Orders of the Day — Prices and Incomes (No. 2) Bill

– in the House of Commons at 12:00 am on 10th July 1967.

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As amended (in the Standing Committee), considered.

Clause 1.—(POWER TO EXTEND PERIODS OF STANDSTILL UNDER PART II OF PRICES AND INCOMES ACT, 1966.)

3.50 p.m.

Photo of Mr John Nott Mr John Nott , St Ives

I beg to move Amendment No. 2, in page 1, line 8, after 'prices' to insert 'other than retail prices'.

When the dangers of cost-push inflation first became a serious topic of study, in the 1950s, a proposal was developed to introduce a policy of productivity, prices and incomes. In this form, with the emphasis on productivity, the policy was, on the whole, a constructive one.

During the past two years, under the Labour Government's administration, the whole prices and incomes policy has become more and more negative and is now concentrated almost wholly on controlling prices and restraining incomes rather than on encouraging productivity. Month by month we see examples of the Government's proliferating controls and interference and of their becoming more and more dictatorial about prices and incomes; so much so that the whole of the market mechanism is beginning to break down.

Proposals are now being put out by the Government for commando teams led by Mr. Aubrey Jones to investigate price increases in the shops. The Amendment, which relates to retail prices only, draws attention to a matter where the Government are getting increasingly into deep water and where it is possible and easy to show that control of retail prices through the National Board for Prices and Incomes is not only unnecessary, but is also unworkable, impractical and undesirable.

Although I am personally violently opposed to a policy of retail price control, I fully appreciate and understand why the unions have been demanding it. The unions, which have suffered from Government interference in the free bargaining of wages and which have had contracts entered into between employers and employees forcibly severed as a result of the Government's prices and incomes policy, have rightly and understandably demanded as a quid pro quo that there should be a peg on prices as well.

The fact that the unions have demanded a policy for prices is not in any way to be held against them, but prices are the only way in which demand can be kept in balance with supply. If the Government believe that they, by interfering in the price mechanism, and, in particular, with retail prices, are able to improve upon the market and the means by which it can keep demand in balance with supply through the flexibility of prices, the policy has reached a most remarkable stage of stupidity.

The first thing to be said about retail prices and their control is that this type of reference to the Board is unnecessary. The retail trade is fiercely competitive and, with the abolition of resale price maintenance, is becoming more so. The scope for retailers to raise prices unreasonably is very limited indeed. In no field are the sanctions and benefits of a competitive free market more obviously to be seen than in retail prices.

The extent of the competition in the retail trade is evidenced by the figures produced by the Department of Economic Affairs in its June progress report. The report shows that, of the 2½ per cent. rise in retail prices which took place between July, 1966, and April, 1967, 1 per cent. was purely the result of Government action in increasing Purchase Tax, in imposing Selective Employment Tax, and in increasing postal charges. A further 1 per cent. was accounted for by seasonal price increases. Therefore, a large proportion of the 2½ per cent. rise in retail prices which took place was due to increased taxation by the Government. Another large proportion of it was due to seasonal price increases. Only ½ per cent. of the 2½ per cent. could be attributed to price increases to improve retail margins.

During the same period of July to June average earnings rose by 1·5 per cent., against retail prices which rose by ½ per cent. if one takes purely those aspects of retail prices which could be attributed to increased margins on the part of retailers. Likewise, from April, 1963, to April, 1966, retail prices rose by 11½, per cent., whereas average earnings rose by 25 per cent.

Earlier this year the Minister of Agriculture said that he had no evidence that retailers are in general working to excessive margins and"— that he did not— propose to introduce legislation."—[OFFICIAL. REPORT, 10th May, 1967; Vol. 746, c. 242.] This was a perfectly fair statement, because the rise in prices had come about predominantly through increases in Government taxation and through seasonal fluctuations and not through profiteering on the part of retailers.

I take a department store as an example of how difficult it will be to introduce any kind of enforcement of retail price control. A department store may sell 300,000 individual items. Its pricing must be related to its costs. It is virtually impossible in such a store to isolate individual items, as, clearly, would have to be done if a retail price were referred to the Board. Only now is it becoming possible to say that during last year retail margins were stable. How will it be possible to refer a particular retail price to Mr. Aubrey Jones's Board and for him to report within one month that that price is unfair when it is only now becoming evident, some six months after the end of the year, that retail margins were stable last year?

The fact that the Jones Board is expected to make an investigation and, within one month, denounce a price as being unfair—presumably it will be entitled to denounce a price as being unfair, even though the price is competitive—is evidence enough that the whole idea of referring retail price increases to the Board is thoroughly impracticable. Day by day retailers are making adjustments to prices to accord with adjustments in their suppliers' margins, to accord with seasonal adjustments, and also to hold their own stores margins which come about to cover their own costs. It would be impracticable and unworkable for any board consisting of 20 men to pronounce on retail prices as being fair or unfair or reasonable.

What happens if the Board sets a price limit to a commodity which is being sold at 10 separate shops down the high street? The suggestion that this should be done is one of the most remarkable aspects of the Government's policy that we have yet seen.

Why are the Government attempting to do so? I fear that it is because the First Secretary invited housewives to write to him about price increases, as a result of which I believe that he has had about 18,000 letters complaining about price rises in the shops. I do not think that there has ever been a clear statement to show how many of these price increases have been attributable to a rise in retailers' margins. In view of the figures published by the D.E.A., I doubt whether many of the increases have been attributable to increased retailers' margins.

It is because the First Secretary is now bombarded with complaints on price increases that he is suggesting that retail prices should continue to be referred to the Board. This is the way in which he is trying to convince the country that he can do something to hold prices in check.

Finally, we on this side are well aware that there are many families, particularly pensioners, who are unable to bear a further increase in prices. Hon. Members must be aware of this from their constituency correspondents. Surely the way to tackle the problem is to revise the Welfare State so that it becomes more selective and so that those families who are living in poverty, and pensioners in need, are helped and are able to pay the prices they are being asked for in the shops. The way to do this is not to impose controls and to refer retail prices to a Board which cannot possibly be more effective than the market mechanism.

The Government's whole policy on prices and incomes is an absolute mess. They have not tackled the really important questions which remain unanswered. Some of the unresolved questions about which we should like to hear are these: how does one measure an increase in productivity—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The unresolved questions the hon. Gentleman must raise on other Amendments, not on this.

Photo of Mr John Nott Mr John Nott , St Ives

I conclude by saying, then, that the Government's proposals to refer retail prices to the Prices and Incomes Board are unworkable. They involve an unwarranted interference with the market mechanism. The suggestion that there should be a team going about to investigate rises in retail prices is impractical. The only way by which retail prices can be held down is by increasing productivity in the retail trade, and that can come about through greater competition.

4.0 p.m.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I support the excellent speech made in moving this Amendment by my hon. Friend the Member for St. Ives (Mr. Nott). When the right hon. Gentleman, some time ago, requested that the public should report to his Department any price increase which they thought unreasonable, he was asking for trouble. I believe that he got it. He well deserved it, because that request was merely the futile fruit of an even more puerile policy.

We are running into the serious danger of attributing to the comparatively innocent Mr. Aubrey Jones and his colleagues an ability to be everywhere and to know everything. I do not believe that Mr. Jones would accept the attribution. Nevertheless, I think it dangerous that a board of this kind, with rather loose powers of supervision, at least at first, should be called upon to conduct an operation of this sort. As my hon. Friend said, the Government's prices and incomes policy is a mess, and now to engage in an exercise of interference on a massive scale to deal with any complaint which is made, and to have a commando—I think that that was the expression used at one time—to examine increases in retail prices is to undertake an exercise which simply cannot be performed and should not be performed in a free society.

When the first Prices and Incomes Bill was introduced by the right hon. Gentleman who is now Foreign Secretary I said that the Government were taking a step down a wrong road and that, being human—one must concede that to all Governments—they would, when they found that they were wrong, merely take another step down the same road. The proposal before us now is a good instance of the truth of that observation. The Government are being led, in pursuit of an absurd policy, into ludicrous measures. I very much hope that they will think again before they further discredit themselves and the whole machinery of Government by taking on a load which no Government can or should discharge. My hon. Friend was absolutely right in all he said, and I support him with enthusiasm.

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

What I find a little odd about the Government's proposal to control retail prices is that they have been so enthusiastic in destroying the only method yet devised which did effectively control retail prices, namely, retail price maintenance agreements. When one had manufacturers concerned for the repute of their products and deeply concerned as to the prices at which they were passed on to the consumer, one had an effective level of prices, and it did not always work only one way. One remembers the tremendous effort put in after the war by the motor car manufacturers to prevent the exploitation of the shortage by the retailers. That worked very effectively. I cannot believe that anyone other than the manufacturer can police a system of this sort.

If we want to control retail prices, we shall have to get over our prejudice against retail price maintenance, because that is the only way we shall do it effectively. If we can, working through the manufacturer and, perhaps, through the Jones Board, work out a basis for fair prices at the various levels, we can have an enforceable system.

I speak on this question largely because, a good many years ago, I did a lot of work on it on what was called the Lucas Committee, which considered how to control retail prices of agricultural and garden produce. The proposal which we then put up was that the system should be worked entirely through the market, that, if one controlled the wholesale market, then the write-ups on the wholesale market price could be controlled within a maximum.

I do not believe that, unless we control the wholesale link, it will be remotely possible to control the retail price when we come to that end. It just is not a policeable method. It reminds one a bit of speed limits on the road. We have not got the machinery to make them effective. Unfortunately, although there is no direct profitability in exceeding the speed limit, there is every profitability in exceeding a controlled price. Therefore, we shall have even more mischievous results in the shops than we have already on the roads.

Photo of Mr Hugh Wilson Mr Hugh Wilson , Truro

I support the Amendment. When it was first proposed that there should be commandos and the rest for the examination of retail prices I expected to receive a number of complaints from my constituents about this and that retail price. In fact, I have had none. I receive a good many complaints about the nationalised industries, about coal, gas, postage stamps, and so on. I do not believe that the general public are in any position to judge whether a retail price is reasonable or unreasonable, or whether an increase is fair or unfair. It seems to me that, at best, it will be very much a hit and miss business.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

The hon. Gentleman says that he has had no correspondence. I have had over 100 letters complaining about increases in retail prices. My constituents are perfectly capable of judging a price after it has been increased, and I am certain that the hon. Gentleman's constituents are equally capable of doing it.

Photo of Mr Hugh Wilson Mr Hugh Wilson , Truro

I can only repeat that I have had no complaints. Perhaps there are people in the hon. Gentleman's constituency who are taking more interest in this matter. As I say, I think that it will be very much a hit and miss affair as to whether any complaint is made or not. I greatly doubt that the Government's proposals are satisfactory or workable, and for that reason alone I support the Amendment.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

This Amendment gives me the first opportunity to intervene in the debate on this important Bill. I think that I speak for a good many of my hon. Friends who are in the same position, seeing that many hon. Members on these benches who expressed strong criticism of the Bill were not on the Standing Committee. I begin by making that point and saying that, at least so far as some of my hon. Friends and I are concerned, there will be no repetition of what we were not able to say in the Standing Committee.

The point of the hon. Member for Truro (Mr. Geoffrey Wilson) is of capital importance. He said that the public are not capable of judging whether increases are justified. If he put this point to public meetings, the response would be a rough one. Hon. Members know that, during recent weeks, the main subject of discussion with constituents, regardless of party, has been retail price increases.

In fairness to my right hon. Friend, he has never denied that there have been some increases. He would not think of doing so, in the face of the facts. He has argued that there has been a more limited increase than would have been the case under previous Administrations, or in different circumstances, and that, as there was a heavy increase in earnings just before the introduction of the Prices and Incomes Act—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. With respect, that point must come some other time. The hon. Gentleman must confine his remarks now to this Amendment.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

With respect, Mr. Speaker, the Amendment deals with retail prices and my right hon. Friend has recently made statements dealing with them. The reasons for increases must be part of the subject of the debate. I made only a passing reference to it, but I had to make it.

My right hon. Friend said that, as there had been considerable increases in earnings before the Act came into force, it was to be expected that there would be—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. I hope that the hon. Gentleman will take note of what I say. The Amendment seeks to exclude retail prices from those which are controlled. The hon. Gentleman will have opportunity to talk about the general issue of prices at some other stage.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

I see the issue as the possibility of controlling retail prices and the hon. Member for St. Ives (Mr. Nott) —it is rare that I seek to challenge your Rulings, Mr. Speaker—is trying to exempt all retail prices.

To use Parliamentary language, this Amendment would completely emasculate 50 per cent. of the Bill, and this crucial Amendment must be discussed. Our experience of retail price increases is that a one-sided position has been created, as many of us predicted. Under this Bill, which will continue some of the Government's policies and the previous legislation, we will have the same experience. This is not incomes and prices legislation, but legislation heavily concentrated on the control of wages—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Gentleman must take note of the previous observations of the Chair. These points might be made on Third Reading, but not on this Amendment.

4.15 p.m.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

The exemption of all retail prices means that the Government would have no power to control retail prices. In considering the Amendment, it is crucial to judge whether the retention of what the hon. Gentleman wishes to remove would give an effective price control policy. Without such a consideration, no one can make a case on the effectiveness of the proposed legislation. If the hon. Member has his way, there will be no control of retail prices, and the Government have been arguing that this is a prices and incomes policy.

Although I would oppose the hon. Gentleman's attempt to emasculate the Bill on the prices front, and to prevent my right hon. Friend having any powers, I would like my right hon. Friend to tell us how he sees his opportunities under the current legislation, if the House rejects the Amendment, for effectively controlling prices. The House would make it too easy for my right hon. Friend—I have no intention of doing this, as this is of paramount importance to my constituents and to people in general and will be for many months to come—if we merely accepted his advice to resist the Amendment. If the Government merely argued that they should retain the powers in the Bill, it would be too easy.

I am putting the kernel of the argument. Given that the appeal which he will make to reject the Amendment succeeds, what detailed proposals has he, under these powers, to control prices effectively? I did not want to stray out of order, but I cannot put this point with any force unless I make my complaint, which is that of many people throughout the country, that the powers so far have been completely ineffective in controlling prices. He must tell us how he intends to proceed in future and whether he hopes for more success than in the past.

Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash

The hon. Member for Penistone (Mr. Mendelson) was concerned with whether, the Amendment were accepted, the Government would not have enough control over retail prices, but he mised the burden of the argument, not only that the vast proportion of retail price increases are within the Government's power to control but that recent increases have been largely due to Government action. The Government are resorting in the proposal to examine retail prices and the way that this has been brought to the public's notice, to the kind of doubtful "leaked" stories similar to the D Notice story in the Daily Express.

This could be called the "L.S.D." story with the news of the shock "commando" scrutinising individual prices. This is the worst sort of intimidation, and uncertain shadow Government by innuendo to which we are becoming accustomed under present Ministers, and it will not do.

The First Secretary has emphasised the so-called voluntary principle, but my understanding of "voluntary", dating from Army experience of the voluntary church parade, is that it implies the opportunity to opt out, and this is what the Government seem to be disallowing. They have the other conception of volunteering, which in the Army was symbolised by, "You, you and you". Do they really believe in the voluntary principle—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. That is a general question which might come on another occasion, but not on this one. The hon. Gentleman must address his remarks to whether retail prices shall be included or not.

Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash

I come back to the point, that the Government are taking quite unnecessary powers. They already have the main responsibility for increases which have taken place in retail prices recently. Judging by the leaked reports in the Daily Express, and our suspicion that they will seek to reject the Amend- ment, the Government appear to be trying to shift the odium for retail price increases from where it belongs, which is in their own court, on to the unfortunate shopkeeper who is the last soldier in the rank in respect of all the pressures which built up earlier in the line as a result of increased prices.

As my hon. Friend the Member for St. Ives (Mr. Nott) pointed out, over half of the 2½ per cent. increase in the Index should be laid at the door of the Government as a result of Purchase Tax, Selective Employment Tax and the recent increase in petrol prices, and the 2s. in the pound increase in electricity charges will also be passed on. How will the right hon. Gentleman disentangle all these things when he examines retail prices? All he is doing is shifting the odium on to the retailer, who has to digest the varied increases which the Government generate. How will blame and praise be apportioned? Once an unfortunate retailer is to be examined by the "ghost squad", his reputation will be lost.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I wonder whether my hon. Friend has any evidence for supposing that the squad will be a ghost squad? I should wholly welcome that.

Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash

The "ghost squad" is an effective arm of Scotland Yard. If that connotation is to apply, the squad will probably be only too effective if it is used by the Government. As I say, odium will be cast on the unfortunate retailer, and this will be largely the responsibility of the Government.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

Is the hon. Gentleman saying that the one person at whom the Government must not look to keep prices down is the retailer?

Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash

No, I am saying that they must not adopt this system of the ghost squad, the connotation which they apparently leaked to the Press, as the system which they propose to introduce to discharge the so-called voluntary aspect of prices and incomes. Apparently they are to send people round to scrutinise prices in the shops and hold them up to public scrutiny. This is not in the White Paper, but it has been publicly leaked to the Press by the Government. It is monstrously unfair.

The extra cost of electricity may be a factor which may be allowed under the recent White Paper as a legitimate reason for increased prices, but one thing is not clear. The proposed increases in electricity charges will come into effect in September and will amount to 2s. in the pound, and they will have an immediate effect on retailers already hard hit by Selective Employment Tax. But electricity authorities are apparently to be allowed to increase their charges because of a back-log.

