer political manipulation. It might, however, be helpful if I were to explain how the present state of affairs has come about.
It is the needs element of the grant—and the use of multiple regression analysis to assess local authorities' expenditure needs—which has provoked the most controversy. My hon. Friend has argued very fairly that it is the use of this method and its susceptibility to political manipulation which has led to the steady shift of grant away from the shire counties over that period. Although I entirely understand and respect my hon. Friend's feelings on the matter, I suggest that the real villain of the peace is not multiple regression analysis but the naked political considerations of the previous Government. Let me try to explain why.
I remind my hon. Friend that it was the last Conservative Administration who introduced this technique. We did so because the method of assessing expenditure needs prior to 1974 was a fairly crude judgmental system which was not properly sensitive to the needs of all authorities, in particular to the real problems of the urban areas. We therefore introduced multiple regression analysis, not to favour any particular group of authorities but because it was a more objective and accurate basis for measuring the needs of all local authorities. We did not expect the twisting that was done by the Labour Party.
It is perhaps multiple regression analysis which has most contributed to RSG's reputation as an incomprehensible system. In essence, however, its basic principles are simple enough. It is a method of selecting and weighting a range of social and economic factors according to the extent to which they are correlated with variations in the actual expenditure

631
of authorities. These factors constitute a formula which is then applied to all authorities to produce an assessment of need.
My hon. Friend implied in his speech that these factors had in the past been carefully selected by politicians to produce particular results in the grant distribution, favouring one type of authority rather than another. I have to say, however, that I do not believe regression analysis can be accused of lending itself to manipulation of this sort. It is the people who run it who were responsible, not the actual formula. The analysis itself is carried out by computer following standard statistical procedures.
Mr. Alec Jones: Will the hon. Gentleman give way?
Mr. Finsberg: No.
Mr. Jones Mr. Jones rose—
Mr. Deputy Speaker: The right hon. Gentleman must resume his seat. The Minister is not giving way.
Mr. Jones: The Minister should not tell lies.
Mr. Finsberg: I invite you, Mr. Deputy Speaker, to ask for the withdrawal of that word.
Mr. Deputy Speaker: I am sure that the right hon. Member for Rhondda (Mr. Jones) did not intend to say that. I Would ask him to withdraw it.
Mr. Jones: There is, Mr. Deputy Speaker, an alternative to " lie " which I understand to be " terminological inexactitude ". If that is so, I withdraw the word " lie ".
Mr. Finsberg: I hope that the right hon. Gentleman renounces that expression.
The analysis is carried out by computer following standard statistical procedures. Either the factors are found to be correlated with the pattern of expenditure or they are not. If they are, they are weighted according to the strength of the correlation as part of the mathematical analysis.
My hon. Friend also argued that by basing the regression analysis on the actual expenditure of authorities it inevitably produced a formula which favoured high-spending authorities. This
632
is probably true, in my view, of groups of authorities. But no individual authority's grant entitlement depends directly upon its expenditure. The analysis produces a formula which represents an average relationship between a range of factors and the pattern of expenditure. Nevertheless, there must inevitably be some concern that groups of authorities with similar characteristics and expenditure behaviour, that is, Socialist spendthrift authorities, may unduly influence the outcome of the analysis. This is something to which we shall want to give further consideration in the not too distant future.
I do not therefore accept—I do not think that my hon. Friend implied it—that multiple regression analysis has been the major cause of the shift of grant away from the shire counties.
What, then, has caused the continual grant losses experienced by the shires? Quite simply, it has been the result of a shift in the grant distribution since 1974–75, when the party then in power decided to twist the whole system towards London. The total amount of grant going to London is ultimately determined not by multiple regression analysis but by the Secretary of State through a device known as London clawback. This reduces the total amount of grant which London would otherwise receive under the needs element formula in order to take account of the capital's very considerable advantage in terms of high rateable resources. The amount by which London's grant entitlement is reduced is then distributed to all non-London authorities.
There is no objective basis for determining the size of London clawback. It is therefore left to the judgment of the Secretary of State. In recent years, under the previous Administration, the claw-back decision was increasingly favourable to London, with the result that since 1974–75 its share of the total needs element increased by 25 per cent. Despite this, however, the London authorities still maintain that they have not done as well as their special circumstances justify.
Mr. Alec Jones Mr. Alec Jones rose—
Mr. Finsberg: I shall not give way. I am debating this matter with my hon. Friends, who raised it. The right hon. Gentleman did not seem interested in the subject in all the years that he was

633
in office. Therefore I shall not give way to him now.
Despite that, the London ratepayer is paying per head more than anyone else. None the less, the shire counties' share of the grant has fallen by about 10 per cent. The non-London metropolitan districts, despite all the claims made by the previous Administration about helping areas with the greatest problems, have increased their share by less than 6 per cent. In the last two settlements their share of grant actually fell.
London has therefore been benefiting from a series of political decisions by the previous Secretary of State at the expense of non-London authorities. More than anything else, this has caused the erosion of the shire counties' position. I might add that in spite of this political gerrymandering Labour managed to lose control in short order of both the GLC and the London Boroughs Association as people were not prepared to be bought off in a shameless way by the previous Government. [Interruption.] I thought that we had got rid of the babbling brook.
My hon. Friend also mentioned a number of problems which his own authority in Northamptonshire faced. He made some suggestions about education pooling arrangements, fees and charges, and school meals. He will appreciate that they are more matters for my right hon. Friend the Secretary of State for Education and Science. I shall make certain that his attention is drawn to those points.
My hon. Friend also made the point that Northamptonshire faces particular problems because of its growing population. He pointed out that although its grant has fallen its population has increased and that out-of-date population data have meant that the authority has not received the full amount of the grant to which it is entitled.
My hon. Friends the Members for Macclesfield (Mr. Winterton), on behalf of Cheshire, and for Peterborough (Dr. Mawhinney), on behalf of Cambridgeshire, made similar points showing how the shares for their shire counties had fallen. I shall make certain that those points are also taken on board. I am perfectly certain that a substantial number of my hon. Friends from other counties,
634
had they had the time and had the debate been longer, would have wished to make the same points.
On the first point, it does not follow that an increase in the authority's population should be accompanied by an increase in its grant entitlement. The purpose of the needs element is to compensate for variations in authorities' expenditure needs per head of population. It may be a revelation to the hon. Member for Berwick-upon-Tweed (Mr. Beith), but these are he facts, as he should know. My hon. Friends know them quite well. I am merely putting the facts on record for the benefit of the hon. Gentleman. Whilst an authority's total expenditure may well increase in line with its population, it does not follow that its expenditure needs per head will increase as well, particularly if the increase is accounted for by able-bodied, independent households.
Secondly—and this is a trickier point—my hon. Friend spoke of the use of out-of-date data. This is a technical matter. I can assure my hon. Friend that the data used are the most up-to-date available consistent with the principle of " data freezing " which has been agreed with the local authority associations in order to provide authorities with reasonable certainty as to their grant entitlement at the start of the grant year. However, one is always ready to see whether there is a more up-to-date method, and my right hon. Friend will be happy to receive any ideas my hon. Friend may care to send to us on this matter.
Finally, my hon. Friend painted a rather gloomy picture of Northamptonshire's financial position next year if its grant position is not improved. He also rightly emphasised that future cuts in the grant should not fall indiscriminately on thrify and profligate authorities alike. I shall draw that point to my right hon. Friend's attention.
I think that the House will appreciate the points that my hon. Friend has raised. He is to be congratulated on having the initiative to apply for this Adjournment debate, on having been fortunate enough to secure it, and on having two others of my hon. Friends take part.
My hon. Friend will understand that at this stage I cannot give him any commitment about the rate support grant, and

635
he did not expect me to, as he made quite clear. What he wanted was to make his points so that they could be taken on board in the negotiations. I give him an unqualified assurance that what he has said will be taken on board when we are having the discussions.
The matter is highly complex. Ministers have yet to reach final decisions, so my hon. Friend's points are certainly not made too late, and we have noted them. I assure the House that we are in no doubt about the concern of the shire counties over recent RSG settlements. Ultimately, the interests of the taxpayer and the ratepayer and what they can reasonably afford must be our overriding concern.
Mr. Alec Jones Mr. Alec Jones rose—
Mr. Finsberg: We shall keep the position of the taxpayer and the ratepayer very much in mind when we are reaching our decisions. I give that assurance to
636
my hon. Friend and those who supported him in his short but very interesting and helpful debate. I am most grateful to my hon. Friends for giving me the chance to explain the matter. I am sure that the House is sorry that no Opposition hon. Member thought it practical to put his name in at the right time, though there was an attempt to remove time from my hon. Friends who raised the matter.
Mr. Jones: On a point of order. Mr. Deputy Speaker. For the Minister to suggest that no hon. Member on the Labour Benches wanted to speak in this debate is—
The Question having been proposed after Ten 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 twenty-three minutes past Eleven o'clock.

  EASINGTON
  EASINGTON
HOME DEPARTMENT
  European Parliament
  European Parliament
  Skylab
  Skylab
  Gay Pride Week Festival (Police Costs)
  Gay Pride Week Festival (Police Costs)
  Vehicle Excise Duty
  Vehicle Excise Duty
  Departmental Funds
  Departmental Funds
  Driving Documents
  Driving Documents
  Uninsured Drivers (Convictions)
  Uninsured Drivers (Convictions)
OVERSEAS DEVELOPMENT
  Vietnam
  Vietnam
HOUSE OF COMMONS
  Snuff
  Snuff
  Hansard
  Hansard
EMPLOYMENT
  Training Opportunities Scheme
  Training Opportunities Scheme
  Retail Price Index
  Retail Price Index
  Hotel and Catering Training Board
  Hotel and Catering Training Board
  Industrial Disputes
  Industrial Disputes
  Factory Inspectors
  Factory Inspectors
  Manpower Services Commission
  Manpower Services Commission
SCOTLAND
  Nuclear Waste
  Nuclear Waste
  Agricultural Marketing
  Agricultural Marketing
FOREIGN AND COMMONWEALTH AFFAIRS
  Cyprus
  Cyprus
  Chile
  Chile
  South West African People's Organisation
  South West African People's Organisation
  Pakistan
  Pakistan
  Disarmament
  Disarmament
  Helsinki Agreement
  Helsinki Agreement
  Rhodesia
  Rhodesia
  Salt II
  Salt II
  Middle East
  Middle East
  Latvia, Lithuania and Estonia
  Latvia, Lithuania and Estonia
  Seabed Resources
  Seabed Resources
  Uganda
  Uganda
  Namibia
  Namibia
  France and West Germany (Foreign Ministers)
  France and West Germany (Foreign Ministers)
  Indonesia
  Indonesia
DEFENCE
  HMS "Warrior"
  HMS "Warrior"
SOCIAL SERVICES
  Mental Illness and Handicap
  Mental Illness and Handicap
  Benefits
  Benefits
  Supplementary Benefit (Industrial Disputes)
  Supplementary Benefit (Industrial Disputes)
  Cancer (Terminal Patients)
  Cancer (Terminal Patients)
  Ancillary Workers (Car Allowance)
  Ancillary Workers (Car Allowance)
  Sickness Certificates
  Sickness Certificates
  Private Health Insurance
  Private Health Insurance
  Tuberculosis
  Tuberculosis
  Death Grant
  Death Grant
  Prescriptions
  Prescriptions
  Family Income Supplement
  Family Income Supplement
  Budget (Family Impact)
  Budget (Family Impact)
TRADE
  Balance of Trade
  Balance of Trade
  Company Accounting
  Company Accounting
  Holiday Caravan Sites
  Holiday Caravan Sites
  Petrol Price Displays
  Petrol Price Displays
  Heathrow and Gatwick Airports
  Heathrow and Gatwick Airports
  Pakistan
  Pakistan
WALES
  Queensferry Flyover
  Queensferry Flyover
EDUCATION AND SCIENCE
  Expenditure (Wolverhampton)
  Expenditure (Wolverhampton)
NORTHERN IRELAND
  Nuclear Waste
  Nuclear Waste
  Prisoners (Statistics)
  Prisoners (Statistics)
INDUSTRY
  National Enterprise Board
  National Enterprise Board
  Company Cars
  Company Cars
  Shipbuilding (Labour Force)
  Shipbuilding (Labour Force)
ENERGY
  Oil Supplies
  Oil Supplies
  Chemical Industry (Supplies)
  Chemical Industry (Supplies)
  Paraffin
  Paraffin
  Gas Contracts
  Gas Contracts
  Electricity Generation
  Electricity Generation
  Coal and Nuclear Power Industries
  Coal and Nuclear Power Industries
AGRICULTURE, FISHERIES AND FOOD
  European Community (Budget)
  European Community (Budget)
NATIONAL FINANCE
  European Community
  European Community
  Higher Civil Servants
  Higher Civil Servants
  Tap Stock Issues
  Tap Stock Issues
  Value Added Tax (School Uniforms)
  Value Added Tax (School Uniforms)
  Subcontractors (Income Tax)
  Subcontractors (Income Tax)
  Trade-weighted Exchange Rate
  Trade-weighted Exchange Rate
  Exchange Rates
  Exchange Rates
  Government Shareholdings
  Government Shareholdings
  European Community (Mutual Assistance)
  European Community (Mutual Assistance)
  Expenditure (Wales)
  Expenditure (Wales)
  Excise Duty
  Excise Duty
  Personal Taxation (Budget Changes)
  Personal Taxation (Budget Changes)
  Sterling (Buying Power)
  Sterling (Buying Power)
  Personal Incomes
  Personal Incomes
TRANSPORT
  Schoolchildren (North-West)
  Schoolchildren (North-West)
  Mileometers
  Mileometers
  Motor Coaches
  Motor Coaches
  Vehicles (Optimum Speed)
  Vehicles (Optimum Speed)
  Concessionary Fares
  Concessionary Fares
  Provisional Driving Licences
  Provisional Driving Licences
  Bicycles (Reflectors)
  Bicycles (Reflectors)
  Motor Cyclists (Accidents)
  Motor Cyclists (Accidents)
ENVIRONMENT
  Nuclear Waste
  Nuclear Waste
  Greater London Council (Planning Decision)
  Greater London Council (Planning Decision)
  Turner Gallery
  Turner Gallery
  Local Authority Lettings
  Local Authority Lettings
  Community Land Act 1975
  Community Land Act 1975
  Building Control Act 1966
  Building Control Act 1966
  Local Authority Tenants
  Local Authority Tenants
  Housing Cost Yardsticks
  Housing Cost Yardsticks
  Regional Planning
  Regional Planning
  Local Authorities (Planning Applications)
  Local Authorities (Planning Applications)
  Heathrow Airport
  Heathrow Airport
  Ordnance Survey
  Ordnance Survey
  Rating Revaluation
  Rating Revaluation
  Rating System
  Rating System
CIVIL SERVICE
  Non-Home Department Police Forces
  Non-Home Department Police Forces
FOREIGN AND COMMONWEALTH AFFAIRS
  Warsaw Pact Countries (Diplomats)
  Warsaw Pact Countries (Diplomats)
  Vicuna Culling
  Vicuna Culling
  Skylab
  Skylab
  Gibraltar
  Gibraltar
  Rhodesia
  Rhodesia

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

LORD MACKAY OF CLASHFERN
The Right Honourable James Peter Hymers Mackay, QC, having been created Baron Mackay of Clashfern, of Eddrachillis in the District of Sutherland, for life—Was, in his robes, introduced between the Lord Kinross and the Lord Wilberforce.

LORD STRAUSS
The Right Honourable George Russell Strauss, having been created Baron Strauss, of Vauxhall in the London Borough of Lambeth, for life—Was, in his robes, introduced between the Lord Shackleton and the Lord Peart, and made the solemn Affirmation.
The Lord Tedder—Took the Oath.

GAS EXPLORATION: INCENTIVE MEASURES
2.45 p.m.
The Earl of LAUDERDALE: 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 incentives they propose to offer to encourage exploration for natural gas on the United Kingdom Continental Shelf.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, as the House will know from the answers I have given my noble friend recently, Her Majesty's Government recognise the importance
874
of encouraging exploration for oil and for gas. The rate of exploration is kept under review and if appropriate the Government are ready to consider whether additional steps are needed to encourage exploration.
The Earl of LAUDERDALE: My Lords, I thank my noble friend for that reply. May I ask him whether he would agree that a lower domestic price for natural gas has been a disincentive to exploration for it, and, likewise, constitutes a disincentive for the development of those marginal fields of which the production of gas could form a part?
The Earl of GOWRIE: My Lords, I rather agree with my noble friend. But the fact is that we have a surplus in gas stocks at the moment, so I think it would be quite wrong in those circumstances to take any immediate steps to interfere with the price.
Lord STRABOLGI: My Lords, may I ask the Government to confirm that they do not intend to sell off the North Sea assets of the British Gas Corporation, and that they will continue to encourage a British presence in the North Sea?
The Earl of GOWRIE: My Lords, it would be impossible for the British not to have a presence in the North Sea. The first part of the noble Lord's question is a matter that is being reviewed by my right honourable friend the Chancellor of the Exchequer.
The Earl of LAUDERDALE: My Lords, may I ask my noble friend whether he has any confirmation of the report that something like 10 per cent. of the known recoverable reserves of North Sea gas have already been used up? If so, would he not regard that as rather a profligate use of a scarce natural resource, which could be countered by adjustments in the price?
The Earl of GOWRIE: My Lords, it would indeed be profligate if that were true, but my information is that it is not.
Lord LEE of NEWTON: My Lords, will the noble Earl agree that the Government are doing far too well already in increasing the price of other things, without doing it with gas?
The Earl of GOWRIE: My Lords, is the noble Lord asking for information, or making a political point?
Lord WYNNE-JONES: My Lords, would the noble Earl confirm that our production of North Sea gas has continued to increase and that there is no need for alarm, except at the astonishing wastage which is encouraged by the oil companies in flaring off gas, because they have not taken the trouble to develop the proper methods of separating gas from oil?
The Earl of GOWRIE: My Lords, I am grateful to the noble Lord for allowing me to draw attention to my earlier point again, that we are in surplus on gas stocks. On the point about flaring, my right honourable friend the Secretary of State for Energy announced on 5th July a new study of a major gas gathering scheme in the Northern Basin. It would further our objectives of maximising hydrocarbon recovery from present and future fields, and maximising the quantities of gas available to the United Kingdom. So that we are in considerable agreement with the noble Lord. Unfortunately, what he is suggesting is very expensive.

HELSINKI FINAL ACT: MONITORING
2.48 p.m.
Lord CHELWOOD: 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 how it is intended to improve the monitoring of the Helsinki Final Act, with special reference to the human rights clauses.
Lord TREFGARNE: My Lords, the Government have instructed our Embassies in Eastern European countries to monitor developments and to report regularly on the state of implementation of the Helsinki Final Act in the countries in which they are accredited. Summaries of these reports about the progress, or lack of it, in implementation have been presented at six-monthly intervals in another place. They are available in the Library of this House and these arrangements will continue until the next CSCE
876
Review meeting which takes place in Madrid in November next year. The Government believe that they provide a reasonable basis for assessment.
Lord CHELWOOD: My Lords, may I, with respect, question whether that is quite good enough, with no arrangement whatsoever for Parliament itself to monitor the behaviour of the Communist Governments with regard to their promises arising out of the Helsinki Final Act, or even to hold regular debates in Government time in either House? Could not consideration be given to the setting up of a joint select committee which would have the advantage both of relieving pressure on another place—which has, in all conscience, set up enough committees recently—and of taking advantage of the very considerable experience of Members of the Upper House in this respect. Would the Government look with favour on a possibility?
Lord TREFGARNE: My Lords, that is a matter for Parliament rather than for the Government. However, as the noble Lord will be aware, consideration is being given in the other place to setting up a committee to monitor foreign affairs. I have no doubt that if that suggestion is proceeded with, that committee will concern itself particularly with matters of this nature. There is also the Helsinki Review Committee, of which the noble Lord, Lord Caccia, is such a distinguished member, and the Government will continue to provide information to that committee.
Lord GORONWY-ROBERTS: My Lords, may I offer support for the general point made by the noble Lord, Lord Chelwood, regarding this matter. The six-monthly reports, based on reports coming in from the field, are indeed invaluable, and the suggestion, which may well be implemented—at least in another place and, I would hope, in this House—for a select committee, is equally valuable. My question is this: Over and above those provisions, is there not room for repeating what the Labour Party did in Government—and I had a good deal to do with this—namely, setting up a specialised monitoring committee, as we did under the very able chairmanship of my noble friend Lord Thomson? Their

877
report on performance, not only in totalitarian countries but wider afield was most valuable and very helpful to the delegation which proceeded to Belgrade.
Lord TREFGARNE: My Lords, I think that the committee referred to by the noble Lord is the Helsinki Review Committee, which continues in existence and which, as I mentioned, is supplied with information by the Government.
Baroness BACON: My Lords, may I ask the noble Lord whether he is aware that one of the sub-committees of the North Atlantic Assembly issues a bulletin which is full of useful information on this matter? If the noble Lord thought that it would be helpful, I could arrange for some of those bulletins to be distributed here.
Lord TREFGARNE: My Lords, I am sure that that would be most helpful.
Lord SHINWELL: My Lords, does the noble Lord recall the high expectations about the beneficial results which would flow from the conference at Helsinki, which took place some considerable time ago, and in particular the impracticability of the union in the context of the violation of human rights? Why are we not a little more realistic about it? Why do we not understand that we are going to gain very little from conferences of this character?
Lord TREFGARNE: My Lords, I would not agree that the Helsinki Agreement has achieved very little. There have been a number of signs of an improvement in the situation in Russia since that treaty was signed.
The Earl of KIMBERLEY: My Lords, if much improvement, following the agreement, does not occur, would the Government consider suggesting that the Western countries ought to boycott the Olympic Games in Moscow?
Lord TREFGARNE: My Lords, I do not think that that would be very helpful.
Lord CHELWOOD: My Lords, the noble Lord referred to the committee which was chaired by my noble friend Lord Caccia. However, is the noble
878
Lord bearing in mind the fact that that review group unanimously and strongly recommended that Parliament should have a monitoring role in these respects? Is he taking into account that Parliament should have a monitoring role, exactly as the American Congress has, with six senators and six members of Congress, together with representatives of four Departments of State, doing an excellent job in keeping Congress regularly informed, Congress debating matters every six months or so?
Lord TREFGARNE: My Lords, the establishment of a joint committee, such as the noble Lord suggests, is a matter for Parliament, not for the Government.
Lord BROCKWAY: My Lords, while welcoming what the Minister has said about the present arrangements and the new proposals which have been made, may I ask whether he will agree that this issue of human rights is now of paramount importance, and this not only applies to the Soviet Union but to many countries in the world, even among our old allies? Will Her Majesty's Government bring greater pressure to bear in order to secure the carrying out of the Helsinki Agreement?
Lord TREFGARNE: My Lords, we certainly attach great importance to all the requirements of the Helsinki Agreement, and we will continue to monitor it on a worldwide scale, as we have already done.
The Earl of ONSLOW: My Lords, is it not true that if the Government were to recommend to Parliament that it should set up a committee, that would be done, and Parliament does not normally act without the guidance of the Executive?
Lord TREFGARNE: My Lords, I do not think Parliament would quite agree with that.
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, perhaps this House of Parliament might agree that we should move on to the next Question.

THE NATIONAL HERITAGE
2.55 p.m.
Lord CHELWOOD: 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 when they will bring forward proposals to safeguard our national heritage of historic buildings and artistic treasures, and whether they will take full account of the equal importance of the need to conserve the countryside, in its widest sense.
Lord MOWBRAY and STOURTON: My Lords, the Government are now considering proposals for the establishment of a National Heritage Fund under an independent body of Trustees, as recommended by the Expenditure Committee in July 1978, and intend to make a full announcement soon; I can assure the noble Lord that these proposals will take full account of the interests of the countryside.
Lord CHELWOOD: My Lords, I am very grateful indeed for that reply, which has certainly relieved a good many anxieties arising from the failure to mention the countryside in the Queen's Speech. But can my noble friend go a little further and tell the House when legislation is likely to be presented, and whether it is the Government's intention to get it on to the statute book during this Session? Secondly, can my noble friend give an assurance that there will be very wide consultation, not only with the statutory bodies but with voluntary bodies concerned with the scenic beauty and the scientific importance of the countryside?
Lord MOWBRAY and STOURTON: My Lords, I think I can give my noble friend the assurance that he wants. An announcement will be made soon. Discussions are going on at the moment between my right honourable friends the Secretary of State for the Environment and the Chancellor of the Duchy of Lancaster, and I can say that legislation will be introduced this Session and also that full consultations with the countryside bodies will be held.
Baroness BIRK: My Lords, in view of the cut in the money given to the Arts Council by the present Government, which was certainly not one of the promises in the Manifesto, and also in view of the high increase in VAT, can the noble Lord give us any more information as to what lines the National Heritage Fund will take and whether in fact there will be more money diverted from it than has yet unfortunately been expected? Since the amount of money needed is much greater than I think any of us had hitherto thought, concerning what we in the last Government were all trying to accomplish in the White Paper which was published, how does that tie up both with regard to the cuts in public expenditure which could affect such bodies as the Historic Buildings Council, and also the expenditure for the National Heritage Fund?
Lord MOWBRAY and STOURTON: My Lords, as I have said, an announcement will be made soon and reference to the National Heritage Fund will be made in that announcement. However, I cannot anticipate the announcement. I apologise that, if I am asked many more questions, I may have to give the same stonewall answer because I cannot anticipate what my right honourable friends will be saying. The Arts Council cut is regrettable but every department had to take its share of the cuts. The Arts Council had a budget of just over £61 million and they have had a cut of just over £1 million. I agree that it is regrettable, but when there is an across the board cut these reductions cannot be helped.
Lord WINSTANLEY: My Lords, while thanking the noble Lord for his encouraging answers may I ask him to urge Her Majesty's Government to recollect that the costs of reclaiming the countryside when once it is lost are immeasurably greater than those of preserving it initially? Will he further bear in mind that the countryside is a resource which is already in desperately short supply and for which, in the present era of increasing leisure, there is an ever increasing demand?
Lord MOWBRAY and STOURTON: My Lords, the noble Lord, Lord Winstanley, has raised an important

881
point which I am sure Her Majesty's Government will view with every sympathy.
Lord INGLEWOOD: My Lords, may I ask my noble friend whether he is aware that, however large the National Heritage Fund may be and however generous the Countryside Commission may be in a number of cases, the safeguarding of our historic buildings and their contents and certain tracts of land will depend much more upon the ability of the owners who show these to the public to be enabled to he assessed under Case 1 of Schedule D or some special case which Her Majesty's Government will have to define? Without proper appreciation of the taxation problems the heritage is lost.
Lord MOWBRAY and STOURTON: My Lords, Her Majesty's Government are also studying the tax structure, and we have already ameliorated the position with regard to the tax structure on higher incomes. All this may help private owners to do more than they have been able to do so far.
Lord MURRAY of GRAVESEND: My Lords, may I ask the noble Lord whether the introduction of legislation will mean the bringing about of more Quangos?
Lord MOWBRAY and STOURTON: I certainly hope not, my Lords.
Baroness STEDMAN: My Lords, while the noble Lord cannot anticipate what is going to be in the Bill, can he make an educated guess as to whether it is likely to include, in the widest sense of the countryside, some of the recommendations of the Sandford Report, the Porchester Report and the Cripps Report?
Lord MOWBRAY and STOURTON: My Lords, even for such an attractive person as the noble Baroness I am unable to anticipate, but I should think that in the widest sense the answer is "Yes".
Lord HUTCHINSON of LULLINGTON: My Lords, the noble Lord has mentioned the cuts to the Arts Council of £1 million. Does he think it proper for any Government to claw back £1 million which has already been
882
announced to an organisation such as the Arts Council, has been committed by them to their clients, who are trading companies, and which companies in turn have entered into legal and moral obligations with other persons on the strength of that commitment?
Lord MOWBRAY and STOURTON: My Lords, nobody likes having to announce cuts. When we do these things we do them with the utmost regret. We did not find a very full cupboard, as the noble Lord will be aware.

MARCHES ON THE PUBLIC HIGHWAY
3 p.m.
Lord DUNCAN-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 will consider taking steps to prohibit the organisation of marches along the public highway.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, the Government announced during the Statement on the disturbances at Southall made on 27th June that a review of the Public Order Act 1936 and related legislation was to be undertaken. The adequacy of the powers for the preservation of public order during processions is a matter to which the Government attach importance and it will certainly form part of that review.
Lord DUNCAN-SANDYS: My Lords, while thanking my noble friend for his reply and the implied assurance that this matter will receive serious consideration, may I ask him whether the Government will bear in mind that, while everyone recognises the democratic right of assembly—that is to say, the right to hold public meetings indoors and outdoors—there are very many people who do not accept that this necessarily includes the right to organise mass marches through our towns, the right to hold up all traffic, the right to prevent other citizens from going about their lawful business, and, perhaps most

883
serious of all, the right to divert large numbers of police from more important duties?
Lord BELSTEAD: My Lords, those who would be prevented by a ban from marching would still be free, of course, to organise a meeting, and that, too, could give rise to severe disorder and inconvenience. While, therefore, I fully sympathise with my noble friend's desire to minimise disturbance to the general public, to ban all marches might not achieve that objective. My right honourable friend will certainly look at this issue very closely indeed in the review which he has instituted. May I just remind the House that he has also undertaken that on any matter touching the Representation of the People Act there will be consultations with the parties in the normal way.
Lord BLYTON: My Lords, is the Minister aware that he ought to be very careful in regard to this question? After all is said and done, trade unions have demonstrated and marched through the streets for years. The attitude of the questioner would require that the Durham Miners' Gala through the streets of Durham, which has gone on for a hundred years, in Northumberland, in Yorkshire, would be abolished.
Lord BELSTEAD: My Lords, I do not think this is what my noble friend Lord Duncan-Sandys is getting at at all. The vast majority of processions—I entirely agree with the noble Lord, Lord Blyton—do not cause major inconvenience or disorder. I think the point which my noble friend was getting at is that there is a need to find a balance which, so far as is possible, reconciles the rights of those who wish to protest with the rights of ordinary people who want to go about their daily lives in peace.
Lord ELWYN-JONES: My Lords, should not a distinction be made between peaceful law-abiding marches, which have been a feature of our democratic practices through the ages, and marches like those of the National Front through immigrant areas, done in a threatening fashion accompanied by racialist abuse? Should not those marches now be subject to some control and indeed intervention? How soon are we likely to hear the outcome of
884
the review which I am sure the House is delighted to hear the Government are undertaking not only into the Public Order Act but, so far as election periods are concerned, into the Representation of the People Act?
Lord BELSTEAD: My Lords, it is, if I may say so, because the noble and learned Lord has hit the nail on the head with regard to the difficulty of making distinctions in these matters, that my right honourable friend felt that the time had come for a review of the 1936 Act and related legislation. With regard to the second supplementary question, about the timing, which the noble and learned Lord put to me, your Lordships might wish to know that my right honourable friend's review initially will take place within his department. Naturally, it will take into account points of view put in both Houses of Parliament, not least the expressions of opinion put by your Lordships today, and then my right honourable friend will wish to consult organisations principally interested. After that, my right honourable friend will consider what further procedural steps will be necessary in the light of that initial work. I am sure the noble and learned Lord will acquit me of any discourtesy if I say that I cannot put a timescale on it.
Lord PAGET of NORTHAMPTON: My Lords, could the noble Lord tell us whether the Government have considered whether any amendment of the law is necessary? Is it not a fact that the public right to use the highway is one strictly limited to purposes of transit? Is there any absolute right to obstruct the highway by parading? Is not this something which in any event is only legal with special permission, and is any change of the law necessary? Is it not merely a change of administration?
Lord BELSTEAD: My Lords, the noble Lord may be right, but it is because the answers to the questions which he puts are obscure that my right honourable friend has felt it necessary now to undertake a review.
Lord JANNER: My Lords, while thanking the noble Lord for the reply which he gave to the Question, in view of the terrible situation being created by the National Front—the holding of

885
marches in order to incite racial misunderstandings, and going into districts where people are incited to attack them, and one can readily understand why—will the noble Lord please ask the Government to direct their attention to that particular form of demonstration, which is so damaging to everybody who has any civilised ideas in his mind at all?
Lord BELSTEAD: My Lords, I appreciate the concern which the noble Lord expresses, but it is part of our democratic tradition that people should be free to express their views, however unpalatable they may be to others, so long as they keep within the law. It is the review of the law which my right honourable friend has felt is necessary at the present time.
Lord DUNCAN-SANDYS: My Lords, while recognising the difficulties to which reference has been made, in particular the point raised by the noble and learned Lord, Lord Elwyn-Jones, and the obvious difficulty of discriminating between one type of march and another, can my noble friend assure us that the possibility—I am not asking more than that—of restricting marches of a political and demonstration nature will be seriously considered in the course of the Government's examination of the problems of law and order?
Lord BELSTEAD: My Lords, I gave an undertaking a few minutes ago that the subject matter of my noble friend's Question will certainly be taken seriously into account in the review that my right honourable friend is undertaking.

GAMING (AMENDMENT) BILL [H.L.]
Lord BIRKETT: My Lords, I beg to introduce a Bill to amend subsection (3) of Section 20 of the Gaming Act 1968, to enable the Secretary of State, by order, to amend the limit of £1,000 therein. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.— (Lord Birkett.)
On Question, Bill read 1a, and to be printed.

ECONOMIC POLICY
3.10 p.m.
Lord BOYD-CARPENTER Lord BOYD-CARPENTER rose to move, That this House welcomes the determination of Her Majesty's Government to reverse the decline in the economic strength and competitive power of this country, and the changes which they have initiated to achieve these ends. The noble Lord said: My Lords, I hope that your Lordships will feel it appropriate if, at the beginning of this debate, I make it clear that, so far as I personally am concerned, I have no intention whatsoever of asking your Lordships to register any decision on this Motion. I think that it would be inappropriate to do so for two reasons. The first is that my purpose in moving the Motion is to seek—I would hope with a very wide measure of agreement in the House—to establish the grave and dangerous situation in which our economy stands.
Secondly, in view of the very high calibre of the noble Lords who have indicated their intention to take part in the debate—other, of course, than the mover—it would be a great pity if the fact that I shall seek (as I shall) not only to draw attention to what seems to be wrong, but to indicate, however tentatively, steps which in my humble view might be taken to improve matters (but on which I am perfectly certain there will not be a particularly wide measure of agreement), were to blur the general effect. Therefore, with your Lordships' permission—which, of course, I shall require—I should like to treat the debate as if it were a Motion for Papers, which for technical reasons which I am quite incapable of explaining to the House it cannot apparently be and I shall at the appropriate moment seek your Lordships' permission to withdraw the Motion. I hope that in these circumstances we may have—and from the list of speakers I think that we shall have—a discussion which will contribute something to the development and guidance of public opinion on what is, we must all agree, the basic issue facing our country at present.
I do not think that there is anyone in the House, whatever his or her political views may be, who is other than deeply concerned with the developments of recent years and with the situation with which all of us—the Government, the

887
Opposition, those on both sides of industry—are concerned. I would suggest that the seriousness of the situation merits very full and penetrating consideration.
I remember being told by a very distinguished medical man that the sudden onslaught of some disease or illness was not necessarily a matter of very much concern. However, sensible people would be right to be alarmed at a slow, insidious, almost unnoticed decline, or growth in some defect. It is precisely that type of complaint from which I am afraid it is only too abundantly clear the body politic of this country is suffering today. And, for the reasons that that great physician gave to me in the medical sense, it is perhaps the more alarming. There has been a decline over quite a number of years, not merely relative to our competitors in the industrial world, but in absolute terms. Our productivity has been disappointing and, as an inescapable consequence of that, our standards of life have begun to fall.
Like many of your Lordships, business takes me to many parts of the world. And, like I imagine many of your Lordships, one feels a good deal of awkwardness and embarrassment when confronted with the almost open contempt with which our country's economic effort is now regraded in many countries. Perhaps what is even more difficult to bear is the touching sympathy of friends. One finds this whether one goes to the countries which not long ago we defeated in war or to the countries which not long ago we rescued and put on their feet again. It is a very widespread feeling that one encounters, more abroad than at home, and indeed I shall seek to quote one very distinguished observer, who, from points of view abroad, was able to form devastingly clear views on this matter.
It may be of help if I very briefly sketch the background. Since the war there have been three phases in the movement of our economy. There was a short period, five or six years after the war, when we were buoyed up with the euphoria of victory and the almost surprised consciousness of survival. We suffered the illusion that six years of carnage and destruction had mysteriously made us all very much richer. There is
888
no doubt at all that in those early years we failed, when compared with countries that had been occupied and devastated, to modernise our industries, and we spent too much time on restructuring institutions and on making alterations which, whatever their merits, had very little to do with our capacity to earn our living in the world.
Then came 1950–51 and the break-through of which I ventured to remind your Lordships only a few weeks ago, under the guidance of that great statesman my noble friend Lord Butler of Saffron Walden. This country made a break for freedom, and for some years after the initial pains and agonies—which I recall as his Financial Secretary only too vividly—we were successful and we saw a period of rising standards. Indeed, they rose so much that the Prime Minister of the day in the late 1950s was able to say to the people of this country, "You've never had it so good". Although, as noble Lords will recall, that remark was criticised on perhaps grounds of taste, no one ventured to criticise it regarding its accuracy. Factually it was an era of rising standards of life among all sections of society; of stable currency and of falling taxes, whose ever increasing yield—because they fell on the products of a growing economy—enabled widespread improvements to be financed in our social services. It was an era of high employment. Unemployment at that time was something like a quarter of what it is today. It was a period of recovery, of hope, and one can perhaps sum it up by saying that it was a period of confidence.
Then, sometime in the 1960s, the malaise seemed to fall upon us, and we have had a fairly long period of decline masked sometimes by fortuitous circumstances, and particularly perhaps by the fortuitous circumstance that millions of years ago the Providence that formed this earth put large quantities of oil at the bottom of the North Sea which no one discovered until this era. However, there has been a steady downward process. It has been so well summarised that I hope your Lordships will allow me to quote from the famous dispatch which Sir Nicholas Henderson wrote as his valedictory dispatch from the Embassy in Paris. After a most successful tour in the

889
post which my noble friend the Leader of the House adorned, he wrote what he believed—we are all happy, I think, to discover wrongly—to be his valedictory report on his public service. He wrote:
"In the mid-1950s we were still the strongest European power militarily and economically. We were also well ahead of all Continental countries in the development of atomic energy. It is our decline since then in relation to our European partners that has been so marked, so that today we are not only no longer a world power, but we are not in the first rank even as a European one. Income per head in Britain is now, for the first time for over 300 years, below that in France. We are scarcely in the same economic league as the Germans or French. We talk of ourselves without shame as being one of the less prosperous contries of Europe. The prognosis for the foreseeable future is discouraging. If present trends continue, we shall be overtaken in gross domestic product per head by Italy and Spain well before the end of the century".
He supports—as I, too, can support—those gloomy statements by figures which tell the same tale. I promise not to weary your Lordships by quoting too many of them. I have always held the belief that speakers are apt to use statistics for the same purpose as a drunken man uses lamp posts; that is, more for support than for illumination.
However, some figures throw a certain light on the scene. For example, in 1954 our gross domestic product per capita was ahead of that of France and Germany; in 1977—the latest year for which we have complete figures—it was at only two-thirds of their level. Our growth in productivity has been an equally sorry tale. Taking as a base figure the figure of 100 in 1954, in 1960 we were still slightly ahead, but by 1977 our figure was 168 against a figure of 286 for France and 277 for Germany. That is an immense and overwhelming difference. Even more vivid is the value of output per man-hour in manufacturing industry. Again, in 1977 Great Britain's was £2·70; France, £4·50; and Germany £7·10.
The result inevitably—it does not need harping on—is that our standards of life have fallen relatively, because we have not been producing wealth to anything like the same extent as those countries, and, therefore, have not had it to consume. Moreover, it is an accelerating process. Between 1970 and 1973 manufacturing productivity rose by 17·3 per cent.; between 1973 and 1976 it actually fell marginally by 0·1 per cent. In 1959
890
our standard of living was the highest in the European Economic Community, except for that of Luxembourg. It is now only marginally ahead of that of Italy and Ireland. Our share of world trade was 25 per cent. in 1950; last year it was 8½ per cent. In 1950 we built 42 per cent. of the world's ships; in 1978 we built only 4½ per cent.
In recent years up to this year we have at least been relieved of some of the anxiety over the balance of payments which haunted earlier Governments—relieved, of course, by that North Sea oil, to which I have referred. But even more striking, in so far as the figures for the first part of this year are complete—and I recognise, as do your Lordships, that various problems with the Government machine have meant that the figures are far from complete—is that it appears that we had a current account deficit on the balance of payments of £1,000 million in the first four months of the year. So even the consolation that North Sea oil propped up our balance of payments was denied us over that period, leaving us with the grizzly speculation of where we would have stood if, like our competitors in Europe, we had not had the support of that oil.
This is a sad story. Some optimists try to cheer us by saying that this is still a very good country in which to live, which is true, and by commending our quality of life. But our quality of life—in which we take pride—our tolerance, our good sense and our good manners have developed against the background of a society which was also yielding rising material standards to its people. It is at least a matter of some doubt and hesitation whether that quality of life would stand a reversal of that economic background; whether, if standards were to fall—as they are now indicating they will—that whole fabric of life on which we pride ourselves would, in fact, endure. After all, if one wants to make oneself shiver, one can only reflect what an erosion of material standards did to the bright and happy hopes of the Weimar Republic of the 1920s, and how that story ended.
Therefore, the situation which Her Majesty's present advisers face is a grim one. Indeed, they may well sympathise with the Irishman who was asked by a

891
tourist to tell him the road to Limerick. The Irishman gave a complex route, which puzzled the tourist, leading him to ask for further explanation. The Irishman simply shrugged his shoulders and said, "Well, if I had wanted to go to Limerick, I would not have started from here". Had they had a choice, Her Majesty's Government would not have started from here. But they are here and they have to handle a situation, because a couple of months ago the majority of our fellow countrymen decided that they wanted a change of direction in our affairs. It is this situation, which Her Majesty's Government must face, which I have tried to analyse with such fairness as I am capable of, against which we have to judge their measures.
I shall not spend much time on the measures; as I said at the beginning of my remarks, they will perhaps be the controversial part. I am sorry if they cause any offence to any noble Lord, but I do not think that one should discuss the state of our country today without, however modestly, suggesting actions that can and should be taken to remedy it. I believe that not to do so would seem to reek of a defeatism which I, personally, decline to feel.
However, the background to this is to realise that in this era my noble friends on these Benches represent the party of change. We have moved a long way from the days of Prime Minister Salisbury, who is reputed to have said,
"Heaven forbid that I should ever touch a vested interest".
Conservatives are now the party of change. Noble Lords opposite are, in the true sense, the conservatives—the preservers of the cosy, consensus relationship, which in easier times might well make sense. My noble friends represent the party of change, and change, of course, involves serious risks. I commend to your Lordships the thought that simply to continue as we have continued—and I am not making a party point against any particular Government—over the past 15 years, leads just to the conclusions so eloquently set out in Sir Nicholas Henderson's report: a steady and continuing decline to below the level of Italy and Ireland; ever falling standards with all that that would do to our society, to our
892
position in the world and to our capacity to defend ourselves.
Therefore, I hope that the House will feel, as I do, some sympathy—even if it does not agree with the precise methods—with the approach of Her Majesty's Government. I can begin with a matter on which I imagine there is a good deal of agreement; that is, the reductions in personal taxation. These certainly were very strongly urged by the Liberal Party, who played a very honourable part in the last House of Commons in imposing some modest change in taxation on the then Government. Indeed, in recent months, Mr. Healey has indicated with great fairness that personal taxation has been at too high a level. So at least on the relaxation of taxation—I shall not be led into the precise detail or into the argument whether some noble Lord would have added a penny—the principle of reducing personal taxation is important for the following reason. The basic incentive which makes any decent, responsible man make every effort is the desire to benefit his own kith and kin, to give his own family a better share of the good things of life. If he has the ability and the energy to do it—to give them a steadily improving share of the good things of life—that is fundamental human nature. Any Government, whatever their political colour, who ignore that are certain to get themselves into very serious trouble indeed.
Politics and economics are the science of managing people. It is extremely important to realise that if one takes, for the highest of public purposes, too large a share of what a man at any level of earnings is earning, one is quite certain to diminish the effort that he makes, perhaps causing him to emigrate, to ease up or not to take extra responsibilities—it varies with the individual. But one is dealing here with a human reality, which is really what government is all about. I hope, therefore, that the action of Her Majesty's present advisers in reducing the level of taxation as a principle will strike the House as a sensible and proper way of dealing with this situation.
If you are faced, as we are, with a relative—sometimes an absolute—decline in productivity; if you are faced with reduction in the efficiency of your economy and the output of your industry, it is

893
necessary to look at the incentives which cause people to work harder and more efficiently; to train; to take up apprenticeships; to go to night school; to take courses; so that they can make a more effective, and to them, more remunerative contribution to the national financial effort.
There are many other aspects upon which I would not wish to detain your Lordships because this is a great subject and we shall hear a great deal about them before the debate is ended. Let me give just one comparison on this point. In 1978, last year, before the changes in my right honourable and learned friend's Budget of a few weeks ago, a man on the then average wage in this country—about £80 a week—with two children, paid in the course of a year in income tax and National Insurance contributions something like £700. This is £200 a year more than would be paid by any other opposite number of his on that wage level in the EEC.
It is surely no coincidence that we are so out of step in this respect and also so sadly out of step, as the figures I have quoted to the House show, in the similar effort and success of our production and of our creation of wealth. There is one other aspect which may be controversial but which I should like to touch on because it raises quite serious issues. We have high-mindedly used very considerable resources in this country to prop up companies, or even industries, that were in decline. That is to say, we have taxed the profitable concerns to subsidise and keep in business the unprofitable.
I do not take a doctrinaire view on this. There may well be cases, particularly where national defence is concerned, where it is a sensible thing to do. But if you carry that process too far you reach the situation which, according to the Permanent Secretary of the Treasury in his note to the Permanent Secretary of the Department of Industry earlier this year, we had reached, of actually incurring greater losses in keeping those concerns going than can be offset by the increase elsewhere in national wealth. That may well be an explanation of our relative decline.
This policy is an easy one to slip into. It touches most people when an old firm,
894
that has given good employment for many years in perhaps a rather broken down area of this country, is in trouble. It is so easy to use public money to prop it up. It is a temptation to which I have no doubt my noble friends are very far from immune. But carried beyond a certain point it must be wrong to use resources earned by profitable companies which could use those resources in developing their own profitable enterprise, in order to prop up enterprises which, for one reason or another, are running at a loss and likely to continue so for a continual period.
There is the awful warning, if one wants to touch on it, of the efforts—so well intentioned—to prop up the shipbuilding industry, which have had the most unhappy effect of subsidising competition for our hard pressed ship operators. Supporting cheap shipbuilding for foreigners has led to our own shipping industry—and some noble Lords will speak with much greater experience of this than I—undoubtedly feeling very serious effects.
There are many other measures that we shall hear about. I hope that we shall follow the example of the noble Lord, Lord Butler of Saffron Walden, who in the 1950s removed restrictions upon production and development. I was glad to hear that the Price Commission was to go. Noble Lords will have read the comments of the chairman of Whitbreads in the Press only the other day. There are others who have suffered from that body. I am also glad to hear that exchange control is being eased. There is very little justification for preventing companies investing their funds in appropriate and remunerative places at a time when it is the strength of sterling, rather than its weakness, which is causing preoccupation to Her Majesty's Government. There are whole areas in which we can improve things.
We come back to the fact that this country's situation, in the judgment of many people, is such that mere tinkering; mere modifications and adjustments; the mere taking of measures which will cause happy consensus to continue; will, as has been shown by the experience of recent years, be inadequate. The Government will take risks. Some of the things they do will undoubtedly be wrong.

895
I personally have some reservations about the high level at which they have placed and maintained the minimum lending rate. If that is maintained for very long its side effects may be more damaging than the advantages to be obtained from it.
There is a whole area in which, as my noble friends will know, there are many people who hold differing views. The one thing for which we would not forgive Her Majesty's Government would be if they did not make every effort, by the taking of measures, however drastic, on, for example, public expenditure (which has already been mentioned today) which seem to be going to contribute to the end we all want to see: that is, that this country should return to the creation of wealth; should concentrate far more on the creation of wealth and perhaps concern itself, for that reason, a little less with its distribution; and should show respect and give help to those at all levels in our economy and in our society who can, and do, create wealth.
As I was reflecting on what I should say in this debate, and as I read the gloomy material, some of which I inflicted upon the House a few minutes ago, I came across some lines which seem to be so appropriate that I hope the House will allow me to quote them. They are words which Shakespeare put into the mouth of John of Gaunt:
"This land of such dear souls, this dear dear land,
Dear for her reputation through the world
Is now leased out, I die pronouncing it,
Like to a tenement or pelting farm:
England, bound in with the triumphant sea,
Whose rocky shore beats back the envious siege,
Of watery Neptune, is now bound in with shame,
With inky blots, and rotten parchment bonds;
That England, that was wont to conquer others,
Hath made a shameful conquest of itself."
There is one consolation. When Shakespeare wrote those words he knew that this country had come through the troubles which threatened to overwhelm John of Gaunt and his contemporaries, and had come through to the triumphs and glories of the Elizabethan age. It may be so again. My Lords, I beg to move.
Moved, That this House welcomes the determination of Her Majesty's Government to reverse the decline in the economic
896
strength and competitive power of this country, and the changes which they have initiated to achieve these ends. (Lord Boyd Carpenter.)
3.39 p.m.
Lord PEART: My Lords, we have just heard an interesting and fascinating speech. I think that the noble Lord had much to say. I was rather surprised, because he is usually a very effective debater and I admire his skill, that he seemed a bit lost, and finally he engaged in generalities. May I say something to him about his early history before I deal with the Motion. He mentioned the period immediately after the war. The noble Lord and many others of us came hack from the Services and we saw the beginning of a new Britain; a Britain which, in a period of time, was built up, and which also was envied by many other countries.
I refer to the creation of the Welfare State, of the National Health Service. One of the great jobs of a famous Minister of Labour who became Foreign Secretary, Ernest Bevin, was to bring back the men and women from the forces. He brought them back efficiently and smoothly, in contrast to what happened in the aftermath of 1914–18. All this was done. We sought also to build up the regions which had experienced unemployment: the regions of the North East, of my own West Cumberland, of Durham, Wales and Scotland. John of Gaunt did not deal with Wales and Scotland. I hope the noble Lord realises that the malaise then was cured and that Britain became a civilised State in the best sense. All the excesses that we knew in the 'thirties which angered men and women, all that period was changed and changed for the better. I am amazed that he did not give credit to the architects of that period: the Attlee Government; a great Prime Minister, backed up by men like Stafford Cripps, Hugh Dalton and others. They worked a revolution, and I believe that period will be regarded by historians as one of the great periods in British history.
Lord BOYD-CARPENTER: My Lords, would the noble Lord also recall that that Government, of which he was a distinguished member, which he so extols, ended in a disastrous balance of payments

897
crisis from which they ran away by going into an election they knew they would lose?
Lord PEART: My Lords, the biggest crisis in the balance of payments was in 1964 under the Tories. We created stability in that period, and there is no doubt about that. I remember, along with my noble friend Lord Shackleton, and others who lectured in the States in that period explaining what was happening in Britain, how even American society admired many aspects of life in this country, especially the creation of the Welfare State and the building up of the National Health Service. I believe we achieved a miracle.
It is true that we all want to increase wealth; we all want our families to have better things. We accept that because, whatever society man lives in, that is a natural thing to expect, and there is no desire on the part of the Labour Party, whether in power or in opposition, to decry that principle. We want wealth, but we want that wealth fairly shared. After all, who creates the wealth? The trade unionists, who are so often attacked by noble Lords opposite—the men and women in the factories—are the people who create it. That is why I want a better educational system which will turn out more engineers.
Lord DAVIES of LEEK: They are shattering it, my Lords.
Lord PEART: Yes, my Lords, and now we are going to have a crisis in education. This Government will be cutting 70,000 teacher jobs at a time when we need to train our young people in our schools. Their schools are not often cut; I never hear of cuts at Eton, Harrow, Winchester and places like that. It is always in the State sector that we hear of such cuts. Why should that be so? Noble Lords opposite know that they are now embarking on a wrong policy, a policy which will be harmful to our economy because in the end we need skilled men and women in industry. There is still too much snobbishness in our educational system in relation to the creation of engineers; and that is true at all levels, even in the universities which concentrate too often on pure science. We need to train more engineers, and I
898
should have thought that Lord Boyd-Carpenter, with all the interests he used to have—he was a very fine chairman of a Quango, which he now seeks to destroy—would be only too well aware of that.
Lord BOYD-CARPENTER: Oh?
Lord PEART: The noble Lord may remember that I was once put on a Quango by himself. It was the Japanese Prisoner of War Fund, but I did not get any salary. However, he was on a good Quango and he never objected to that.
Lord BOYD-CARPENTER: So were you!
Lord PEART: I hope there will be no attacks on Quangos again, my Lords.
Lord BOYD-CARPENTER: Oh dear!
Lord PEART: The Lord President of the Council, the noble Lord, Lord Soames, is looking rather worried. I hope he will not worry too much, and I certainly hope he will not fall for the change of title on the part of the Tory Party as suggested by his noble friend. I read in the Financial Times:
"Tories now take a new name for Europe".
It seems they are ashamed of their own party. It is amazing.
The Earl of GOWRIE: Really?
Lord PEART: My Lords, would the noble Earl care to look at the article? It seems they are to be called democrats, as though that were a new term. I hope noble Lords will concentrate on what is happening in our economy: the Budget, the strategy of Government and planning. That is really what is important. I believe that the Labour Government over a period of time pursued the right policy in relation to industrial strategy. We tried to revive industry and we tried to create a better understanding with industry, private and public. Indeed, I remember hearing the noble Viscount, Lord Watkinson, in a debate in your Lordships' House, praising the planning agreements of the different sectors of industry, and I thought he made a positive contribution. I hope, therefore, from his vast experience, that we shall hear him today making a case quite different from

899
the generalities and generalisations we had from Lord Boyd-Carpenter.
Viscount WATKINSON: My Lords, the noble Lord should not anticipate my speech and I rise simply to tell him that I shall also be saying what I have said before; namely, that planning agreements are totally indefensible anywhere and I have never agreed with them.
Lord PEART: My Lords, the noble Viscount praised the sector working parties and if he consults past issues of Hansard he will see I am right. I have always thought of him as a progressive businessman, and he should be delighted that I am calling him that. I am simply telling noble Lords that we must have the right strategy, and I have to ask this: Is the Budget we have just had the way to win the confidence of the British people who are going to create the wealth? It is in fact a move towards Professor Friedman's philosophy—in other words, the use of market forces. It is rather remarkable that a Chancellor should say, "I am putting more money into their pockets so they may pay the value added tax". What a strange choice of language!
Lord DAVIES of LEEK: They are "going bananas", my Lords.
Lord PEART: My Lords, I believe the main effects of the Chancellor's Budget will be to produce massive increases in unemployment, with high prices. Even the Road Haulage Association believes the Budget will add £900 million to the cost of road transport in the coming months. There will be vast increases in indirect taxes and cuts in public expenditure, which in the end are bound to raise prices. The figure, a cut of one-third of £1 billion in the rate support grant is, I believe, likely to be met by terrific increases in rates, and that will cause great hardship to many families in the country. That attack on the rate support grant will therefore strike at the very heart of the wellbeing of the British people.
There will be increases in food prices. If the Government carry out their election promise to devalue the green pound to parity, there will inevitably be a rise in inflation as well. It has been estimated by
900
the Chancellor that it will be in the region of 16 per cent., although the Secretary of State for Social Services expects the rate of inflation to reach 17½ per cent. by November. Added to that there will be an increase in unemployment. I understand that the Civil Service Department, the department of the noble Lord the Leader of the House, is now preparing for cuts of up to 150,000 in the Civil Service alone. There will he savage cuts, of £172 million, in support for the Manpower Services Commission and for job creation measures. That is bound to have an immediate and direct effect on unemployment. Thus, I believe the industrial strategy of this Government is wrong, and I wish that the noble Lord, Lord Boyd-Carpenter, had started to examine objectively what he is supporting, although he does not intend to press the Motion to a Division.
I was shocked at the way he attacked the National Enterprise Board yesterday and I thought that was very unfair of him. I believe that board has done much for Britain and needs to be continued. I spelt it out in a previous debate in your Lordships' House, and perhaps I may remind noble Lords and people outside the House that the National Enterprise Board is engaged in business in aero engines, electronics, machine tools, engineering, scientific activities, computers, medical exports, electric transformers and many other things. It has been responsible for a major section in our economy; yet we have noble Lords opposite sniping at it, as they have been continually.
I believe the Government would be foolish to scrap the National Enterprise Board, and I should like to know from the Leader of the House what is to happen to it. Are the Government going to keep it in tact, or are they going to listen to the advice which some of their supporters in this House are now giving? I hope not, because the National Enterprise Board is vital to the prosperity of the regions—those regions which even a Tory is now worried about. I have here a copy of a very good, fine speech by Jim Prior, the Employment Secretary. He said that there are basically two nations, and he told the Tory Reform Group in Cambridge that, if the Government were found wanting, the people would turn once again to Labour. He is very worried.