According to the Financial Times of 30th June, the Minister of Power, apparently in a private address to a meeting of the Parliamentary Labour Party, said: The Government had already delayed earlier price increases— for electricity— because of the incomes policy and now charges had to take account of the back-log.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

The hon. Gentleman cannot, on this Amendment, discuss the merits of the electricity charges. He can mention them, as he has done, but he cannot argue about them.

Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash

I will not argue about them, Mr. Speaker, but I should like to know whether the principle of taking up the back-log of increases in prices, which has been adduced by the Minister of Power to justify the price increases, will be allowed to ordinary retailers. If so, how will the Government decide where blame and praise really lie?

In this idea of an unofficial body going round snooping we see the danger of the reputations of individuals, firms and so on being tarnished through being selected for special treatment. They will be held out to the disapproval of the public because the Government are trying to shift the odium on to a section of the public which should not bear it. The greater part of the responsibility lies with the Government. The increases in retail prices are sometimes directly and in many cases indirectly the result of the Government's policies.

I have already mentioned the Selective Employment Tax and the increase in the cost of petrol, and so on. What about the increase in Purchase Tax for motor cars sending up the prices of secondhand motor vehicles or the secondhand market generally suffering increases in prices as a result of squeezes in other directions? Is this held to be undesirable? What about the price mechanism in housing? It may well be that the level of rents, particularly council house rents, can best be kept down by allowing increases in certain sectors.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Gentleman must not let his enthusiasm carry him away. We cannot discuss the whole of the Government's policy on this Amendment.

Photo of Mr Michael Alison Mr Michael Alison , Barkston Ash

My enthusiasm, Mr. Speaker, is entirely for the Amendment and in no way for the Government's proposals in the Bill.

The First Secretary has done what appears to me to be an ungenerous and uncharacteristic trick in putting forward in the newspapers the idea of a ghost squad. I hope that he will come clean about this and recognise that the greater part of the price increases which we have suffered is his own responsibility and will stop the policy of snooping and innuendo, which seems to be such a part of the Government's policies.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

The hon. Member for Barkston Ash (Mr. Alison) was apparently very worried about the Government accepting odium. His argument about the effect on prices of Government policies has always been accepted on these benches. Indeed, we have been sneered at from the other side for accepting what he calls odium. It is true that of the very small increases which have taken place in the retail index a considerable part is due to policies of the Government which were necessary because of the critical situation in July. We do not in any way disagree that we were responsible for a goodly portion of the 2½ per cent. increase in the retail index which has taken place in the last nine months.

So that we may put the matter in its correct perspective, let us take another critical nine-month period, that to which was given the term "the Selwyn Lloyd freeze", when retail prices increased by 4½ per cent. instead of 2½ per cent. Perhaps by this means we can get the relative accomplishments of the two parties in their right perspective.

Under Part II of the 1966 Act, a temporary standstill under Section 7 (3,b) or Section 8(2) can be imposed on increases in manufacturers', wholesalers', or retailers' prices. If we accepted the Amendment it would mean that retail prices would be completely excluded from our purview.

I was asked questions by a number of hon. Gentlemen about ghosts or commandos and matters of that sort. I, too, read in the newspapers that the Government were thinking in terms of getting together a squad of people to investigate retail prices over a wide area. It is entirely untrue that the Government have made any such arrangements. What we have discussed is that, when there is a concentration of complaints about a particular price increase—when we are receiving well over the average number of complaints—we would think it right to have a close look at that price.

That is a very different matter from what the hon. Member for Yeovil (Mr. Peyton) was talking about. We appreciate that, in a nation in which there are 2 or 3 million price movements a year, one cannot possibly have a huge squad of people going round supervising every price. Nor would the Government attempt such a thing.

4.30 p.m.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I want to get the record straight. I did not initiate the reference to a "ghost squad". It was my hon. Friend the Member for Barkston Ash (Mr. Alison) who referred to it for the first time. I expressed the pious hope that it would consist only of ghosts because disembodied spooks would do less harm whereas a heavy-footed squad sent round by the Government would cause a lot of alarm and confusion.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

There will be neither heavy-footed gentlemen sent round by my right hon. Friend or by me nor the ghosts of Christmas past, present or future. I have explained what it is we have discussed and it is not the grandiose statement which appeared in the Press.

This debate has been interesting. The hon. Member for St. Ives (Mr. Nott) told us that there had been a remarkable stabilisation of retail prices—he suggested that it was such a great success story that there was no need for us to have any kind of control at all. That was a true chronicle from the Conservative Party of the events of the last 12 months and I accept it entirely.

My hon. Friend the Member for Penistone (Mr. Mendelson) rightly asked whether we believe that, arising from this new legislation, we could achieve success similar to that which, quite rightly, the hon. Member for St. Ives congratulated the Government on achieving during the last 12 months.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

As my right hon. Friend is enjoying himself, I ask him to remember that if he goes on for years to come to use the praise of hon. Members opposite, but fails to get ours, it might put him in a queer position one day.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

I am speaking in the knowledge that the vast majority of my right hon. and hon. Friends support me, even if two or three do not, on this point, find themselves able to do so. The same apparently obtains on the benches opposite.

We are fortified by our success and now that we have proved our case by facts and figures we believe that we can bring about not what hon. Members opposite have described as further restrictions—an odd choice of phrase, since the Bill is much less restrictive—but something far more constructive in its approach to the prices and incomes policy. I do not think that we should be too despondent and talk in terms of restriction rather than of a constructive approach.

If we continue as we intend to continue, supervising manufacture and wholesale prices—which, in any case, is a responsibility of Government Departments quite apart from the prices and incomes policy—and achieve success, gaining improvements in manufacturing and wholesaling methods, it would be unfair if retailers were able to cream off the results of improvements in efficiency of manufacturers and wholesalers.

There has been one occasion on which the Government asked the Prices and Incomes Board to look at a retail price and I would have thought that, on a day like this, it would commend itself to hon. Members. In its Report on Costs, Prices and Profits in the Brewing Industry— Command Paper No. 2965—the Board made recommendations about the retail price of beer charged in public bars and recommended that, with some exceptions, there should be a standstill of from six to nine months. Surely that was an achievement worth having. It may well be that we shall require on future occasions specific power to look at retail margins and it would be wrong for us to rob ourselves of the ability to do so.

My hon. and learned Friend the Member for Northampton (Mr. Paget) argued that we should retain resale price maintenance. It was not the Labour Party which introduced the Resale Prices Act although, in fairness, I should say I believe that we are now beginning to benefit from it. I believe that, in some directions, there is, in the retail trade, more competition than there would have been without the Act.

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

Order. I understand that Mr. Speaker intervened to keep the debate to the Amendment, which is that retail prices should be exempt from any standstill after the pause. I find it difficult to believe that the Resale Prices Act comes within the provisions of the Amendment.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

With respect, Mr. Deputy Speaker, I would have thought that I was no, far off. I was arguing that the Act had had a beneficial effect on retail prices. However, I shall not continue that line.

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

On a point of order, Mr. Deputy Speaker. It was I who raised this subject when Mr. Speaker was in the Chair. The argument I was putting then was that one would never successfully control prices except through the manufacturer or supplier and that one could only do that through some form of price agreement between the manufacturer and the retailer. I thought that that was in order and I think that Mr. Speaker also thought it was.

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

I would not be too happy to pronounce upon that now because my feeling is that the argument is, nevertheless, a little wide of the Amendment. However, as the Chancellor of the Duchy of Lancaster is going on to some other subject, I will not press the point.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

I have practically finished the argument I wish to deploy, Mr. Deputy Speaker.

I believe that it is essential to retain these powers. The debate has been helpful in informing the country of the success we have achieved. I know that some of my hon. Friends still believe that greater success could have been achieved in some other way. I have said that this is a huge operation and that no Government in a democratic society ever could hope to set up a mechanism which could control every retail price movement. Nor would we attempt to do so.

I have argued that other events have brought extraordinary pressures to bear and the stability of the retail price index, in spite of these pressures, has shown that our policies are succeeding. This is not now a matter of theoretical argument about what may or may not happen a few years from now: we have already achieved great success in this respect. Especially among low-paid people the steadying influence of our policies on the cost of living have been of great value. When one looks at the backlog of other issues which produced the pressures which we had to counterbalance by our legislation, I believe that we are entitled to expect that the House will support us in retaining the powers which we now have.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

If the Chancellor of the Duchy believes his peroration, he will believe anything.

I was disappointed that the right hon. Gentleman rose so early in the debate—we have hardly started it yet. It is only in the interests of tidy debate that I follow him, although I hope that other Members will continue this most important point.

The Chancellor of the Duchy went on to move a vote of thanks to my hon. Friend the Member for St. Ives (Mr. Nott) because, whatever alliances may be formed in the course of the evening, or night, he has succeeded in uniting the other side on an issue concerning prices and incomes—a very remarkable achievement indeed.

I would like to support the Amendment by an illustration from the particular before I move to the general. My experience of constituents has been somewhere between that of the hon. Member for Penistone (Mr. Mendelson) and that of my hon. Friend the Member for Truro (Mr. Geoffrey Wilson). I have not had anything like 100 letters, but I have had some. I agree with the hon. Member for Penistone, on the issue of retail prices, that the public can judge, but I go on to draw the conclusion that because that is so we do not need the provision that is in the Bill and we should support the Amendment.

The particular instance that I give—I dare say other Members could match it from their own correspondence, but it illustrates the deep waters that we are in when we try to contemplate power over retail prices—came to me from a woman constituent who is obviously extremely intelligent and persistent. The facts are that after a period of severe restraint a world-famous brand name on a toilet preparation changed from a plastic to a glass container, and to pay for the additional cost it reduced the amount from 35 grammes to 25 grammes. The retail cost remained the same, but there was a substantial increase in price because of the reduction in content, leaving aside the merits about whether the container is or is not an improvement.

My constituent wrote to me, to the Consumer Council, to the firm and to the Board of Trade. To the firm she said that she preferred the old plastic container to the glass, because it was easier for travelling, and that the cost, taking into account the reduction in content, was too much and that she would no longer buy that particular brand. That action by her was exactly right, because that is the operation of the market. If her opinion is the right opinion on this particular retail price and if all the other people in the country who buy this preparation took the same action, the firm would "go broke". That again is the operation of the market.

However, there is the other side. The firm does not make these changes because there is an "r" in the month or to have fun. In this case, the firm went in for extensive market research and its view was that the container and the new improved system, which we are so used to hearing on television, was an improve- ment. If the firm is right then people will buy it and the firm will prosper and that is as it should be.

In other words, on this particular retail price—and hon. Members could no doubt duplicate this from their own correspondence over and over again—the position of my constituent in complaining and refusing to buy the product is absolutely right. The action of the firm is for the future, because this is a matter of supply and demand and the way the market works. The firm thinks it is right and my constituent thinks it is wrong. No doubt we shall see.

4.45 p.m.

But it is nothing to do with the Board of Trade to whom this matter was in due course referred, and because we do not believe that these matters have anything to do with a Government Department we seek to move the Amendment and take retail prices out of the Bill.

As a consequence of this short episode that I have related, my constituent is very indignant. Think of it in terms of any other retail price. Suppose that she goes to buy a dress. If she finds that the length of the skirt, the material of the dress and the cut of the dress are prescribed by a Government Department, she would be very angry. Such things are only tolerable in wartime, if at all, but there is no essential difference between the two. In neither case has a Government Department any standing in the matter. This is a real difference between the two sides of the House.

I said on Second Reading that in relation to prices the back bench supporters of the Government were being conned—I believe that is the right word—and some of them liked it. Some of them want to feel that this power is there, even though they and the Chancellor of the Duchy and the First Secretary and the rest of the Front Bench know perfectly well that it is a bluff. It is not possible to control prices, whether you try and do it by diktat or by reference to Aubrey Jones or in any other way.

This is party because what emerges as a retail price, perhaps in the food sector, the most important of all, is affected more than anything else by the weather, and even Governments cannot prescribe that. In all the other range of retail prices such matters as design, fashion and packing an a hundred other things come in all the time. It is, therefore, impossible—and if the Press reports are right, this has been put by Mr. George Woodcock and others to meetings of the party opposite—to contemplate a Government having any serious impact on the issue of retail prices.

We have in the White Paper on Prices and Incomes Policy After 30th June, 1967, the philosophy of the Government which leads them to say that they need this particular power. In paragraph 2—this is a contradiction which was referred to in Committee by the hon. Member for Worthing (Mr. Higgins)—they say that the July measures have eliminated the excess pressure of demand…". In paragraph 6 they say: …the aim must be to avoid any widespread and unjustifiable increases in prices due to pressures which may have been building up…". Whether paragraph 2 or paragraph 6 is right, they cannot be right together. The Chancellor of the Duchy made no attempt in his rather light hearted comment on what had happened since last July to justify this point.

The aim in relation to prices is at the end of paragraph 7, …the aim will he to concentrate on those prices which are of economic significance, including those of importance in the cost of living. I do not understand, and the Chancellor of the Duchy did not explain, what prices are of economic significance. The only example on which the Government have moved is laundry prices. We know why they did that. They had about 300 letters and they panicked and brought in an Order. I think that the Director-General of the C.B.I. said that industrialists felt betrayed by what had happened. Since then we have heard no more about it.

The answer which the Chancellor of the Duchy was touching on and which the First Secretary gave in Committee was that one must not measure the success—that was the word—of this policy by the number of Orders. The Chancellor of the Duchy said that he had been fortified by the success of the policy since last July. What success in relation to retail prices? The Chancellor of the Duchy of Lancaster produced one year, and he saw me looking at him and quickly passed over that example. I know how Ministers get briefed—it took a long time to find that year.

It is perfectly true that there is another, but in the record of the last 10 years on seven occasions the retail price index went up by less, so that the Government's performance is worse than in those years, whereas in two years, one of which has been quoted, it is better. That is all that the Government can claim in 10 years. One example was quoted; no doubt the other will be quoted to us in due course.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

Does not the right hon. Gentleman recall that his hon. Friend the Member for Yeovil (Mr. Peyton) informed him that from April, 1963 to 1966 the retail price index went up 11½ per cent. and incomes 25 per cent.?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

That does not alter my argument in the least. As the right hon. Gentleman will remember, the average amount of 22 per cent., in a period which is seasonally favourable all the time, compares very badly with almost every Tory year, with the two exceptions which I have given.

There has been no success whatever with retail prices since last July. The Chancellor of the Duchy gave the lie, as it were, to what my hon. Friends have been saying about the commando squads. These were reported in the Daily Express of Wednesday, 5th July as being squads to do on-the-spot prices checks. It was the main story and I should have thought that it was a bit late to deny it now. If it were untrue, a denial should have been issued straightaway. After all, the Leader of the House has just issued a denial this afternoon of the speech which he made last Saturday and which I have not the slightest doubt was accurately reported by the Press Association. Perhaps in the course of the night another opportunity will occur to come back to that.

There is no doubt that the word used by my hon. Friend the Member for Yeovil (Mr. Peyton) and others was right and that this policy is a mess. There can be no doubt that the Government have had no success with retail prices. There can be no doubt that they do not intend to make a move about retail prices, except from time to time to hurl a bone to the wolves when the wolves behind them begin to snap a little too near the Government's sledge.

The right thing to do, therefore, is to accept the Amendment and to leave retail prices out of the operation of Clause 1. We should join together and free retail prices from interference by the Government, because that interference is bound to be ineffective if tried and has been shown to be ineffective every time it has been tried.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

The right hon. Member for Enfield, West (Mr. Iain Macleod) began his speech by agreeing with my hon. Friend the Member for Penistone (Mr. Mendelson). I am pleased to be able to tell the House that I agree with the opening remarks of both speeches. However, I notice that the right hon Gentleman quickly parted company from my hon. Friend and drew a very different conclusion from the same facts. That is not the first time that that has happened in the House.

The right hon. Gentleman made much of the fact that our constituents are knowledgeable about retail prices. Housewives, naturally, know more about retail prices than most male hon. Members do, but it is precisely because of the inability to do much about it that the Government need powers to lend support when and where that is necessary. That is precisely the purpose of the Clause which the right hon. Gentleman and his hon. Friends seek to amend.

It is somewhat 19th-century economics to think that the consumer has sovereign control over retail prices because of his ability to buy or not to buy. What happens these days, as everyone knows, is that the consumer is on the sticky end of the wicket of large-scale promotion. It is promotion and production and the way in which things are sold which produce the market, and it is, therefore, essential that the Government should have some say if our constituents are to be protected.

The right hon. Gentleman gave a classic example and almost destroyed his own case in the next sentence. He spoke of a proprietary preparation whose quantity and container had been changed. Unless the Government are able to keep charge of that kind of thing, the consumer is unable to do so. It was the right hon. Gentleman's party which brought in legislation dealing with retail prices and it was the Leader of the Opposition himself, against a good deal of advice from his colleagues, who tried to end resale price maintenance.

The right hon. Gentleman said that Government Departments could not interfere, but it was right hon. Gentlemen opposite who introduced the Weights and Measures (No. 1) Bill, about which we had much discussion before it fell, and which they followed with the Weights and Measures (No. 2) Bill, which dealt with retail prices of various kinds of commodities so that consumers could be protected. The right hon. Gentleman is usually logical and clear, but on this occasion he was a little ambiguous and I found him destroying his own argument in his own speech.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

I do not mind what the hon. Gentleman says about my speech, but will he make his own a little clearer? Does he suggest that the Government—and this is the only conclusion one can draw from what the hon. Gentleman is saying—should have powers to lay down what shape, size and material a container should be made of?

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

I am too old a bird to be caught by that one. The right hon. Gentleman is trying to draw me far wide of the Amendment and the Clause. I should be out of order if I started to say how far the Government should use its influence in these respects, and the right hon. Gentleman knows that as well as I do.

It is a classic red herring to argue that it is regimentation if it is provided that the retail price of biscuits, for example, shall be based on an 8 oz. packet and not on a 6¾ oz. packet. Most people would sooner be able to buy a clear package which was clearly understood with its contents printed on it in large and not small print so that they could know precisely what kind of retail price they were paying.

It is absolute nonsense to think that we can do anything about prices if we differentiate between prices of production, prices of wholesaling and retail prices. We cannot deal with prices as though they are three separate items, which is what the Amendment seeks to do. We have to recognise that what hon. Gentlemen opposite are saying is that they do riot like the Clause at all, which is honest enough, but the Amendment does nothing to protect the consumer which, I hope, is the desire of hon. Members opposite.

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

Is not the hon. Gentleman aware that on page 13 of the Prices and Incomes Board Report No. 13 on the Brewing Industry, that industry is divided between production, distribution and retailing, and that each is treated completely separately?

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

I should be very surprised if the Ministry concerned—the Department of Economic Affairs, the Board of Trade or the Ministry of Agriculture —which would have a wide interest in each was not able to apply an interest to each. Surely that is the whole purpose of the Bill.

The only way in which we can show that we want to make sense of prices, productivity and income is to take power to deal with prices. I agree with my hon. Friend the Member for Penistone that prices are more or less the key to a number of the other problems which we face. If we are to deal with prices, we must include the tail end, which is the retail price the consumer has to pay. The right hon. Gentleman said that this is a bluff, that we cannot do everything about the 3,000 different prices, and that every price increase cannot be looked at. I accept this, but what the Government have been doing over the last 12 months, and what they are doing now, is to show that by using their influence appropriately from time to time they can keep the lid on the runaway of prices which occurred during the 10 years before the change of Government in 1964.

I hope that the House will reject the Amendment, because if it were accepted it would make nonsense of the Clause. I am sure that hon. Gentlemen opposite are as keen as anybody else to protect consumers, in spite of the fact that the hon. Member for Barkston Ash (Mr. Alison) was more concerned with the shopkeeper than with shoppers.

5.0 p.m.

Photo of Mr David Howell Mr David Howell , Guildford

May I, as a member of the Committee which considered the Bill upstairs, extend a welcome to the hon. Member for Penistone (Mr. Mendelson) and his hon. Friends to our deliberations at this stage. They were, at times, sorely missed.

I must break the harmony which seems to be growing between us on the question of retail prices, because the hon. Member for Penistone asserted that housewives were capable of judging when prices had moved upwards. I straight away disagree with that statement by asserting that this is not always so. In fact, in many cases it is not so, and the reason for this is that very often the price does not move. A housewife does not know when she is paying the same amount for less.

We have just heard the hon. Member for Willesden, West (Mr. Pavitt) saying, in effect, that these changes in quality or content should somehow be policed. He wants observations of a detailed kind, not merely for prices—which admittedly one constituent of my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) was quick enough to spot, a change from plastic to glass, and a change in content—but changes in packaging or content which many housewives do not spot as they hurry through the supermarkets.

I have the support of no less a person than the Chairman of the Institute of Weights and Measures Administration who is reported as saying at the end of June that there were 492 varieties of biscuits produced by 23 manufacturers, and that these packages were being changed all the time. He went on to ask, according to the newspaper report: How can the purchasing public compare values and prices when this practice is adopted? The hon. Member for Willesden, West would like a team of people out on the job checking these 492 varieties and 23 manufacturers' operations weekly, or as often as they changed their packages. This is the kind of price control which he would like to see. It would be extremely costly in manpower. I suppose that it would be possible, but at the end of the time I am sure that many of the people would never look another biscuit in the face. This is the kind of variety and price change that is going on all the time.

That leads me to the central question which my right hon. Friend the Member for Enfield, West raised, namely, if a proper system of retail price control is to to be operated how is one to take account of quality? The number of price movements concealed in quality and packaging changes is legion. These are price movements which affect housewives in many ways, and which will not be controlled by these powers, or by any other measures which the Government bring in. It is only when the housewife gets back home that she realises that her money has not gone as far as it did previously. These are concealed price increases, and the Government's power to control retail prices do not affect these. I come back to the Chairman of the Institute of Weights and Measures Administration, who reportedly said that there was an even more bewildering picture in soap powders, liquid and powdered detergents, and a whole range of packaged goods in the supermarkets and groceries.

This picture is wildly different from the picture of success painted by the Chancellor of the Duchy of Lancaster, who, a short while ago, was in a mood to take a lot of credit for the success which had been achieved. I thought that he was going to take so much credit that he would overburden himself.

The right hon. Gentleman said that my hon. Friend the Member for St. Ives (Mr. Nott) had congratulated the Government. I listened to my hon. Friend's speech, and I heard nothing of congratulation in it. What I heard my hon. Friend argue was that during the last year, when unemployment had risen, when there had been the most vicious credit squeeze for many years, when there had been strict credit restrictions, and when we had begun to see the effects of the Measure passed by my right hon. Friend the Member for Bexley (Mr. Heath) for the abolition of resale price maintenance—the discussion of which has been ruled out of order, but it has had some effect in keeping down prices—and when there had been a favourable move in commodity prices, retail prices had nevertheless risen by 2½ per cent. This is the fantastic figure which requires no congratulations, and certainly provides no excuse for taking any kind of credit.

It means that over the measurable area of retail prices, prices have increased, as any housewife can tell the right hon. Gentleman, and that over the vast area where the price itself has not moved, but the quality has,—there is one less biscuit in the pack, or half an ounce less detergent in the pack—here, too, real price increases have taken place. This is where the Government have no control, and this is why their policies for price control have not worked, are not working, and will not work, and why other, more sensible, and effective measures are needed.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I am sorry that the right hon. Member for Enfield, West (Mr. Iain Macleod) has disappeared, because I wanted to talk to him, and to one or two other hon. Members as well. I am sorry, too, that the right hon. Gentleman has got mixed up in the rather squalid grocers' revolt which seems to be going on on the benches opposite, because he is something of a giant among the many intellectual pygmies that there seem to be in the Conservative Central Office when it comes to dealing with economic affairs.

The interesting thing about the debate is not what has been said about the whole question of retail prices, but that for the first time we have had a Front Bench spokesman from the party opposite asserting very clearly, in his support for the Amendment, that his party does not support the idea of controlling retail prices. They have said on other occasions that they cannot support the idea of industrial price control, so if we put the two together they are on record for the first time as saying that price control is not only impossible, but undesirable.

Photo of Mr David Howell Mr David Howell , Guildford

Before he reads that conclusion into his personal record, may I tell him that simply because the Government's present methods have failed to keep down prices are wrong, this does not mean that we do not advocate—and past Conservative Administrations have advocated—legislation to affect the level of prices. The abolition of resale price maintenance is a classic example of this, for which credit is being claimed by the Chancellor of the Duchy of Lancaster.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I am grateful for that intervention, because it illustrates the problems of the party opposite. I am not quoting the minnows of the Conservative Party, but the right hon. Member for Enfield, West, who said quite categorically this afternoon that retail price controls are impossible and undesirable, and he supports the Amendment. It has been submitted to the House because the party opposite is arguing that retail price control is impossible.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

In the absence of my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), I would like to make it clear that we are not saying that it is impossible to control the general level of prices, but that it is the individual price which we feel it is impossible to control.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

That is a rather curious statement. I am trying to clarify the situation. I can understand the view of the party opposite, because once we start to interfere with the price mechanism of organisations, we start to interfere with those who sponsor the membership or hon. Gentlemen opposite—[HON. MEMBERS: "Rubbish"] It is true. Not long ago the Chancellor of the Exchequer said that when he looked at hon. Gentlemen opposite he saw vacant faces, but he also saw the interests of X Y and Z represented by those vacant faces.

Photo of Mr Kenneth Lewis Mr Kenneth Lewis , Rutland and Stamford

Is the hon. Gentleman prepared to bet that there are fewer hon. Members on this side sponsored by any organisation, least of all by retail organisations, than there are Members on the benches opposite sponsored by the co-operative society?

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

Order. Both hon. Members are getting wide of the Amendment.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

We must get this clear. I noticed from the nods of my right hon. Friends on the Front Bench that it was in their own hearing that a responsible spokesman of the party opposite said that retail price control was not possible or desirable and, therefore, that hon. Members opposite were supporting the Amendment to remove retail price con- trol from the Bill. That is a fair assessment of the situation.

It is important to get the record right. The party opposite has shown itself to be clearly opposed to the idea of price controls. It was a pity that, over the weekend—between the squalls of yachting experience—the Leader of the Opposition could not have fitted into his statement of policy the argument that one of the facets of Tory policy in respect of economic management must be that retail price controls and industrial price controls are impossible.

That was the case made by the hon. Member for St. Ives (Mr. Nott). He seeks to delete certain words because, he says, the whole theory of price regulation is an impossibility. Many of my hon. Friends have advanced the case for a price regulation or price licensing system. I do not want to stray beyond the guide lines of order. I shall stick strictly to the question of retail prices.

Together with some of my hon. Friends I have argued that a policy to control retail prices can be successfully carried out by licensing retail outlets. That is the whole case for the policy of wage restraint and wage freeze. We have said that it is possible—with our curious mixed economy—to have a system of price licensing if retail outlets are licensed. We have based our case upon our experience with similar retail outlets which are licensed, or where there is some degree of control, as in the case of the Post Office and the licensing trade. It is possible for the Government to license all the retail outlets. The hon. Member for St. Ives is not correct in saying that retail price licensing is not possible.

That is not to say that my right hon. Friend and the Government have been desirous of carrying out price control, because they have not made any attempt They have decided that economic management can best be carried out by allowing some increase in retail prices. Therefore, they have not wanted seriously to intervene to keep prices down. They have deliberately stimulated price increases to bring about a degree of deflation, and that has caused some criticism from this side of the House.

I want to take up one point made by the Chancellor of the Duchy of Lancaster. He claimed that we did have price control in the licensing trade. I do not know whether it is commonly known, but that is a bogus claim, because the only price regulation that the Government have is in respect of bar prices. Only in the public bar is any control possible. The publican or manager of a licensed house can charge what he likes anywhere but in the public bar.

That is what has generally been done, and that has been the cause of hundreds of letters being sent to hon. Members on this side of the House by constituents who complain that prices have risen in hotels and public houses because the manager or tenant is allowed to charge whatever price he likes other than in the public bar. In these days the public bar is often about the size of a telephone kiosk. The licensing trade has not been placed in much difficulty in this matter.

For some time there has been a system of price regulation under which merchants must inform the Government of any intention to impose a price increase on any item that is sold. He is obliged to inform the Government that the price of jam, for example, will rise by 1½d. next week, and he is then barred from imposing that increase for 30 days, unless permission is forthcoming.

All that my hon. Friends and I are arguing is that every retail outlet, of whatever kind, should be licensed. Just in the case of a dog licence, if firms do not conform to the needs of the time they should lose their licence. We must have some such system of licensing. I do not disagree about the impracticability of controlling every luxury commodity. We have no quarrel on that score. It is possible to regulate prices in this detailed way. Our general thesis is that it is possible to have a licensing system such as that which applies to the Post Office and other licensed retail outlets.

Far from shying from the question of intervention, we hope that the Government will come to grips with the problem, not only in resisting the Amendment but in going much further by pursuing a policy which enables us to have some price control, therefore encouraging the T.U.C. and other people to attempt voluntarily to carry out a wages policy.

5.15 p.m.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

The hon. Member for Tottenham (Mr. Atkinson) talked about this form of licensing being like a dog licence, and said that a firm might have to lose its licence because it made a large profit through efficiency or made a loss through being inefficient. It is not the case that the firm which makes the smallest profit, on a footage basis, is less efficient than a smaller firm selling at higher prices and so making a higher profit, and working within the Government system.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I argued in this way because it has been suggested by hon. Members opposite that we wanted teams of snoopers going round the country looking for price increases. It is nothing of the kind. We have said that the onus rests upon the retail supplier to notify the Government. Apart from that, the people themselves would test the case for the continuance of the licence, and would judge whether the retailer had trespassed beyond the prices which they had considered to be reasonable.

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

Just as I had to intervene on the question of retail price maintenance, I must intervene now to point out that we cannot have a detailed discussion about alternatives. That is what we are in danger of doing on this question of licensing.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

As the hon. Member for Tottenham has taken about five minutes over his intervention, perhaps I may reply. What he has suggested is completely unworkable. It would be a bonus for inefficiency and not for efficiency. Not even the Chancellor of the Duchy of Lancaster would be very enarmoured of his hon. Friend's argument.

It is on the question of retail prices and not manufacturing prices that I maintain, after a lifetime's experience, that the Government's suggestion is completely unworkable. For many years, I have run retail shops and been in the wholesale business and I am familiar with many commodities. I do not say that a retailer might not sometimes make an exorbitant profit on some commodities, makes losses on other commodities, and so would be a fool if he did not. If he makes a good buy, he will make a profit, but with a bad one it will be a loss and he has to balance the two. An enormous amount of trade is done on prices which they know that the public want to pay.

My clothing business had an enormous reputation for the best value in a jumper at £1, or 19s. 11d. This had to cover an enormous number of price increases. If the price of wool went up, the weight of the garment was reduced, but if it went down, we gave better value. At that price, we covered an enormous amount of reductions in the quality of the garment. We offered manufacturers a large contract. If the wool market was unfavourable or wages rose, we had to consider that, but we want to give the best value at £1 and we succeeded.

Suppose there were statutory control or retail prices in the clothing business. In one year, men's cardigans are 22 in. long, and in the next might be 24, and the price rises because there is another 2 oz. of wool in the garment—

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

Would the hon. Gentleman not agree that skirts nowadays should cost about 6d. each on that theory?

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I agree, and women's dresses today are far cheaper than five years ago. If dress prices are controlled statutorily next year and fashions change and girls wear about four and a half yards of material, those calculations will be round the bend, and will be worked out only when the fashions change, because it will take months—

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

In one of the best sections of the London export business, how would my hon. Friend envisage these controls in Carnaby Street, for instance?

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

Exactly. No sensible group of people could decide on the price of half the things in Carnaby Street. They have recently been selling secondhand guardsmen's tunics which they probably bought for a shilling each and of which they put up the price when they discovered the enormous demand. After all, there were only so many such tunics available, and they made a good profit out of what was available. Next year, it may be something else, but it will take the Board of Trade 12 months to work out these things and they will be behind the times all the time.

The same applies to food. The average greengrocer knows that, in June, he will sell X pounds of tomatoes. If there is bad weather, and tomatoes are scarce, he will sell about the same quantity, provided that they do not exceed a certain price. If there is a glut, he sells roughly the same quantity, because each household cannot eat three times as many just because they are cheap. When the price is low, his margin is higher and vice versa. That seems a contradiction in terms, but he must get so much profit per pound because his sale is much more static on the number of pounds he sells than on the cash turnover. When the price is low, he wants a big mark up, and when it is high he does not need such a high one.

When a market changes almost hourly, how could any Government work out a price control system? This applies not only to tomatoes and greengrocery, but to meat and to anything baked. Hon. Members who, like me, shop at the weekend for their families know that the price of scones cannot be regulated. Would every one have to be weighed? Every housewife knows that they are only pinches of dough put into an oven, and even machine-made scones must vary in weight by up to 20 per cent. There is an enormous give and take in much retail distribution and there is bound to be.

If someone has a bad tomato in a pound bag, that is not a deliberate Machiavellian act by the retailer, who only picked out half a dozen. I might be the next customer and get five good ones in my bag. Hon. Members opposite seem to have forgotten that we are talking about controlling retail prices and not about the electricity increases, which the right hon. Gentleman did not mention, although his constituency and mine will face 15 per cent. increase. This is something which the Government should inquire into, because it is the production end.

On the retail end, a long lifetime of experience convinces me that it would be impossible, without laying down standards like those of the utility scheme during the war, that only certain things should be made if prices are to be controlled. Do hon. Members opposite, in a growing modern economy, want to start stipulating what will be made or sold? There is always a changing of fashion, habits and tastes. Even a biscuit manufacturer, with all his vast variety, tries a new biscuit or a new make-up of biscuits. No doubt he first sells it cheaply because he is trying to tempt the public to buy. He may, therefore, be selling at cost. or below cost.

5.30 p.m.

But suppose that the biscuit becomes popular. If the manufacturer is to have a large amount of his manufacturing turnover in the biscuit, it is essential that he should get a proper profit on it. Perhaps in the first lot of biscuits there were seven in a packet. But having established the biscuit on the market he has to put it on the same level as all the other biscuits and, therefore, he puts six in a packet. One could say that one was being robbed, but a far better way of looking at the matter would be to think that previously one was being tempted with an extra biscuit to buy the biscuits and that this was the bonus. Now one is paying the proper price for it.