901
I think that he is a progressive—one of the few in the Tory Cabinet—and I am glad that he has shown the country that he at least feels for the situation in which, as Employment Minister, he plays an important part.
I hope there will be no attempt to destroy organisations which seek to build up the strength of the regions in England, Scotland, and Wales. I should like the noble Lord to give an answer to that point when he replies. Where are the cuts to be? Are more cuts coming? I have in mind such organisations as the Manpower Services Commission, which I have already mentioned. What will be the extent of the cuts? The noble Lord must know that this country of ours needs good regional policies. We must remember that we are part of the Community, and I have here a copy of the regional development plan relating to the European Community. I hope that noble Lords will read it so as to find out to what they have committed themselves in Europe. Europe will be much more progressive than we are if we have the Tory way of thinking.
Do the Tory Government believe in regional policy support in relation to projects which arise and which are engineered in the regions by Europeans? In my former constituency part of the Lillyhall industrial estate was financed from the European Regional Fund. The noble Lord is a great, a fine, European. I hope that his Government will be strong in their support of regional policies emanating from Brussels, and I hope they will do nothing to harm the regions of this country.
I could go on arguing about such questions as whether or not we are to have a society in which the State positively intervenes and in which we do not rely entirely on market forces. I believe in a mixed economy. I suspect that many noble Lords opposite are still wedded to the rigid doctrine that I mentioned earlier, and which in the end leads them to Professor Friedman. I believe that a mixed economy is essential, and we must build up the regions in order to fight unemployment, which has caused so much distress over the years in our country.
I hope that the noble Lord opposite will give us assurances that in no way will regional aid be cut back. Only the other
902
day I spent a pleasant afternoon in White-haven (near my old constituency) where I opened an extension to a factory. The firm involved are now dominated by Americans, but they have a good factory and every businessman whom I met there paid a tribute to what we have done in this country in the way of aid to the regions and the provision of grants and other financial aid in order to build up strength in those areas.
I hope that there will be no going back. I hope that we are not going to think in terms of market forces entirely. Remember that it was a Labour Government who built up an industry which the noble Lord and many other noble Lords are in. I refer to British farming. The noble Lord who opened the debate asked us to think of history, and I would remind him that one of the great agriculture Ministers was Tom Williams. What did he do? He did not rely on the forces of the market. Rather he brought in an Act which gave to the farming community assured markets and guaranteed prices. He succeeded, and agriculture, which had been neglected over the years, improved, which was unlike what occurred in the period after World War I during which the corn production Act destroyed at a stroke security for people in agriculture, both farmers and agricultural workers. It was a Labour Government who built up measures and gave aid to the farming community. The noble Lord himself was a very distinguished Minister of Agriculture and he, too, gave help and aid. As I reminded the House some time ago, he was also responsible for the creation of many good Quangos which have helped agriculture. The Meat and Livestock Commission is just one example.
I hope that noble Lords will not embark upon an attack on Quangos. The noble Lord must give an answer today, otherwise I shall go on pressing him. The Tory Party must come clean. If they destroy some of these Quangos (as we call them) they will in the end harm the efficiency of those departments that are affected by them. Here is another example of people who are going to pursue a doctrinal policy. I hope that the noble Lord will treat this question very seriously because he will have a major part to play in, I hope, keeping the Quangos and protecting them. Of course we do not want to keep

903
organisations that have lost their use; I am not arguing that. But I believe that many of the so-called Quangos (to use the odd term that we give them) serve a useful purpose and enable men and women, whatever their political persuasions, to perform a service to the State and to the community.
I say to the noble Lord that here is another example where we are not ashamed of what we have done. However, I am worried about the attack on education. I am worried about the danger to the teaching profession and about the present lack of morale, as well as all the uneasiness that parents must feel. I believe that this is one of the tragedies of our time. We must not go back to a two-nation system; we must not go back to a system which divides the nation. I know that education does; I have always argued that. If children of the same age are sent to different schools, inevitably there will be a crisis. There will not be a democratic society in the best sense of the term. That is why I welcomed the move to comprehensive education, and that is why I resent what the Prime Minister is seeking to do in the Education Bill—to bring back selectivity. As I say, this is one of the great tragedies of our time. We shall fight the Education Bill through and through on the Floor of this House; and I know that many of my noble friends are waiting to go into battle. We shall not let it go through without making a major protest. What the Conservative Government propose to do is really scandalous.
I hope that the noble Lord, Lord Boyd-Carpenter, will again think carefully. He did not tell us much in his speech. It was a very vague speech. There was no precision in it—it was unusual for him. I think that he must have had a bad night, or some other trouble. I like the noble Lord so much, he is such a reasonable man, and he has done much. I hope that the noble Lord will not press the Motion. He said that he will not press it, though it cannot be a very good Motion if he is frightened to press it—
Lord BOYD-CARPENTER: My Lords, will the noble Lord allow me to intervene? I think that what he is really trying to tell the House is that I did not deploy any of the points to which his office had
904
prepared for him the answers. Therefore he finds it easier to answer by speaking about something wholly irrelevant, such as the Education Bill.
Lord PEART: My Lords, I have not an office which provides me with a brief—probably that is why I now make better speeches. However, I hope that the noble Lord will take note of what I have said. I am sorry to say so, but the noble Lord's speech lacked precision. I hope that in the debate we will be able to examine critically what he has proposed.
3.59 p.m.
Lord ROCHESTER: My Lords, it is the courteous custom of the House to thank the noble Lord who introduced the debate for having done so. I must confess that I thought that on this occasion I would find it rather difficult to do so in view of the fact that the noble Lord, Lord Boyd-Carpenter, instead of putting forward a Motion for Papers, which could later have been withdrawn, so framed his Motion as to give me at least the impression that he was seeking to oblige us to welcome, not only the Government's determination "to reverse the decline in our economic strength and competitive power"—a sentiment with which I am sure we would all agree—but also the means adopted to that end. In doing this, in my view, he acted, maybe unwittingly, in a way which was almost bound to call forth the retaliatory response which it in fact invoked from the main Opposition party, and has placed me, certainly, speaking from the Liberal Benches, in something of a dilemma.
This is because, in principle at least, if not in degree, I very much welcome some of the changes initiated by the Government; for example, reducing the higher rates of taxation, to which the noble Lord referred, in a way which is designed to restore the differentials for responsibility and skill which have been so seriously eroded in the last few years. In the interests of our long-term competitiveness there are certain measures, such as the relaxation of exchange controls, which should, in my view, also now be taken further; and there are others, like the increase in the rates of interest, that have, on the basis of such information as is available to me, perhaps gone too far.

905
On these points I am rather inclined to agree with the noble Lord, Lord Boyd-Carpenter.
But there is one measure, the absence of which I very much deplore, and that is any firm indication of the Government's wishing to confer with representatives of employers, trade unions and other interested parties under conditions which would enable a better public understanding to be gained of the effect on the national economy of increases in pay which are not matched by improvements in productivity. So keenly do I feel on this point that at one time, given the way in which this Motion was framed, I even contemplated suggesting to my noble friends that I should put down an amendment, which would have advocated such an educative process, in substitution for the last clause in the Motion as framed. But I rejected that idea because it seemed to me, on reflection, that it would serve only to exacerbate the conflict which in my view we should do all we can to limit.
I am left, nevertheless, to regret, as your Lordships see, the way in which the Motion is framed, because I cannot unreservedly welcome as a whole all the changes that the Government have initiated. Indeed, in another place my party has already opposed some of them; and if the Motion were to have been carried to the point at which it was pressed to a Division, then I think I should have been obliged to recommend to my noble friends that we should oppose it. It seems to me that that would have been a great pity, because we would simply have divided on party lines for and against the Motion. Because of the in-built Conservative majority in this unreformed House, it would no doubt have been carried by a substantial majority, but we would have achieved absolutely nothing, in my view, in terms of finding what the noble Lord, Lord Boyd-Carpenter, may call a cosy consensus relationship but what I prefer to regard as common ground on which alone, in my view, our basic economic and industrial problems can be solved; and the debate would then have been totally unproductive. With these considerations in mind, anyway, I am delighted that the noble Lord, Lord Boyd-Carpenter, as I understand it, for his part at least, is prepared to withdraw the Motion at the
906
end of this debate, in just the same way as he would have done had he moved for Papers, and I can only express the hope that his noble friends will support him in that.
My Lords, it is understandable, I think, that, because so many of our basic national problems are of an economic and industrial kind, they are debated frequently in this House by people who have at least some experience in these fields. One of the attendant disadvantages, I think, is that when a noble Lord gets up to speak others must have a pretty shrewd idea what the particular Member is going to say, and it is salutory to think that that must be true of me just as much as of anyone else. Indeed, the prospect of listening to me may be more than ordinarily daunting to your Lordships because on the occasions of the last two debates in recent weeks on the subject of the Government's economic and industrial policies I have had something to say of substance. At least this afternoon I should like, for my part, to try to remedy that particular deficiency by talking, with some diffidence certainly, on only one theme, and briefly at that; namely, the motivation to work. In doing so, I should like to try to relate what it is that I have to say, I hope not in too hectoring a way, to a particular tenet of political philosophy which has featured prominently in the Conservative Party's recent election Manifesto, in the gracious Speech, in the Budget Statement which followed that Speech and, most recently, only yesterday in another place, in an answer which the Prime Minister gave to the Leader of the Opposition, and this concerning the desirability, in the Government's view, of providing greater financial incentives.
My Lords, it so happens that towards the end of my career in manufacturing industry I was responsible for the education and training of nearly 20,000 people in a large organisation, arid a particular responsibility I had was for the training of managers, supervisors and even, jointly with the trade unions concerned, shop stewards in what might be called the management of people. In giving this training we needed to establish whether certain motivational theories in fact stood up to the test of modern industrial life in offices and on the shop floor. A part of one of these theories, put in its simplest

907
form, was that, although lack of adequate financial incentives or rewards, whether viewed absolutely or relatively to the rewards of others, could be a cause of dissatisfaction, the mere accumulation of more pay did not give rise to positive satisfaction at work. On the other hand, so the theory ran, factors such as responsibility, achievement and the recognition of that achievement did give rise to positive job satisfaction.
We sought to test this proposition by the simple expedient of inviting people to think back to those periods in their lives when they had been most inclined to give of their best at work, and I can only testify that, whether one was dealing with managers, supervisors or shop stewards, the result was invariably the same. Rarely indeed did those concerned say that at such periods money had been a significant factor in the situation; nearly always, on the other hand, it did indeed prove to be the case that factors such as responsibility, achievement, the esteem in which people were held by their colleagues, self-fulfilment and that sort of thing, were the matters which, in the view of the people concerned, had motivated them to give of their best. Therefore, these were the factors which we sought to introduce into the jobs of the people concerned. But that is another story.
If your Lordships are in any doubt as to the validity of this proposition, I can only suggest that you apply it to your own experience in this House. Whatever may be the factors which motivate us to contribute to the best of our ability to the proceedings of this House, I suggest that on one thing we might all agree—we do not come here for the money. I am certainly happy in anticipating that, with the prospective increase in the amount of expenditure that I incur in the course of my duties in having to stay overnight in London, I shall no longer be out of pocket; or, to the extent that I am, it will not be nearly as unrewarding as it is now.
For me, that simply supports the contention that absence of sufficient financial recompence can act as a discouragement. Surely, the things that cause us to give of our best in contributing as well as we can to the work of this House are the exercise of responsibility—whether that stems merely from an accident of birth, as in my
908
case, or not—and those occasions when we are deemed by our colleagues to have performed well, and so on. If I may seek to apply this thinking to the subject of the Motion before your Lordships—namely, the means by which the Government should demonstrate their determination to reverse the decline in the economic strength and competitive power of this country—I would simply say that in the last few years the after-tax salaries of senior and middle management, on whose morale, in my experience, industrial performances largely depends, have been reduced to an extent which is altogether disproportionate to that of other categories of employees. This cause for justifiable grievance, as I see it, has now been removed; but I do not believe that the Government's objective is going to be achieved simply by the provision of further financial inducements. On the contrary, if it is possible—as I hope it may be—to reduce direct taxation still further, then in my view the perks which, understandably, multiplied in the wake of what seemed to me to be the penal higher rates of taxation imposed by the last Administration should now be progressively dispensed with.
The truth is that solutions to such problems as how to control inflation or to improve productivity, or to restructure (as the noble Lord, Lord Boyd-Carpenter, was saying) large parts of industry or to create more job opportunities are not within the power of governments alone to solve. In fairness to the present Administration, I do not think that they would claim to be trying to do more than to create conditions in which the solutions to those problems can be facilitated. In my view, we shall improve our industrial performance only by the very much more difficult, long-term, education processes involved in convincing people, in their own interests, of the need to accept change; that more real wealth can come only from a rise in output per man and that if employment, even at the present lamentable level, is to be maintained, we shall have to accept some reduction in our standards of living and so on.
I do not believe—and I have said this before and I cannot forbear repeating it—that radical changes like this can be effected until we are prepared to embark on them together. The noble Lord, Lord Boyd-Carpenter, an experienced

909
politician, has attained high office of State and is also the leader of one of our most successful companies. In that capacity, he will know of the vital necessity of establishing a common purpose to which management and employees together can subscribe. I would respectfully suggest to him that that objective, the objective that he has in mind—and to which we would all, I imagine, subscribe—of seeking to improve our economic and industrial performance, is most likely to be achieved by seeking at least minimal agreement as to the means by which that can be done.
4.16 p.m.
Lord SOAMES: My Lords, I think that all of us will be grateful to my noble friend Lord Boyd-Carpenter for having introduced this Motion which enables us to confront some of the really major, vast and complicated anxieties which face us all today. The Motion
"welcomes the determination of Her Majesty's Government to reverse the decline in the economic strength and competitive power of this country …"
The noble Lord, Lord Peart, raised a number of questions, some of which—I refer to those rather more relevant to the debate—I will attempt to answer in the course of my speech. Others, my noble friend Lord Gowrie will talk of in his speech.
As my noble friend Lord Boyd-Carpenter said, there is, alas! no room for argument about the decline of our national strength—that is, in comparison with others. It has been so far only a relative decline. Let us hope that it will never become an absolute decline. My noble friend quoted a few figures. I will not quote many, but, in order to show the degree of the comparative decline, I think it is necessary to bear some figures in mind. My noble friend referred to our share of world markets in manufactured goods. I am taking this over a 25-year period; we have declined from some 80 per cent. to 20 per cent. of the world market. The growth of our gross domestic product during the past 25 years has been of the order of 75 per cent., while in France and Germany it has trebled. In terms of gross domestic product per head, both those countries are now of the order of 50 per cent. higher than we are.
910
Small wonder, indeed, when you look at the figures of our productivity—a rise in Britain in 25 years of some 70 per cent., while France and Germany both multiplied theirs by more than two-and-a-half times. This leads me to the figure, my last figure, which seems to encapsulate, for me, at any rate, so many of the economic indices; namely, the comparison of the figures of our exports and imports of manufactured goods which traditionally used to be of the order of 3 of exports to 1 of imports and which is now, give or take half a percentage point or two, about "even Stevens", about 1 to 1.
From where, therefore, if it were not for the benefit of North Sea oil, for the boon of North Sea oil, would be coming the money to pay for the raw materials and the food we need to import? I do not want to go back to the Attlee Government, I have been talking now about the past 25 years. Whether or not our Welfare State is better or is not so good as those of other countries, whether or not more has been done by one party or another in this regard, I do not think that this is the main argument that we should be having across the Floor of the House in this debate. Our argument and disagreement with the last Government was that, given these facts and also the highly inimical if not malign international economic atmosphere in which we were having to live, too many of their actions and policies aggravated rather than improved what was already a thoroughly bad national situation.
What was the economic position when this Government came to power? Well before the election it was clear that any hopes of a substantial balance of payments surplus had been disappointed. We had a bare surplus in 1978, and a forecast deficit of £1 billion in the first four months of this year. Inflation was already back in double figures and rising, with a sub-stantial number of significant price increases already in the pipeline, delayed until after the general election: postal charges, bread, beer, milk, gas, electricity. They were all waiting. Production was slowing down, and the number of unemployed was widely forecast to be at least 1½ million by the end of the year. The growth in world economic activity was forecast to be less this year than last.

911
What effect did a brief consumer spending spree as a result of last year's substantial pay awards have? It sucked in yet more imports through the failure of our own industry to supply the extra goods which the extra demand called for. We had in effect arrived at the moment of truth with the really frightening prospect that unless we changed our ways, and changed them quickly, our relative decline might become an absolute one. Given that situation, it is simply not enough to do a little here and a little there to try to change, as my noble friend said, in effect, long-term trends with short-term measures. And, worse still perhaps to try to tackle problems which are predominantly on the supply side of the economy with policies aimed at manipulating demand. Hence, my Lords, the Budget, to which the noble Lord, Lord Peart, referred, which is perhaps the main indicator so far of the Government's economic policies, and which set out to avoid both these practical and conceptual errors. Just as the main causes of our decline have been long-term and on the supply side, so too must be our solutions.
There are four major elements of economic strategy that I should like to touch upon. The first concerns the need to strengthen incentives—to which my noble friend rightly paid much attention—by allowing people to keep more of what they earn. This is far from being an abstract principle, based only on generalities about human character. It is based on hard evidence. It is based on the experience of others. It is based on the evidence that we hear from industrialists and trade unionists. And it is based on the evidence of the ballot box. Of course it is not the only answer but it is a feature of the answer. Our overall burden of taxation is not in effect radically different from that of many of our international competitors. But the way we distributed it most certainly was! Indeed, as I have said before in this House, it would have been hard to have designed deliberately a system which was better structured to penalise success and discourage initiative at just the points where this could do most damage to the economy as a whole.
Now, my Lords, may I look for a moment at what we need in the labour force from an economic perspective. We need, first, a labour force of the highest
912
possible quality. In other words, it needs to be fully equipped to face the technological challenges that lie ahead. In turn, it must be trained to the highest possible level. Yet what do we find in practice today? We find shortages of people willing to take on apprenticeships. And in many areas of industry, despite our high level of unemployment, we find a shortage of skilled craftsmen and engineers.
Then in all too many cases, we find a shortage of suitably qualified management. We do not need to look very far to find one of the major reasons for this: it is because training almost always involves short-term sacrifice for long-term gain. But for far too long, much of that long-term gain has been thought at least to have been taxed away. So people decide—rationally from the point of view of the individual, but disastrously from the point of view of the country as a whole—that training and apprenticeships are not worthwhile.
Another facet of the labour force that is essential for any advanced industrial country is flexibility—flexibility to change jobs and to move around the country when necessary. Yet in practice, people are often unwilling to do this, despite the financial incentives that may be offered Again, this arises in large measure because far too high a proportion of the gain is not theirs to enjoy when they haved moved; it goes to the taxman; and far too few own their own houses which they can sell to buy another elsewhere.
Finally, we need a labour force which is enthusiastic and dedicated. Of course, in no way is this solely a question of financial incentives. Indeed it is one of the most reassuring aspects of the British way of life that there are any other sides to motivation. But the importance for morale of our high levels of personal taxation—in particular our high marginal levels of personal taxation—cannot be overstated. Why work an extra two hours when you have to work a third one for the taxman?—even if you are only earning well below the national average.
It is considerations of this kind that lead one inexorably to the conclusion that something has to be done about the way we pay our tax, and that is why sweeping income tax cuts were introduced in the

913
Budget. Not because it was a "giveaway" Budget—far from it—but because it is essential that we achieve major changes in the structure of our tax system if we are to remove major obstacles in the say of modernising our industrial actions and attitudes.
The second general principle of our economic policy to which I should like to refer is the need to enlarge the freedom of choice for the individual by reducing the role of the State. This is not just a question of political conviction, but a matter of economic judgment; and it is a matter of common sense. It is rooted above all in a recognition that competition has a role to play not only between industrial nations, but within them, and that in turn it provides by far the greatest spur to individual effort, efficiency and initiative. If this now sounds something of a truism, your Lordships will remember that up till recently, such talk had become highly unfashionable.
The principle of freedom of choice has already been reflected in a number of Government actions or announcements. For example, a start has been made in the long overdue process of relaxing exchange control. Dividend controls will lapse after 31st July. The Community Land Act is to be scrapped. And, at the very highest level, a start on rolling back the frontiers of the public sector has been taken.
Noble Lords on both sides agree on the principle to which the noble Lord, Lord Peart, referred, of the mixed economy in our country. We agree with it because it is a fact of life: so we had better agree with it. But where we disagree is over where the public sector should end and where the private sector should begin, and vice versa. There are, of course, elements in the Labour Party which seem to be increasing in influence if not in numbers, and which would be quite prepared to see the public sector spread its tentacles far wider and deeper than they are at present into the private sector. In no way can this be right and in no way does this find favour with the electorate, as was made clear above all, I believe, in the general election.
We on this side of the House—and the noble Lord, Lord Peart, referred to the Welfare State—yield to none in our desire to secure lasting improvements in the quality of public services; but such
914
improvements must be sustainable, and in order to be sustainable they must be founded on a firm economic base. It is no good just mouthing words such as, "How nice it would be if we had this" or "How terrible it would be if we did away with that". What we do must be founded on a firm economic base so that we can continue to pay for it. Major changes in the economy as a whole must, and will, come first. We cannot spend money that we have not got, and we will not continue the evil process of spending public money on a scale that damages the interests of the private sector, on which the process of wealth creation so heavily depends.
The third element of economic strategy is the need to reduce the burden of financing the public sector so as to leave room for commerce and industry to prosper. Our logical starting point in this respect has been the overriding need to reduce the rate of growth of the money supply; for if we do not do this we shall have no hope whatever of squeezing the fundamental causes of inflation out of the system. Too high a public sector borrowing requirement, with a given money supply target, simply gives rise to a sharp credit squeeze in the private sector, with harmful effects on both investment and jobs.
Another principle for the conduct of economic policy is related to pay bargaining. If we are to encourage responsible bargaining, as we must, we need to ensure that those who take part in collective bargaining understand the consequences of our actions and of their actions. There are two aspects to this. In the first place, let there be no doubt of the Government's resolve to stick to the monetary targets announced. That resolve will not be deflected by any short-term pressures that may build up. This being so, it follows that excessive pay rises will have one effect, and one effect only: that is higher unemployment. That does not sound pleasant, and it is not pleasant, but it is a reality of life—because we are not going to allow our economic and industrial recovery to be put at risk by a continuing upsurge in inflation. I think that many trade unionists understand the logic of this very well, but we certainly intend to ensure that the message is repeated again and again.

915
Secondly, there are the implications which excessive pay increases will have in the long run. In addition to unemployment, which can occur quite quickly, large rises in money earnings unmatched by productivity (which was a point quite rightly referred to by the noble Lord, Lord Rochester) will raise unit labour costs. That in turn will do further damage to our international competitive position, causing further unemployment and lower living standards for the country as a whole. I am sure that no one, whether inside the trade union movement or outside it, wants this to happen. For our part, we will do everything in our power to ensure that it does not happen; but ultimately it is a question for the British people themselves. We must cease to think in terms of pay increases being automatically related to increases in prices. There simply will not be the money available to pay increases unless they are matched by genuine—and I repeat "genuine"—increases in productivity. To take this a little further, it is only when cause and effect are reestablished as principles in economic life that the British economy will pull back from its dangerously inflationary tendencies domestically, and start to correct the regional and other imbalances which make our chances of industrial recovery all the more difficult.
May I assure your Lordships that we have no illusions as to the magnitude and the sensitivity of the task. We are convinced, nevertheless, that the country has the human and national capacity to undertake it; and in a world shaken and made volatile by further gathering recession, we are aided—so far at least, and hopefully this will continue—by the stability of our political traditions and institutions. Certainly after years of decline the task of turning around the British economy seems daunting. Many years of steadfast and sound government will be needed. The Government will inevitably make mistakes—for what Government does not?—but we hope that steadfast and sound government will put Britain back on to a par with countries which 20 years ago were far behind us.
The necessary change in performance is well within our grasp as a nation, if we choose. How many even moderately
916
successful companies would consider a 3 per cent. increase in output as beyond their reach, given the right conditions? And a 3 per cent. increase in total output would do the trick. It would be roughly equivalent to the benefit which flows from North Sea oil and gas. But if the change in performance necessary to revive our country's fortunes and to restore its self-confidence is but a matter of a few percentage points, the change in personal attitudes necessary to bring about this improvement is, on the other hand, both fundamental and vast.
The little more and how much it is,
The little less and what worlds away".
The Government's whole strategy is designed to offer leadership—for that is their job—and opportunity, for it is only the people of our country who can do the job. It offers a challenge, above all, to individuals to look again at their own country's needs, to question their own attitudes and their own values, to take courage and to act in faith.
4.39 p.m.
Lord SPENS: My Lords, I thank the noble Lord, Lord Boyd-Carpenter, for introducing this debate, but I want to bring your Lordships down from the sublime general arguments we have been listening to to a very few small, particular ones. The Motion welcomes the changes which the Government have initiated to achieve the reversal of our present economic decline. So far as those changes go I welcome them, but they have not gone very far as yet, in particular in relation to small businesses; and it is about small businesses that I want to speak today.
In our debate on unemployment three weeks ago, the noble Lord, Lord Northfield, gave some figures. He quoted from a book, and if true—and he qualified his remarks by saying that—they are quite horrifying. He said at column 1040 of the Official Report of 20th June, that at the level of the smallest businesses—that is, businesses of less than 10 employees—
"there are only about 27,000 manufacturers in this country as compared with 180,000 in France and 150,000 in Germany".
That comparison is very similar to some of the larger comparisons made by the noble Lord, Lord Boyd-Carpenter, and to the same effect—that we are very far

917
behind. Here is an area in which growth and expansion can be created quickly, and it is now essential to display speed in this if we are to avoid the catastrophe of huge structural unemployment. But the conditions for that speedy growth must be set by the Government and, so far, they have not been.
The first of those is surely availability of finance at a reasonable rate of interest. The noble Lord, Lord Northfield, still at column 1040, mentioned the example of Japan, where he said that small firms have access to £400,000 at 7¼ per cent. He went on to say that in this country more than one firm is really put in jeopardy by sudden fluctuations in the bank rate. We must get the interest rates down. I realise the overbearing need to reduce inflation, but until we get those interest rates down we shall not be able to start the expansion of the small businesses.
Secondly—I apologise for quoting the noble Lord, Lord Northfield, so much, but his speech three weeks ago went remarkably to the point of our problems—the noble Lord stressed the importance of the help that can be given to small businesses through the provision of small sites for factories and workshops by local authorities and development agencies. I want to take this a stage further and ask the Government to take a very close look at our present planning controls, to see whether they can be relaxed. At present, the planners' attitude and inclination is to say "No", leaving it to the applicant to make out a good case for obtaining approval of a change of use, or for opening up a business in a residential area. So there is a lack of encouragement to the go-ahead person who wants to start up something new in his own locality.
Obviously, where noise, smell or a large increase in traffic would upset the neighbours, there should be a rejection of the application. But these rejections are far too frequent, and I get a very strong impression that the real reasons for some of them are either objections to competition from other businesses in the area, or the fact that the applicant has jumped the gun and upset the planning authority. I believe that the attitude of planning authorities should be changed to become one of basic approval of new applications unless the objections are overwhelming.
918
With the imminent advent of the technological revolution, I believe that many people will want to work from and in their homes and they should be encouraged to do so, especially while there is an energy crisis. Why should small businesses not be allowed to start up in residential areas, including more corner shops, more small repair enterprises and more craft businesses?
I come now to some other disincentives which are restricting the growth of small businesses, and first and foremost are the restrictions of the employment protection, redundancy payments and minimum wages legislation. All are very fair, theoretically, but in practice they are utterly inhibiting to businesses which are very small but ready to expand. I am talking about those which start up as family operations and get to the position where they want to take on outside people. At once, they come up against a barrier of laws of which they know nothing but about which they have heard a lot of bad rumours. I know that two draft orders were laid before Parliament yesterday—the draft Employment Protection (Handling of Redundancies) Variation Order and the draft Unfair Dismissal (Variation of Qualifying Period) Order—but they are not yet available in the Printed Paper Office. All I know about them, therefore, is what I have read in today's papers. They cover the handling of redundancies and unfair dismissals, but I do not believe that they go far enough and I should like to see small businesses—and not just those with less than 10 employees—exempted altogether from this kind of legislation.
Another disincentive to expansion of the very small business is Pay As You Earn. The owner realises that he is going to get involved in tax and insurance collection, with a tax official breathing down his throat. He knows nothing about it, so he has to make up his mind to go out and get help and—and I am now speaking against my own personal interest, because I am in business to provide that help—that help is an additional cost which has nothing to do with the productivity of the business. I should like to see PAYE done away with altogether, because it is also such a huge disincentive to the employee who never receives in his pocket his full earnings and who, if he works overtime to help increase productivity, immediately sees an even