Even with all the vast amalgamations, there is still fierce competition in selling goods in the high streets of the country. Far more than Government exhortation or Government control, the thing which made me—and I am sure that this applies to every efficient retailer—study the question of sales was the competition from somebody across the road who was fighting me tooth and nail for my trade. There is no law of the Medes and Persians which says that a retailer stays in business if he does not provide what the public want. I do not accept that the public do not know what they are up to. Most people know perfectly well when the wool is being pulled over their eyes. They deliberately accept it in most cases.

Take the question of cosmetics. We have all got wives, daughters and girlfriends. Therefore, there is not one of us who has not heard a great deal of conversation about this matter. Women like articles to be wrapped in attractive packages. They may be told that one package does not contain as much as another package, but it may be a lot more attractive and look much nicer on the dressing table or when she takes it out of her handbag. She is perfectly well aware that the more attractive bottle does not contain as much scent or powder, but it looks very much nicer when she takes it out in front of the hon. Member for Tottenham (Mr. Atkinson).

There is very little about which the British woman does not know when she goes shopping. She is prepared to buy vegetables in a shop which she thinks is more reliable than another, although its prices may be higher. She realises that she will pay more in one shop than in another, but she knows that it is a more reliable shop and that its reliability outweighs any 1d. or 2d. which she might save by going elsewhere. Other people want to buy in the keenest possible market and they are not interested about service. Therefore, they go to a different shop.

Will those two shops have to sell their products at the same price? If so, we shall be depriving the public, first, of a great deal of satisfaction in shopping and, secondly, of their chance to get better quality and better service even if they have to pay more for it. A woman who buys a dress in a shop where there are bare wooden floors or linoleum expects to get a cheaper dress than the woman who goes to Harrods and walks on thick carpet. The woman who goes to Harrods expects that Harrods will have to work on a bigger margin.

Do both establishments, selling exactly the same merchandise, have to sell it at exactly the same price? If so, it will not be long before Harrods closes. If it did, would it be a good thing for the nation? That would remove a great deal of dignity from the nation. Not many overseas visitors would come here if many of the big stores closed. They cannot possibly compete purely on price. They compete on price, service, environment and all the other things which go to make up shopping.

To talk about statutory control of retail prices is a nonsense which should be opposed. In a free society, it is an impossibility.

Photo of David Winnick David Winnick , Croydon South

The Conservative Party has consistently opposed intervention in the price mechanism and, therefore, this Amendment was to be expected. However, there is a contradiction in the argument of the Opposition. We have been preached at for the last hour or so about how wrong ii is to intervene in the price mechanism and we have been told that the Government should not consider it their responsibility to meddle in such matters. But hon. Members opposite have spoken about items which have risen in price in the last six months or year. Therefore, logically we should be arguing for tighter controls and not less control.

I see no reason to adopt this 19th century attitude, as my hon. Friend the Member for Willesden, West (Mr. Pavitt) described it, whereby one does not intervene in cases in which it is considered wrong to intervene. One of the reasons why I was willing to support and vote for the prices and incomes policy last year, with a great deal of hesitation, was that the Government said that it was not just a question of pegging incomes because of the economic situation but also of doing something about prices.

When I abstained last October, again with hesitation—no one likes abstaining against one's own Government—I did so because I felt that the Government had not taken enough action over prices. I should find it impossible to support any incomes policy if the Government were not willing to take the necessary action ever prices. That is absolutely essential.

One can make out a strong case for saying that, because of the economic situation and the economic difficulties, the Government must have these reserve powers for another year; but they must be combined with reserve powers on prices. If hon. Members opposite say that we have not been willing to use these powers very effectively on prices, I hope that my right hon. Friends on the Front Bench will take heed of those words and will recognise that there is a need for strong, effective action over prices and not just over incomes.

Time and again during the last few months my constituents, and, no doubt, the constituents of other hon. Members, have said that prices are going up. Rightly or wrongly, they thought that last year, as a result of the July measures, not only incomes but prices would be frozen. Perhaps this explains to a certain extent some of the reverses which we suffered earlier this year. I see no reason why we should not be perfectly frank about that. I have never said, and the Government have never said, that all prices would be frozen.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

The Selective Employment Tax alone will increase prices by 5 per cent. on what I would call the weekly shopping basket.

Photo of David Winnick David Winnick , Croydon South

I know about the problem of the Selective Employment Tax. The picture is not as one-sided as it is sometimes made out.

I had hoped that over the last year the Government would be more militant over prices. It is a disappointment that we have not had a success story on prices. But that does not mean that we should take out, as the Opposition would like us to do, any reference to retail prices in the Bill. We should be just as firm over prices as we are over incomes.

In a recent report published by the Ministry of Social Security, attention is drawn to the number of families living in great poverty and hardship. I raised this matter at Question Time today. A number of these families have husbands in full-time employment and it is obvious that many of these, who are earning low wages, will be adversely affected by the reserve powers in our incomes legislation.

One can argue that, because of the economic situation, it is necessary for the Government to take these reserve powers. However, what is to be the plight of these people, many of whom are earning less than £l5 a week, if they find that it is more difficult for them to get wage increases in the coming 12 months, but if prices continue to rise? I put this question to my hon. Friend the Parliamentary Secretary to the Ministry of Labour earlier. I now ask it of hon. Gentlemen opposite who support the Amendment, because if they are willing to delete this provision referring to retail prices, those who are living on very small incomes will be even worse off. On the one hand they will find it difficult to get a wage increase while, on the other, there will be no restraint over prices. This proves that the Amendment is a policy of sheer madness. If the Government are to be given reserve powers—and I appreciate that some of my hon. Friends are not agreed about that; I support the move because, rightly or wrongly, there is little alternative—it is essential that prices are included. Not only must we reject the Amendment—and I assure hon. Gentlemen opposite that, Left or Right wing, my hon. Friends and I are united over this one—I implore the Government to see, in the coming 12 months, that effective action is taken over prices. If we do not we will be penalising the very section of the community which sent us here and which the Labour Party came into existence to defend.

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

It is clear that there is a division between the two sides on this issue. The hon. Member for Tottenham (Mr. Atkinson) described supporters of the Amendment as being concerned in a "squalid grocers' revolt". He has a short political memory, although he was not here when we debated the resale price maintenance legislation. There was certainly nothing like a squalid grocers' revolt on that occasion. The remarks of hon. Gentlemen opposite on this issue show the clear division that exists between the parties on this subject.

My hon. Friends and I take the view that prices can be kept down by free competition and activities in the market place. Hon. Gentlemen opposite, on the other hand, want to control prices generally—and the hon. Member for Willesden, West (Mr. Pavitt) went so far as to show that he would control every aspect of prices, even to the extent of the wrappings, contents and quality of the articles inside, say, a box of cosmetics. This is rigid control going mad.

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

The hon. Gentleman is taking my remarks too far. He has put up a bogey merely to knock it down. I said the whole sphere of legislation needed looking into and required control, and I was referring to legislation passed by the present and former Governments.

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

It was only at the last moment of his remarks that the hon. Gentleman realised the full implications of what he had said. When my hon. Friends challenged him about his remarks, he tried to say "Oops!"—as though he had almost said, or perhaps had said, something that he should not have said. But it was too late. If attention had not been drawn to what he had said it might have been necessary for my hon. Friends to have gone through the OFFICIAL REPORT to ensure that there was nothing in his record which could be used as ammunition for the Conservative Party.

5.45 p.m.

In any case, I wish that the hon. Member for Tottenham would not use the word "squalid". He should be more generous to his political opponents. He should not refer to my hon. Friends and I being here at the beck and call of the producers of these articles. I hope that he was not implying that. I have taken the precaution of looking up the hon. Member for Tottenham in Dod's Parliamentary Companion—

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

Really, and I said "Dod's" and not "dogs". I was not going into any of the Prime Minister's statements about his supporters. I gather that the hon. Member for Tottenham is a sponsored trade union member of the A.E.U. I hope, therefore, that he will not accuse my hon. Friends of always having vested interests. I have no vested interest to declare on this subject.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I undoubtedly have a vested interest. It is on behalf of the working-class. I am a sponsored Member and I openly carry a banner to that effect. I want hon. Gentlemen opposite to declare their squalid interests.

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

The hon. Gentleman must not judge others so low. I assure him that there are others who are not as low as his imagination might lead him to believe.

I have no interest whatever in retailing and I am sure that my hon. Friend the Member for Ormskirk (Sir D. Glover), who gave us a fascinating insight into his vast knowledge of departmental stores and supermarkets, has no interest to declare, except a vast knowledge of the retailing section of the community. The activities of this section have done more to reduce prices for the housewife than any other section since 1951.

My hon. Friend the Member for Ormskirk showed what a great deal has been done by this section of retailing from the point of view of price and quality. He also spoke about Carnaby Street. I had hoped that, with his knowledge of military uniforms, he would have given us a little more than that fascinating vignette of the activities of Carnaby Street which, however frivolous they may be thought to be by hon. Gentlemen opposite, are bringing a great deal of foreign currency to this country.

Photo of Mr Daniel Jones Mr Daniel Jones , Burnley

I, too, listened with great interest to the remarks of the hon. Member for Ormskirk (Sir D. Glover). I noticed that, despite the great strides made by the section of retailing to which he was referring, prices have not been prevented from rising since 1951.

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

If the hon. Gentleman studies the retail price indexes of the large multiple stores and supermarkets he, will see that, in those establishments where retailing has been taken to its most sophisticated point, price rises have been a great deal less than in other sections of the community. He will note the difference between their activities and those of the co-operative society, which did not see the development of the supermarket and the 4,000 square feet-type of store and which did not develop itself along those lines, no doubt because it operates by committee. It has not been able to pass on price reductions to its customers to the same extent as the large private retailer has been able to do.

Photo of Mr Sydney Irving Mr Sydney Irving , Dartford

Order. I have tried not to interrupt the hon. Gentleman, but he is getting rather wide of the the Amendment.

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

I apologise, Mr. Deputy Speaker. I was doing my best to answer hen. Gentlemen opposite and, in my enthusiasm, rather got carried away.

My hon. Friend the Member for Ormskirk spoke at length about quality. It must be remembered that one can talk about petrol or chemical derivatives. One can discuss aromatics and make a distinction between various products. One can say, "These are new soapsuds" or, "This is a new petrol fluid". By saying that something is a new product, one can say that the price should be increased. That being so, who will check on these statements? Perhaps one might concentrate on the octane rating of petrol, though even this is subject to much doubt as between different octanes in Britain and the United States.

The hon. Member for Willesden, West said that it was not possible to differen- tiate between production and distribution, on the one hand, and between the various aspects of retailing, on the other. Has he read Report No. 13 of the Prices and Incomes Board, in which such a differentiation was made? He will see that the subject is divided right down the centre, in one case applying to the retail outlet and in the other checking on all other aspects.

My hon. Friend the Member for Yeovil (Mr. Peyton) talked about "spooky snoopers" who would have to check every aspect of this. This will cost the community more than it is likely to save. My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) asked whether we had climate or weather. I have the honour to represent the finest strawberry-producing area in Britain. Cheddar strawberries are the finest to come to London, Birmingham, or elsewhere. I know perfectly well that this year the Cheddar strawberry growers—

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

On a point of order, Mr. Deputy Speaker. Is an hon. Member allowed to advertise?

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

I will not follow my hon. Friend into the path of advertisement, but I hope that he will not join the hon. Member for Swindon (Mr. Francis Noel-Baker) in his disapproval of anything that is advertising and at the same time gives people pleasure.

The Cheddar strawberry growers were terrified in April that they would have a very bad year, and again in May, when the rain continued. Not only would there be a loss because of the reduced crop, but had they not been able to pass on an increase in prices through the retailing outlet the position would have been quite disastrous. Many of these people go in for direct selling. They sell these magnificent strawberries at the side of the road. This is carried out throughout the whole of the perishable foodstuffs side of the economy, and it shows the nonsense of what is being attempted now—

Photo of Mr Laurie Pavitt Mr Laurie Pavitt , Willesden West

In talking of the retail price of strawberries, the hon. Gentleman will doubtless recall it was his Government that introduced sale by the punnet or by the lb, so the regulation of strawberry sales was introduced by a Conservative Government.

Photo of Mr David Webster Mr David Webster , Weston-Super-Mare

And a lot of strawberry growers very much welcome that fact, because they were known to be reputable and to be maintaining an adequate standard of quality. Let us maintain an adequate standard of quality but leave the price mechanism to operate for itself.

All these retailers have had a terrific battering since the present Prices and Incomes Act was passed twelve months ago. We are not allowed at this stage to talk at length of the Selective Employment Tax but it represents a very considerable amount of oncost. In addition, we have the abolition of investment allowances, a vast increase in the costs of distribution, a vast increase in the rate burden as a result of Government action, and the 15 per cent. increase in electricity charges. The hon. Member for Tottenham speaks of a squalid grocers' revolt, but he probably has in his constituency grocers who are very much in revolt, and shopkeepers who have made the economy efficient are getting very fed up. I hope that the Amendment will be carried.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

I listened with great interest to my hon. Friend the Member for Ormskirk (Sir D. Glover), who has a very considerable amount of experience of the retail side of trade. I, too, may claim to have a certain amount of experience. I am chairman of a group of wholesale textile companies, and we rely for our business on the activities of retailers. I am amazed at the Government's attitude. I do not think that they know what they are taking on. They do not have a clue. If they had, the First Secretary would be a very worried man.

I want to refer for a moment to the speech of the hon. Member for Croydon, South (Mr. Winnick), who said that the Conservative Party had, during the last year, very vigorously contested certain increases in prices. He admitted that price rises had taken place, but the position is that when we have a nationalised corporation controlling a certain section of the economy it is extremely easy to intervene on the subject of price.

It is the easiest thing in the world for the Government to intervene, to question, to check and to refer to the Prices and Incomes Board suggestions of increased electricity prices. It would be the easiest thing in the world for the Government to refer to the same Board increases in various railway prices and increases by other nationalised industries. But they do nothing of the sort. When it has been a question of nationalised industries asking for increases, the increases have been given straight away. There has been no question of referring those to the Prices and Incomes Board.

The Government say that there would be difficulty, but there is no real difficulty if there is the desire to act in that way. On the other hand, there is now the desire to impose price control over a vast number of retail articles, but the possibility of doing so will be enormously difficult—

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

This is an Amendment to take away a power that the Government have not used. They would not use it if they could, and they could not use it if they would. The real objection is that giving up these powers would be awkward because of trade union negotiations. Let us get down to reality.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

I am reminded that in one area of the retail trade one member of the Government has condoned increased prices, during the last year. Let us take as an example the case of selling meals in railway hotels. I sent to the right hon. Lady the Minister of Transport a bill from the North-Eastern Railway Hotel which had been sent to me by one of my constituents because, at the bottom of the bill, was shown a levy of 2s. 6d. for Selective Employment Tax. The Minister wrote back to me and said, "It is perfectly all right. They have every right to pass this on."

That illustrates some of the difficulty in which the Government will find themselves, because if the railway hotels which sell food retail have the right to pass on to the public increased costs brought about by S.E.T., which is Government action, so, presumably, will the same caterers' prices reflect increases in electricity and other charges. I suggest that if the Minister is honest in saying that he intends to peg those prices, he will have one devil of a job in deciding how to do it.

Those of us in the retail or wholesale trade know only too well that many of the retailers have had a very difficult year, and that many of the smaller firms are on the brink of bankruptcy. I should like to ask the right hon. Gentleman, who talks of controlling retail prices, just how many bankruptcies of retail shops have taken place in the last year, and how many in the previous three, four or five years. He would be rather alarmed, I think, by the number. Does this indicate that they are doing extremely well out of the prices they are now charging?

Another difficulty is that of controlling the price, not of one article produced by one industry but a tremendous number of articles. My own firm wholesales at least 4,000 items. Let us take the case of a large store selling, perhaps, 20,000 articles, and let us suppose that there is another store along the street selling the same number. How does the right hon. Gentleman propose to act? Does he intend to send someone into the one store and check every price from time to time in that store, and then do the same in the other in order to see that one does net charge more than its rival, and that they do not increase their prices?

What about the supermarket that puts in a loss leader and sells it at a cut price? Is that cut price to be the standard price, the yardstick by which every price in the area is to be judged? What about the shop, cited by my hon. Friend the Member for Ormskirk, that is prepared to sell without frills? One firm I know in London has 66 shops which sell at the lowest possible level. Many of the other shops round about sell the same articles at a slightly higher price because they give greater facilities and greater service. What will the Government do? Will they say that everybody must sell at what happens to be the lowest retail price? This is an enormous problem.

If the Government are serious in keeping down prices and saying that there shall be no increases, they should not come to the House and be so hypocritical as to allow price increases in nationalised industries whenever and wherever they may come almost without question and then introduce a Bill like this to pillory the retailer, who is in constant competition, not only with shops in other parts of the country, but with others around him, who will undersell him if they possibly can.

6.0 p.m.

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

I support the Amendment which has been so ably moved by my hon. Friend the Member for St. Ives (Mr. Nott), who made one of the best speeches which we have heard during the passage of the Bill. I support all that my hon. Friend the Member for Gillingham (Mr. Burden) has said. He has spoken with great depth of knowledge and has developed the argument put forward by my hon. Friend the Member for Ormskirk (Sir D. Glover).

Is it not ridiculous that a shop in London which, perhaps, gives credit for three months and delivers the goods to one's door should be forced to sell its goods at the same price as another shop in which one has to pay cash and carry the goods away?

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

What about the position of the credit draper, who sells from door to door and has to charge more for the credit service which he gives, which often amounts to a year's credit?

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

This brings home to the House how totally misconceived is the Bill and the Clause. This part of the Bill, dealing with retail prices, is, perhaps, the most sinister part of it. It interferes in the fundamental law of our economy that the price of goods shall be determined by the relationship between supply and demand. If we interfere with prices and artificially keep them down, the supply will not increase because it increases only when the price rises.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

The hon. Member is suffering from the severe disadvantage of not having heard the speech of his right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), who speaks for his party in these matters and who tried to prove conclusively that it is a matter of make-believe. The hon. Member is trying to blame the Government for all the misdeeds in which his right hon. Friend does not believe.

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

I firmly believe that the Bill is misconceived and could not have very much effect on the market. My worry is that it is the tip of an iceberg an initial step which might later be broadened. It is a very bad precedent to have on the Statute Book and it could well be extended. I am dealing with what will happen if it is extended.

The strength of the country as a trading nation depends on the flexibility of our economy and our ability to produce goods which the world needs. We will produce goods in a free economy only when the price rises, because that is the bait to the entrepreneur and the industrialist to produce the goods which are needed. Unless the price is allowed to move freely and flexibly, manufacturers will not produce the goods that the country needs and, therefore, by their not being produced for home consumption, none will be available for export. Japan has not become a great trading nation since the war by applying policies such as those.

I wanted briefly to make the point of the inequity between various retailers, some giving good service and others bad, and, secondly, to underline the point that in a virile and changing economy we must allow prices to move freely to enable the economy to move flexibly and to meet world demand for Britain's goods.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

The point which emerges from this important debate is that the Government's proposals for controlling retail prices are humbug. To use them would create impossible nonsense. If the debate has been somewhat lighthearted, it is clearly because of some of the ludicrous proposals which have been made from the other side of the House about how retail prices might be controlled.

I want particularly to take up a point made by the hon. Member for Tottenham (Mr. Atkinson) in referring to the speech of my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod). Our position on this side of the House is abundantly clear. We believe that it is a vitally important function of the Government to control the level of prices, because if we do not do so, the effect on those with fixed incomes and on our balance of payments would be severe and important. It is, however, absolute nonsense for the Government to try to control individual prices.

That comes out clearly in the Government's White Paper which now forms Schedule 2 to the 1966 Act. The Government said in paragraph 7 of the White Paper: It would not be in the interests of economic efficiency to seek to operate the policy in a rigid form involving a very widespread and detailed supervision of individual prices. That answers the point made by the hon. Member for Tottenham when he suggested the adoption of a system of licences.

We want to know from the Government Front Bench what is the position concerning the banner headlines which appeared in the Daily Express. Are we to understand that the Government propose to establish a group of inspectors, as one might call them, or snoopers who will go round looking at individual retail prices? I hope that we shall have either a denial or a clear statement of intent about this from the Government Front Bench. We want to know what is their position concerning retail prices.

Reference has been made in earlier speeches to the correspondence which right hon. and hon. Members, on both sides, have had. The vast majority of the letters which I have had about price increases have been concerned with increases by the nationalised industries. We are firmly convinced that that is something for which the Government have responsibility.

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

May I remark how much we on this side welcome the enthusiasm on the benches opposite for increased subsidies to nationalised industries, which is what the rejection of price increases would mean?

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

Not at all. As the hon. and learned Member well knows, it depends also on the standard of efficiency in the industry and the arrangements which are made for raising capital.

My hon. Friend the Member for St. Ives (Mr. Nott), who admirably proposed the Amendment, certainly did not, as the Chancellor of the Duchy of Lancaster suggested, congratulate the Government on the way that they control prices. On the contrary, he condemned them out of hand. It is only one or two gullible individuals on the back benches opposite who can believe that they were right to vote for this policy last year because the Government would succeed in controlling prices as well as incomes and would continue to do so this year. The time span over which we must judge their performance in controlling the general level of prices is not merely from the date of last July's heavy deflationary measures to this July, but the two-year period extending to next July.

The hon. Member for Willesden, West (Mr. Pavitt) said that because there was mass advertising, and manufacturers were trying to persuade people to buy one thing or another, we should not accept the Amendment. That mass advertising in no way reflects directly on the retail margin. Indeed, some retailers seek to offset it by introducing own label brands, and so on. The hon. Gentleman was off the point there.

What was much more to the point was the brilliant speech of my hon. Friend the Member for Ormskirk (Sir D. Glover) who spoke with great experience and who stressed that, in allowing for individual retail price changes, allowance must be made for the fact that the price of some items will be decreased by the forces of the market and the retailer will make a loss and that in other cases it will be necessary for the retailer to increase the price so as to make a profit on a particular item when the demand for that item has increased.

That brings me to the heart of the matter. I well recall, I think at the 1959 General Election, speaking at a street corner opposite the right hon. Member for Battersea, North (Mr. Jay). I spoke in Battersea Market. I got a question from the audience in the market asking me, "Why do you not control the price of goods sold at this market at the weekends?".

This brings us to the heart of the problem. If an attempt is made to control individual retail prices, one is inevitably forced either into the position of rationing, because it will be found that more people will want to buy at the lower controlled price—the price below the competitive level—than there are goods to supply them with, or there is the problem of a black market.

If the Government seek to control retail prices at a level which they regard as fair, as against one which is competitive, this is the kind of position which will inevitably arise. In view of the White Paper, I cannot believe that they would be so stupid as that. On the other hand, we need to know very clearly what the Government's proposals are here. I hope that we shall have a reply from the First Secretary.

I turn now to the question of what will happen about retail prices. Are we to understand that these are now to be included in the voluntary notification scheme? If so, this raises some administrative difficulties of enormous magnitude. Or are we to understand that retailers do not have to volunteer and notify increases hut, instead, Government snoopers will go round and pick on individual retailers, who will then be referred to the Prices and Incomes Board—in other words, "You need not volunteer under this part of the system, but our inspectors will go round chasing you up"?

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

If there are to be Government snoopers, will the Government say how many snoopers will be required to cover the whole of the United Kingdom in the way that it should be covered?

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

I hope that we shall get an answer to that point if the First Secretary's answer to my questionis in the affirmative.

The point here is: are we to have a system where individual retail prices, as a result of Government inspectors going round, will be referred to the National Board? If so, it raises some fascinating questions. The powers which the Government are taking under the Clause and which we seek to amend are primarily delaying powers. They enable the Government to control price increases for a maximum of seven months.

In fact, many of the increases which will be discovered by those going round will immediately be reversed, almost before the inspectors have had a chance to report to the Government, let alone before the Government have had a chance to refer the increase to the Board or the Board has had a chance to make its report and the Government have taken any action. As we are concerned here purely with delaying powers, we want to have some idea of what situation the Government envisage these delaying powers might be used in.

If an inspector going round the country has decided to refer an increase to the Board, what allowance will be made for the question of consumer choice, a point which was raised by a number of hon. Members on both sides of the House? The service which is provided clearly makes a very big difference on the price which is to be charged. Are we to understand that the Government will control retail prices in such a way that no allowance is made for service? If an allowance is to be made for service, how is it to be measured? Are shops which give service and which, in spite of the abolition of resale price maintenance, continue to operate on a profitable basis, to be put out of business by Government price control? Will it be the case that, instead of shops continuing to give service, everyone must buy from supermarkets, where the customer wanders round and serves himself?

6.15 p.m.

It seems clear that the proposals the Government have in mind are very foolish indeed. We on this side do not believe that the proposals which the Government have put forward are practical. In fact, it is abundantly clear that the vast mass of the criteria set out in the Government White Paper, which now forms Schedule 2 to the 1966 Act—"vast mass" is an overstatement; there are in fact only eight—seem largely irrelevant to the retail trade.

For that reason, my right hon. and hon. Friends and I think that the right criteria for retail prices is to rely on the forces of the market and is to rely on competition; competition, not only amongst retailers, but amongst those buying the things which retailers sell, because we believe that in this way it will be much more likely that individual consumers will get goods with reasonable service and at a reasonable price than otherwise.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

The hon. Gentleman has repeated that it is the Tory Party's policy to rely on the market forces. He has also said that it is the Tory Party's policy to control price levels generally, but not in any way to control individual prices or groups of prices. Can he tell us how this contradiction can be balanced?

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

I agree with everything that the hon. Gentleman has said. I believe that there is no contradiction whatsoever. Therefore, I hope that not only my right hon. and hon. Friends, but hon. Members opposite, also, will support my hon. Friend the Member for St. Ives on the Amendment, which makes it abundantly clear that the Government will not propose to engage in a very foolish detailed price control or an extension of the discrimination and intimidation which they have so far restricted only to the wages field. I hope that we shall have a clear statement on what the Government's policy is on retail prices.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

I will reply very briefly, though my right hon. Friend the Chancellor of the Duchy of Lancaster has already explained what the Government have in mind and why hon. Members should not take too seriously the stories about commandos and ghosts with which some hon. Members who are not now here have regaled us.

Much of the argument in favour of the Amendment was conducted on the entirely wrong assumption that what the Government intend to do is to try to control every and any retail price, whereas the boot is on the other foot. If the Amendment were carried, it would not be possible for the Government, under any circumstances, to take any action on any retail price. Hon. Members opposite, if they are thinking of voting for the Amendment, should think twice about it, because I do not think that this would be a reasonable proposition to put forward.

Nothing that the Government have said, nothing that they have done in the use of their powers during the last 12 onths, suggests that they will attempt—

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

I will not give way. We have had a long debate. I listened carefully to the hon. Gentleman. He can now listen to me. He has not been here during the whole debate, as I have.

Nothing that the Government have said and no use that they have made of their powers during the past 12 months suggests that they will be likely to attempt any of the fantastic things that some hon. Members opposite have amused themselves by imagining. It cannot be put forward as a reasonable proposition that the Government should be left with no powers over retail prices.

My hon. Friend the Member for Tottenham (Mr. Atkinson) quoted the case of the control of the price of beer in the public bar. The argument was that that was, by itself an ineffective measure. I assure him that, by and large, that has by no means been so. It has been a partial measure, it is true, but it has been a valuable measure. If the Amendment were carried, it would not be possible to take even as limited a step as that. True, the powers were not used in that instance, but, if they had not been there, that limitation on prices could not have occurred.

That is the issue before the House. There is no proposal to set up the totally unworkable chimeras with which hon. Members opposite have amused themselves. The issue on which the House will vote can be put in this way. Anyone voting for the Amendment will be saying that this is a Bill to prolong certain Government powers, but they must not in any circumstances include power over the retail price of anything. I do not believe that the House will assent to that proposition.

Photo of Mr John Nott Mr John Nott , St Ives

If I may have the leave of the House, I wish to comment on the speeches of both Ministers. The Chancellor of the Duchy of Lancaster said that I had congratulated the Government on their policy. That was a thoroughly inaccurate statement. He knows that I made no such suggestion. One of the most unfortunate things that could be said of any member of the Tory Party is that he had congratulated the Government on their prices and incomes policy, a policy which is getting into more and more of a mess.

Photo of Mr John Peyton Mr John Peyton , Yeovil

Perhaps that statement of the Chancellor of the Duchy could be attributed to a natural misunderstanding on his part. The right hon. Gentleman treated my hon. Friend's speech as an apology, if not as one congratulating the Government, and he may have taken

that view because, if one addresses remarks to him merely with civility, the right hon. Gentleman is so unused to civility that he takes it as congratulation.

Photo of Mr John Nott Mr John Nott , St Ives

He may have taken it in that way.

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

On a point of order, Mr. Speaker. This is the Report stage. Has not the hon. Member for St. Ives (Mr. Nott) already addressed the House?

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. First, the hon. Gentleman asked leave. Second, he did not need to ask leave. We are on Report, and the mover of an Amendment, if the Bill has been to a standing Committee, may speak again without even asking for leave.

Photo of Mr John Nott Mr John Nott , St Ives

In winding up the debate on the Amendment, the First Secretary of State said that the power to control prices had not yet been used, and he cited the instance of beer prices saying, in effect, that no compulsory action had been taken. If that is so, why is it necessary to prolong this type of control over retail prices? The right hon. Gentleman has admited that it is not intended to send out any teams such as those to which certain of my hon. Friends referred.

We on this side have never claimed, so far as I know, that it is impossible to control the trend of prices generally by economic management. At a time of rising unemployment such as we now have, with falling disposable incomes and the most severe credit squeeze since the war, these elements of the Government's policy have had, of course, some effect on prices. Control over the general level of demand must have some side effect on prices. The burden of our argument is that control over individual prices by the Prices and Incomes Board cannot possibly work. I am glad that my right hon. and hon. Friends intend to divide the House on the Amendment.

Question put, That those words be there inserted in the Bill:—

The House divided: Ayes 132, Noes 185.