919
higher proportion of his earnings removed in tax.
If PAYE cannot be abolished altogether—and we should never keep on with a method of tax just because it is the most convenient way of collecting it—at least I hope that the day will very soon come when the threshold for commencing to pay income tax is raised to take the ordinary worker out of the PAYE system. We ought at least to put the minimum wage below the tax threshold, but we do not even have that at the moment.
I want to raise one other point. Rather like my remarks about planning controls, it is a question of attitude. Here I want to criticise the attitude of the Inland Revenue towards the self-employed. This is now becoming especially important, because the expansion of self-employment is the one field in which new jobs can be created speedily. All new businesses start as self-employed businesses, or as very small limited companies, but most start as self-employed businesses or partnerships. I know that the Inland Revenue are concerned about the black economy and that their job is to collect back taxes, but they are inclined to be particularly severe on the self-employed.
I do not propose to go into what many people think is a witch hunt against the self-employed; a great deal has been said and written about that. But the attitude which I call into question happens in the case of person starting up in business for the first time, when the sources of their capital are questioned. Recently I had to deal with such a case. As soon as the tax inspector was sent the first year's accounts, he queried the capital involved and immediately assessed the proprietor for seven years back tax, at the enormous assessment of £5,000 a year. That man had recently married. Before that time he had been a wanderer, picking up jobs here and there and never using a bank account. How could he possibly prove to the inspector of taxes, or even to the General Commissioners, how much money he had earned in previous years? There were no records.
The case went on for a year and eventually we had to settle for quite a high assessment on that man, which very nearly bankrupted him. Indeed, it would
920
have done so if his local bank manager had not had trust and faith in him. That man is all right, even though he has had to pay an enormous amount of back tax. But think of his customers; think of his friends. None of them is going to start up a new business after hearing about what happened to him. I feel that this attitude of inspectors of taxes must be changed, perhaps even at the expense of not collecting a little more tax from those who may have been working on the black economy. My Lords, I have tried to make out a case for help for small businesses. I believe that this help is required very quickly, because it is the area which can be expanded most speedily and with the greatest effect in terms of creating new jobs.
4.53 p.m.
Lord THORNEYCROFT: My Lords, I do not know how many of your Lordships remember Harry Crookshank who was a much loved Leader of the House of Commons. He was loved by both sides. I remember Harry Crookshank once embarking upon a debate of this character, when there was an incoming Conservative Government and an outgoing Labour Government. He spoke about the skeletons in the cupboards and he was challenged as to what and where these skeletons were. He said that they were "hanging like chandeliers in all the offices in Whitehall "—I think to the delight of both sides of the House of Commons. It is customary on these occasions for people to talk a little about the legacies they have inherited, but I think it is perilous. It is dangerous to exaggerate all the problems of one's country and to exaggerate the problems with which a Government are faced. Moreover, we are sitting on these Benches because we claimed that we had some kind of a solution, perhaps, to some of the problems; we were there to try to do something about them.
It is a fact that the incoming Government found that borrowing was too high—even higher than it was said to be. It is true, as the noble Lord, Lord Soames, has said, that the balance of payments is in serious disarray. It is also true, as the noble Lord. Lord Boyd-Carpenter, has pointed out, that productivity is low and that the expectations of the British

921
public are very high indeed. But, in a way, all these things were expected.
In politics, it is not the expected things that are a problem. It is the things that are unexpected; it is the new things that happen. The arts of Government are not really concerned with what one debates in elections; they are concerned with what is going on in the world. The sudden upsurge of oil prices imposed by OPEC is, in a way, a far more dangerous and damaging thing for a Government to face than any of these other matters. It would be difficult to overestimate the effect of that sudden upsurge. The damage that it will do to the developed countries, to the developing countries, and perhaps most of all to the undeveloped countries, is certainly something which ought to be widely recognised. That was, as I say, unexpected.
I believe that the policies of the Government are correct. They were correct before this new blow and they are even more appropriate after it has been delivered. It is surely right that we should spend less. It is surely right that direct taxes should be lower. As the noble Lord, Lord Soames, has said, the level of taxes in some areas was almost designed to stifle initiative, risk-taking, wealth creation and effort, and it is right that that should be corrected. In putting their policies into effect, it is right that the Government should seek to safeguard the poorest and do everything they can to ensure safety at home and security abroad. All that, I think, we would accept from them.
The scene which confronts us was, as the noble Lord, Lord Boyd-Carpenter, said, rather well painted by Sir Nicholas Henderson, in words certainly shorter than Gibbon's but certainly telling. He described a nation in decline. It was the portrait of a people who had lost an empire and found themselves curiously linked with a Continent which they did not altogether understand and which some of them, perhaps, did not particularly like. To be honest, Sir Nicholas omitted to state that the Foreign Office itself was the last Department of State to have discovered Europe, or to have done very much about adjusting this country to the situation that it was there. But so much of what he said was so right that I forgive him these minor lapses.
922
In any event, the role of Government is not concerned with the errors of Government departments or even with the legacies of previous Governments. It is concerned with dealing with the world about us. If you deal with the world, and a country, I think that you have to take it as you take your best friends—warts and all, with all their virtues and vices. It is not much good complaining about these things. You cannot—at least very easily—change them.
If we take this country, it is a great country, it is basically a rich country. It has enormous resources but it seems to have developed—and this was really the theme of the speech made by my noble friend Lord Boyd-Carpenter and, to some extent, of Sir Nicholas Henderson—a certain lack of will: a weakness in manufacturing industry and incredible rigidities. I shall not elaborate on these. We have a Post Office today in which one can hardly get the urgent letters dealing with export trade to their destinations and yet nobody can find jobs for unemployed students. It seems incredible that we should need to do so much and have so many people doing nothing. It is a sort of strange contortion into which we have got ourselves with our rules and regulations.
Also we lack a certain sense of common purpose. Indeed in some ways the only common purpose in this country that men find very easily is that they join together rather enthusiastically in small groups in order to snatch wealth from one another, but that is about the only grouping that one can detect.
I am not going to make a long speech —in fact I am hardly going to make a speech at all. My purpose really is to pose a question. The noble Lord, Lord Soames, expressed the belief that the Government would give the leadership and the opportunity, and may I say that I believe that, too. I have great confidence in my noble friends and my right honourable and honourable friends in the Government. I think the measures that they take will create an opportunity for the people of this country. The question that I pose is, will the country take it? I think that is by far the most urgent and difficult question. That is the gnawing question that is in the mind of any thoughtful person at the present time.

923
I believe the answer depends upon a great deal more than politicians. Frankly, I am not absolutely certain of the answer. If I look at this country today it seems to me that we lack the discipline of the Germans. People are always citing German systems that seem to work; it is not their systems that work, it is the Germans that work. They have a certain discipline. We lack the faith that the French still seem to hold in the destiny of their great country. We lack the financial ambitions of the United States of America. In the United States, men genuinely want to be rich, to succeed, but we do not have that passionate desire to get on here—not in the same way—and we certainly lack the incredible flair for manufacturing which is possessed by the Japanese.
So we lack some of these things but we do possess an awful lot. If we look at this country today, with its oil, with its coal, its gas, its fertile fields and, incidentally, one of the ablest and most efficient agricultural industries in the world, with great traditional skills and a kind of great tradition of being able to get on with one another, we see somehow or another we possess all that, we have all those things going for us. The question is, can we really use those assets and those opportunities? I think the answer as to whether we can or not is not going to be given simply by politicians. Politicians argue about techniques and how to approach things, I argue—I am quite a keen politician myself—but I do not kid myself that things are done by politicians: other people do the things and, as my noble friend said, the politicians can create the opportunities but they cannot do the things.
So when I ask my question, "Will they take it?" I do not think of politicians, I think of managers. They have been knocked about a good deal in the last few years. I do not criticise managers but many of the managers I know are punch drunk by now; they are spending two-thirds of their time arguing with the unions and about one-third of their time trying to run the businesses, and it is a pretty poor division of effort. Some of them do not feel that they are even doing either of those things particularly well.
924
Then there are the trade unionists. I have actually thought very well of some of the speeches made by leading trade unionists lately. They have spoken with great courage and very realistically and one of the things that made me happy in the election—apart from the fact that we won it, which made me quite happy, too—is that we somehow managed to get through the election without having a battle about the trade unions. I thought that was a great thing; there was very little abuse on either side about that. That was good. Yet if the trade unionists are to play a part there will have to be some noises a little more constructive than those coming out of the trade union discussions going on this week, with an utter refusal to look at any of the amendments which the nation is plainly demanding should take place and which are indeed couched in the most moderate terms.
There are many trade unionists in this House. I should welcome hearing occasionally a good trade union speech in this House from someone who would say, from all his experience in it, where the trade union movement stands today and where it expects to move now. They have a responsibility and it is a responsibility which should find, somewhere, a voice.
Then there are the investors: they are the people who take risks, they are the people who create wealth. The problems that we have to face are also deeply rooted in the educational system of this country. How to find the men, how to find the young men, how to see that people are leaving school sufficiently numerate and sufficiently literate to be able to play a part in the enormous and difficult and complicated industrial society in which we live? I think we are entitled to ask whether, if we create the opportunity, it will be taken.
I am the chairman of the Conservative Party and. as I have said, I am interested in politics and in political debate, but somehow or another I feel that in the real problem which confronts us it is the same on both sides. There is no party in this country that can bail the British public out if they press their follies beyond a certain point. It does not matter which side we stand on. Therefore, whatever we say across the Floor of the House of Commons we have a role outside as well. We need

925
to tell people that we cannot just print money that they have not earned; we cannot fake jobs which they have not created; we cannot debase our currency in order to protect the inefficiencies of some of the factories in this country, as we are indeed sometimes asked to do. I have therefore to pose the question: Given all the opportunity; assume that the Government are right—as I do; assume that they do it all—will the British people still be prepared to take that opportunity? I think it is a time for men and women on all sides in politics to tell the truth to any of these great audiences who are prepared to listen to it.
5.10 p.m.
Viscount WATKINSON: My Lords, I rise to support the Motion so effectively moved by my noble friend. I could hardly do otherwise, because the measures so far adopted by Her Majesty's Government after all bear at least some resemblance to the proposals fought for by the Confederation of British Industry under my presidency and that of my successor. So I have a natural anxiety that they should succeed. Yet I should like to echo what my noble friend Lord Thorneycroft has just said: success requires a greater degree of response from management and men than any Government have so far achieved in the last decade, or perhaps since the war. That is the measure of the task which my noble friends face, and I am sure they realise it.
I propose to use my few remarks not to continue with further diagnosis, because whatever we may say in this House or outside we all know in our hearts that our country cannot go on like it is, and if it does it will not only be privately bust but will soon become publicly bust as well. I should like to try to see what are the possibilities of cure. It is only fair to say that the CBI is doing its best to see that managers and employers do try to respond to a Government that I think on the whole rather surprised them by doing a good deal more of what they were advocating than they expected. Sir John Methven, the Director General, has just sent a very powerful appeal to every member to try to respond, and the British Institute of Management and the Institute of Directors, to take two other bodies, have also done what they can in supportive action.
926
Yet again I have to say that whatever action has so far been taken, either by the Government or by anyone else, it is only a beginning if we are to turn round the British economy. I have not changed my view since I said in this House some time ago, when sitting on the Opposition Benches, that if you want to spur the basically lazy British people to change their ways you have to use every available stick and carrot. I think my noble friends will have to do that. It is people's personal reactions that in the end will save us or sink us. On the other hand, previous strategies have been sincerely meant. Coming to what the noble Lord, Lord Peart, said about planning agreements and the industrial strategy, I continue to support the industrial strategy. I think it was right; I think it is right, and I hope my noble friends will make some use of it. A great deal of quiet sensible work has been done. What I said about planning agreements was, first, that individual planning agreements were purely a political device beloved of the Left-Wing of the Labour Party, and of course merely designed to nationalise everything through the back door without the benefit of parliamentary procedure. I am glad to be able to say all that again. All I did say when a Labour Government were in office was that if you have to have planning agreements I would prefer them to be sectoral planning agreements, which is something that one perhaps could live with. That is no doubt true. However, it is much better to have none at all.
Whatever the sincerity of previous Governments, and I do not refer only to the party opposite, we have to face the fact that the policies they put forward just have not done the trick, and therefore it must be in the national interest that this Government should succeed. We have to face these facts: Much British management and its workforce is debilitated by the years of high taxes and State control. Whether the British "black economy" really amounts to 7 or 8 per cent. of the gross national product, as was said the other day by somebody who ought to know, I do not think that is nearly as important as the fact that it illustrates a totally debased attitude of mind in many people to the job they are trying to do or should be trying to do. Therefore, it must be difficult to turn this attitude round; and it is only too plain, as one

927
begins to see the season of trade union conferences again, that the activists who ran our last winter of discontent are still with us and are still able to make their disproportionately small numbers effective in terms of the media and all the rest. So that problem faces us still.
Well, my Lords, many managers—and I am sure I speak the truth in this—will try very hard to make this new strategy work; will try to give something back to a Government that they feel have at least tried to understand some of their problems. But I am sure Ministers will be wise enough to assume that a change of Government policy by itself will not at once suddenly cause British industry to be more efficient and more productive. Let us hope that in the longer term it will, but I hope that this Government will not calculate on some kind of immediate turnround. It is going to be a long job. As my limited experience of politics dictates that you had always better back yourself both ways if you can, I should like to mention a few ways in which I think my noble friends should follow up their initially good start. After all, although we may all say, and say with justice, as my noble friend has just said, that in the end the arbiters of our destiny are the managers, the trade unionists, the ordinary people of Britain, it is Her Majesty's Government that will take the ultimate responsibility, perhaps a little praise for success, but certainly they will take the blame for failure. So I think the Government shoud try to follow and to assist certain initiatives.
There is one example I would like to give at once. Ministers should ask industrialists to tell them in precise terms what they are doing. I quote from a recent CBI letter to every member of the CBI:
"Industrialists must do everything in their power through the efficient and competitive management of their enterprises to ensure that the policies which the CBI has long advocated and which are now being pursued by the Government lead to higher productivity, higher living standards, more jobs and a more successful economy in the interests of British people as a whole".
The Government must ask the members of the CBI how they are going to do this, how they are getting on, what can be done to help; and they must go on asking. They must also ask firms what they are
928
doing, through active participation with their work people, to see that the problems surrounding their own work people's jobs are clearly understood. As this Government have taken off the shoulders of the employers all the horrors surrounding the Bullock Report, I think that kind of return is the least that the Government should ask for, and they should see that they get it. Many employers are already doing this, but all must do it if we are to succeed. People must understand at their place of work exactly what the problems are and how they affect their own jobs.
Turning now to pay, I do not think anybody much relishes an autumn of pay negotiations against the background of an official l7½ per cent. inflation. I think many managers do not yet know what is going to hit them and how much more on their own they are.
However, the Government could do a good deal to help, not in the sense of going back to norms or pay policy but by making an attempt at least to get a tolerable level of wage settlements—and that is about all that we shall get. Therefore, the Government must take active steps now to ensure that employers, trade unions, nationalised industries and, above all, the employees who are paid by our taxes—the tax dependent employees in the Health Service, local government and so on—understand the economic background against which the autumn negotiations must take place.
If I may say so, it is no use relying on the Treasury brief to do that. It is no use, I am sad to say, perhaps relying on the kind of first-class speech which my noble friend has just made. We must find some way of sitting these people down, letting them argue the matter out and making them go away convinced about the facts, but I do not say convinced about what the level of pay should be. I shall not go into that matter because I think that the facts are ugly enough to concentrate people's minds. We all know what they are. Look at the new militancy of many members of OPEC. What will that do to us?
Although it is right for the pound to be riding high, people should understand that we are not efficient enough to stand a two-dollar plus pound without some

929
loss of export markets, unless we become much more efficient very quickly. People should understand that. There is a need for much more import substitution. Why should we have a terrible yen to buy foreign motor cars when we can make a great many more in our own country? Let us remember that the United Kingdom is now trying to grow faster against a world that is moving rapidly into recession—a tough proposition.
Finally, as has been said on either side of the House, what is the use of more pay without more productivity? This is not a pay policy: it is just setting the parameters of what can be paid without increasing inflation to a point where any further pay is immediately destroyed by an increase in inflation. I cannot see a better way of doing this—and I am trying to be specific—than by having an early meeting of the National Economic Development Council with the Prime Minister in the chair. If the Government know a better way, then obviously they should and will take it. If they want to invent some body, then let them go ahead and do so. However time is short. If this autumn's pay round is to be conditioned by the facts, then time is desperately short to rub those facts into the minds of trade unionists, employers and everyone else. Whatever difficulties we may have over the Government's, in my view, entirely justified mandate on labour relations and other matters, we ought to keep this subject separate and we ought to stick to the hard facts because they are ugly and they do, after all, make all the difference between survival for us all, whether we are trade union leaders, managers, politicians or anyone else.
I now come to my last and most important point. We must now work once again towards a national anti-inflation policy. There should not be any great difference between the parties on this. Speaking for my colleagues in the CBI, we always did our best to support the previous Government as regards their anti-inflation policy, and I hope that the CBI will certainly do its best to support this Government's anti-inflation policy. Therefore, there should not be great differences between the parties. There is certainly no difference between the TUC and the CBI. We both know that in the end it is no use living with double figure
930
inflation. It is not a way of life of any value to anyone in Britain.
Now that the Government have quite rightly exercised their mandate for a shift from direct to indirect tax—for what it is worth, a shift advocated by the CBI over the last four or five years—let us get back to the task of trying to get national inflation down to single figures, and low single figures. Every one of us, whatever our job, has a part to play and somehow, if we are to win the battle, the Government must try their best to achieve this. I give all credit to the previous Government. They tried—but I do not think that they succeeded very well—to get a sense of national purpose through their industrial strategy and other methods. I do not think that they did it very well; I do not think that they succeeded, but they tried.
This Government must try and one hopes that they will be a good deal more successful, because we shall not get our people and our country through to better times without the concept of working together and having something to strive for. That can best be expressed at present by the need to get inflation back to the sort of figures that now apply to our main competitors—4 or 5 per cent. How we can possibly live on the basis of double figure inflation as long as that takes place is something that should be carefully spelled out to trade union leaders before they enter into their autumn round of pay discussions.
It is all very difficult. As my noble friend has said, who knows, as we stand here, whether they will succeed or whether they will fail? All we can say is that if they fail this will not be a country worth living in any more. Therefore, on the whole, I am pretty well convinced and I wish the best of good fortune to my colleagues. Let them stick to their courage; let them get on with the policies and I believe that in the end the country will see the sense of it all and they will succeed.
5.27 p.m.
Lord CAMPBELL of CROY: My Lords, it is difficult to follow my four noble friends who have already spoken on the main points which arise from my noble friend's Motion. My noble friend Lord Boyd-Carpenter has given a masterly

931
assessment of the situation facing this country and the present Government. His words should be widely registered and heeded. My noble friend Lord Soames pointed out that our country's recovery is dependent upon a firm economic base. That must depend on our industry being competitive and successful.
I should like simply to expand on three of the matters which have already been touched upon: the balance of payments; the United Kingdom's offshore oil and gas; and employment, particularly the need to distinguish different kinds of job. As regards the balance of payments, the figures for the first four months of this year were available only recently, and my noble friend Lord Boyd-Carpenter pointed out that they were about £1,000 million minus. It was not known earlier in the year what even the provisional figures were. It was not known during the last general election. I cannot help being reminded of the similarity to the situation in October 1964, to which the noble Lord, Lord Peart, referred in his amiable speech. The Labour Party at that time made great capital during the election of a temporary worsening of the balance of payments situation, because the provisional figures came out at the end of September,1964— only a few days before polling day. In a similar situation this year during the recent election, no figures at all were available; but had provisional figures come out then, they would have shown something in the order of a balance of payments deficit on current account of £1,000 million compared with about £800 million which was being bandied about in 1964. Why were those figures not available?
Lord BOYD-CARPENTER: My Lords, the £800 million alleged against the 1964 Government was in respect of a whole year. The £1,000 million for this year is in respect for four months.
Lord CAMPBELL of CROY: My Lords, I am grateful to my noble friend. I was, indeed, going to move to that point. I do not wish to detain your Lordships for long on this matter, but it is important. I was asking why it was that the figures, even for a few months, were not available. The answer is because of an industrial
932
dispute—an industrial dispute in the official machine which meant that neither the computers nor the statistics were available. That was yet another reflection of the state of the nation during last winter.
The figures for 1964 show—and in retrospect one can now look them up and see—that in fact it was simply a temporary trough during the course of that year and for the whole year the balance of payments deficit on current account came out at about £360 million. This, of course, would not have been noticed by the general public if it had not been that these figures came out during the course of a general election. They were, of course, seized upon by the party in Opposition at that time.
The irony of these events is that only a few weeks ago in a similar situation, with the roles reversed, no figures at all for the recent situation or for the contemporary situation—even provisional figures—were available because of strikes. On 19th June, when the figures were revealed for the balance of payments in the first months of this year, we could see that the situation was serious, even though that situation has been assisted, and increasingly will be assisted, by North Sea oil.
That brings me to my second subject. Again, I declare the interest which I have declared before, that I act as a consultant in the oil industry. The availability of offshore oil now flowing in the late 1970s is of great significance to our country at a difficult time. But we must make the most sensible use of that oil and gas, and of the revenues which they generate. Of course, they will not solve our problems but they can be of great help to us during the 30 or so years when we can enjoy these resources. The noble Lord, Lord Peart, asked for precision. Indeed, somewhat surprisingly, he appeared to ctiticise my noble friend's opening speech for lack of it. Therefore, I shall pick up the annual Brown Book which has come out today on the oil industry and turn to page 18, dealing with exploration. There we find the sentence:
"Total expenditure on exploration in 1978 amounted to £257 million, which represents a decrease of £118 million from the 1977 level. This reflects the decrease in drilling activity".
That is a very substantial reduction in exploration drilling in the United Kingdom Continental Shelf. I must state—and I

933
have said this before in your Lordships' House—that the last Government were less than adept in dealing with our offshore oil and gas resources. Neither side of the House can regard that falling away in exploration as satisfactory.
Although it is widely accepted that there must be a depletion policy from about 1981 onwards, it is also accepted that we must first achieve self-sufficiency in oil. I would remind your Lordships that the exploration and production of these resources involve very high risks and massive resources. Only consortia of companies with huge investment, on which no return can be expected for several years, are able to carry out this work. There are also losses to be incurred every time a hole is drilled—losses of several million pounds every time a hole turns out to be dry. Therefore, the technological resources of the world were needed to find the oil, and they are still needed.
My noble friend Lord Boyd-Carpenter referred to providence as having placed these oil and gas resources below the North Sea. But only 10 years ago we did not even know they were there. It is only within the last 10 years that they have been discovered and developed. Even today, we still would not know that the oil and gas were there had not international consortia been encouraged to take the very high risks involved. I would remind your Lordships that man landed on the moon before the oil was discovered under the North Sea.
As regards exploration now, the deeper waters of the Continental Shelf will require a very high degree of technology. There are also decisions to be taken on development, as to whether marginal or difficult fields should be proceeded with. Changes in the price of oil affect this. For example, the recent increase in the price of oil, to which my noble friends have referred, has one effect in making greater the value of the oil in our Continental Shelf. But against that must be weighed the much greater development costs which have arisen. I understand that the Government are reviewing the whole situation against the background of the legislation and the organisation which is now in existence. I am sure that that is right, as they have been in office for only little over two months. How much of our future oil and gas
934
should be used as fuel—should be burnt off—or should be used as feedstock for our chemical and plastics industries; and decisions on the use of revenues in the future, are all matters that must be taken into account.
There is a comparison that can be made with the Netherlands. I am sure that any who have visited the Netherlands recently or spoken to Dutch friends will recognise that the Dutch are worried that they did not make full and proper use of the revenues from the gas, which was the first discovery in the North Sea, now running out. We at least can learn a lesson from that. Let us make sure that the resources themselves are best used and also that the revenues which arise from them are not frittered away.
I come to my third subject, which is the different kinds of jobs which are generally just spoken about as jobs. We know that the Government will have to face very difficult decisions on redundancies in certain industries. My noble friend Lord Boyd-Carpenter referred to the shipbuilding industry. I spoke on the relationship which he mentioned between that industry and the shipping industry in our debate on shipping exactly three weeks ago, so I shall not repeat myself now. I shall simply say that in a situation where there is at least three times more capacity in the world for building ships than there is demand for ships, some action must be taken. But this can he painful, because that industry is inclined to be concentrated, with its ancillary industries and component suppliers, in particular areas of the country.
However, with those decisions must also come the encouragement of replacement jobs. If possible those jobs must be real, new jobs—jobs that will last for a reasonable time, and not just stop-gap jobs. In the past we have been able to obtain considerable sums of money from the EEC Social Fund to help with training and retraining. In fact, not enough publicity has been given to the amounts which have been received, particularly in regions where there is high unemployment. I trust that the Government will continue to apply for and receive assistance of that kind. It makes some counterweight to the budget situation, where it is suggested that we do not do so well, particularly in the Common Agricultural Policy.

935
There is also the question of service industries. I believe that the jobs in service industries are important as well as the jobs in manufacturing industry. Therefore, the principle behind that tax known as the selective employment tax—not lamented, but deceased—of discrimination against the service industries is even less relevant than it ever was. However, as we have also been discussing a Budget brought out shortly after a general election, may I remind your Lordships that that new tax—SET—was brought out in a Budget precisely six weeks after the polling day of a general election, when not a word had been said about a tax of that kind during the whole election campaign—not one word. Therefore, when there is criticism now that last month's Budget may not be exactly carrying out, in every item, what was said beforehand, there is no doubt that it is carrying out the principles which were widely ventilated by the Conservative Party during the election. Let any critics remember 1966, and the announcement in that Budget, six weeks after a general election, of a totally new kind of tax about which nothing had even been said beforehand.
There is a place for temporary stop-gap jobs as long as they are not confused with the real, lasting jobs I have spoken of. In certain circumstances short-term schemes can be of help. But may I give an extreme example. There has been in the last year a seaside town in this country which has given temporary employment to people to sweep the sand and pebbles off the promenade. The promenade is so situated that normally every day the waves bring them up, and then the little squad, or the large squad, come along and sweep them away. When the weather was not so inclement and the sand and pebbles were not thrown up on the promenade, a bulldozer came out in order to place them there, and they continued the daily job. I do not condemn that kind of job creation. That is an extreme case of job creation, and it may be that it will fulfil a certain purpose where school-leavers are concerned who have nothing else to do, no other activity, where you might get vandalism.
Lord DAVIES of LEEK: My Lords, will the noble Lord give way?
Lord CAMPBELL of CROY: In a moment. I have already decided that I will not disclose the place. I believe it is not the only one; I think others have done it as well, and I decided that I would not disclose a particular place. I give it as an example.
Lord MELCHETT: My Lords, I hope the noble Lord might give way. He has not given way yet to anybody in his speech.
Lord CAMPBELL of CROY: My Lords, I have already given way. But if the noble Lord is only going to ask the same question, I have already answered it.
Lord MELCHETT: My Lords, unless the noble Lord gives way, he will not know what I am going to ask him. It is extraordinary to make that sort of allegation and not be prepared to support it in any way whatsoever. I hope that the noble Lord might reconsider giving at least some indication so that those of us who are particularly interested in the examples given can verify them.
Lord CAMPBELL of CROY: My Lords, I have already decided that I would not. So far as I am concerned, I am not condemning anybody who does that kind of thing, but I give it as an example because it can fulfil a purpose as long as it is not confused with the real jobs which are needed if Britain is to recover. The recovery of Britain depends upon those real jobs rather than the stopgap schemes which, as I say, do have a place in helping during difficult periods. The Government are now setting about the task in the right way; the task of creating the climate in which British industry can succeed and provide the real jobs.
Lord ZUCKERMAN:My Lords, before the noble Lord sits down, may I ask him whether he is aware, with regard to the creation of real lasting jobs, that over recent years the United Kingdom has fallen behind, not only Japan in a disastrous way but every European country for which there are figures, in development money, in forward investments. So that the creation of new industry, based upon new discoveries demanding high-risk capital, is something which the Government, I feel, should look to.
Lord CAMPBELL of CROY: My Lords, I am most grateful to the noble Lord, Lord Zuckerman, for that additional point. May I just also take the opportunity—as I had not sat down—of continuing by saying that I do not intend to be what my noble friend Lord Mansfield's father once said when the Stone of Scone was delivered to him at his home Palace of Scone. He said, "Take it away" to those who had delivered it. But when he was asked, "Are you going to give us away, though?" he said, "No. I am not a Campbell."
5.45 p.m.
Lord NUGENT of GUILDFORD: My Lords, I should like to begin by thanking my noble friend Lord Boyd-Carpenter for giving us the opportunity of discussing this vital topic in this debate today. I feel perhaps that as I am the sixth in line of noble Lords speaking from these Benches, I almost owe the House an apology. But I am glad to see that the seventh is the noble Lord, Lord Davies of Leek, and no doubt he will live up to the tradition of the seventh being far the greatest, which will be more than enough to balance the six who went before.
I shall not spend time in discussing the analysis of the position, which has already been so fully and interestingly discussed by my noble friend Lord Boyd-Carpenter and others. I shall make only one comment: my own forecast is that had the present trend of decline continued for another five years, with the policies which noble Lords opposite and their right honourable friends were pursuing, I believe that within those five years the decline in the economic life of this country, and the loss of our competitive edge, would have reached a point where it would have become necessary to have drastic import controls on the trade of this country, and systems of controls in this country which would go very far indeed. I believe that it was a sense of the peril which is really facing this country that caused our people to vote as firmly as they did in the last election, despite the anxieties which obviously many of them felt.
The Government have already published the main outlines of their policies in the Budget in particular, but a number of other statements have made it plain that there is to be this sharp reduction in
938
personal tax; there is to be a sharp reduction in public expenditure, and strict financial disciplines. But the touchstone for success of the whole of this broad strategy is the creation of new wealth, and that must of course be by the private sector. Profit is to be seen as a virtue and not as a vice. The belief, which I share, is that the incentive of increased earnings and increased profits will stimulate the formation of new business and will expand existing business, and strengthen the competitive edge of our businesses generally to hold existing markets, and indeed to win new ones.
There are two essential factors for success. First, those in management will be attracted by the increased cash earnings, by the increased profit that is attracted to them, to make the effort and take the risk to start up and expand existing business. Secondly, those in employment will be attracted by the increased cash earnings to co-operate with greater effort and application to achieve greater productivity and lower costs of production. I agree with the noble Lord, Lord Spens, that the prospect in small and medium sized business is good. The lower rates of personal tax change the equation of what enterprise is worth undertaking. This is a background I well understand. It is where I started. I would expect that there may be some complaint from some parts of business, despite what my noble friend Lord Watkinson said, when they find that some subsidies and grants which have been paid in the past will no longer be there. But I think they will probably accept this in the end and learn to live with the market.
I remember the precedent of 1951, to which the noble Lord, Lord Peart, referred. I was Parliamentary Secretary in the Ministry of Agriculture at the time, and I therefore took some part in this great strategic change that we then brought about, of ending State trading, State purchasing of food and every commodity of life the country required, and returning to free markets. There were great risks attendant on taking that step and we were heavily opposed of course by the Opposition Labour Party of the day. The cries of gloom and doom that the noble Lord, Lord Peart, uttered today were nothing to what he said in those days about the risks there would be,

939
the dangers to the poor, the unemployment that would follow and so on.
But we held steadfastly to our task, and here I entirely join with my noble friend Lord Boyd-Carpenter in agreeing that Lord Butler was the supreme architect of that great strategy. He firmly told the merchants that they should get back to trading. For half a generation they had existed on fixed margins which the government underwrote; the government did all the buying and took all the risks. The day had come when the merchants had to go back into the market, use their own capital and skills, judge what the consumers here would buy and what quality they would pay for, and what they would pay for it. The merchants did this, to the immense benefit of this country, giving us again freedom of choice and a rising standard of life throughout the fifties, as has been referred to. I think all that will happen again, and that when our managers get a little more elbow room they will find they are better off with lower taxes and less Government help.
The other aspect of this equation which is important but which has not been mentioned today is the brain drain. This is something we may all deplore but, my word! it is doing us harm. Relief from penal levels of taxation I believe will check the loss of top talent and attract those men and women to remain and work here, and I hope it will attract some to return as well. We must recognise that, however much we may deplore the departure of these people, top talent today is in an international market, be it in making music, in playing games or in the more mundane business of commerce and industry. Top talent is in an international market and these extremely able people can command top international salaries wherever they move to.
They are the innovators and leaders whom we really need for the value of their spark of genius in our national life today, and it is something to be said time and again that while this may be the day of the common man, it is also the day of the uncommon man, the man who has the ability to understand modern technologies and finance and the leadership to persuade
940
men and women to join with him in developing it. I therefore hope to see something come from that.
I turn to the second major factor, which is the prospect of employee co-operation. That we must win too. From small businesses I have no doubt there will be a good response, whether they have a few or a few dozen employees. Where the boss works alongside his workers there will be an atmosphere of mutual confidence and they will work well together, and the greater rewards will cause greater effort. Big business—the private sector, nationalised industries and public services—is a different dimension altogether, and one we well understand here. There we must expect and ask for wise leadership from management, but they have to win the co-operation of the trade union leaders who speak for the body of the workforce; and now, this week, when the Government have published their consultation paper on the legislative amendments which the Government wish to make—it is right to make this comment—some opposition has already been expressed.
The proposals which the Government have made, for consultation only, really do no more than suggest giving legislative effect to the code of conduct which th TUC and the last Government agreed and published last February. It is not the time to discuss them now, but that is what they are in substance and it seems there has been an over-reaction by the trade union leaders, who have already, immediately, declared their opposition. I hope that wiser counsels may prevail, and there are three major points which I feel are worth making in this context.
The first is that our people have made it very plain by their vote in the last general election that they do not want another winter like the last one, with small groups of militants holding defenceless people to ransom in order to put pressure on the Government of the day and to try to make the Government do what they believed they should not do. That undoubtedly was a major factor in the general election result. Today the Conservative Government, in their policies in regard to industrial relations and other matters, are doing no more than carrying out what they said they would do in their general election Manifesto. To do less would be to renege on our promises.

941
The second major point I wish to make is that we here well understand, though sometimes I feel that people in the country outside do not, that governments in a parliamentary democracy are expected to govern in the interests of the whole community, and government therefore cannot accept domination by any sectional interest, however important and powerful it may be, even as powerful as the TUC. To do so would be to undermine the credibility of parliamentary democracy in effective government, and that would be a very long step towards a dictatorship in this country, as it has been in many others.
We do well to remember—this may be a glimpse of the obvious but I will say it and say it again—that the history of mankind, today and always, has been that men and women have lived largely under dictatorships and that parliamentary democracy is a very rare achievement of mankind. It is achieved only by men and women who have been prepared to work and fight and sacrifice to bring it about and it is maintained only by men and women continuing to do that. That is what is at stake now when the Government of the day are challenged by an outside body of such tremendous power.
The blessings of freedom and order that a parliamentary democracy give are so great that I am certain we in this country are still determined to fight for it and keep it here. A dictatorship, of the Left or Right, is equally objectionable. Nearly all freedoms would go with it and one of the freedoms that would go is undoubtedly a free trade union movement. I am sure all trade union leaders well understand that.
The third point, on a much more mundane level, is the economic and financial one which has already been made, but I will make it again. It really has been driven home in the last five years that big pay increases without increased productivity benefit no one, and, my word, they hurt retired people on fixed incomes. In the past five years, pay has doubled but so have prices. The result is that the pound has lost half its value and British industry has lost its competitive edge, with unemployment more than double what it was five years ago and with manufacturing industry pretty well stagnant. Thus, big increases without increased production are the road to ruin, and the lowest incomes suffer most.
942
I hope those arguments will moderate the pay claims in the next round coming up this autumn. I very much agree with my noble friend Lord Watkinson that, with a 17½ per cent. increase in the cost of living, it will be a tough round, but I commend my noble friend Lord Soames's words, which I am sure are right. The trade union leaders, many of whom noble Lords here know, as I do, are experienced men, shrewd men who well understand all these things and the force of these arguments. They are compelling arguments for co-operation with the Government of the day in the interests of all their members, the ones who voted for us and the ones who did not. I just hope that they will pick up the document which they signed with the last Government last February and see what is said there: that partnership is basic to success, and that the national target is above all being against inflation, reducing it to small, single figures. So I conclude by commending what my right honourable friend the Prime Minister is doing and the leadership that she is giving. She is discharging her electoral promises, and I believe that she is giving us as a nation the chance to reverse this perilous decline and to start ourselves off on the road to a sounder, safer, better economy—
Lord BALOGH: My Lords, before the noble Lord sits down, may I ask him two questions? The first question is: how does he reconcile his speech with the fact that the relative decline of Britain started in about 1875 and has continued ever since? Secondly, does he think that a cut in the education programme, when we have already a grave shortage of skilled manpower, will contribute to the competitiveness of the country?
Lord NUGENT of GUILDFORD: My Lords, I am afraid that I could not hear the noble Lord's second question, but my answer to his first question would be, certainly there have been trends of decline, but there have also been trends of improvement, and if the noble Lord's excellent memory on historical matters will go back to 1951, he will recall what has already been referred to in the debate: the massive improvement that we achieved during the years 1951 to 1964. They are sometimes called the 13 wasted years, but my word the nation would be glad to see them back again.
6.2 p.m.
Lord DAVIES of LEEK: My Lords, for two or three months I have missed the mental activity which I receive in this noble House. I make my own Christmas cards, and my next one will depict a steamroller going along a promenade with a couple of fellows carrying bags of pebbles and a gang behind with brushes to sweep them away. I do not know whether the setting should be a Welsh seaside or, bearing in mind the noble Lord, Lord Campbell of Croy, whether it should be a Scottish seaside. No Member of this noble House has the right to introduce a piece of mythology like that unless he is prepared to say where it happened. This could happen in the other place. I was delighted to hear the noble Lord, Lord Thorneycroft, who at this moment is enjoying himself with his own joke. The noble Lord, Lord Thorneycroft, mentioned that grand Member of the other place, Captain Crookshank, who came here. We all interrupted that Leader of the House at our peril. I remember with happiness and a little nostalgia his reply to a question from my side of the House—the questioner thought that it would absolutely bend him—when he said that he found skeletons hanging like chandeliers in every cupboard in every Ministry.
I recall a little of my philosophy. I was not educated at Oxford or Cambridge; I went only to red brick places—universities and Welsh grammar school. Between 1300 and 1340 Occam's razor was a piece of philosophy that the noble Lord, Lord Campbell of Croy, should remember. Dear old Occam posed what was known as Occam's razor: Entia non suns inultiplicanda praeter necessitatem. That means, when translated—and this is the better English translation: things not known to exist should not, unless it is absolutely necessary, be postulated as existing. Did the steamroller really exist? The noble Lord had better apply the philosophy of Occam's razor to what he said before he repeats it in other parts of the country.
I want to know what we are talking about. I have been here all day, though I was called out of the Chamber for a short while. I have turned down what would have been a welcome dinner tonight in order to listen to the debate
944
and so educate myself. So what are we talking about? The noble Lord, Lord Boyd-Carpenter, was one of the finest social security Ministers we ever had. It appeared that at one time he knew more about social security than did his advisers. He is a very able Member and I do not say that with any facetiousness. The noble Lord has put forward the Motion:
"That this House welcomes the determination of Her Majesty's Government to reverse the decline in the economic strength and competitive power of this country …".
That is all right up to there. Nobody would vote against that. We all welcome determination; of course we do. There is nothing in that; it is a pillar of cloud. But the Motion includes the phrase, "to reverse". To reverse what? The Motion says:
"To reverse the decline in the economic strength and competitive power of this country…"
Now who do you blame for that, my Lords? The Motion then adds that we welcome the changes which the Government have initiated to achieve these ends. So in this debate we should be looking not so much at history, but at the changes which the Government have introduced during the three months that they have been in power. That is the logic of the debate. We have not heard much about that.
I have here a cutting from today's Evening Standard which I saw in the Library. The headline reads:
"Rich get richer … Poor get poorer".
That used to be our cry in our university on rugby playing days. There is an old rugby song:
"It's the rich what gets the pleasure, and the poor what gets the blame".
Let us see what is said in the report of the Royal Commission that has just been published. Denis Healey, from the other place, made a famous general election speech in which he said that he was going to squeeze the rich until the pips squeaked and the cartoonists gave him a worse image than they gave Wedgie Benn. He did not squeeze any pips. What are the facts put forward by the Royal Commission? The facts, released today, include the statement that the years 1974 to 1976 were years of plenty. In 1974, when Mr. Healey became Chancellor, the top 1 per cent. of the population owned 22·5 per

945
cent. of the nations' personal wealth, and by 1975 the figure had climbed to 23·5 per cent. So the Labour Government have not done too badly for noble Lords on the other side of this noble House. Why do not noble Lords thank us a little?
At the other end of the wealth league table, the position was reversed. This is our end of the league, or my end; the lumpen proletariat. That is a Marxist phrase; one should not use it. Between 1975 and 1976 the share of the national wealth held by the bottom 50 per cent. declined from 6·7 per cent. to 5·6 per cent. The figures are contained in the latest report from the Royal Commission on the Distribution of Income and Wealth, a body which, after doing all that work and finding out all those facts, is soon to be wound up by Maggie. That will be another Quango gone.
Now let us consider the point about changing the decline. In my little old study the other day I was reading a very old report, covering the years 1927, 1928 and 1930. That was a long time ago, and I am becoming old and a little decrepit now. It is the Maine report. I could bring it here tonight, take scissors to it, cut lumps out of it, and quote it, and it would form an up-to-date speech, because all the economic problems were the same in those days as they are now: the struggle for markets; improving our productivity; getting good managers. It is all there.
What has happened? We are still speaking the same language, forgetting that the entire system of the world's production of wealth has altered because of the magnificent and majestic progress of man's inventions and his inventive mind. So we are using old-fashioned phrases, arguing with semantics, when, as the noble Viscount, Lord Watkinson, said in his speech, we should be looking at the realities. And what are the realities we should be looking at? Among them is the declining production of oil and the increasing production of (now a platitudionous phrase) the micro-chip. In 1960 a computer cost £60,000, and you had to put it in a room with air-conditioning. If any noble Lord went into a computer room in the 'sixties he will know that the room had to be air-conditioned. Now, for £20, on a silicone chip, one centimetre in size, you can get exactly the same; and, in a clerical office, it could put 40 people
946
out of work in 10 minutes. We are meeting the point where, unless we get a modification of the acquisitive society, the production of the machine which should release man from slavery is throwing him into destitution and despair. Hence the militaristic attitude of the trade union movement and, sometimes, the bitterness.
Let me give an example in the mining industry. I do not know whether there are any colliers among noble Lords, but I would say that I could make a pit uneconomic in two months. I could go and buy modern pit prop equipment at a million pounds a throw and push it into the headings and into the sideways, and I should not get enough coal out of that pit, with the amount of manpower employed with modern methods, to pay for those machines over a period of long years. In other words, when you talk about a pit being economic or uneconomic, you must try to understand the problems of mining. You are not running a factory, where people have beautiful toilets and where they can have a cup of tea when they are tired or can be bandaged up by a nurse 10 yards away from a heading. I am talking about a modern pit, with very expensive equipment, mangling coal. Today, you never see a truck with those beautiful, delicious, shining lumps of coal, those huge lumps of coal, some weighing half a hundredweight, that we used to see as kids on the trucks in the South Wales sidings which went down to a sea of coal in Cardiff. Today, most of the coal is crunched up; and in some of the railway sidings which we no longer use because of "Beechingitis", there are millions of tons of what we call small coal, unused.
We should be looking at the mining industry. Do not scoff! We could get this production with two weeks' work a month, and let the miners have the other two off. We could get the production in society today, with an intelligent use of the machines that exist, with much more leisure. The tragedy is—and I do not mean this in (I do not like this English word) a snide way—that our people must be educated to use leisure. They must get the culture. That is regarded as a horrible word by some. Was it not Goering who said, "When I hear the word 'culture', I reach for my revolver"?

947
This is what we should be aiming at, not longer hours.
Now, greater productivity. My goodness!—how the time goes; I have been speaking 11 minutes. Let me take an example. We say, "Growth, growth, growth! " Analyse the word "productivity ". What do we mean? The tyre industry is dominated by Michelin, Dunlop, Goodyear, Firestone, Pirelli, Avon and Uniroyal. They employ some 41,700-odd men.
"Despite the fact that the number of vehicles in use has continued to rise since the worst days of the recession the tyre replacement factor—the number of tyres sold divided by cars and vans in use—has not improved ".
If he were here, the noble Lord, Lord Lucas of Chilworth, would confirm this.
"This has been due to the impact of the steel belted radial tyre which lasts up to 25 per cent. longer than the textile belted radial and more than twice as long as the crossply ".
I apologise to the House for reading this, but I think it is important for this point to be driven home.
"In 1972 only one replacement radial in three was steel belted but by 1978 it had risen to well over 50 per cent. and is now the standard type of car lyre ".
My Lords, that is not a problem of bad management, naughty trade union leaders or anything else. It is a problem impinging upon man because we have discovered better ways. The danger of yelling for growth is that you get built-in obsolescence—cheap and nasty plastic materials; horrible plastic things which have no tactility and no beauty to look at, and which do not feel good. We are filling the world with ugly things because we scream for growth and scream for people working harder and working longer. The machine should liberate mankind from that kind of slavery.
Having said that, my Lords, much of what I was going to say because of that damned steamroller pushing pebbles on the promenade has been altered. I will come to my last point. Economists worry me. They use phrases. When I was a youngster studying economics we had "sun spots ". Then there was the "crawling peg "in Europe. Do your Lordships remember the "crawling peg "? None of them knew in the least what they were talking about, but it was the "crawling peg ". It was wonderful to make a
948
speech and to mention the "crawling peg "three times. Everybody said, "Oh—doesn't he know what he is talking about! "
My Lords, there are worries in the Treasury, which turns out a lot of this stuff. I could analyse the Budget, but your Lordships have heard enough from me by now, but there is a great new thing. The "Phillips Curve ", it is called. Have your Lordships ever heard of the "Phillips Curve "? This is a new economic trend. The noble Lord, Lord Home of the Hirsel—and I beg the noble
Lord's pardon—did better years ago, when he was Prime Minister, using matches to do his economics, than these people are doing today.
This
"is illustrated by the wide acceptance in government circles of an economic theory called the Phillips Curve '."
It is accepted in Government circles. The Tories are falling for it hook, line and sinker! The theory is—and noble Lords should not get worried; I am nearly finished—
"that there is a direct correlation between unemployment and wage rates—raise unemployment and wages will fall and vice versa. However the theory ",
as usual,
"fails to take into account the intervention of the unions in setting national as well as local wage levels for the job ".
So the point is to weaken the unions and the theory will have a chance to work. My Lords, in an extreme form, that has happened in Chile. Let me warn your Lordships in all seriousness, that this is what the Government opposite are threatening to do. It is dangerous. There is no need for us to get into fights. There is no need for us to quarrel. There is a need for the trade unions, labour and management, to look at these facts about the world in which we are living today, to make a success once again, and to make Britain British.
Baroness PHILLIPS: My Lords, before my noble friend sits down I wonder whether he would make it clear that I have no responsibility for the " Phillips Curve ".
Lord DAVIES or LEEK: My Lords, I am grateful. We will leave it at that.
6.20 p.m.
Lord POLWARTH: My Lords, I am sure we are all delighted to see the noble Lord, Lord Davies of Leek, back in his seat and fully restored. I must say that after listening to him, I am sure that none of us would have realised that he has been away for three months; he is now back here in his usual fighting form and has given us an entertaining speech, one which I thought a remarkable example of brevity to some of us on both sides of the House. I had prepared a speech and I have now thrown it away, because everything that I was going to say has been said so much more effectively in what I think were some outstanding speeches this afternoon. I am sure that that would be agreed on both sides of the House.
We are grateful to my noble friend Lord Boyd-Carpenter for giving us this opportunity. My only regret is that we have not had more contributions from the Benches opposite. In spite of the last stirring speech that we heard, I agree with one noble Lord who said that he wished we could hear more from eminent trade union leaders from the other side of the House. The trouble is that normally they do not arrive in our company until they have been out to grass; and sometimes I feel that by then they may have lost the enthusiasm to make the kind of contribution that we should like to hear.
I would simply now, in the circumstances, pick up one or two points and echo them from my own experience. I have got the impression that there is really little disagreement throughout the House on the serious state of the country—of the patient—and, indeed, to a large extent, on the diagnosis of his condition. I think that the main differences are on the prescription necessary to turn the patient round from a near-terminal illness towards a state of recovery, convalescence and full health. I thought it right of my noble friend Lord Thorneycroft to point out how limited in this field are the powers of politicians of any party. It is up to people at all levels whether we are going to pull round or not. All that politicians can do is to try to create one part of the climate necessary to make people realise what their part is and how to play it and the consequences if they do not. This was brought home to us seriously by one or two speakers.
950
It has been said with regard to the package of measures announced by the Government that they should not have moved so speedily; that they should have moved more gradually, for instance, with tax changes. I think that this is a false understanding of the position. I think that the country has felt bogged down, demoralised and totally uncertain how to get out of its rut. I think that that is the result of the policies of previous successive Governments. I think that only a drastic change of climate offers any hope for our own people to get together and pull round. We all know that a heavy, sultry, humid climate is not conducive to thinking, to enterprise and to dynamic behaviour and that a more invigorating blast is occasionally more effective in stimulating the brain and the action.
What we have been presented with is a more invigorating climate, and I believe that people could be prepared to respond to it. At bottom, I think there is a genuine desire for more freedom to make one's own decisions and to follow one's own path. I have seen this particularly among the younger generation. More and more, I have found that the young are rejecting going into major enterprises and major organisations because of the bureaucracy, control and the rate of taxation that they suffer. More and more have been tending to set up their own enterprises from scratch. I am not suggesting that they are all "moonlighting "but that they are finding more fruitful paths for their activities. There is something that we should be encouraging and I believe that by cutting the rates of taxation we are encouraging them to follow careers more widely than they do at present.
I think that the other basic fact running through the package of measures is a recognition that, although we are an island, we are not insulated from the European Community and from the rest of the world. Whether in industry, in commerce or in the arts and sports and so on, we are playing in the international league and, therefore, the conditions must be comparable to those internationally. That is another reason why I welcome the changes in taxation, particularly in the heavy burden that was previously on higher and middle management and which I am glad the noble Lord, Lord Rochester, with his close personal experience in that

951
field, referred to and acknowledged that the levels of tax were a very real deterrent. It is particularly so in international companies where people compare their position with those of their colleagues working overseas and sometimes having to make difficult changes from one country to another, with grave financial problems.
The same thing relates to the removal of the Price Commission and its apparatus. I frankly believe that it was more cosmetic than anything else. The cost of administering it—not merely of running the Commission but for all the companies involved—and the vast amount of work involved in representing matters to it probably out-weighed any benefits in reduced prices.
Here, again, I believe that our position in the international market is the answer to keeping prices at a reasonable level. I refer to competition in the international markets. I think that, through this, there is still plenty of discipline against a monopoly situation. We are in a mixed economy, as the noble Lord, Lord Peart, has said in his speech; and I do not think that any of us would deny that. I think the question at issue is where the boundary comes in the mix—and that has been said before. I think that all that the private sector is seeking is a little greater freedom and a little less cnstraint in order to put its talents to use.
I want to speak briefly on two specific points. One relates to regional policy. The noble Lord, Lord Peart, in his speech, was I think inevitably roused to indulge in some ritual sparring with the opening speaker. I do not blame him for that; but I think that he rather suggested that this Government were going to sweep away regional policies because of their intentions to alter, or, at least, to investigate, the powers of the National Enterprise Board and other bodies. I do not believe, from anything that I have heard, that this is the case. I am sure that there is a role for the National Enterprise Board but I think that its role in relation to investment in industry should be closely examined. I think it still has a role in the regional field. That is also very true in relation to the Scottish Development Agency, a smaller body which has been less ambitious in its investment operations. But I am sure that there is a continuing role for it in a
952
number of functions such as industrial estate management and industrial promotion overseas, and in bringing together local authorities and so on. They have, I think, now got a well-defined relationship with other bodies in this field, notably with the Scottish Council for Development and Industry. I hope that what will happen—and I suspect that this is so—is that the Government will review the power of these bodies. I think that a Statement was made in this House that in doing so they would first consult other interested organisations. I hope that the noble Earl who is going to reply will confirm that that is the case.
We have got to keep regional policies; they are increasingly being developed by our competitors, in particular, in the European Community; and this is accepted. If we are to compete for foot-loose industry, we must have them. But I am all in favour of their being refined, sharpened and perhaps concentrated rather more than they have been over the last few years.
The final point that I should like to make relates to the state of the pound, to which reference has been made already. We should welcome the strength of the pound in recent months. It will make an undoubted contribution to reducing inflation; but we must recognise that it owes quite a bit of its strength to North Sea oil rather than to our competitive position industrially. So this is a difficult act for the Government, a balancing act where they will have to decide at what point the pound has gone high enough, and to exert the influences that they have to avoid our exports becoming uncompetitive and an undue drawing in of imports, which is a danger. I am sure that they will have close regard to this. Subject to those points, I should simply like to say that in general I believe the policies announced by the Government have the greatest hope of giving this country the opportunity to rescue itself from the rut in which it is at present.
6.31 p.m.
Lord GLENKINGLAS: My Lords, I too should like to thank the noble Lord, Lord Boyd-Carpenter, for the opportunity that he has given the House in what I believe has been an extremely interesting debate. I say this with some hope that I

953
may not completely ruin it, but owing to the length of time the debate has inevitably taken, like the noble Lord, Lord Polwarth, and my noble friend earlier, I have also cut out large chunks of my speech. I hope in that regard that it does not sound too incoherent.
I am glad to follow my noble friend in this debate. He and I not so many years ago spent a great deal of time trying to change the industry of Scotland from what had been predominantly the old-fashioned industries. We had many unpopular things to do at the time, but we did at least in the early 'sixties get the basis of a great many important American electronics industries to settle in that country.
Corning back to the immediate point of this debate, I am a little worried, despite the excellence of many speeches, that there is still too great a degree of complacency about the situation which the country now faces. I enjoyed almost every moment of my noble friend Lord Soames's speech, but when he said it was not too difficult to put the whole of this matter right, it merely needed a 3 per cent. increase in output across British industry which would solve all our problems, that is dangerous thinking. I am quite certain that is not true and cannot ever be true in the situation in which we find ourselves today. We have, I am afraid, in this country a situation where a great many of the industries—just as happened in Scotland 17 years ago—have no long-term future. That does not mean to say you can cut the whole lot out, but you have to plan the build-up of new industries that this country needs if it is to survive the problems which are certainly being posed, not so much by America, as it used to be—because America itself is following a slight curve in decline—but by some of the newer growth industries from Japan, Germany and France. This is not going to be done across the whole board by a 3 per cent. increase; it is going to have to be done fairly quickly over the next five or 10 years with a great deal of hard thinking and a great deal of cash.
The feeling has been stated more than once—I think my noble friend Lord Thorneycroft referred to it, and probably my noble friend Lord Soames as well—that politicians cannot really solve these problems. They cannot, but—my goodness!—they can make them impossible
954
for anybody else to solve them. We have been suffering from this for most of the past 15 years whichever party was in power. The truth of the matter is that if one looks at Cmnd. 7439, which was published by the last Government in January of this year, it shows that the planned research and development expenditure of this country was £482 million in 1974–75, that it fell to £358 milion in 1978–79, and was planned by the last Administration to be £284 million for 1982–83. That is almost half what it had been nine years before and at a time when perhaps at no other time in British industrial history had there been a greater need for an enormous increase in research and development expenditure.
If that was the late Government's thinking about how to get our country moving in the new sphere, then I am afraid they were totally failing the country. I should like my noble friend on the Front Bench to give the House at some convenient date, if he cannot do it today, details of the money which our competitors in Germany, Japan and France are spending, not just on research and development but on special new research into new projects. This would give the country a very good insight into the problem which we have to face if we are going to stay alive as a manufacturing industrial nation at all. I know that we have great problems of discussing things witn the trade unions. The great majority of them are very sensible and reasonable people who will talk extremely sensibly and reasonably so often when one is talking to them round a table, but they are not always—for reasons which we understand—so forthcoming outside when the media are about.
We have great problems to solve in that field, and we also have great problems to solve in the management field. One of the things most necessary if we are going to succeed in getting on to the right lines for the 1980 decade—something which is probably most necessary of all—is to establish really significant increases in the training for skills right through from management to the shop floor. I read in the Paper today—and reference has been made to it earlier in the debate—that owing to the shortage of teachers it might be necessary to diminish the teaching of Greek and Latin and possibly I some other foreign languages as well.