Division No. 428.]AYES[6.25 p.m.
Allson, Michael (Barkaton Ash)Beamish, Col. Sir TuftonBromley-Davenport.Lt.-Col. Sir Walter
Allason, James (Hemel Hempstead)Bennett, Dr. Reginald (Gos. & Fhm)Brown, Sir Edward (Bath)
Aster, JohnBiggs-Davison, JohnBruce-Gardyne, J.
Awdry, DanielBlaker, PeterBullus, Sir Eric
Balniel, LordBoyd-Carpenter, Rt. Hn. JohnBurden, F. A.
Barber, Rt. Hn. AnthonyBoyle, Rt. Hn. Sir EdwardCarlisle, Mark
Carr, Rt. Hn. RobertHogg, Rt. Hn. QuintinPardoe, John
Cary, Sir RobertHolland, PhilipPeel, John
Channon, H. P. G.Hooson, EmlynPercival, Ian
Chichester-Clark, R.Hordern, PeterPeyton, John
Clegg, WalterHowell, David (Guildford)Pink, R. Bonner
Cooper-Key, Sir NeillHunt, JohnPrior, J. M. L.
Costain, A. P.Iremonger, T. L.Pym, Francis
Craddock, Sir Beresford (Spelthorne)Irvine, Bryant Godman (Rye)Ramsden, Rt. Hn. James
Crosthwaite-Eyre, Sir OliverJenkin, Patrick (Woodford)Rees-Davies, W. R.
Crouch, DavidJennings, J. C. (Burton)Renton, Rt. Hn. Sir David
Dance, JamesJohnson Smith, G. (E. Grinstead)Ridley, Hn. Nicholas
Deedes, Rt. Hn. W. F. (Ashford)Jopling, MichaelRoyle, Anthony
Dodds-Parker, DouglasKershaw, AnthonyRussell, Sir Ronald
Elliott,R.W.(N'c'tle-upon-Tyne,N.)Kimball, MarcusScott, Nicholas
Emery, PeterKing, Evelyn (Dorset, S.)Sharples, Richard
Errington, Sir EricKirk, PeterShaw, Michael (Sc'b'gh & Whitby)
Fisher, NigelKitson, TimothySinclair, Sir George
Fletcher-Cooke, CharlesKnight, Mrs. JillSmith, John
Fortescue, TimLambton, ViscountStoddart-Scott, Col. Sir M. (Ripon)
Foster, Sir JohnLewis, Kenneth (Rutland)Summers, Sir Spencer
Fraser,Rt.Hn.Hugh(St'fford & Stone)Loveys, W. H.Taylor, Sir Charles (Eastbourne)
Glover. Sir DouglasLubbock, EricTaylor, Edward M.(G'gow,Cathcart)
Glyn, Sir RichardMcAdden, Sir StephenTemple, John M.
Goodhart, PhilipMacArthur, IanThatcher, Mrs. Margaret
Goodhew, VictorMacleod, Rt. Hn. IainTilney, John
Gower, RaymondMcMaster, StanleyTurton, Rt. Hn. R. H.
Grant, AnthonyMarten, Nellvan Straubenzee, W. R.
Grant-Ferris, R.Maxwell-Hyslop, R. J.Vickers, Dame Joan
Griffiths, Eldon (Bury St. Edmunds)Maydon, Lt.-Cmdr. S. L. C.Wainwright, Richard (Colne Valley)
Grimond, Rt. Hn. J.Mills, Peter (Torrington)Walker-Smith, Rt. Hn. Sir Derek
Hamilton, Marquess of (Fermanagh)Miscampbell, NormanWalters, Dennis
Harris, Frederic (Croydon, N.W.)More, JasperWard, Dame Irene
Harvey, Sir Arthur VereMorgan, Geraint (Denbigh)Webster, David
Hawkins, PaulMorrison, Charles (Devizes)Whitelaw, Rt. Hn. William
Heald, Rt. Hn. Sir LionelMunro-Lucas-Tooth, sir HughWilts, Sir Gerald (Bridgwater)
Higgins, Terence L.Noble, Rt. Hn. MichaelWilson, Geoffrey (Truro)
Hiley, JosephOnslow, Cranley
Hill, J. E. B.Page, Graham (Crosby)TELLERS FOR THE AYES:
Hirst, GeoffreyPage, John (Harrow, W.)Mr. David Mitchell and
Mr. Bernard Weatberill.
NOES
Abse, LeoDewar, DonaldHowie, W.
Allaun, Frank (Salford, E.)Diamond, Rt. Hn. JohnHughes, Emrys (Ayrshire, S.)
Alldritt, WalterDriberg, TomHughes, Hector (Aberdeen, N.)
Armstrong, ErnestDunn, James A.Hughes, Roy (Newport)
Ashley, JackDunwoody, Mrs. Gwyneth (Exeter)Hynd, John
Atkins, Ronald (Preston, N.)Dunwoody, Dr. John (F'th & C'b'e)Jackson, Peter M. (High Peak)
Atkinson, Norman (Tottenham)Eadie, AlexJay, Rt. Hn. Douglas
Bacon, Rt. Hn. AliceEdwards, Robert (Bilston)Jeger, Mrs.Lena(H'b'n&St.P'cras,S.)
Bagier, Gordon A. T.Ellis, JohnJenkins, Hugh (Putney)
Barnes, MichaelEnglish, MichaelJohnson, Carol (Lewisham, S.)
Beaney, AlanEnnals, DavidJohnson, James (K'ston-on-Hull, W.)
Bence, CyrilEnsor, DavidJones, Dan (Burnley)
Bidwell, SydneyEvans, Albert (Islington, S.W.)Jones, Rt.Hn.Sir Elwyn(W.Ham,S.)
Bishop, E. S.Evans, loan L. (Birm'h'm, Yardley)Judd, Frank
Blackburn, F.Fernyhough, E.Kelley, Richard
Bowden, Rt. Hn. HerbertFletcher, Ted (Darlington)Kerr, Russell (Feltham)
Braddock, Mrs. E. M.Foot, Michael (Ebbw Vale)Leadbitter, Ted
Brooks, EdwinFowler, GerryLee, Rt. Hn. Frederick (Newton)
Brown, Rt. Hn. George (Belper)Fraser, John (Norwood)Lee, Rt. Hn. Jennie (Cannock)
Brown, Bob(N'c'tle-upon-Tyne, W.)Fraser, Rt. Hn. Tom (Hamilton)Lee, John (Reading)
Brown, R. W. (Shoreditch & F'bury)Freeson, ReginaldLewis, Ron (Carlisle)
Buchan, NormanGordon Walker, Rt. Hn. P. C.Lipton, Marcus
Butler, Herbert (Hackney, C.)Gray, Dr. Hugh (Yarmouth)Lomas, Kenneth
Carmichael, NeilGreenwood, Rt. Hn. AnthonyLoughlin, Charles
Coe, DenisGregory, ArnoldMcBride, Nell
Coleman, DonaldGriffiths, Will (Exchange)MacCoH, James
Conlan, BernardHamilton, James (Bothwell)MacDemtot, Niall
Craddock, George (Bradford, S.)Hamling, WilliamMcGuire, Michael
Crawshaw, RichardHannan, WilliamMackie, John
Crosland, Rt. Hn. AnthonyHarper, JosephMackintosh, John P.
Crossman, Rt. Hn. RichardHarrison, Walter (Wakefield)Maclennan, Robert
Dalyell, TamHaseldine, NormanMacPherson, Malcolm
Darling Rt. Hn. GeorgeHattersley, RoyMahon, Peter (Preston, S.)
Davidson, Arthur (Accrington)Hazell, BertMallalieu,J.P.W.(Huddersfield,E.)
Davies, Dr. Ernest (Stratford)Heffer, Eric S.Manuel, Archie
Davies, G. Elfed (Rhondda, E.)Henig, StanleyMapp, Charles
Davies, Harold (Leak)Herbison, Rt. Hn. MargaretMaxwell, Robert
Davies, Ifor (Gower)Hooley, FrankMellish, Robert
Davies, S. O. (Merthyr)Houghton, Rt. Hn. DouglasMendelson, J. J.
Delargy, HughHowarth, Harry (Wellingborough)Milne, Edward (Blyth)
Dell, EdmundHowarth, Robert (Bolton, E.)Morris, Alfred (Wythenshawe)
Morris, Charles R. (Openshaw)Price, Thomas (Westhoughton)Tuck, Raphael
Morris, John (Aberavon)Rees MerlynUrwin, T. W.
Murray, AlbertRoberts, Albert (Normanton)Wainwright, Edwin (Dearne Valley)
Newens, StanRoberts, Gwilym (Bedfordshire, S.)Walker, Harold (Doncaster)
Noel-Baker, Rt.Hn.Philip(Derby,S.)Robinson, W. O. J. (Walth'stow, E.)Watkins, David (Consett)
Oakes, GordonRoebuck, RoyWatkins, Tudor (Brecon & Radnor)
Ogden, EricRose, PaulWellbeloved, James
O'Malley, BrianShaw, Arnold (Ilford, S.)Whitaker, Ben
Orbach, MauriceShore, Peter (Stepney)White, Mrs. Eirene
Orme, StanleyShort, Rt.Hn.Edward(N'c'tle-u-Tyne)Whitlock, William
Owen, Dr. David (Plymouth, S'tn)Short, Mrs. Renée(W'hampton,N.E.)Willley, Rt. Hn. Frederick
Owen, Will (Morpeth)Silkin, Rt. Hn. John (Deptford)Williams, Alan (Swansea, W.)
Page, Derek (King's Lynn)Silverman, Julius (Aston)Williams, Alan Lee (Hornchurch)
Paget, R. T.Slater, JosephWilliams, W. T. (Warrington)
Pannell, Rt. Hn. CharlesSmall, WilliamWillis, George (Edinburgh, E.)
Parker, John (Dagenham)Snow, JullanWilson, William (Coventry, S.)
Parkyn, Brian (Bedford)Spriggs, LeslleWinterbottom, R. E.
Pavitt, LaurenceStewart, Rt. Hn. MichaelWoof, Robert
Pearson, Arthur (Pontypridd)Summerskill, Hn. Dr. Shirley
Peart, Rt. Hn. FredTaverne, DickTELLERS FOR THE NOES:
Pentland, NormanThomas, George (Cardiff, W.)Mr. Charles Grey and
Perry, George H. (Nottingham, S.)Tinn, JamesMr. John McCann.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

I beg to move Amendment No. 4, in page 1, line 14, to leave out from 'recommendation' to first 'the' in line 15 and insert 'against'.

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

With this Amendment we can also take Amendment No. 23, in page 3, line 9, leave out from 'recommendation' to 'an' and insert 'against'.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

The drafting of the Bill is not the simplest thing in the world, and this Amendment is not very simple, either. Briefly, I will explain its intention. It will be seen that Clause I says that where, by reference to the National Board for Prices and Incomes under Section 2(1) or (3) of the Prices and Incomes Act, either an increase in prices or an increase in a wage settlement is forbidden then, … before it ceases to be so forbidden, a report of the Board on the reference is published with the recommendations adverse in any respect to the increase of the prices or charges … and the Government may take action.

This Amendment is similar to one which we debated in Committee, when we sought to remove the words "in any respect." It seemed to us that the use of these words was extremely ambiguous. Ambiguity has been one of the features of the Government's Prices and Incomes Bills the ambiguity of the drafting last year, and the Government's refusal to alter it subsequently, has been responsible for a very high percentage of the Prices and Incomes Orders which have passed through the House being annulled, either by the decision of the court, or by the subsequent decision of the Government. It has been very difficult to clarify precisely what this expression means.

To do so, we propose this Amendment, which is to delete words as set out on the Notice Paper and insert the word "against", so that the Government will only take action if the report of the Board on price or wage increases is clearly against that increase.

If the Amendment is not accepted it may be that the Government would have to take action, even though only a very small proportion of the total report of the Board was against the increase. The extraordinary thing was that in Committee, the Chairman had to use his casting vote to ensure that the Amendment which we were then proposing was not accepted. We divided the Ayes and the Noes equally and the Chairman then said: This is where I use my casting vote. I think that it would be fair that I should vote for the Bill as it stands to enable Members to have another opportunity to discuss the Amendment later. I therefore give my casting vote to the Ayes, and the Ayes have it"—[OFFICIAL REPORT, Standing Committee A, Tuesday, 27th June, 1967; c. 109.] The Amendment that we are now discussing is similar in intent, although, I think, somewhat better drafted than the Amendment we were then discussing. It is quite remarkable that such a situation should arise in Standing Committee. The Government should have had their full majority because none of those Members who had abstained on the Government's policy on the Floor of the House were on the Committee.

The point that we wish to make is that we want wording which will ensure that the balance of the Prices and Incomes Report shall be against the increase of the wage or the price concerned. By inserting the word "against" this clearly implies that, on balance, the report would have to be adverse. The First Secretary said, on the Second Reading of the Prices and Incomes Bill: In all cases—and this is an essential principle of the Bill—the Government will not be able to act in a manner more hostile to a proposed increase than is the report of the Board."—[OFFICIAL REPORT, 13th June, 1967; Vol. 748, c. 330.] Unless this Amendment is accepted there is an inconsistency in the Government's approach to what they put forward as an important point of principle on Second Reading. They were arguing that the Government would not be more hostile than the Board, so, clearly, if they can take action even though a small part of the report is contrary to the increase, they are acting inconsistently with the principle enunciated on Second Reading. Unless the Amendment is accepted there will be a basic and fundamental inconsistency in their policy.

From that broad outline, I want to turn to one or two specific examples to show the kind of difficulty which might arise if this Amendment is not accepted. The Report of the National Board for Prices and Incomes on the Prices of Compound Fertilisers, page 18, which is headed "Our Conclusions", says: We have no doubt that in the long-term an increase in the rate of return"— that is, of those making compound fertilizers— is desirable. Are we to understand that this is an unfavourable or adverse comment by the Board? If one looks at the particular context in which that quotation arises, it is still by no means clear whether that should be regarded as favourable or unfavourable.

The Board's Report No. 13, on Costs, Prices and Profits in the Brewing Industry, which has already been referred to, says in paragraph 52, on page 13: Examination of the level of profits shows that in absolute terms the return on capital employed in brewing was higher than that in general manufacturing and distribution in 1962 and 1963, but lower in 1964. Are we to understand, within the terms of the Bill, that this is an adverse comment in any respect? Would this particular phrase enable the Government to take action under this Clause which we are now debating? The term "adverse in any respect" is so nebulous as to be utterly meaningless, and it is for this reason that we move the Amendment. I hope that it will at least do something to clarify the situation or to bring from the Government some indication of what they feel the right interpretation is.

It may be that they intend to refer only to the actual conclusions of the Prices and Incomes Board in any particular report. But even that is not clear. If the Board made a statement at some point in a report before its conclusions or recommendations, it is not clear whether that would be regarded as sufficient basis for the Government to take action. Perhaps the Joint Parliamentary Secretary to the Ministry of Labour will say whether this is intended to be restricted to the conclusions or recommendations of the Board, and if that is not so, in what respects the phrase is limited. The drafting does not make the matter clear.

Finally, we want to be clear whether the expression "in any respect" refers to the short term or the long term. In many of its Reports the Board says that it "takes a view" that such-and-such a price or wage change would eventually be desirable, but is not desirable in the period of the freeze. What is the position in the period when the Government are taking stronger delaying powers than they were originally going to take under Part II? Are we to understand that they are now to take the matter, on balance, over the long term or concern themselves still only with short-run considerations?

I think that I have said sufficient to make the point that the wording of the Bill on this point is extremely ambiguous and inconsistent with the statement made by the First Secretary on Second Reading.

6.45 p.m.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I gladly give my support to my hon. Friend the Member for Worthing (Mr. Higgins), who has moved this verly sensible Amendment with commendable brevity. In considering it, we must have in mind the kind of animal that the Prices and Incomes Board is. Our experience with it does not leave us to believe that it is particularly modest in its approach to its terms of reference. It has performed some fairly drastic surgical operations on what has been put before it in the past. Either the terms of reference have been exceedingly liberally construed or they have been more deliberately widened.

By means of the Amendment we might wed put upon the Board the onus of coining down one way or the other. When hon. Members are asked to vote, they vote for or against. The Opposition are very well acquainted with the endearing habit of hon. Members opposite who speak very strongly for a policy during a debate and then oppose it—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Member is just out of order at the moment.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I am sorry, Mr. Speaker. I was giving the briefest and most rapid of illustrations of the point that I am making, which is highly germane to the issue.

But I will approach it the other way round and say that we think that the Board should be called upon to follow the examples of procedures here and come down one way or the other—for or against. If the Board's judgment in a matter were to be based on the criterion suggested here—namely, if it were "in any respect" adverse—we might take the examples of speeches made in the House by many hon. Members who could frequently be said to be in many respects adverse in their judgment to Government policy and yet they immediately vote for it. We wish to avoid this happening, and. I think that the Government Front Bench would be well advised to accept the very modest Amendment so wisely and sensibly proposed by my hon. Friend.

I do not believe that to add loose verbiage to an Act is any help. It has become a very tiresome habit of modern times—I have complained about it on many occasions—never to use one word where a great many more will do. Here we have a further example. There is the perfectly simple word "against" that could be used. I would willingly stop the argument now if the Joint Parliamentary Secretary, sitting between what I suppose can be termed his two supporters on the Government Front Bench, would set up, like Moses, between them, and tell us that he was prepared to accept the Amendment. However, we on this side need a good deal of satisfying that the Amendment is not a perfectly reasonable one to make. We should like the simple word "against" inserted in place of the highly misleading phrase in this already rather discreditable and untidy Bill.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I did not have the honour and privilege of being a member of the Standing Committee, but from what my hon. Friend the Member for Worthing (Mr. Higgins) said I am surprised that the Government have not brought the Amendment forward under their own name. It seems to me—I agree with my hon. Friend the Member for Yeovil (Mr. Peyton)—that we ought to try to have words which mean something and to use one simple, forthright word to express the Government's intention instead of half-a-dozen words. Incidentally, I think that my hon. Friend the Member for Yeovil might have referred to the two supporters of the Joint Parliamentary Secretary on the Government Front Bench as "lions couchant."

I agree with what has been said about the Prices and Incomes Board. It is not a very modest, wilting flower. It comes forward with some outrageous recommendations, and it ought to be asked to be forthright in those recommendations. It ought to be either for or against. When we divide in this House we do it not because we are "adverse", but because we are "against". If that is the sort of thing that we require here, then it is the sort of thing that ought to appear in the Bill.

I cannot imagine what argument the Joint Parliamentary Secretary will raise against the Amendment. I emphasise that if the Board makes a recommendation on something referred to it it ought to be either for or against. Something in this field might be taken to a court of law. I am sure that our Amendment would be supported by the judges, who say that far too often this House passes weak and woolly legislation and so the courts have to make their own interpretation of it. In the case before us it is clear that if we deleted the words that we propose to delete and inserted "against" there would be a clear and consistent body of law on which one could build and on which decisions would be taken.

I hope that the Joint Parliamentary Secretary will bear in mind the history of the Amendment. In Committee, the Chairman gave his casting vote for the Bill as it stood, but it must be remembered that it is a long-standing rule of the House and of Committees that the Chairman always votes for the status qua. Therefore, it does not in any way express the Chairman's views on the rights of the arguments on an Amendment in Committee. In Committee, the Government were, therefore, defeated, and I think that they were sensibly defeated. There is no actual party division in our Amendment. It is simply an Amendment which would make the Clause very much clearer than it was. I hope that the Government will be able to accept it. If not, I hope that my right hon. and hon. Friends will divide the House, because the Government are, as usual, producing nonsense.

Photo of Mr Reginald Paget Mr Reginald Paget , Northampton

Is there not the objection to this Amendment that it is not grammar? The Opposition are asking to make an adverb qualify a noun. If they wish to make this change, they would also have to change "recommendation" to "recommend against". One cannot have a recommendation against because it is an adverb.

Photo of Mr John Pardoe Mr John Pardoe , North Cornwall

I am no grammarian and I support this eminently sensible Amendment. It is extraordinary that the Government have not thought fit to put it in the Bill themselves. Whether the Amendment is good or bad grammar, the Bill as it stands is extraordinarily vague.

When I moved a similar Amendment during the Report stage of the 1966 Act—an Amendment which the Government have accepted for this Clause—I envisaged the situation in which the Board could report wholeheartedly against an increase, in which case we would be left in the ridiculous situation in which the increase could go ahead on the very day that the report was published.

At that time, I did not go into the considerable difficulties that could arise when the Board reported and no firm decision was reached. One could arrive at a situation where it rather sat on the fence. It would be a poor Government who could not find something which could be termed "adverse" in some respect. In the present drafting, the Gov- ernment are being left with far too much discretion of interpretation. They could take a broadly favourable report and find something in it which could be brought under this vague phraseology.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

The hon. Member for Worthing (Mr. Higgins) rightly said that the Amendment was in many ways parallel with one moved in Committee. But, if I may say so, his objections to the Clause in Committee were more succintly and positively put than his objections today. In Committee he told us that he hoped to ensure that the Government did not abuse a report of the Board. He wanted to ensure that we used it in a balanced and sensible way. He feared that the Government would pick on one small adverse point in a fundamentally favourable report and impose the full powers of the Clause. I hope to be able to convince the hon. Gentleman that such a state of affairs could never come about but, before doing so, I want to deal with the need to avoid ambiguity, to which he referred. It does not seem to me that, by deleting the words proposed and substituting the word "against", ambiguity would be avoided. The hon. Gentleman will have to explain how a court would be able to decide whether a standstill could be imposed if a report from the Board was entirely against, on balance against, substantially but not comprehensively against, or specifically against one part.

In a speech devoted to the virtues of avoiding ambiguity, the hon. Gentleman began by talking about a report being "clearly against" and he ended with a report that might be "on balance against". If he asks us to insert an Amendment partly to make the provisions of the Bill more comprehensive and to be more precise legally, he must do rather better than this. The Amendment would not make the Bill more clearly able to be implemented or its operation more precise. It would make it open to a good deal more dispute and argument. I am glad to see that I receive some support from hon. Members opposite on that point. However, the main argument against the Amendment is not the ambiguity to which it would give rise.

Photo of Mr John Peyton Mr John Peyton , Yeovil

Can the hon. Gentleman tell us whether in putting this argument he has the support of the Solicitor-General? If he has, this would weigh with us a great deal—although I am not saying which way.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

I am sure that the hon. Gentleman knows that the nature of common responsibility means that, unfortunately, my right hon. and learned Friend the Solicitor-General at the moment has to accept the judgment I am putting forward. I am sure the hon. Gentleman understands equally well that, had I not a firm basis for making this posit, I would not have the temerity to make it to the House—certainly not to a House in which he was sitting.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

If the Board were to say, "We are against this increase", would not this present no verbal problem?

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

Indeed, but when the Board says, "We have reservations about this increase; part of it is admirable but part deplorable", the Amendment goes no way to meeting that sort of verbal problem. But, as I have said, this should not be the main complaint against the Amendment. Were we to feel that there were substance in the argument for the Amendment, our obligation would be to redraft the Amendment to make it appropriate.

The substance of our argument is that the fears the hon. Gentleman expressed in Committee and has repeated today are groundless, for the reasons that he himself touched on but did not develop. Paragraph 2(1) of the Schedule to this Bill refers the Government to Schedule 2 of the Prices and Incomes Act, 1966, which specifies and stipulates the Government's attitude towards prices and in-conies matters. Schedule 2 of the Act, to which this Clause and the Amendment refer, lays down for the Board the nature of its considerations and its obligations and the things it must consider. Paragraph 2(1) also makes it clear how the Government must react to the conclusions to which the Board has come. It says that the Government: … shall not preclude an increase in prices or charges or the implementation of an award or settlement in any respect in which the National Board for Prices and Incomes … recommend that it should not be precluded … I will give a clear example, because I think that hypotheses in this situation are potentially dangerous. The hon. Gentleman will recall the case of the Crown Bedding Company, where the Government decided that a major wage increase that the Company was contemplating did not conform with the requirements of the prices and incomes policy but considered that a reduction in the working week for the drivers from 42½ to 41 hours did so conform.

Within the powers vested in my right hon. Friend the First Secretary of State, an order was made against the major increase but a letter of consent was provided which enabled the minor increase to go ahead. What Paragraph 2(1) of the Schedule to the Bill means is that, if a report of that sort came from the Board saying that a major pay award was unacceptable but that a minor alteration in remuneration, a minor reduction in hours or a minor increase for some of the men was possible, my right hon. Friend would be precluded from preventing that part of the award which was not referred to adversely from going ahead.

By allowing the Clause to remain as it is, and by not amending it as the hon. Gentleman suggests, we have a great deal more opportunity for flexibility, for reasonableness, for exercising the sort of discrimination which I am sure we all want and expect. But we do not have an opportunity to exercise discrimination and flexibility which is in any way more detrimental to the parties than any part of the Board's report recommends. Our discretion can be exercised only in their favour. That is why the hon. Gentleman was wrong to say in Committee that the need for the Amendment was exemplified by the fact that this was an all or nothing situation. He said that the phrase used in the Bill could either be accepted or abandoned and that there were no half measures.

7.0 p.m.

It is not an all or nothing situation. It is a situation in which my right hon. Friend, the First Secretary, may on occasion rightly wish to choose one element of the Board's report and say, "This can go on", but choose another in regard to which the Board has specifically said that the increase is not within the terms of the policy and not in line with the national interest and say, "This cannot go on". I am sure that the House wants to give him that opportunity to discriminate. It does not want to impose upon the Prices and Incomes Board an obligation to come formally and firmly and definitely down on one side or the other. The hon. Gentleman the Member for Worthing did not advance the argument that it should, but his hon. Friend the Member for Yeovil (Mr. Peyton) and the hon. Member for Ormskirk (Sir D. Glover) suggested that this was the rôle that the N.B.P.I. could occupy. I believe that this is a fatuous rôle to expect the Board to perform. Its job is to look with some sort of objectivity and intellectual understanding, and with the best information at its disposal, at an award and to make a judgment on it; if it has many aspects, to make a judgment upon the aspects; and, if it has many different details, to make judgments upon the details. To ask it to raise its hand or nod its head and say that an award is altogether good or altogether had misunderstands the rôle of the N.B.P.I. and misunderstands the interests of the incomes policy. In consequence I must ask my hon. Friends to resist the Amendment.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

The Joint Parliamentary Secretary's speech, delivered with his usual fluency and charm, sounded very plausible, but I suspect that when one reads it it will sound a great deal less plausible.

I will put forward one or two reasons why I think this is likely to be so. While there might be some legal difficulty if the Board did not come out clearly one way or the other, none the less there should be no difficulty in drafting an Amendment in such a way that the wording of the Bill was consistent with the speech which the First Secretary made on Second Reading. I do not think it is consistent. It is quite possible under this Clause for the Government to take action which is more severe than the recommendation which is in the Board's report.

If this were not so and if the right hon. Gentleman wanted to make sure it were so, clearly he ought to have inserted in the original draft of the Bill that the Government would take action only if a recommendation was adverse in any particular instance. In that situation the Government could not go further than the report of the Prices and Incomes Board. Unless he narrows it down—no doubt he could have done so either when the Bill was drafted or during Committee stage or now—and says that the Government shall take action only with regard to the respects in which the Prices and Incomes Board reports unfavourably, then he is being inconsistent with the speech which he made on Second Reading. It is clearly a badly drafted Bill and I would report adversely on it in that respect.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

May I clarify the position in terms of the wording of Clause 2(1) of the Schedule. It simply says that my right hon. Friend … shall not preclude an increase of prices or charges or the implementation of an award or settlement in any respect in which the National Board for Prices and Incomes in the relevant report recommend that it should not be precluded … That final part of the sentence which refers to "it", recommend that it should not be precluded", firmly and clearly and precisely limits the power of my right hon. Friend in judging parts of a report, parts of an issue, and limits it to judging it in the way I have explained. Those final words make it clear that my right hon. Friend cannot possibly be more repressive and cannot implement a report in a way in which the Prices and Incomes Board has not specifically recommended.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

I am grateful to the hon. Gentleman. We shall read HANSARD with interest and we shall judge his action during the period of the Bill accordingly and we may have cause to return to the matter anon.

The point that he has just made about the way in which the Prices and Incomes Board is therefore circumventing Government action, if he is right on the drafting, raises some other important points to which we shall return perhaps on the next Amendment.

The Parliamentary Secretary should perhaps take up some of the points which he made during the Committee stage. He said that I seemed to expound the points more simply than I did today. This is because the complexities of the situation are becoming clearer. The hon. Gentleman this afternoon said that he did not wish to hypothesise; he wanted to take a specific case. In Committee he said that he did not want to hypothesise about possible references to the Board without giving hypothetical examples, and he then produced a hypothetical situation in which he referred to a series of related prices or a group of related wage claims. He has not put forward that argument this afternoon. Are we to understand that this argument no longer applies or are we to understand that this is still the purpose of this aspect of the Clause? This is not clear from the debate we have had so far. I hope that we shall have a statement from the hon. Gentleman clarifying whether the multi-argument still applies, because this will seriously affect some of the other Amendments which we come to later.

Photo of Mr Robert Carr Mr Robert Carr , Mitcham

I do not want to delay the House, but my hon. Friend the Member for Worthing (Mr. Higgins) asked the Parliamentary Secretary, or a spokesman of the Government, to clear up the point which he was making, which was the main case on which the Parliamentary Secretary rested his opposition to our Amendment in Committee. It was very noticeable in his speech today that he did not use that argument. I, therefore, ask the Government to reply to the point which has just been made.

Photo of Mr Roy Hattersley Mr Roy Hattersley , Birmingham Sparkbrook

With the leave of the House: I was even more careful not to hypothesise today. In Committee I did mention what I rather inelegantly referred to as a multi-reference. Today I made reference to one group of people whose wages had already been considered in the House and about whom the Government had to make a decision concerning

the two aspects of increased remuneration, namely, hours and the rate of pay. The argument remains valid in the same way. If—and here I fear that I do hypothesise—a reference is made to the Board which concerns a group of related workers or a group of related prices, and examines every aspect of their wages and remuneration, my right hon. Friend would want to have the opportunity and would want to keep the option open of implementing the standstill in respect of those related parts of the report.

I do not think that the hon. Gentleman understands, but I am sure that he will on reflection, that the distinctions between a report about one group of men and two different aspects of their increase in remuneration, and a report which concerns related groups of men with rather different remuneration patterns is not very fundamental. We are making provision for a situation in which the Board may want to make a report which contains a number of elements. I do not think it matters how the elements are brought about. We want to reserve the right to operate on each element as the Board suggests and not necessarily look at the report as all black or all white.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

I am grateful to the hon. Gentleman, but does that not mean that the point which he made on Committee Stage is not covered by the expression "adverse in any respect"? Should it not read, "with regard to certain people within the group who have been referred to the Board"?

Question put, That the words proposed to be left out stand part of the Bill:—

The House divided: Ayes 190. Noes 127.

Division No. 429.]AYES[7.9 p.m.
Abse, LeoBraddock, Mrs. E. M.Dalyell, Tam
Alldritt, WalterBrown, Rt. Hn. George (Belpar)Davidson, Arthur (Accrington)
Archer, PeterBrown,Bob(N'c'tle-upon-Tyne,W.)Davies, G. Elfed (Rhondda, E.)
Ashley, JackBrown, R. W. (Shoreditch & F'bury)Davies, Harold (Leek)
Atkins, Ronald (Preston, N.)Buchan, NormanDavies, Ifor (Gower)
Atkinson Norman (Tottenham)Butler, Herbert (Hackney, C.)Davies, S. O. (Merthyr)
Bacon, Rt. Hn, AliceCallaghan, Rt. Hn. JamesDelargy, Hugh
Bagier, Gordon A. T.Carmichael, NeilDell, Edmund
Barnes, MichaelCoe, DenisDempsey, James
Baxter, WilliamColeman, DonaldDewar, Donald
Beaney, AlanConlan BernardDiamond, Rt. Hn. John
Bence, CyrilCraddock, George (Bradford, S.)Doig, Peter
Benn, Rt. Hn. Anthony WedgwoodCrawshaw, RichardDriberg, Tom
Bidwell, SidneyCronin, JohnDunn, James A.
Bishop, E. S.Crosland, Rt. Hn. AnthonyDunwoody, Mrs. Gwyneth (Exeter)
Boardman, H.Crossman, Rt. Hn. RichardDunwoody, Dr. John (F'th & C'b'e)
Bowden, Rt. Hn. HerbertCullen, Mrs. AliceEadie, Alex
Ellis, JohnJones, Dan (Burnley)Pearson, Arthur (Pontypridd)
English, MichaelJones, Rt.Hn.Sir Elwyn(W.Ham,S.)Peart, Rt. Hn. Fred
Ennals, DavidJudd, FrankPentiand, Norman
Ensor, DavidKerr, Russell (Feltham)Perry, George H. (Nottingham, S.)
Evans, Albert (Islington, S.W.)Lawson, GeorgePrice, Thomas (Westhoughton)
Evans, loan L. (Birm'h'm, Yardley)Leadbitter, TedBees, Merlyn
Fernyhough, E.Lee, Rt. Hn. Frederick (Newton)Roberts, Gwilym (Bedfordshire, S.)
Fletcher, Ted (Darlington)Lee, John (Reading)Robinson, W. O. J. (Walth'stow, E.)
Foot, Michael (Ebbw Vale)Lewis, Ron (Carlisle)Roebuck, Roy
Fowler, GerryLipton, MarcusRose, Paul
Fraser, John (Norwood)Lomas, KennethShaw, Arnold (Ilford, S.)
Fraser, Rt. Hn. Tom (Hamilton)Loughlin, CharlesShort,Rt.Hn.Edward(N'C'tle-u-Tyne)
Freeson, ReginaldLyon, Alexander W. (York)Short, Mrs. Renée(W'hampton,N.E.)
Garrett, W. E.McBride, NeilSilkin, Rt. Hn. John (Deptford)
Ginsburg, DavidMcCann, JohnSilverman, Julius (Aston)
Gordon Walker, Rt. Hn. P. C.MacColl, JamesSlater, Joseph
Gray, Dr. Hugh (Yarmouth)MacDermot, NiallSmall, William
Greenwood, Rt. Hn. AnthonyMcGuire, MichaelSnow, Julian
Gregory, ArnoldMackie, JohnSpriggs, Leslie
Grey, Charles (Durham)Mackintosh, John P.Steele, Thomas (Dunbartonshire, W.)
Griffiths, Will (Exchange)Maclennan, RobertStewart, Rt. Hn. Michael
Hamilton, James (Bothwell)MacPherson, MalcolmSummerskill, Hn. Dr. Shirley
Hamilton, William (Fife, W.)Mahon, Peter (Preston, S.)Thomas, George (Cardiff, W.)
Hamling, WilliamMallalieu, J.P.W.(Huddersfield, E.)Tinn, James
Hannan, WilliamManuel, ArchieTuck, Raphael
Harper, JosephMapp, CharlesUrwin, T. W.
Hart, Mrs. JudithMellish, RobertWainwright, Edwin (Dearne Valley)
Haseldine, NormanMendelson, J. J.Walker, Harold (Doncaster)
Hattersley, RoyMiller, Dr. M. S.Watkins, David (Consett)
Hazell, BertMilne, Edward (Blyth)Watkins, Tudor (Brecon & Radnor)
Heffer, Eric S.Morris, Alfred (Wythenshawe)Wellbeloved, James
Henig, StanleyMorris, Charles R. (Openshaw)Whitaker, Ben
Herbison, Rt. Hn. MargaretMorris, John (Aberavon)White, Mrs. Eirene
Hooley, FrankMurray, AlbertWhitlock, William
Houghton, Rt. Hn. DouglasNewens, StanWilley, Rt. Hn. Frederick
Howarth, Harry (Wellingborough)Noel-Baker, Rt.Hn.Philip(Derby,S.)Williams, Alan (Swansea, W.)
Howarth, Robert (Bolton, E.)Ogden, EricWilliams, Alan Lee (Hornchurch)
Howie, W.O'Malley, BrianWilliams, W. T. (Warrington)
Hoy, JamesOrbach, MauriceWillis, George (Edinburgh, E.)
Hughes, Emrys (Ayrshire, S.)Orme, StanleyWilson, Rt. Hn. Harold (Huyton)
Hughes, Hector (Aberdeen, N.)Owen, Dr. David (Plymouth, S'tn)Wilson, William (Coventry, S.)
Hynd, JohnOwen, Will (Morpeth)Winterbottom, R. E.
Jackson, Colin (B'h'se & Spenb'gh)Page, Derek (King's Lynn)Woof, Robert
Jackson, Peter M. (High Peak)Paget, R. T.
Jay, Rt. Hn. DouglasPannell, Rt. Hn. CharlesTELLERS FOR THE AYES:
Jeger, Mrs.Lena(H'b'n&St.P'cras,S.)Parker, John (Dagenham)Mr. Walter Harrison and
Jenkins, Hugh (Putney)Parkyn, Brian (Bedford)Mr. Ernest Armstrong.
Johnson, James (K'ston-on-Hull, W.)Pavitt, Laurence
NOES
Alison, Michael (Barkston Ash)Fletcher-Cooke, CharlesLambton, Viscount
Allason, James (Hemel Hempstead)Fortescue, TimLewis, Kenneth (Rutland)
Astor, JohnGlover, Sir DouglasLoveys, W. H.
Barber, Rt. Hn. AnthonyGlyn, Sir RichardLubbock, Eric
Beamish, Col. Sir TuftonGoodhew, VictorMcAdden, Sir Stephen
Bennett, Dr. Reginald (Gos. & Fhm)Gower, RaymondMacArthur, Ian
Biggs-Davison, JohnGrant, AnthonyMacleod, Rt. Hn. Iain
Boyd-Carpenter, Rt. Hn. JohnGriffiths, Eldon (Bury St. Edmunds)McMaster, Stanley
Boyle, Rt. Hn. Sir EdwardGurden, HaroldMaude, Angus
Bromley-Davenport, Lt.-Col. Sir WalterHarris, Frederic (Croydon, N.W.)Maxwell-Hyslop, R. J.
Brown, Sir Edward (Bath)Harris, Reader (Heston)Maydon, Lt.-Cmdr. S. L. C.
Bruce-Gardyne, J.Hawkins, PaulMills, Peter (Torrington)
Bullus, Sir EricHeald, Rt. Hn. Sir LionelMiscamphell, Norman
Burden, F. A.Higgins, Terence L.Mitchell, David (Basingstoke)
Carlisle, MarkHiley, JosephMore, Jasper
Carr, Rt. Hn. RobertHill, J. E. B.Morgan, Geraint (Denbigh)
Channon, H. P. G.Hirst, GeoffreyMorrison, Charles (Devizes)
Chichester-Clark, R.Hogg, Rt. Hn. QuintinMott-Radclyffe, Sir Charles
Clegg, WalterHolland, PhilipMunro-Lucas-Tooth, Sir Hugh
Cooper-Key, Sir NeillHooson, EmlynNoble, Rt. Hn. Michael
Corfield, F. V.Hordern, PeterOnslow, Cranley
Costain, A. P.Howell, David (Guildford)Page, Graham (Crosby)
Craddock, Sir Beresford (Spelthorne)Hunt, JohnPage, John (Harrow, W.)
Crosthwaite-Eyre, Sir OliverIremonger, T. L.Pardoe, John
Crouch, DavidIrvine, Bryant Godman (Rye)Peel, John
Dance, JamesJenkin, Patrick (Woodford)Percival, Ian
Davidson, James (Aberdeenshire, W.)Jennings, J. c. (Burton)Peyton, John
Deedes, Rt. Hn. W. F. (Ashford)Johnson Smith, G. (E. Grinstead)Pink, R. Bonner
Dodds-Parker, DouglasJopling, MichaelPrior, J. M. L.
Emery, PeterKimball, MarcusPym, Francis
Errington, Sir EricKing, Evelyn (Dorset, S.)Ramsden, Rt. Hn. James
Eyre, ReginaldKirk, PeterRees-Davies, W, R.
Fisher, NigelKnight, Mrs. JillRenton, Rt. Hn. Sir David
Ridley, Hn. NicholasTaylor, Sir Charles (Eastbourne)Webster, David
Royle, AnthonyTaylor, Edward M.(G'gow,Cathcart)Whitelaw, Rt. Hn. William
Russell, Sir RonaldTaylor, Frank (Moss Side)Wills, Sir Gerald (Bridgwater)
Scott, NicholasTemple, John M.Wilson, Geoffrey (Truro)
Sharples, RichardThatcher, Mrs. MargaretWolrige-Gordon, Patrick
Shaw, Michael (Sc'b'gh & Whitby)Tilney, JohnWylie, N. R.
Sinclair, Sir GeorgeTurton, Rt. Hn. R. H.
Smith, JohnWainwright, Richard (Coins Valley)TELLERS FOR THE NOES:
Stell, David (Roxburgh)Walker-Smith, Rt. Hn. Sir DerekMr. R. W. Elliott and
Stoddart-Scott, Col. Sir M. (Ripon)Walters, DennisMr. Timothy Kitson.
Summers, Sir SpencerWard, Dame Irene