955
I will willingly sacrifice every one of those—even though I was a Classical scholar—if the Government of the day will increase the training which is needed in engineering and other skills. This is going to be the key to our future and this, I hope and pray, my Government will succeed in doing.
It is not only on the shop floor, because those of us who have been in industry and moved around a bit know that there are a number of managements of sometimes quite big firms in this country who send their young officers off to learn about micro-processors and all these new ideas, but when they come back they do not get any chance to take part in any decision-making or to use any of the skills that they have been learning. This is not by any means always the case; but it is too often the case that young people are trained and then advantage is not taken of the training that they have acquired.
My Lords, I have spoken for long enough. I hope with all my heart that our new Government will be able—and they must do it quickly because I do not believe there are more than four or five years available at the most—to get this new development on its feet, and that they will do it bravely. If they make some mistakes, let them be mistakes of spending too much money on modern technology and not too little, because too little, as one has seen over the past five or 10 years, has had no effect at all. Let us try to re-establish the principles which did Britain so well for a very large number of years, so that the quality of the goods that we produced, the dates of delivery and the excellence of the design of the goods and now technological skill will once again make it possible for us to export even with a strong pound, and also make it possible for our own manufacturers to fill the gaps when demand in this country surges up, so that we do not all have to buy foreign goods because they are there at the right time, their quality is on the whole better and their delivery dates and services, before and after purchase, are better. We have a long way to go. It is not going to be a easy road, and I wish the Government every possible success on it.
6.41 p.m.
Lord KALDOR: My Lords, I did not intend to speak in this debate simply
956
because this is the theme on which I speak most of the time—that is, Britain's economic decline—and ever since my maiden speech nearly three years ago, most of my speeches, as some of your Lordships may recall, have dwelt on this subject. So if I speak now it is because I am tempted to do so after listening to the speeches of noble Lords opposite.
It is very gratifying to find that there is now a very much greater awareness of the deadly seriousness of our situation than there was a few years ago. In some ways our present situation reminds one of 1940, although what is in question is not our military survival but only our economic survival. But it can be just as dangerous and may lead, at a certain point, to a collapse which is too bad to contemplate. So in that respect I am fully in agreement with what the noble Lord, Lord Boyd-Carpenter, said, and also with what was said by the noble Lord, Lord Soames, whose presentation of the facts I thought was a very fair one—to the point of acknowledging for the first time that this is not an over-taxed country but that, in relation to other European countries, we are by no means at the top of the taxation league but somewhere nearer the middle or just below the middle. He made much of the fact that our tax system is different and that the marginal rates are much higher. As I have often said, I am against high marginal rates, but I must, point out that here the noble Lord Lord Soames, was in error because I could mention several European countries which are highly successful in production and productivity and show none of our signs of decadence, and who yet have as high, or even higher, rates of taxation than we had and whose public sector or whose social wage takes up an even bigger proportion of output than ours—I refer to the examples of Sweden, Denmark or Norway.
I feel however that the diagnosis, as distinct from a factual analysis, of the noble Lords opposite did not stand up to examination. And, as my noble friend Lord Peart mentioned, they are very short on remedies. Exhortation and hoping for the best are not good enough. We can always hope for the best but it does not get us very far. I agree with the noble Lord, Lord Thorneycroft, that we can never be certain of the ultimate

957
causation of comparative success or failure but the least one should expect is that any explanation of the causes of things should survive the test of logical consistency. We should not be so prejudiced as to ignore broad historic facts, which are inconsistent with the explanations that are being put forward.
Here I would mention two points. The first is that the world did not begin 20 years ago. That is a point I have made many times. This country had a very poor record in relation to other countries in the 40 years before the First World War: in fact if I were to transmute the figures quoted by the noble Lord, Lord Soames, and apply them to the relative growth rates of the manufacturing industries of Britain as against Germany, or the United States the picture always would have been a worse one in the 40 pre-World War I years than it was in the 25 years since World War II. So that does not fit in with all those explanations which point to inflation, high taxation, or lack of incentives due to taxation as being the basic cause of our troubles. If that were so, why has our record been so poor when none of these existed?
Secondly, any explanation must also take into account something of which we have not heard a word, so far as I am aware, during this debate—that our record was not uniformly bad over the last 100 years. We had an interval of around 25 years when we had very fast growth. That was between 1932 and 1957. Ignoring the war years, our manufacturing production increased at a compound rate of 5 per cent. a year, which compares with 2 per cent. in the pre-World War I period and with 2½ per cent. in the period since 1960. So, this again, I think, needs an explanation. Why did we do so well in the middle period and so badly now, before and since?
I realise that I must not, as an additional speaker, take up much time; but briefly, I should like to mention four factors which seem not to have been considered adequately or at all, and which I regard as major causes of our difficulties. I put first the poor quality of our business leadership, which is very ancient. You have only to read studies like The British Entrepreneur, 1870–1914, by Professor Aldcroft which was published in the 1960s, together with numerous other
958
historians, or the studies of Professor Gowing at Oxford, as well as numerous other studies, to see that the British entrepreneur, even in the 1880s, was out-standing as a cause of poor performance, due to his prejudices against education, against anyone who had a university degree or against the introduction of new methods, new techniques, or entering new fields.
Although in some ways the position has radically changed, in a more funadmental sense this is the basic trouble today. What is it due to? I should say that this is not so easy to explain in a few words. It has something to do with the archaic methods by which we select our business leaders, as against the methods followed by other countries. The noble Lord, Lord Thorneycroft, made a very apt reference in this context to Germany. He thinks that the Germans do so much better than we do, and he went on thinking aloud and said that it is not because of this or that but just because Germans, as Germans, seemed to him superior. I would say that this is not the case—certainly not always. I think he will agree with me that in the Battle of Britain in 1940 the inferiority of British pilots over German pilots was not so clearly evident; nor, when it came to military staff work in the war, did we prove in any way inferior to the Germans, according to the military historians. But if you look at the German business leadership, it is obviously very much better than ours—not just a little better, but enormously better.
This has something to do with their system of two-tier directorships under which the upper tier consists of people outside the business whose chief job is to select the managing directors entirely on criteria of efficiency and ability, and they (the members of the supervisory board) are people who are experts in this matter of selection. Professors of chemical engineering become heads of the biggest chemical concerns. That has always been the German tradition. In Britain the expert ends up as the best backroom boy. He is not in the administrative class, but only in the executive class, which is a rank below it. That seems to me the major reason.
I would also draw the attention of noble Lords opposite, and particularly of the noble Lord, Lord Thorneycroft, to the fact that this is not only my view but is the predominant view of the German

959
business leaders themselves who almost unanimously gave it as their opinion, in an enquête organised some years ago by the German newspaper Der Spiegel, that it is the poor quality of business management that is mainly responsible for the weakness of British industry. They strongly disputed the view that British workers are in any way inferior to German workers when they are properly led. They asserted that they could get just as high production out of them as out of German workers, and the same view was also echoed by Japanese business non-operating subsidiaries in this country. So that the poor quality of British leadership is a most important factor—I am sorry that the noble Viscount, Lord Watkinson, is not here because I should have liked to watch his face in response to this remark—but it is not something that we can change overnight.
Secondly, you cannot ignore the fact that in competition in industry the law of cumulative causation holds, which means that success breeds success and failure begets more failure. Every businessman knows that if he loses his market share he is up against it and gets into increasing difficulties. That has important consequences which are often not taken into account. It is no good saying that we must weed out all the loss-making industries if we are losing in competition. Any such weeding out simply means more losses and a greater shrinkage. It does not mean that you can thereby reverse the position. Profitability is a very poor test in a situation such as ours, where so many of our resources are idle. Are we right in shutting down the shipbuilding industry or any other major industry on the grounds that we are not fitted to its production? Why are we not fitted? Only because those industries have been so poorly led that they cannot compete with other countries who are more efficient. There is no reason why Sunderland or the Clyde should by nature be less well endowed to carry on shipbuilding activities than any other part of the world. That also applies to many other industries. So that the announced policy of this Government—and I wonder how far they will carry it out in practice—to kill off lame ducks everywhere and let them drown may, in our present situation, cause nothing but an acceleration in our econo-
960
mic decline and untold misery to the local communities which are destroyed in the process.
My third point is that we must create a favourable environment for increasing output. Without increasing production trying to increase productivity is hopeless. We do not want higher productivity as such. If high productivity merely means less employment but not more output it is pointless. We must increase production and I am very glad that on this note the noble Viscount, Lord Watkinson, took what appeared to me a more sympathetic line when he mentioned import penetration in the motor industry.
If we want British industry to reverse the decline of British industry then we need a period of protection. It seems to me an absolutely inescapable conclusion, however unpalatable it is. Sooner or later we are bound to recognise this, but the later we recognise it the worse will be our situation. We joined the Common Market at the worst possible moment, and the effects of entry—as the noble Lord, Lord Thorneycroft, may remember, because he was chairing some meetings in Cambridge at which I was arguing the case against entry into the Market—have been that the Germans were able to penetrate our markets enormously faster than we were able to gain markets in Europe. The result of that was that our export-import balance in manufactures to which the noble Lord, Lord Soames, so rightly drew attention as something absolutely vital, deteriorated at an accelerated rate. If I remember rightly the noble Lord, Lord Thorneycroft, said at that meeting that we were agreed on all sides that entry into the Common Market meant much greater risks. It would put us in a better position if we succeeded but in a much worse position if we failed. I am afraid that up till now the latter is what has happened.
Fourthly, and lastly, we must be sensible about inflation. People believe extraordinary things by way of dogmas and cabals on the "money supply ". They believe that the money supply is the main factor which causes inflation, and to prevent prices rising all you have to do is to control it. This seems to me absurd. It is a complete reversal of the chain of causation and until this matter is seen more clearly, it is hopeless to expect the Government to follow intelligent

961
policies. It is hopeless to expect them to follow policies which lead to an improvement in our situation and not to our further impoverishment. Here again I was glad to hear that the noble Viscount Lord Watkinson, was perhaps a lone voice in calling for a "National Anti-Inflation Policy ". He did not say what he meant, but he could not have used more precise language in the circumstances. But clearly a National Anti-Inflation Policy is something quite different from what this Government are at the moment engaged in. Those are the main points that I wanted to make and I am sorry if I have taken up so much time.
6.58 p.m.
Lord MELCHETT: My Lords, my noble friend Lord Kaldor has not spoken for too long, because he has left me in the happy position of not having to say some of the things I should have said, and of saying several things which I should not have thought of saying about the debate so far. I think it was the noble Lord, Lord Rochester, who said early in the debate that we have been discussing this kind of subject fairly frequently in recent weeks. I have a feeling that the noble Earl, Lord Gowrie, must be particularly conscious of that. I am not sure whether this is the fourth or fifth debate of this kind which he has summed up in the last few weeks. I shall be interested to see whether he can think of something new to say, and during my brief remarks I shall try to stimulate him into covering some new fields. It may be that the fact that we have been discussing this subject rather regularly recently, was what led my noble friend Lord Peart to complain, when he rose to speak, that the speeches that he had heard, did not contain anything very new.
As my noble friend Lord Davies of Leek pointed out, the Motion which we have been discussing contains at its beginning nothing with which anybody could possibly argue. The long-term goal to make everybody better off is something shared by all governments of all countries, I suspect, and it is certainly something with which nobody on this side of the House would disagree. Of course, we welcome the determination of this Government—again shared by all Governments, I suspect, in this country for many years—to reverse the long-term decline. We had quite a long discussion in a recent
962
debate about when that might have started, and there was some annoyance on the Liberal Benches when somebody suggested that it might have been one of their former Prime Ministers who started the rot. Today, my noble friends Lord Balogh and Lord Kaldor have put various dates on it. In any event, there is no argument about that part of the notion. What my noble friends on this side of the House would express some concern about are the changes which the Government have adopted to try to meet these objectives.
I think it is fair to say that the Government have been reasonably forthcoming about how they think they will achieve their long-term aims. However, it is also fair to say that there has been a deafening silence about what, exactly, those long-term aims are. The kind of generalities which have been expressed in the debate on today's Motion are all very well, but we have had no information about what the Government expect and want to see happen to the level of unemployment: by how much it will fall and how long it will take to fall. Nor have we seen any forecast about the level of inflation, other than that it will go up to 20 per cent. by the end of this year. When do the Government expect inflation to come down, and to what level and over what period of time?
The Government have said—and I have said that they have been quite clear about this—how they expect to secure whatever these long-term aims may be. They have said that they will create the opportunities and that the people of this country must then seize those opportunities. Even if we accept—although we on this side of the House do not accept it for a moment—that these opportunities are being created, we have to ask—as the noble Lord, Lord Thorneycroft, asked—whether people will seize them. The noble Lord very honestly admitted that he had his doubts.
In fact, it seems to me that the Government's long-term strategy goes something like this. They have increased taxation on everybody except the very richest, all of whom since the Budget, whenever they have been asked in public, have said quite firmly that the massive handouts which they have been given will not make them work any harder. If you are being paid £60,000 a year as the chairman of a

963
big company, it is very difficult to admit that you are not already working as hard as you can. As I have already said, the Government have stoked up inflation to what they now estimate will be 20 per cent. by the end of the year—that is, within six months or so of the Budget and of taking office. Their only solution to the inflation which they have created is higher unemployment, as we have heard quite clearly stated by a number of noble Lords opposite during today's debate.
Then, having somehow created these opportunities, they have no idea how people will respond to them. Indeed, they seem to go slightly further than the noble Lord, Lord Thorneycroft, went in simply wondering about it, to judge by what was said by the noble Viscount, Lord Watkinson, in what seemed to me to be an extra-ordinarily insulting view of the people of this country. The noble Viscount said that the people of this country are basically lazy. It was a great pity that the noble Viscount was not here to hear what was said by my noble friend Lord Kaldor about the management of British industry, for what my noble friend said was based on a rather more scientific and careful appraisal of our performance, compared with other people, than the noble Viscount's remarks about the people of this country, and whether or not they are lazy.
It seems to me that already we can see the Government preparing the ground for the failures which they and their supporters are clearly expecting. The noble Earl, Lord Gowrie, said in a recent debate that the last Heath Government were not to blame for the property boom which they created. He said that the people who were to blame were those who did the investing in property. Indeed, he went slightly further than that and said, as though Keyser Ullmann had never been invented, that it was the trade unions who were doing all the investing during the property boom.
So much for the Government's long-term strategy. Turning to the shorter term, it seems to me that the Government's overwhelming priority in almost every field is to make an attempt to have it both ways. People have already commented on the fact that before the election the Government said that they would not double the rate of VAT. Now they are
964
saying that because two times eight is 16, not 15, they have kept their promise. It seems to me that there is a slight difference between a party in Opposition saying quite clearly that they have no intention of doing something and then doing it a few weeks later. Various other examples of Governments doing things which had not been discussed before they were elected were mentioned by noble Lords opposite during the debate.
Talking about the election campaign, we also heard the interesting view of the noble Lord, Lord Boyd-Carpenter, who said that we on this side of the House have now become the party of "cosy consensus ". I seem to remember a slightly different picture being painted by members of the Conservative Party during the election campaign. However, it may be fair to say that in comparison with the extremely Right-Wing Government that we in this country now have, my noble friends and I do represent a "cosy con sensus ".
In any event, the Government have introduced a tax cutting Budget, so they claim, which will nevertheless put tax up in a full year by £425 million. Therefore, as the noble Lord, Lord Soames, said in his remarks today, it certainly was not a "give-away "Budget. In fact, as I have already said, the Budget and the economic consequences which flow from it appear to have left everybody worse off, except those who were already very well off before the Budget was introduced.
In view of all this, it is not surprising that in the short-term the Government admit that things are going to be very hard. I suspect that it may be the case that some noble Lords opposite rather welcome the fact that unemployment is due to rise to the staggering totals to which clearly it will rise, because they see this as the only effective way of curbing what they regard as the excessive power of the unions. But none of them so far has come out and said that.
What noble Lords opposite want and expect to happen is not all that easy to discover. The noble Earl, Lord Gowrie, kindly told my noble friend Lord Wells-Pestell recently in reply to an oral Question in the House that public sector employment is not going to rise at the rate at which it has risen in the past—something

965
which several noble Lords might have been able to discover for themselves. On 20th June, the noble Earl was a little more forthcoming and said:
"However, we believe that large-scale redundancies may be contained to acceptable, though still painful, levels ".—[Official Report, col. 993.]
As I have said, the best estimate which those outside Government can make is that unemployment will rise to 2 million in the near future. Indeed, my noble friend Lord Wallace of Coslany said this in a recent debate, without any contradiction from the Front Bench opposite.
A little later in the same debate on 20th June, the noble Earl had a sudden attack of candour. He said that he did not think that any strategy of either party could do anything to reduce the very high level of unemployment within 10 to 15 years. I think it is fair to say that that is the first glimpse we have had from the Government of exactly how long they expect very high levels of unemployment to remain in place in this country under the economic and industrial strategy which they are pursuing. And it is a very gloomy prospect in the long-term as well as the short-term.
I do not know whether that is why the noble Earl is worried about what he described as the "national hypersensitivity" to unemployment in this country. It seems to me that it is becoming a feature of this Government that if a particular statistic or set of figures does not suit their case they ignore it, or re-jig it. If the retail price index is going up too fast, they simply take oil out of it. If anybody complains about the high level of unemployment, they are told that they are simply being hypersensitive about an issue which they should not worry about at all.
I am sure that the noble Earl wishes to respond to many of the points made by those who sit behind him, so I should like to ask him only one question. It is a simple one, and I hope that the information will be readily available; namely, how many public sector jobs will be lost as a result of the cuts in public expenditure which were announced in the Budget, or which have been announced by the Government before or after the Budget, and how many jobs will be lost as a result of decisions which have been made since the election on the imposition of
966
cash limits. I know that noble Lords opposite consider that all this short-term shedding of labour in the public sector is neither here nor there, but I hope that the Government will at least admit that it is of some consequence to those who will be out of work as a result of these cuts and that they will therefore be able to go a little further than the noble Earl went at Question Time the other day and tell us exactly how many people are likely to be affected.
I have said that the noble Earl has sat through several of these debates recently. I suspect that there was one moment in this debate which made him rather more uncomfortable than he has been in previous debates. That was when it appeared, at least, that the noble Lord, Lord Boyd-Carpenter, was suggesting to my noble friend Lord Peart that his remarks on the education service were irrelevant to the Motion. I remember very well at least twice in your Lordships' House during the time when the noble Earl was in opposition hearing him tell us about his experience in comparing what had happened to his own contemporaries when they left university and his wife's contemporaries in Germany. I fully agreed with the conclusions which I understood he was drawing from that—that is, that the people in this country who have the privilege of a university career are, because of our social system and the way that we have viewed industry in the past, simply not attracted to the wealth-creating sector of the economy. They are attracted to things like the professions, to which, incidentally, the noble Earl's Government have just given a large salary increase and tax relief.
If he still holds that view—and it is certainly one that I hold and shared with him in the past—the noble Earl must be extremely worried, even if the noble Lord, Lord Boyd-Carpenter, is not, about the cuts which are taking place in training and in the secondary sector of education. Noble Lords may have seen the headmaster of a large comprehensive school being interviewed on television the other night. He said that if the proposed cuts were implemented a lot of the secondary school children in his school would cease to have chemistry lessons at all because neither the equipment nor the staff would be available. The other thing that would

967
suffer would be trips outside the school—for example to local firms.
The noble Lord, Lord Glenkinglas, said that he would happily sacrifice the classics and a foreign language, although I should have thought that a foreign language was now widely accepted as being very important for a nation like ours which exports much of its production. But he would happily sacrifice the classics if we would keep in schools some of the things which I think he and I would agree are important. However, the fact of the matter is—
Lord GLENKINGLAS: My Lords, I am grateful to the noble Lord for giving way. The point I was making was that more money must go into retraining people for skills in the engineering industry and that if one has not the money for both, then that is where it ought to go.
Lord MELCHETT: My Lords, I quite agree but I hope the noble Lord would agree in turn that it is a lot easier to retrain people and make them competent in engineering if, for example, they have learned some mathematics, some physics and possibly some chemistry at school. It is there, before one even starts to get people trained or retrained, that the cuts which the Government have introduced will do the damage. I am sure the noble Earl and I would agree that we should like to see those scientific subjects retained. There may be some other things which, if there have got to be cuts, the noble Earl would say should go first, but the fact of the matter is that what is going to happen, as is all too often the case, is that it will be "last in, first out ". Where science and contact with local industry have just been introduced into schools—inevitably at some extra costs—they will be the things which will be lost.
Lord SOAMES: My Lords, if the noble Lord will give way, he is asking us how many cuts there will be in this, how many people will leave, what will be the cuts in the other. I think he probably realises that, if the expenditure which was planned by the last Government were to continue as it was planned and without any cuts at all, the proportion of the GNP that goes into the public sector would continue to rise. I am not asking the noble Lord for a particular figure of what he thinks it ought
968
to be; I am stating the fact that it is a higher percentage of the GNP in this country than in any other country among our European partners. Does he believe that there should be some limit—without asking him what that limit is—on what the percentage of GNP taken for the public services should be?
Lord MELCHETT: Yes, my Lords, of course there should be a limit. That was accepted and quite clearly stated on a number of occasions by the Government of which I was a member. The noble Lord knows that perfectly well. As my noble friend Lord Kaldor said—although I do not think the noble Lord was present—there are some other countries with as high a level of public sector expenditure as this country and many of them are more successful than we are.
I do not think the criticism which the noble Lord has made of what I am saying removes the obligation on the Government at least to say how many people are going to lose their jobs as a result of the cuts in public expenditure which they have announced and the imposition of cash limits in the way that they have decided. The noble Lord may think it is a very good thing that all these jobs will be lost but I should have thought he would accept that a Government which believes in telling people what it is doing (which I understand this Government does) would at least give us that information, and I hope the noble Earl will be able to give us that information when he winds up the debate, particularly with his Leader beside him nodding in response to what I have said.
Lord SOAMES: My Lords, I was nodding in disagreement.
Lord MELCHETT: Well, my Lords, the noble Lord did not indicate disagreement when he nodded to me so I am afraid that, like everything else, the Front Bench opposite have got it back to front again.
The noble Lord, Lord Boyd-Carpenter, opened the debate by saying that the economy stands in grave danger; we, on this side of the House, would say that the danger has become a great deal graver since the election and that this has happened because everything which this Government have done since the election

969
has either fueled inflation or increased unemployment, or both. As the noble Viscount, Lord Watkinson, said in an extraordinary admission, which I think again might have been said before the election rather than after, if the Government's policies fail—as we believe they will—this country will not be worth living in.
Lord KALDOR: My Lords, before my noble friend sits down I should just like to ask him whether he would not agree that a ratio is a relationship between two magnitudes and if the ratio of public sector expenditure to the GNP goes up, it is to be judged quite differently whether the ratio changes on account of the rise in public sector expenditure or as a result of a fall in the GNP. I am very much afraid, that, so far as the projections made by the noble Lord, Lord Soames, are concerned, the increase in the ratio results from a fall on the denominator and not a rise in the numerator.
Lord MELCHETT: My Lords, I invariably agree with everything that my noble friend says, particularly when I am not likely to understand it until I have read it in Hansard the following morning!
7.17 p.m.
The Earl of GOWRIE: My Lords, in spite of what the noble Lord, Lord Melchett, said about the fact that one might have wearied after winding up, I think, three or four and opening two, economic debates within the last few weeks I can disabuse him of any weariness on my part as I have enjoyed them all and this one not least. I think perhaps one of the differences between the noble Lord, Lord Melchett, and myself is that I tend to come to your Lordships' House prepared to give the Government's views and opinions but also to learn and I am not sure whether the noble Lord, Lord Melchett, really took in the major lesson of the debate, which is the limitation of Government—what they can do apart from creating a climate which people will then take up for themselves. This is a definite and clear difference in policy and in attitude and even in ideology between my right honourable and my noble friends and some, although not by any means all, of the right honourable gentlemen in another place and the noble Lords opposite.
970
I think one of the most important things that can happen to our political economy in the next few years is that the Labour Party will decide on which side of these divides it will come down. The leadership of the Labour Party is quite clear about the extent of the mix in the mixed economy, but it is not clear to us whether the Left of the Labour Party has come to any such conclusions; and from the noble Lord's remarks there seems to be very little doubt about where he would fall in that category. I rather enjoy being described as a member of an extreme Right-Wing Government who spend a lot of their Wednesday afternoons debating on the merits of the noble Lord, Lord Butler, as my noble friend Lord Boyd-Carpenter mentioned when he opened the debate, that he was his Financial Secretary. I must say that is not a Government that I recognise under that description.
The noble Lord really asked me to gaze into the future and to give a precise itemisation of what the future will bring. He was kind enough to say that I had been candid in the past and I shall be candid now and say that I do not know what the future will bring. How many jobs will be lost, both in the public and the private sectors of the economy, will, in my opinion, depend very extensively on what kind of pay settlements are made, both in the public and the private sector. We know that there is a close correlation between levels of pay and levels of employment, and that is why we are urging responsible pay bargaining in this context.
I have said earlier—and it was a speculation, as I enjoy speculating in the context of general economic debate, as the noble Lord, Lord Kaldor, does—that in my view the present levels of unemployment were really much higher than the published figures. I think there are many more people who are in employment which is so badly based in investment or productivity terms that it will only be a matter of time, whoever you put into government, before they will tumble on to the register, and that is to he very much regretted. What we are trying to do as a long-term strategy is to see that the wealth creating private sector of the economy has more resources released to it by which it can create real jobs. I will come back to that a little later.

971
The diagnosis is quite clear and agreed on all sides and I am not going to go over it again. There has been a high level of talent and speaking ability and I am not going to add my rhetorical halfpenny to what has already happened. I am just going to deal quite quickly, if I may, with the specific points that noble Lords have made to me. My noble friend Lord Boyd-Carpenter—and I congratulate him on the fire as well as the specific gravity of his speech, if I may put it that way, in spite of what the noble Lord, Lord Peart, said—did have a caveat and anxiety about the sterling rate and the high minimum lending rate, and this was echoed by my noble friend Lord Polwarth. Certainly sterling has been strong recently and since the Budget it has risen by about 6 per cent. in effective terms and by over 17 per cent. against the dollar.
I think the rise primarily reflects two factors: the first, and probably most important, is our favourable position among industrial nations as an oil producer at a time when oil prices have been rising very fast. North Sea oil benefits our balance of payments directly and it also encourages international investors to buy sterling. There is, of course the factor of the high interest rates, and these are of course unwelcome for businesses, both large, and, as the noble Lord, Lord Spens, said, small, businesses on whom we depend. We do not, therefore, welcome the high interest rates in any sense. But we did inherit a situation in which the money supply was getting badly out of control and in order to regain control it was necessary, in our view, to take immediate action in the Budget, including the rise in minimum lending rate. The noble Lord, Lord Kaldor, was quite clear that he thinks we have over estimated and various people have overestimated the role of money supply in getting down the rate of inflation. But we are determined to keep to our target, and the short answer to the noble Lord is that we shall see in, I would guess, 1982–3 a very sharp decline in the rate of inflation. We will have to calculate which of us was right.
Lord KALDOR: My Lords, I am very grateful to the noble Lord for giving way. Are the Government so certain that raising the minimum lending rate will cause the money supply to shrink when the money supply is defined as M3, including interest
972
bearing deposits? I know from fairly good authority that those who worked on this subject in the Bank of England and elsewhere failed to establish any tolerably good relationship between changes in the interest rate and changes in M3. What I have against this Government's policy is not simply that they pay so much attention to the money supply but that they use an instrument, the minimum lending rate, for regulating it which is wholly unsuited to the purpose and creates havoc with industry.
The Earl of GOWRIE: My Lords, the noble Lord has been right in his life and he has been wrong in his life. We always listen to him, and I will look at that point and see what officials think about it and what my right honourable friend the Chancellor thinks about it. The noble Lord has been quite clear; he has a strategy for the economy which would involve probably withdrawing from Europe and probably the imposition of import controls. As I am one of the few Conservatives who have publicly aired the debate about import controls, admittedly when in Opposition, and another was my noble friend Lord Harlech, I may not be on the side of the angels as far as the noble Lord is concerned but I have at least an open mind.
I was going to come to the noble Lord's speech later, but I will deal with it now, if I may. The real point I want to make to him is this. The noble Lord is a passionate sceptic about the role of money and the rates of inflation. There is a programme for measuring whether this will happen. The alternative strategy, either a statutory prices and incomes policy under the last Conservative Government, or a sort of semi-statutory prices and incomes policy under the last Labour Government, has not been conspicuously successful. So let us see how this one does. Before I leave the point of the high minimum lending rate, I must make a point in my own field of employment. It certainly seems to us of paramount importance that people do not borrow money which is fundamentally there for investing and for new wealth-creating opportunities simply in order to pay off excessive or inflationary wage claims. We would anticipate that the high rates of interest would have a definite effect on the pay bargaining system.

973
The noble Lord, Lord Peart, made a splendid speech rallying his troops. He said at the end, "Many of my noble friends are just waiting to go into battle ". As someone who sometimes has deplored in Opposition the rather bland nature of debates in your Lordships' House—always informed, but sometimes rather bland—I was delighted that we were going to have a bit of block-busting and knock-about in the present Parliament. I do not think I would regret that at all. But as well as calling his troops into battle—perhaps a little prematurely as a general election seems fairly far away at the moment—he did ask me a serious point about the Social Fund and our attempt to try to get our payments and benefits into greater line with Europe. I think this was of interest, too, to other noble Lords; another noble Lord raised the point but I cannot at the moment pinpoint who it was. I am grateful that Lord Peart drew our attention to the Social Fund because it is an area within my department where I have special responsibility. We recognise the need to increase our share and to this end schemes have been adapted and new schemes devised to meet the Commission's stated preferences. We will concentrate our effort on those schemes and those geographical areas to which the Commission give high priority. One of the difficulties is that industrial strategy, regional areas of need, are defined rather differently in Europe from the way they are defined here, and one of my jobs is to try and get closer correlation and a closer match in that respect.
The noble Lord, Lord Rochester, drew the attention of the House to the point which many noble Lords have made about the question of incentives at the higher end of the market, bringing down the marginal rates. There are various views here. The noble Lord, Lord Rochester, thought that 60 per cent. was wrong, that it was inflammatory in some way. The Liberal Party, I understand, has come down as thinking that 70 per cent. is about right for the top marginal rate. I do not know what Lord Melchett's idea is—probably still 83 per cent. or upwards. Mr. Pardoe whose loss to Parliament is generally regrettable though the particular result I do not regret, has said that 60 per cent. is too high and that 50 per cent. is right. I must say that I do not look on this as a
974
kind of button which you press in order to generate an immense new effort in the economy. I look upon it as morally wrong for people to pay more than 50 per cent. of their income. I think 60 per cent. is high, but we are working on it and we hope to get it down at a later stage. This is a clear issue of principle as far as I am concerned.
The noble Lord, Lord Rochester, raised the question of education at work. Of course, I agree with the noble Lord, Lord Melchett, that education is of very great importance, and training matters in my department are of paramount importance. When we have another employment debate perhaps we might take training specifically, but it is too wide a subject to deal with tonight. Lord Rochester said that he would like to see a more informed and better structured framework of discussions between Government, employers and unions on major developments in the economy. We have quite a lot of sympathy with that objective. In our Manifesto we stated our desire for more open and informed discussion of the Government's economic objectives so that there is wider understanding of the consequences of unrealistic bargaining and industrial action.
My right honourable friend the Chancellor said in his Budget Statement that the Government will be more than willing to consider better methods of ensuring that the dangers of higher pay without higher productivity are,
"fully understood by all those concerned with wage negotiation ".
I point out to the noble Lord, Lord Rochester, that the question is one which Ministers are considering very carefully.
If I praise the speech of my noble friend Lord Soames, people will echo the immortal words of Miss Mandy Rice-Davies and say, "Well he would, wouldn't he!" However, I would draw the attention of the House particularly to the remarks which my noble friend made when he said that this was not a give-away Budget. In fact, as noble Lords opposite have recognised, it is something of a deflationary Budget—it has had to be. It is a Budget of structural change. We must not confuse structural alterations in the tax system and the rest with the fact that it is a deflationary Budget.

975
The noble Lord, Lord Spens, and others mentioned small firms. My department is certainly working on reviews. We have already laid orders concerning methods by which the effects of the Employment Protection Act on small business—which have been universally held to be deleterious—may be amended.
Two amendments which should be of considerable help to all employers, particularly small firms, were laid before the House of Commons yesterday in the form of draft orders. They will raise from 26 to 52 weeks the qualifying period of service before a complaint of unfair dismissal can be made, and will reduce from 60 to 30 days the period within which the Department of Employment must be notified and trade unions consulted on redundancies involving from 10 to 99 employees. The Government are particularly concerned to be helpful so far as possible to small firms and that has been a recurring theme in our review of the employment protection legislation.
We are looking at planning controls and at the mismatch of rules and regulations which my noble friend Lord Thorneycroft mentioned. We are also looking at special enterprise zones in difficult areas where the relaxation of some controls might be of assistance, although no decision has been made about that yet. My noble friend kindly gave me notice that he was taking his wife to Monteverdi's Vespers, and that certainly is a more enjoyable pursuit than listening to me winding up! I rather liked him saying, as one who had just masterminded the winning of a general election, that he was quite a keen politician. My noble friend has also added a new word to the English language which is "polly-tician ". Politicians must be careful of imitating their elders and betters in that context.
He raised a very important point, which exercises me in the department a great deal, which is how to find the young men and women sufficiently literate and numerate to fulfil the tasks which society provides. As the noble Lord, Lord Melchett, was castigating me about hypothetical rises in future unemployment, I should point out to him that one must also realise that in this intensely mismatched economy there are vast vacancies. One of the most depressing jobs that I have had since
976
being appointed Minister is to go to areas in South London, where there are large vacancies in the labour market, and where we are trying to train people in the very elementary social skills which they must have in order to get a job in the first place. We are trying to get a better match there.
My noble friend Lord Watkinson was kind to us and of course demanded much of us. He said that we have the intense problem of trying to grow faster in a world in recession. He asked for an early meeting of the NEDC, with the Prime Minister in the chair, to explain that pay must be matched with increased production, and he asked to be told our attitudes about the NEDC. It met on 6th June for the first time under our Administration, and there was unanimous support for continuing the work of the Council and of the sector working parties. Therefore, the Government value the commitment of the TUC, the CBI and other interests represented on the Council to tripartite discussions on major policy issues.
My noble friend Lord Campbell of Croy dealt with the oil issue. I point out to the noble Lord, Lord Davies of Leek—who also raised that matter—that we had a splendid debate in his absence (and we are all glad to see him back) on this topic, to which I would refer him. It is true, of course, that the United Kingdom, as a substantial producer, is affected rather differently from most industrial countries by the recent price rises. A rise in prices has little impact on our trade balance and we therefore do not suffer the loss in terms of trade which is experienced by other countries. So, we are in the lucky position of being likely to experience a smaller fall in living standards. Nevertheless the rise in oil prices may well lead other Governments to adopt more restrictive policies and that could check our growth by reducing demand for exports. So, we are on a knife-edge in this situation, and we must all do what we can in the international markets and in international diplomacy to try to see that things improve.
I am glad that my noble friend Lord Nugent of Guildford brought to the attention of the House the fact that we have honoured many of our commitments. He specially talked about some of our commitments in terms of industrial rela-

977
tions. I should like to take this opportunity, in the context of my noble friend's speech, to point out that we, of course, have no quarrel with the trade union movement. We know that the work of the movement is critical if there is to be sufficient economic recovery, especially in the industrial sphere, to ensure a better life for its individual members and a less shabby environment for them to work in.
We also know that our own internal arrangements for industrial relations have not just tilted the balance of power too heavily towards unions from employers—as I think my noble friend was suggesting—but tilted it also too heavily from responsible union leaders towards militant and unofficial groups. We hope that the very modest measures that we are putting forward, instead of the radical reforms which many people would like us to make, will correct that imbalance. These measures, which are under discussion at present, will, of course, be debated in this House in due course.
The noble Lord, Lord Davies, said that rich people become a lot richer under a Labour Government. Under any Government which inflates by 100 per cent., those with valuable assets will probably see more than a 100 per cent. rise in their assets, and I am sure that people have done very well out of it. I would also refer him to our debate, prior to his return—which we welcome—on microchips and to a thoughtful essay by Edward Goldsmith in The Ecologist about an ecological approach to unemployment, about which we could all learn quite a lot. He drew attention to my noble friend Lord Home of the Hirsel's efforts with matches. The noble Lord did very well by comparison with recent Governments, and perhaps we should all return to our matchboxes.
My noble friend Lord Glenkinglas spoke about the importance of training. As I have said, training is such a large subject that I hope it may be a subject for a small debate later. As it is an area in which I have some responsibilities, I can say that we value the work of the Engineering Training Board levy. I had a word with the noble Lord, Lord Scanlon, and said, "You really should come along to the House and give your show a plug, because it is doing valuable work and needs to do more ". The noble Lord,
978
who gets more jovial year by year, said to me that the trouble was he was longing to come, but he was never free at 2.30 p.m. which is when he has to take the oath. Therefore, I hope that the noble Lord, Lord Peart, will urge him to do so, as we are all looking forward to hearing him.
I have dealt with the remarks of the noble Lord, Lord Kaldor, and to some extent—though not, I am sure, to his satisfaction—with those of the noble Lord, Lord Melchett. I would recommend the noble Lord, Lord Melchett, whose concern for unemployment I cast no doubts on whatsoever, to look at the mismatch in our economy, to look at the level of vacancies as against the levels of people who are out of work, to look at the intensely regional character of the difference—the south of England is still a very prosperously employed part of the country with less than 3 per cent. unemployment and many vacancies—and to try to concentrate his remarks on constructive suggestions as to how these regional imbalances might be corrected.
To sum up, last month's Budget marked, as the debate has recognised, a fundamental change in the direction of economic policy. The days when Governments fine tuned the economy in a desperate attempt to stimulate a little more growth or to shave a percentage point here or there off the RPI are now over. In their place we have a long-term strategy, designed to tackle the deep-seated problems of the supply side of the economy. I acknowledge that it will take years rather than months before this strategy produces tangible results. But I think that then they will be results that will last.
The really important matter here is that, in our view, the previous Administration had come to recognise that our economic problems were basically supply side problems. Although they got the diagnosis right, in our view they got the solution wrong. Their solution was the industrial strategy which, despite its fine-sounding name and containing much sense, amounted in practice to a continuation of the interventionist policies practised by previous Labour Administrations. Such policies effectively amounted to taxing the efficient sectors of the economy in order to subsidise the inefficient ones. That is hardly a recipe for faster growth. Inter-

979
ventionist policies of that kind have conspicuously failed to achieve the regeneration of industry which they were intended to do. Therefore, in our view, it is time to abandon them, and with this debate we are making a start.
Lord POLWARTH: My Lords, can the Minister assure us that his comments about the regional imbalance in the matching of jobs and vacancies mean that the Government will look at regional employment policies very selectively, in a constructive way, rather than slashing them too violently?
The Earl of GOWRIE: My Lords, we are doing so.
7.41 p.m.
Lord BOYD-CARPENTER: My Lords, those of your Lordships who were present at the beginning of this debate may recall that I indicated that when we reached this stage I would seek your Lordships' permission to withdraw the Motion. In a moment I shall seek to do that. However, before doing so, I hope that I may be allowed to say that I very much hope that the House as a whole feels, as I do, that we have had a debate of very considerable value.
The noble Lord, Lord Melchett, pointed out that there have been other debates relating to the economic issues which confront our country, which is, of course, true. On the other hand, as the noble Lord, Lord Kaldor, so well said, this is an issue of deadly seriousness. Those were his words. If this House is to survive, in my humble submission it is essential that we should frequently discuss what is the central issue of our national life, on the solution of which our survival depends. I hope that this debate may have made its own modest contribution to that end, particularly because it was attended by two noble Lords on the Benches opposite whose economic advice has done so much to mould—for good or for ill—the economic fortunes of this country over the past 15 years. I hope that the noble Lord, Lord Peart—who, if he will allow me to say so to his face, was a most excellent and understanding Leader of the House—will also (though he showed a little restlessness at the beginning of the debate)
980
feel that none the less the debate has been a worthwhile exercise for the House as a whole to undertake. At the least he may console himself with the fact that it gave him an excellent opportunity to give us a lively trailer for his speech or speeches (I do not know which) on the Education Bill next week.
I am not inhibited, as is the noble Earl who has just spoken, in what I say about the noble Lord the Leader of the House, for the noble Lord and I have been colleagues over a good many years. I am happy in the consciousness that nothing has ever been known to make him blush. In my judgment the speech which he made to the House this afternoon by itself would more than have justified this debate as a clear, forthright and authoritative summary of the Government's economic policy, which I found to be one of the best statements that I have heard, and I thank him for it. Having said that, I ask your Lordships' permission to withdraw the Motion.
Motion, by leave, withdrawn.

CRIMINAL JUSTICE (AMENDMENT) BILL [H.L.]
7.44 p.m.
Lord WIGODER: My Lords, I beg to move that this Bill be now read a second time. This modest Bill seeks to deal with the situation where there is more than one defendant at committal proceedings in the magistrates' court and there is a disagreement between the defendants as to whether or not the restrictions on reporting the proceedings should be lifted. I suspect that there will be widespread agreement as to the extremely unsatisfactory nature of the present situation, although there may well be some difference of opinion as to what is the best way in which to deal with the situation.
The problem arises as a result of a rather curious history which I should perhaps outline, but only in a few words. In 1848 Section 19 of the Indictable Offences Act gave the magistrates power, if they chose so to exercise it, not to sit in open court when they were conducting committal proceedings. The power was expressed in these terms in the Act:
"It shall be lawful for such justice or justices in his or their discretion, to order that no person

981
shall have access to, be, or remain in such room or building without the consent or permission of such justice or justices, if it appear to him or them that the ends of justice will be best answered by so doing ".
I remind your Lordships of that because the phrase "the ends of justice will be best answered "perhaps echoes the expression that I have suggested should be incorporated in the Bill before your Lordships' House today.
However, although that power was given to the justices in 1848, it appears not to have been widely exercised. They appear to have sat in open court. The power not to sit in open court was repeated in the Magistrates' Courts Act 1952 where, by Section 4(2), examining justices were allowed to sit in camera if they so chose. As I understand it, since that date justices have, in fact, sat in camera only where security considerations have arisen, and not on any other grounds.
In 1957 many of your Lordships will remember that there arose the trial of Dr. Bodkin Adams. At the committal proceedings evidence was given by the prosecution that involved referring to the deaths of three of the doctor's patients. Those committal proceedings aroused great public interest. In its way and in its day it was a very sensational trial indeed, and the evidence given at the committal proceedings was, of course, widely reported in the Press at the time. At that time there was no restriction on publication of committal proceedings, except for certain very limited statutory limitations in regard to indecency and certain matters where the interests of children or juveniles were concerned.
After the widespread reporting of the committal proceedings, when it came to the trial the Crown in fact abandoned the evidence as to two of the deaths and proceeded on one death only. Inevitably, the jury must have had in their minds the evidence that they had acquired through reading the newspapers. It is clear that deep prejudice might have been caused to the unfortunate doctor. I say "might have been caused "because in fact, as your Lordships will remember, he was acquitted. Had he been convicted, he would have had the most profound grievance as to the prejudice that must have arisen as a result of the reporting of his committal proceedings.
982
In those circumstances, in 1957 a departmental committee, under Lord Justice Tucker, as he then was—the Tucker Committee—was set up to consider whether the Press should be free to report committal proceedings. I am pleased to see that one member of the committee—the noble Viscount, Lord Bridgeman—is here today to help us in the course of this debate. That committee reported in 1958 and, in a word, recommended that there should be no reporting whatever of committal proceedings unless the defendant was discharged at the end of the proceedings, in which case the Press would be free to report what had happened.
As is the way with departmental committees, legislation followed some nine years later in 1967, and it was not, in fact, legislation on the lines recommended by the committee, because in 1967 there was the Criminal Justice Act. Section 3(1) of tht Act contained a general prohibition on the reporting of committal proceedings, subject to Section 3(2), which read in this form:
"A magistrates' court shall, on an application for the purpose made with reference to any committal proceedings by the defendant or one of the defendants, as the case may be, order that the foregoing subsection shall not apply to reports of those proceedings ".
What happened in the 1967 Act was that there was a general bar upon reporting committal proceedings unless any one defendant chose to exercise his right to ask that the reporting restriction should be lifted.
As was fairly quickly established in a series of cases, it was made clear that that meant that any one defendant had an absolute right to ask that the restrictions should be lifted. He could do it without cause or reason, at his merest whim, because he was being paid by the Press, or for any other reason, as he chose. Even though in the trial he was playing a minor role, nevertheless the restrictions were lifted automatically, as soon as he asked that they should be, in relation to what might be a number of defendants against whom there were many much graver allegations. That is the unsatisfactory position that has now become clear, and that is what this Bill endeavours to deal with in a limited way.
The present position is that if no application is made by any defendant to

983
lift the reporting restrictions, then they are not lifted; they remain in force. The Bill before your Lordships this evening would not affect that situation in any way. If at present all the defendants apply to lift the restrictions, then they are lifted under the law as it is at present, and they would he lifted under the Bill that is before your Lordships' House this evening.
This Bill deals only with the situation where there is a difference of opinion among defendants as to whether the restrictions should be lifted or not. The present situation is that if any one defendant applies, the restrictions are automatically lifted. What this Bill proposes—and I shall comment on the way it proposes to deal with it in a moment—is that where there is a difference of opinion, and one or more but not all the defendants make such an application, then the court shall have a discretion as to whether the restrictions are to be lifted or not.
It is necessary, in order to appreciate the conflict of interest that may arise between defendants on this matter, to summarise for a moment the principal arguments against reporting committal proceedings and those in favour of reporting committal proceedings. The arguments against reporting committal proceedings which found favour with the Tucker Committee, and which have been generally accepted since that date, are really that they can amount to a grave risk of prejudice for the defendant at his trial, or indeed a belief by the defendant that there is a grave risk of prejudice—which, in its way, is just as harmful.
It can happen perhaps in four principal ways. First, because the prosecution speech that opens the committal proceedings may be somewhat over-enthusiastic. It may be reported at great length in ebullient terms. The evidence may not come up to the prosecution opening speech; nevertheless it is not the evidence that is reported, it is counsel's opening observations.
Secondly, evidence which, as a matter of law, is not admissible and will be ruled to be not admissible at the trial, might be tendered at the magistrates' court and reported extensively. Thirdly, as a particular example of that, where there are
984
several defendants, some defendants who will in due course be pleading guilty at the trial may have made long written statements implicating other defendants. Those statements are quite properly read out during the committal proceedings, and yet they would not be referred to at the trial of those defendants who were contesting the case.
Fourthly, committal proceedings being in fact a preliminary inquiry as to whether there is a case to answer, inevitably the proceedings are somewhat one-sided. They consist of the prosecution presenting their case and not the defence. Therefore, the reporting can lead to a distorted view of the whole situation. It is in those ways that there can be a grave risk of prejudice to a fair trial. Indeed, I willingly accept that in many cases juries are remarkably successful in putting out of their minds prejudice of that nature, but there can also be prejudice to a defendant's reputation with his family and friends where matters are given and reported in the Press in that way which are subsequently, for one reason or another, not supported by evidence.
I ought to stress that although one's mind has perhaps been drawn to this problem by the recent committal at Minehead, this Bill is not primarily to deal with the situation that arose in 1957 with Dr. Bodkin Adams, or with a trial 22 years later in 1979. This difficult situation, where there is a danger of prejudice arising in this way, arises daily in innumerable cases up and down the country which are not sensational, which do not obtain national Press coverage, but which can be reported at great length in the local Press. Proceedings in the magistrates' court are covered in detail, the case is then sent for trial, and in due course at a Crown Court 10, 20, or 30 miles away, the defendant is acquitted, and he may he lucky to get half a line in his local paper reporting that fact.
The arguments in favour of reporting committal proceedings come down, I think, to two. First, it is said that the Press ought to have the right, as part of their basic freedom, to report committal proceedings. I doubt whether that is an argument that in these days is seriously persisted in. I would be the last person to want to seek to diminish the proper freedom of the Press. The Press must have a

985
right to report criminal trials. But we are dealing here not with criminal trials but with preliminary proceedings where there is an investigation to see whether there is a case to answer.
The other reason put forward in favour of allowing Press reporting is that it is said that, as a result of the publicity, there may be important defence witnesses who will become available, having read the papers, who might not become available otherwise. That is in theory an entirely valid argument. In practice, it is an extremely remote possiblilty. The Tucker Committee discovered that in half a century there were some 20 cases in which this could be said to have happened, and they had some doubts as to whether it had happened in all 20 cases. My own experience—not as great as that of the Tucker Committee—is that I have certainly never known it happen. I have known of cases where the publicity has given rise to witnesses coming forward for the prosecution, but that is not a matter that we are discussing this evening.
In that situation it is clear that there may be a genuine conflict of interest between defendants, and that the present state of the law is thoroughly unsatisfactory under which, on the whim of any one defendant, there is an automatic lifting of restrictions which may be to the actual, or believed, great prejudice of his co-defendants. It is in order to deal with that situation that I venture to introduce this Bill into your Lordships' House.
What it provides is very simple. It provides in Clause 1(1) that the existing Section 3(2) of the Criminal Justice Act 1967—which I read to your Lordships earlier—should be removed, and that there should then be substituted two new subsections. Subsection (2) simply preserves the present position where all the defendants apply that the restrictions should be lifted, and if all the defendants apply then subsection (2) says that the restrictions should thus be lifted. The crux of the matter is in Clausel(2A) which reads:
"Where there is more than one defendant, and an application is made for this purpose by one or more, but not all, of the defendants, then the court, after inviting representations from all the defendants, shall make such an order as aforesaid only if it is satisfied that it is in the interests of justice so to do ".
986
In other words, the onus of proof is put firmly on the party making the application that restrictions should be lifted, to satisfy the court that it is right that that should be done.
The test I have proposed there—that it is in the interests of justice so to do—echoes perhaps the words of Section 19 of the 1848 Act which I read. It is of course a test that is well known to the courts in many ways. Trials frequently begin with an argument as to whether two defendants should be tried together or two counts or charges should be tried together and the court has to decide "in the interests of justice"—a rather loose general phrase—where the proper balance lies. At the same time, I should indicate to your Lordships that observations have been expressed to me that perhaps the expression "the interests of justice "may in this particular case be a trifle too loose and wide, and that it might helpfully be modified so as to give more assistance to magistrates as to what it is they should consider.
In particular, I should mention that Lord Justice Lawton—who, as your Lordships will know, is the chairman of the Criminal Law Revision Committee—has been kind enough to write (and to tell me that I may use his letter) suggesting that instead of using the phrase "the interests of justice ", the court should be asked to consider in relation to the applicants whether it is necessary to lift the restrictions "for their fair trial." I take that matter no further at this stage. If your Lordships were good enough to give the Bill a Second Reading, this question of the precise terminology, the criteria the magistrates should use, could properly and helpfully be considered at a later stage in the Bill.
I should mention, about the Bill in its present form, Clause 1 (2B) which is intended—and I hope the intention is clear—to preserve the position that if there is a dispute in a court as to whether or not the restrictions should be lifted, the dispute itself should not be reported. Unfortunately, the drafting is clearly erroneous; I have, I believed, solved the problem of perpetual motion in the form in which I have drafted it by simply referring back to the original subsection again, but that is also a matter which could easily be put right at a later stage.

987
I would hope that the Bill, subject to its improvement at a later stage, represents a very wide consensus among those who have been perturbed at the present position. The Attorney General, Sir Michael Havers, in Hansard on 25th June 1979 at what is page 93 of the rather crude typescript copy I have, answered a Parliamentary Question which was clearly on the lines broadly set out in this Bill. The Law Society has recently given evidence to the Phillips Commission on Criminal Procedure which I understand is, for practical purposes, on all fours with the proposal in this Bill, and perhaps the noble Lord, Lord Mishcon, will be able to help us on that when he speaks.
I have been told by the noble and learned Lord, Lord Edmund-Davies, that I may cite him to your Lordships as one who supports the terms of the Bill. The noble and learned Lord, Lord Diplock, has indicated to me that I can mention his name as one who agrees entirely with the objectives of the Bill, though he would like to consider its precise wording at a later stage. I have referred in part to the letter of Lord Justice Lawton, and perhaps I should read a little more from his letter because it may be helpful to the House. In the course of his letter he says:
"In my opinion the magistrates should decide whether there should he any reporting at all and their decision should not be appealable either in the Crown Court or by way of judicial review ".
That is a matter which might also be borne in mind at a later stage. The letter continues:
"If reporting is to be allowed, whether on the application of one or all of the defendants, I suggest that Clause 1 (2A) should be redrafted to put the burden on those wanting it of satisfying the court that it is necessary for their fair trial. The discretion which your draft gives the magistrates is, in my opinion, far too wide. Allowing reporting if one or more defendants satisfies the court that lifting restrictions will be necessary for a fair trial will meet the argument that Press reporting can produce witnesses, although the evidence before the Tucker Committee shows that this very rarely happens ".
In addition to Lord Justice Lawton, I am able to tell the House that the noble and learned Viscount, Lord Dilhorne, has similarly intimated to me that I may indicate his wholehearted approval of the suggestions that Lord Justice Lawton made in that letter. There is, therefore, a very wide consensus, I would suggest, that the present position is thoroughly
988
unsatisfactory, that it can be dealt with in a simple way and, in those circumstances, I beg to move.
Moved, That the Bill be now read 2a—(Lord Wigoder)
8.7 p.m.
Lord ELWYN-JONES: My Lords, I am sure the whole House will be grateful to the noble Lord, Lord Wigoder, for his initiative in introducing this Bill, so enabling the House to consider whether the present provisions of the Criminal Justice Act 1967, governing restrictions on the reporting of committal proceedings, are working in the best interests—and he used the attractive phrase of the 1948 Act—"of the ends of justice ".
There is of course another public interest in this matter as well, and Lord Wigoder touched on it, namely the right of the Press to have as much access as is practicable and possible to proceedings in court. There is an old truism of the law that where there is no publicity there is no justice, but of course there are already several statutory exceptions to that broad propositon.
It is indeed a happy thing, as Lord Wigoder said, that the noble Viscount, Lord Bridgeman, is here; he was a member of the Tucker Committee which reported unanimously on this matter in 1957, and it will be interesting to hear from him whether, looking back over 22 years, he is now disposed to change his views at all in the light of the experience that has accrued in the meantime.
I am bound to say that I myself was impressed, as indeed I think was Lord Wigoder, by the grounds which influenced the approach of the Tucker Committee in seeing the need for restriction on reporting committal proceedings. Those he has identified, the first being that reports of committal proceedings often include reports of evidence which is not subsequently given at the trial proper or indeed is excluded at the trial proper on the grounds that the statement is inadmissible for the several reasons on which a statement, or indeed an admission, can be challenged. Those of us who have been engaged in the prosecution or the defence process have had many experiences—happy or unhappy, depending upon which side we were on—of this kind of matter.

989
Very often the enthusiasm of prosecution witnesses wanes in the interval between their original commitment to give evidence for the prosecution and the trial. Their memory fades. Pressures—I am not, of course, suggesting they are improper pressures—may be brought to bear on them, and the zeal and confidence with which the prosecution initially launched upon the process withers away when the time of trial arrives, and the enthusiastic prosecutor finds himself handling a skeleton rather than a living body. I say that with feeling in the light of some of my own experiences in this field.
But there it is, my Lords; it means that if those matters which are not in fact evidence at the trial are widely reported at the committal proceedings, it may be that, even if there is an acquittal of the accused, the harm done by the reporting of matters which were never in fact evidence in the case may damage the accused's reputation for ever. Often an acquittal is not as extensively reported as the trial itself. The other element which naturally caused concern to the Tucker Committee was, as the noble Lord, Lord Wigoder, said, that the enthusiasm of learned counsel opening a prosecution is again, for the kind of reasons I have mentioned, not borne out when the trial takes place.
Now I come to the third factor. Inevitably, the report of committal proceedings is usually one-sided in character. In 19 instances out of 20 only the prosecution case is described and developed at the committal proceedings, and a prudent defender will normally be well advised to hold his fire until the time of trial before the jury who will decide the guilt or innocence of the accused. So there again is an indication of the one-sided feature of reporting of committal proceedings, and therefore it is obviously right that there should be appropriate restriction placed upon it as a general rule, because it is damaging that there should be a sense of grievance, and indeed the feeling of public concern about that was one of the factors which influenced the Tucker Committee.
It is a matter of interest that there is no pre-trial publicity in Scotland or indeed on the Continent for pre-trial proceedings. Those proceedings are conducted in private. In Scotland the procurator fiscal does his
990
stuff, and in France the juge d'instruction also conducts the preliminary processes. There is no occasion for publicising the proceedings because they do not take place in public or in the presence of reporters. I must say that I do not feel that there is any great evidence of harm being caused to the administration of justice by reason of that fact.
I must also say that during the course of my career at the Bar I have very often been anxious about the damaging consequences that two-fold detailed repetition of unsavoury sexual abnormality in murder cases may have. I shall never forget, when I had the sombre duty of prosecuting in the case of the moors murders, how there were day after day in London reports covering pages of the evening papers, and it was the same in all the local papers throughout the country. There were daily reports of abominable events. I will not dilate on the matter further. To have taken part in the case was one of the most painful experiences of my career. The evidence was trotted out in detail day after day after day in a society which, like all societies, has its proportion of mentally disturbed people for whom imitation of such crimes may indeed have a dangerous attraction. So there is a menace and a threat in two-fold repetition.
Nevertheless having said that, I consider that it is right, as the Act ultimately provided, that there should be a saving option for a defendant who does not fear advance publicity, or is not worried about it from the point of view of his future reputation; he may not have a very great reputation to lose. But he may feel that perhaps somebody will come forward who may help him. I confess that during many years of practice at the Bar I came across one case where that occurred. That was when I held the high office of Recorder of Swansea, an experience that I shall treasure as one of the most happy in my legal life. Somebody did come forward on that occasion. I will not go into the details of the case; it was not a very attractive one to recount. But such a happening is, I believe, highly exceptional. Nevertheless it is a factor which the individual concerned is obviously very anxious about, and I am interested in the suggestions made by Lord Justice Lawton by way of amendment of the noble Lord's Bill to cover

991
precisely the kind of factor which an accused individual might seek to rely upon in applying for the publicity in his case to be reported.
Now, as the noble Lord, Lord Wigoder, has pointed out, the difficulty arises where there is more than one defendant and one of the defendants alone wishes to have the reporting restrictions lifted while the others do not, and take the view that their fair trial, or their position in the eyes of the law and of the public, would be damaged by the lifting of the restrictions before they reach trial. The solution offered in the Bill is in effect to give a discretion to the committing magistrate to decide the issue, having borne in mind the interests of justice in the matter, or the alternative language suggested by Lord Justice Lawton.
I am rather doubtful about this proposed solution because I believe that a great many difficulties stand in the way of the exercise of a judicial discretion in this matter. It would present the justice of the peace with an almost impossible task. He would have to try to weigh the degree of possible prejudice which might arise as between various defendants, and to decide whether on balance the prejudice to the defendant of taking one course was greater than the prejudice to another by taking a different course. The magistrate would have to do so without having knowledge of the case for the prosecution, which would not have been disclosed to him at that point, and without knowing what the defence of the respective defendants would be to the charge or charges brought against them. That is the kind of information that would be needed to enable the magistrate to decide the issue.
I do not consider that this is quite analogous with the consideration of an application for the severance of an indictment or for separate trials for defendants, where usually the issue is the problem of one giving evidence against the other, and matters which are rather more capable of becoming justiciable I should have thought than the issue which the committing justice would have to decide in the exercise of the suggested judicial discretion. I may be wrong about this—I am not saying it dogmatically—but this is my present feeling about the matter.
992
In the light of that, my own view at the moment is that the better course would be to follow the general principle of the Act. If any defendant believes that he would be prejudiced by the evidence being reported, then that should be decisive and there should be no reporting during the course of a trial in which he is in the dock. However, if a defendant persists in making his application for publicity, he should certainly be given the opportunity to put the point, but, in addition, he should be given the opportunity to apply for the separate trial of his case. It might well be that in the examination of that application his enthusiasm, bearing in mind the cost, labour, delay, et cetera, of a second trial, may wane and he may think it not worth pressing the point any further. I also appreciate, of course, that it could well be costly and would involve delay. However, if the trial of that one man standing out followed the trial of other co-defendants and the trial of those co-defendants resulted in acquittal, it could well be that, in those circumstances, the prosecution would not proceed with the individual's case anyway. One does not know; and one cannot give an assurance, of course, that that would necessarily follow. At any rate, I put that suggestion forward for further consideration, and I approach this matter fully agreeing with the noble Lord, Lord Wigoder, that the present position is not satisfactory and that we should move forward to endeavour to deal with its unsatisfactory nature.
My Lords, the noble Lord mentioned the existence of the Royal Commission on Criminal Procedure. They are examining this and other problems in this field, I have no doubt, in great detail; nor do I have any doubt that, as Royal Commissions do, they will be having lengthy consultations with those interested and those concerned. I am wondering whether, in all the circumstances, the best course may not be to await the outcome of the deliberations of the Royal Commission before we proceed to legislate in Parliament on this matter. This is not to say that I should for a moment resist the Second Reading of this Bill. Indeed not; and it may be that the Royal Commission might tell us that they would like to hear more views from, particularly, noble and learned Lords in this House,

993
who have apparently indicated that they support the objective of the Bill, as indeed I do myself. Indeed, the noble Lord has been able to call on some weighty names in support of the general objective that he has in mind, which I also share.
My Lords, that is my conclusion on the matter. As I say, I put it forward without dogma, but I venture to think that the course which I propose is the one most likely to meet the needs of the situation, although I would not go to the stake about it.
8.24 p.m.
Viscount BRIDGEMAN: My Lords, after listening to that very authoritative speech from the noble and learned Lord, Lord Elwyn-Jones, on the Front Bench opposite, and after hearing the list of legal luminaries whom the noble Lord, Lord Wigoder, says are going to support him in his action, it seems to me the most appalling cheek for a mere layman to get up and intervene in this debate. But, as the noble Lord, Lord Wigoder, mentioned the Tucker Committee, and as, since the noble and learned Lord, Lord Tucker, is no longer alive and I am the only Member of this House who was on that committee, I thought I ought perhaps to come here tonight and give one or two of my recollections about it. Of course, I ought not to have been on that committee at all. The original intention of my noble friends was to appoint the late noble Lord, Lord Merthyr, but he was sent to redefine the boundaries of Nigeria, and I was drafted in to take his place. So there I sat, trying to look at the scene from the only angle which I understood, which was that of one who sat regularly as the chairman of a magistrates' court in a country district doing the same sort of work, I imagine, as the court at Barnstaple normally does.
My recollections of the proceedings of that committee are still pretty clear, and I would hasten to say to the noble and learned Lord opposite that the report was a unanimous one. It reflected my opinion as well, and I have not had any reason to change my mind since. The evidence, as I recollect it, fell into three parts. First, there were the "sitters on the fence ", and we can leave them alone. Secondly, there was the evidence which came very largely from the Press, which took the
994
line that it was wrong to restrict the reporting of anything which the public had a right to know. In order to make that point, they had to argue that the risk of putting juries wrong was not so great as some people might have supposed; or, alternatively, that it was wrong to base legislation on one particular case—namely, the Bodkin Adams case. But the third category of evidence—and, as far as I remember, it was by far the largest body of evidence—was in favour of restrictions on reporting.
Therefore, the Tucker Committee made a perfectly clear recommendation, and with the leave of the House I should like to read three lines of it:
"We recommend that unless the accused has been discharged or until the trial is ended, any report of committal proceedings should be restricted to particulars of the name of the accused, the charge, the decision of the court and the like ".
That is in bold type. Then, in smaller type:
"No lesser reform would he both adequate and practical ".
That is a perfectly clear recommendation, my Lords, so one cannot be surprised if I come as a member of that committee to support any step which goes towards its complete implementation.
My Lords, when I reached the conclusion I did, which was to sign the report, there was another aspect of the situation. It was quite subsidiary, but it comes to my mind fairly regularly on this sort of occasion, and that is what a good thing it is if you can in any way save public or private time and public or private money. I think that we in this House sometimes gaily pass laws which create offences and then find, when those laws have to be enforced, that a lot of time and money is spent which may not be worth the purpose it was supposed to serve; and that, in particular, a lot of police time is wasted. So, quite apart from the merits of the case, I was very glad to find that it fitted in with my views about that.
My Lords, I am bound to confess that, having signed the Tucker Report, as the other members did, I lost sight of the whole matter except in so far as I found, while I was still chairman of a magistrates' court, that I could not remember a single case in which, when it was clear that there was a case to answer and the defendant was going to be committed for trial, every-

995
body was not fully ready to adopt the procedure which was available to them. Granted that we did not deal with any very serious cases, but there it was. My own attention was not drawn to the matter until I read about the recent proceedings at Barnstaple, when I realised that a loophole had been left by whoever drafted the Criminal Justice Act, which made possible what I consider to have been a public nonsense of the greatest magnitude. So we now have this Bill which I very much hope will get a Second Reading. Anybody who has looked into the matter at the very least will realise that the drafting of this Bill will need a great deal of careful attention to meet the points that we have heard about from the noble and learned Lord opposite.
I do not think it is for a layman to take part in this discussion. I am certainly completely unqualified to do so. All that I would say is that, if safeguards are to be provided, I hope that it will not be possible for any case to be reported in the magistrates' court if it is to go forward with a case to answer unless the magistrates, or whoever else are responsible, are genuinely satisfied that such a course would be (if you like) serving the ends of justice; and not for any other reason.
8.31 p.m.
Lord GARDINER: My Lords, my only object in being here this evening is to thank the noble Lord, Lord Wigoder, for introducing this Bill and moving its Second Reading. As a result of recent events, it is obvious that this is a relatively small part of our law which wants reconsideration and wants it fairly urgently. His speed in moving the Bill is to be greatly commended, for it gives us an early opportunity of considering it and I think that, of the two places, this is the best place for it to he considered. It is not, on any view, a matter of party politics and I am sure that we shall be helping the country on the whole by trying to tackle this on an early occasion.
It has never been altogether an easy question and there are altogether five or six different alternatives. One alternative would be to go back to what the law was before the 1967 Act was passed. That is a possible view. I spent a little time this afternoon reading the debate which took
996
place on this clause in 1967. I think that the noble Viscount, Lord Bridgeman, and I are the only Members of this House now present who took part in that. On that occasion, the noble and learned Viscount, Lord Dilhorne, moved an amendment to omit the clause altogether; and took it to a Division. I hope and believe that he has changed his mind since, but this is a possible view.
A second alternative would be to say that no preliminary proceedings before the justices, except for the particulars allowed by the section, should ever be reported. There is something to be said about this, because the suggested alternative, one can see, may give rise to certain difficulties. All that can be said against it is that we must think of those people who want witnesses to an alibi or even witnesses who were present but whom they do not know and could obtain when they are really innocent; and who wish to get evidence to support their case. As the noble Viscount, Lord Bridgeman, knows, his committee went through the question of how often this happened. They found that in 50 years there were 21 cases. I cannot remember precisely, but either 10 or 11 were acquitted; so that in 50 years there may have been 10 or 11 cases in which this happened, and no doubt it is right that we should provide for it.
There is one case I remember in which it simply resulted in a man going to the police station and saying, "I have read about this case. It was I who did it; and not this man ". Perhaps one should be at pains to try to allow, if one can, for those things. Then we get the question of whether the restrictions should be lifted because one person has asked for it. One sees the difficulties of that. One of the matters which the noble Lord, Lord Wigoder, might care to bear in mind, which has not been mentioned but which troubles me a little in thinking of the law being left as it is or, possibly, even if it is changed, is this. What happens if you get one man who is guilty, who knows he is going to be convicted (so that he does not mind what happens) and who is paid a large sum of money by a newspaper to ask for the restriction to be lifted? I do not know whether, under the proposal of the noble Lord, Lord Wigoder, justices should always ask somebody who has asked for the restrictions to be lifted

997
whether he has made a deal with a newspaper. But in the days in which we live and the large amounts of money which newspapers are prepared to pay, this is perhaps a consideration which should be borne in mind.
I do not disagree in any way with the general lines of the proposal which the noble Lord has put forward in the Bill with those amendments which he himself has adumbrated—and I am sure that he will take into account, also, the observations made by my noble and learned friend Lord Elwyn-Jones—subject, if I may be permitted to say so, to one point. That is—and I may be quite wrong—that I surmise that it may be some years before the Royal Commission on Criminal Procedure reports. If that surmise is right, it may be that this is a matter of some urgency which ought to be dealt with now.
Of course I shall be particularly interested to hear the views expressed by the noble Lord, Lord Belstead, because very much depends on what the Government attitude is to the Bill and whether or not they contemplate some amendments themselves. For the moment, I will reiterate my thanks to the noble Lord, Lord Wigoder, for having moved in so smartly so as to enable us to deal with this point.
8.37 p.m.
Lord MISHCON: My Lords, may I be permitted to re-echo the last words of the noble and learned Lord, Lord Gardiner, in commending the initiative of the noble Lord, Lord Wigoder, in bringing this Bill before the House. I mention what I am going to say for very definite reasons in regard to the Royal Commission on Criminal Procedure which has been mentioned. What I wanted to say was this. The recent proceedings in Minehead have called public attention to four matters which had worried practising lawyers for some time. The first one is the whole question of committal proceedings, the need for them and how they are carried on. The second one is the question of agreements between the media and witnesses in regard to the publication of stories or articles.
The third one is the right of silence of the accused, the negation of the right of comment by the prosecution and the
998
limitation upon the right of a judge when addressing the jury to deal with the matter of the silence of the accused. The fourth, and last, is the one with which this Bill deals; namely, the application for the lifting of reporting restrictions where more than one defendant is involved and in regard to the question of Section 3(2) of the Criminal Justice Act 1967.
Without any doubt at all, if I may so submit, there are two matters of those four which stand out as needing urgent attention. One is the question of agreements with the media and witnesses; and I need not say any more about that because I believe that there will be a Bill before this House dealing with this very matter. The second item which calls for urgent attention, in my submission, is the question of the right of one of the accused (as we saw recently in the Minehead proceedings) to insist upon publication when the rest of the defendants do not want it. That is something with which we have to deal, if I may say so, immediately; and we need not wait and should not wait for the Royal Commission to report.
The Law Society, the venerable institution of which I am a very humble member, was mentioned by the noble Lord, Lord Wigoder. I am proud to be able to say that I am authorised by the Law Society to tell your Lordships that they agree in principle with this Bill. There are two comments, as was fairly mentioned by the noble Lord, Lord Wigoder, which they make, but they are not comments that apply to the Second Reading; they are comments which may be thought about and lightly touched upon between Second Reading and Committee stage. One is this: it is felt that the question of an application of this kind is of such importance to the applicant who makes it and to the other co-defendants who disagree with it, that it should not be left to the magistrates alone to decide without any right of appeal. It is the view of the Law Society that consideration should be given to an appeal against the decision of the magistrates to the Crown Court, the judge there sitting in Chambers.
The last point is a topic which has been raised in the course of this discussion: whether, when one leaves it to the court, it is right and proper however appropriate it might he in another context to quote the language of the 1848 Act to leave

999
their consideration to the definition that it is,
"in the interests of justice so to do ".
It is felt that this is far too broad a definition of their responsibilities. Indeed, the court might think that it had to look at the whole consideration of whether publication of the committal proceedings in any event is a just thing, and that the wording ought to be very much nearer a consideration by the court as to whether greater hardship would be caused to the defence of the applicant if the application were refused than would be caused to his co-defendants if it were granted. Having said that, may I say that, from my own point of view and as a member of the Law Society, I commend this Bill most definitely to the House for Second Reading.
8.42 p.m.
Lord BELSTEAD: My Lords, the impression I have gained from the speeches which have been made by your Lordships this evening is that, in the words of the noble and learned Lord, Lord Gardiner, this is not an easy question. Should committal proceedings be published? That is the issue into which the committee under Lord Justice Tucker was asked to inquire 20 years ago; the Tucker Commitee recommended that unless the accused was discharged or the trial was ended, any report of committal proceedings should be restricted to a recital of the main particulars. Nine years later, the Government of the day took a somewhat different view: although the Criminal Justice Act 1967 provided that there should not be publicity for committal proceedings, it none the less enabled a defendant who preferred publicity to secure, as of right, that the restrictions on reporting should not apply in his case.
That remains the law on the subject today. Last year, my honourable friend Mr. Fairbairn, who is now Solicitor-General for Scotland, introduced a Bill which would have prohibited reporting beyond the bare essentials, in effect bringing the law into line with the Tucker recommendations, but this Bill, as your Lordships will know, was amended in Committee and it did not pass into law.
As someone who is not a lawyer, I must bear in mind that we are discussing a procedure preliminary to a trial, a proce-
1000
dure which is not concerned with establishing the guilt or innocence of the accused. Because noble Lords who are distinguished in the law have spoken, because we have also had the advantage of a speech by my noble friend Lord Bridgeman, who was a member of the Tucker Committee, and because the main arguments are essentially the same as those put forward when the 1967 Act was debated in Parliament, I will claim your Lordships' time for only a few minutes in trying to explain the Government's view of the Bill for which we are indebted to the noble Lord, Lord Wigoder.
The main argument for restricting publicity which has been mentioned by many of your Lordships is that publication of evidence brought in committal proceedings may jeopardise the chances of a fair trial in the Crown Court because members of the jury who have read newspaper reports have come to certain conclusions prior to hearing the evidence given at the trial. So far as the Government are concerned—and I am sure we are at one on this—there is no implied criticism of the media in saying this because it is usual for only the prosecution case to be presented to the examining justices, who will have to make up their minds about whether to commit the accused for trial on the basis of that case, so, as the noble and learned Lord, Lord Elwyn-Jones, said, 19 times out of 20 we only hear of one side of a case when full committal proceedings are reported.
It can also be argued that jurors may be prejudiced by prosecution evidence that was not challenged at the committal proceedings, was faithfully reported in the Press or on TV or radio, but is subsequently ruled inadmissible at the trial. Similarly, as the noble Lord, Lord Wigoder, said, the prosecution opening speech may be rather enthusiastic so it is not supported by the committal evidence or evidence given at the trial, and the prosecution may also adduce evidence at the committal proceedings which—for reasons about which the noble and learned Lord, Lord Elwyn-Jones, hazarded a few guesses—in the event is not used at the trial. It is this sort of information which, it is said, could prejudice the minds of those who may in due course serve on the jury if they read about it in the Press or see it on the television beforehand. Of course, whether or not committal proceedings are reported, there is nothing secret about

1001
them since they normally take place in open court. In theory at least therefore a juror can come into possession of advance knowledge of a case. But restricting Press reports does of course effectively make this unlikely.
The noble Lord, Lord Wigoder, adduced all these arguments and he will forgive me for running over them again but I thought it was right to do so at the end of this debate. The Tucker Committee considered all these arguments and concluded—did they not?—that there was no evidence one way or the other that reports of committal proceedings prejudiced trials. However, using its common sense—so it seems to me—the Committee pointed out that the result of full committal proceedings must be that everything which tells against the accused is published twice and what is in his favour only once, and concluded that publicity at the committal stage ought to be restricted. My noble friend Lord Bridgeman commended that view again this evening.
The arguments which persuaded Parliament against following Tucker entirely in 1967 were, in the first place, the possible benefit that publicity may prompt witnesses to come forward. The noble Lord, Lord Wigoder, said that he had known of no such cases personally in his career at the Bar. The noble and learned Lord, Lord Elwyn-Jones, told us of one case; and the noble and learned Lord, Lord Gardiner, reminded us of the Tucker statistics on this point, but reminded us, too, that when it happens only a few times it must be important.
I am bound to say that I am advised that there is no strong evidence to support this contention and perhaps it is right for me to record that Tucker dismissed it as "an extremely rare occurrence ". It has also been asserted that reporting of committal proceedings can have the beneficial effect of dispelling rumour and gossip about the nature and circumstances of a crime, which might otherwise continue unabated until the trial. To this Tucker commented drily that, "some hold the contrary view ". Finally, it has been argued that there is an element of paternalism in denying a defendant the right to have his case publicised if he thinks it is in his interests. It is this last argument which carries weight, and without compelling evidence I should like to make
1002
it clear that the Government would be reluctant to remove entirely from defendant the opportunity to have his committal proceedings reported by the Press who are reporting what takes place in open court. The difficulties arise where there is conflict between co-defendants as to whether or not there should be publicity.
After this debate, your Lordships are familiar with the provisions and the objectives of the noble Lord's Bill which seeks a middle course by proposing that where there is conflict between the defendants they should all have an opportunity to present their arguments for or against maintaining the restrictions and the court shall make an order to lift the restrictions only if it is satisfied that it is in the interests of justice to do so. I am bound to say that this may well be a difficult decision for the court to take. One might have, I suppose, two defendants, one of whom is a swindler on a large scale and the other co-defendant is an accomplice who has perhaps played only a brief and relatively unimportant role. At the committal proceedings the accomplice might well want publicity so as to bring forward further evidence against the swindler and thereby play down his own role; the interests of the other party would be likely to be the opposite. In such a case, I think the court would not find it easy to decide where the interests of justice lay.
I confess also that I am not entirely sure as to what extent it will be necessary for submissions to the court for or against publicity to disclose the defence case. As I have understood the debate, to be obliged to do so would be a departure from existing practice, since at present there is no general obligation on the defence to disclose their case before the trial. Also—and as a non-lawyer I am diffident about raising this point—it seems vital to discover the sort of considerations which should weigh with the court in deciding for or against publicity and whether the phrase " in the interests of justice " gives sufficiently clear guidance. The noble Lord, Lord Wigoder, addressed some remarks to this particular problem and, if the Bill makes progress, I think we may wish to return to this point to see whether it is desirable to try to give a clearer signpost to the court as to what is expected of it.

1003
I was going to venture to conclude that the problem with which the noble Lord's Bill will have to deal could be solved in any one of three ways. The noble and learned Lord, Lord Gardiner, made it six ways, and he would certainly be right; but for simplicity, and for my own benefit, may I say that what I had in mind was: prohibiting publicity of committal proceedings; by allowing publicity upon the application of a defendant or by leaving the court to decide. The noble and learned Lord, Lord Elwyn-Jones, put forward a fourth method of advancing, and I am sure that the noble Lord, Lord Wigoder, will be wishing to take the noble and learned Lord's suggestions into serious account before the next stage of the Bill.
The fact at the moment is that this Bill chooses what I might call my third solution, which carries with it some practical problems; but let us bear in mind that the noble Lord's Bill is designed to improve on a situation which is clearly not regarded as satisfactory by any of your Lordships who have spoken this evening. As several speakers have said, the whole area we are discussing lies within the terms of reference of the Royal Commission on Criminal Procedure, and I understand that on consideration of the Bill of my honourable friend Mr. Fairbairn a few months ago, the previous Home Secretary, Mr. Merlyn Rees, ascertained that the Royal Commission would have the question of reporting restrictions under review. However, your Lordships may wish to be made aware that on that occasion the chairman of the Royal Commission expressed the view that if a clear consensus of parliamentary opinion on this subject became evident, the Royal Commission would wish to take such a consensus into account in formulating its own views. That is also the view of the Government.
Lord ELWYN-JONES: My Lords, can the noble Lord help us as to whether my noble and learned friend Lord Gardiner's pessimistic estimate that the report, to coin an ancient phrase, would be a matter more of years than of weeks is an accurate one, or has he some more hopeful message that we may look forward to an earlier report?—because that would certainly influence my view on this matter.
Lord BELSTEAD: My Lords, I am sorry: I was afraid that the noble and learned Lord would ask that question following upon the remarks made by the noble and learned Lord, Lord Gardiner, on this matter. I have not the answer readily available and I think it would be for the convenience of the House if I wrote to the noble and learned Lord, and perhaps made other speakers in the debate aware of the letter I was writing to him.
So far as the expression of opinion by the chairman of the Royal Commission is concerned, the view of the Government is the same. We recognise that this is a topic about which there has been much concern. We welcome this debate and if the principles of the noble Lord's Bill command the support of your Lordships this evening, the Government would not wish to stand in the way of its progress. It may, as 1 think the noble Lord recognises, be necessary to put forward some amendments for consideration during the Committee stage of the Bill.
8.55 p.m.
Lord WIGODER: My Lords, I am deeply grateful to the noble Lord, Lord Belstead, for what I regard as a most constructive and helpful approach on behalf of the Government. I am grateful, too, to all those noble Lords and noble and learned Lords who have made such interesting and valuable contributions to this short debate.
It would be wrong to take any time at this stage of the evening, except perhaps to make two comments. So far as the Phillips Commission is concerned, however long or short the time may be before it reports, it is perfectly clear that it is going to report on a whole series of very much more important issues than this, and that they are issues which are going to be bitterly and hotly contested throughout in both Houses of Parliament. I cannot believe that effective legislation can follow the report of the Phillips Commission for some considerable time afterwards. If your Lordships agree that there is an urgent problem to be dealt with here, then I would suggest it might not be wise to wait for what might be a very considerable time.
The other comment I would make concerns the suggestion made by the noble

1005
and learned Lord, Lord Elwyn-Jones,that this matter might perhaps be dealt with, where there was a difference of opinion among defendants, by allowing separate trials to take place. Perhaps I might give my immediate reaction to that, although I should like to think about this suggestion very carefully. We all know, as a matter of practice, that where two defendants are jointly charged, their prospects of acquittal are greatly increased if they can obtain separate trials; and it might be tempting for defendants in such a situation to find that they have a new statutory means of securing a separate trial if one of them can find, by some device, a method of asking that reporting restrictions should be lifted.
I am in no doubt, having listened to this debate, that your Lordships would agree that the present position is unsatisfactory and that your Lordships would also agree that somehow the right must be preserved for a defendant to lift the restrictions on reporting, provided he can satisfy the court that he has a good, honest, valid reason for doing so. I believe in fact that will be in a very, very small number of cases, and therefore that it ought to be practicable for us to find a means of resolving this problem at a later stage.
When the noble Lord, Lord Belstead, indicated that it might be desirable for assistance to be given in amending this Bill, I would say, if I may, that I did not take that as a threat but as a very sub-
1006
stantial encouragement. I should be deeply grateful for any assistance that might be forthcoming. If your Lordships were good enough to give this Bill a Second Reading, it may be that we might perhaps postpone the Committee stage until after the Recess. That might give all of us the opportunity to take further soundings and have further consultations so that we could come back to a Committee stage with amendments that would enable this Bill to pass into legislation in the near future. In those circumstances, as I say, I am grateful to all of your Lordships who have helped in this debate, and I ask the House to give this Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

SALE OF GOODS BILL [H.L.]
Reported from the Joint Committee with amendments, and recommitted to a Committee of the Whole House; Bill to be printed as amended.
BRITISH RAILWAYS (SELBY) BILL
Returned from the Commons with the amendments agreed to.
  MR. MAPOSA AND MR CHIMPAKA
  MR. MAPOSA AND MR CHIMPAKA
  POWER ASSISTED BICYCLE PRODUCTION
  POWER ASSISTED BICYCLE PRODUCTION