Photo of Mr David Howell Mr David Howell , Guildford

I beg to move Amendment No. 7, in page 1, line 16, after 'settlement', to insert: 'and that recommendation arises from the terms of reference originally given to the Board'. The purpose of moving this Amendment is to make the Government and those concerned with implementing the Bill stop to ask themselves at this stage, as they plunge on into the more and more tortuous complexities of this legislation, what the National Board for Prices and Incomes is, what it is supposed to be doing and what is required of it.

As we have debated this legislation it has become clear that the Board is regarded as the pivotal instrument in the Government's carrying out of policies, not merely as an instrument in this legislation, but also as part of the long-term development of a prices and incomes policy as a permanent element in our national life, in the way in which the First Secretary is reported to have been talking about it in rather Utopian terms over the weekend. At this stage, therefore, we must ask ourselves very carefully what rôle the Board has in relation to its original terms of reference. In addition, if we read the weekend Press, we see that the Government think that there should be a permament kind of wages legislation, and no doubt there will be a rôle for the Board in this as well, so here again is a reason why we should look closely at it.

Another reason is that the Chairman of the Board, a very able man, Mr. Aubrey Jones, is one of the great managers of state who make the policy decisions in a modern Government, and who, as other managers of state in the complex which makes up our Government, has too little contact with, and no accountability to, this House. Because of this, too, it seems that it is important to look closely into the Board's terms of reference, and at the limits within which the policy influence of Mr. Aubrey Jones is to be exerted.

We on this side of the House, or some of us, have made it clear that the Board has a place in a long-term policy for prices and incomes, in a long-term view by the Government of how they should operate on prices and incomes. We have argued, and I argue now, that there is a case for any agency of this kind to operate on restrictive practices, to peer into industries, to do jobs which ought to have been done by the economic development committees, but which have not always been done, in making the market work in these industries, and ensuring that competitive forces operate. This is the kind of term and form in which we have argued, that in the long-term a Prices and Incomes Board should have this rôle.

That is one view that one can take of the Board, that it should have a place in a long-term policy, and, as I understand it from what Government spokesmen have said inside and outside the House from time to time, this is one view which they hold. It should be said, too, that that view was reflected when it was decided to ask the Board to study productivity agreements and it produced its excellent Report No. 36. This was a case of the Board being seen as an agency for a long-term improvement in competition in various industries, and not as an immediate instrument of short-term policy.

The other view of the Board is the one that we seem to have before us in the Bill, and the one which we are querying in the Amendment, namely, that it should be a sort of clearing house, almost like a daily newspaper office, checking the movement of prices, not we are told, by sending out forces across the land to study prices and watch movements at first hand, but by operating on prices and wage movements in the short-term, and being seen as part of a short-term effort to control the level of prices to beat inflation as part of the Government's short-term strategy. This is a rôle which, the more we examine it, the more we think the Government should reconsider it, and the more we doubt whether the Board can play it.

First, it has to be asked whether the Board has the physical capacity to carry out this kind of rôle—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. The hon. Member must keep to the Amendment, which is whether recommendation should be within the terms of reference as laid down in the parent Act.

Photo of Mr David Howell Mr David Howell , Guildford

As I tried to explain at the beginning of my speech the purpose of the Amendment is to make those who have to implement the Bill when it becomes an Act ask themselves whether the terms of reference which were originally laid down in Part I of the Prices and Incomes Act, the parent Act, are the ones to which they would like the Board to adhere, to which the Board is adhering, and to which it is to adhere if it is to do its job efficiently. It is against this background that I am trying to distinguish between the long-term rôle of a Board for Prices and Incomes in a long-term incomes policy, and the immediate short-term tasks which apparently are being shoved on to this Board, and to query whether they are within the terms of reference when the Board makes its reports.

The terms of reference, as originally set out in Part I of the parent Act, are: The Secretary of State, or the Secretary of State and any Minister acting jointly, may refer to the Board any question … relating to a proposal to increase any prices for the sale of goods or any charges for the performance of services, including charges for the application of any process to goods, or"— and then we come to the paragraph dealing with wages— relating to any pay claims or other claims relating to terms and conditions of employment, or any awards and settlements relating to terms and conditions of employment. There then follow other terms of reference, and the final one is: The Board shall examine any question referred to them under this section and report to the Minister or Ministers who referred the question to the Board. The thought in the minds of many hon. Members, and I believe of many observers outside, is whether, in making its reports, in making recommendations on a settlement, the Board has been answering the question put to it. The terms of reference say that it should answer the original question put to it when it makes a report on a settlement.

On looking at the reports from the Board it seems that we have seen an attempt to try to cover both the rôles which I have described, an attempt to try to cover the long-term rôle of being an instrument for promoting productivity, of which I approve, and, at the same time, an attempt to be a short-term spy master, a short-term controller and checker of price and wage movements, a rôle for which I think it is ill-equipped, and which it will never effectively be able to play.

In other words, we believe that although the Board should answer questions, what will happen as a result of this Clause and what we seek to challenge by way of the Amendment, is that the Board will be asked the wrong questions, and as a result will produce reports which in some aspects will promote understanding, and even, in due course, have a beneficial effect on the competitive structure of various industries, but in other cases will waste time and raise more difficult questions about what rôle the Board should have in implementing the Government's policies. As the Government go from Bill to Bill, from legislation to legislation, and from Clause to Clause, the Board will have piled on it all sorts of vague responsibilities which I contend have not been thought out.

One of the things which the Government's supporters hoped for when they came to office was that the Government would rethink the structure and rôle of agencies of Government, including agencies of this kind, and what they should be doing when they reported. This hope has been confounded, because agencies have had larger responsibilities piled on them. The duties which they are supposed to perform have grown like Topsy. This has left the Board in an ambiguous position when it comes to judging the kind of reports that it should give. It has left it in an ambiguous position when it comes to judging whether it is within its terms of reference in making recommendations. This has tied up, unfortunately ineffectively, the capacity of many able men, which could be concentrated more usefully in reaching the goal of promoting productivity rather than in restraining earnings.

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

I should have thought that the Government would welcome the Amendment. All independent bodies, tribunals, commissions, and things of that sort, are apt to stray very widely outside their terms of reference. Indeed, only the other day we heard the Lord Chancellor in another place complaining that the Radcliffe Committee had not been asked to judge on the accuracy or otherwise of the Prime Ministers statement on the D Notice question, and yet it had chosen to do so.

I refer to that only in passing, as an example of the way in which independent commissions, with the best will in the world, are apt to rove generally around their subjects, and as they get into their stride to expand their activities beyond the desires of the Government, and perhaps away from the public interest, but certainly the former.

The Amendment is designed to help the Government. I am not sure that we are wise to do that. There is a great temptation to try to improve the Bill, and it is one that perhaps we ought to resist. But I cannot see what harm there can be in accepting the Amendment, which the Government may later find very valuable.

7.30 p.m.

Let us suppose, as time goes on, that the Prices and Incomes Board takes the bit between its teeth and issues a report denouncing a certain proposal left, right and centre—something which the Government do not particularly want it to do: how will the Government be able to treat the question of the subsequent Order? In view of the authority that they have been seeking to give the Board it will be difficult for the Government not to accept those denunciations. They will he placed in a difficult political position, whereas if the Amendment is accepted they will not, because they will be able to say that they have no option to go outside the strict terms of reference that they gave the Board; that in the case in question he Board has strayed outside those terms of reference, and in that case the Government not only may not but cannot act.

Surely this is a shield which the Government should welcome. Surely they must feel that there are dangers in these great independent governmental agencies, from which there is no appeal and which are without any sort of control. The Government may find themselves in a very delicate and difficult situation if they come into conflict with the Board in respect of one of its reports.

As my hon. Friend the Member for Guildford (Mr. David Howell) said, there have been signs that the Board—I make no complaint about it; it is in the nature of such an animal—has been straying outside its terms of reference, especially in respect of its report on the banks. That was an interesting report, and perhaps a very good one, but it went far outside the Board's terms of reference. If the Board has begun to do that already it is likely to go the way of all flesh in this matter and do it again.

Surely any Government must protect themselves against that. Unless they insert these words, which cannot do any harm, the Government will find themselves in the embarrassing position, sooner or later, of having to reject certain findings of the Board—and they will not want to do that. What conceivable objection could there be to these innocuous words? Surely the Government do not propose to act on a recommendation that is outside the Board's terms of reference. If that is the case, what is wrong with the Amendment?

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

My hon. and learned Friend the Member for Darwen (Mr. Fletcher Cooke) said, in the course of his penetrating remarks, that he thought that the Amendment could do no harm. It is precisely on that point that I want to hear the observations of the Government, and in that connection there are three specific points that I wish to make.

My hon. Friend the Member for Guildford (Mr. David Howell), by saying that he thought there was a place for the Prices and Incomes Board, clearly expressed the feeling of many hon. Members on this side of the House. We are not sure whether a Board, as such, is a good thing, or whether the free disciplines of our economy provide a better way of achieving fixed wages, but it is clear, if we are to have such a Bill as this, that there are different points of view as to the extent to which the Board should be restricted. The Amendment deals with the extent of that restriction.

I was greatly impressed by the arguments of my hon. Friend the Member for Guildford, but if we are to ask the Board to investigate various wide-ranging matters we ought to appreciate that there could be danger in unduly restricting the exercise of its powers. Several of my hon. Friends and I have been very impressed at the quality of some of the Board's reports. On the other hand, it is clear that in some cases it has ranged widely beyond the specific points which it has been asked to investigate.

I now come to my three points. First, if the Amendment were accepted would it necessarily restrict any consequential recommendation which the Board might make? Let us suppose that the Board were asked to look into the wages of the boilermakers on Clydeside. Would the Amendment prevent the Board making a specific recommendation about the wages, say, of apprentice boilermakers? If that is the case it would be unfortunate. I do not think that the Amendment would restrict such a recommendation, but I should like it made clear.

The obvious thing to do would be to make the terms of reference adequate, but in existing circumstances the terms of reference might not be wide enough and the Board would be prevented from making appropriate consequential recommendations.

Secondly, would the Amendment in any way remove the liability of the Government to implement consequential recommendations not directly associated with the specific proposals put to the Board? I can give a specific example. Prices and Incomes Report No. 9 dealt with gas and electricity prices. I recall a specific recommendation made by the Board that the increase of 13 per cent. recommended for the price of gas in Scotland should be made only on the assumption that equal financial disciplines would be introduced for the electricity and the gas boards in Scotland. In Scotland the Electricity Board is organised by the Secretary of State for Scotland, under his general jurisdiction, whereas the Gas Board is under the jurisdiction of the Minister of Power.

Thirdly, if the Amendment is accepted, together with all the restrictions that may stem from it, does it mean that the Board would not be permitted to make recommendations about consequential increases within the same field of activities? In the Clyde shipyards, where I worked before coming to this House, there were maintenance electricians and maintenance engineers. Always, when there was an adjustment in the wages of the maintenance electricians, there was a similar automatic alteration in the wages of the maintenance engineers.

If the Board were asked to look into the wages of the maintenance electricians on Clydeside and, having done so, it took the view that although the electricians should get the increase there should not be a similar increase—because of the special circumstances of the time—in the wages of maintenance engineers, would the Amendment prevent the Board's making any such recommendation?

Photo of Mr Charles Fletcher-Cooke Mr Charles Fletcher-Cooke , Darwen

The Amendment does not preclude the Board from making any recommendations it chooses. All it does is to preclude the Government from acting on any recommendation which is ultra vires the Board's terms of reference.

Photo of Mr Teddy Taylor Mr Teddy Taylor , Glasgow Cathcart

I understand that the Board can recommend what it likes, but this is a question of restricting the actions of the Government. It would be a little unfortunate if, for example, as in the case that I have quoted in respect of maintenance engineers and electricians, the Government, because of a specific recommendation of the Board, allowed an increase in the wages of maintenance electricians but were not prepared to go ahead and make at the same time a similar increase in the case of the engineers.

My hon. Friend may take the view that the Government should not have power to stop wage increases which had not been considered at the time of instituting the investigation, but the terms of reference—sometimes because they were too wide and sometimes because they were too narrow—might make nonsense of everyday practices in industry if the Government did not have a little scope for carrying out various proposals.

It would be unfortunate if we restricted the Board's activities. I have been very impressed by the quality of its reports and would like to think that this roving band of "whizz kids" would move around not only private industry but the nationalised sector and public service where there is scope for more inquiry. The figures given at Question Time today about the substantial drop in the numbers employed in electrical manufacture and engineering and a substantial rise in the nationalised industries and the Civil Service show the need for this.

Although I have been greatly impressed by my hon. Friend's arguments, I hope that the Amendment will not have this effect and that the Government can give me sufficient assurances to vote against it.

Photo of Mr John Peyton Mr John Peyton , Yeovil

It is seldom and with great reluctance that I differ from my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), but today is one of those exceptions. It is all very well for him to welcome a roving band of "whizz kids" buzzing around and pontificating, but what happens to whizz kids when they grow up? I do not like to think how the Board may develop when it reaches adult status.

7.45 p.m.

The Amendment is profundly helpful to the Government, relieving them of possible embarrassments. If they refuse it, I can only attribute that to obstinacy and dangerous short-sightedness—qualities which I would attribute only reluctantly to the Chancellor of the Duchy. My hon. Friend the Member for Guildford (Mr. David Howell) was quite right to ask what the Board is and what its role is. He adduced a strong reason why its decisions should be confined to the issues covered by its terms of reference. It is not an elected body, or even governed by Civil Service rules. Its members can make speeches, appear at public meetings and on television and do other things which are not the rôle of the Civil Service.

I believe that, as a matter of practice, it delegates some duties, and I should be obliged to know what rules govern its powers of delegation. To what extent can it appoint others to carry out its duties, and how far is it right, proper or desirable to appoint consultants—

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

On a number of references, the Board employs consultants who are specialised in a given field.

Photo of Mr John Peyton Mr John Peyton , Yeovil

This is the issue which I wish to stress, as it is important. I do not say that it is wrong in all circumstances for the Board to appoint consultants, but Ministers, even in this Government, are nominally responsible to Parliament and civil servants to Ministers, as is the Board, to a lesser extent, but if it regularly establishes a chain of consultant operations, responsibility to Parliament and connection with the people's elected representatives will disappear.

We should also consider the parallel of the courts, which are bound by clear rules of procedure and evidence, with carefully defined issues before them. The opinions expressed by judges learned in the law, so far as they are not directly connected with the matter in issue, are of only minor importance. This would be the effect of the Amendment. It would relegate to only minor importance opinions expressed by the Board on matters which the Government apparently never intended it to consider.

An elected assembly should look with grave suspicion on bodies like this, whose powers are loosely defined and whose chain of responsibility is hard to trace. I cast no reflection on Mr. Aubrey Jones personally, but any body of this kind is bound to suffer from its full share of human weaknesses, and when its powers are not fettered, it is apt to grow into a fair conceipt.

This is an important issue and Parliament should say clearly that the opinions of the Board, so far as they are not directly related to its terms of reference, will carry no weight, as otherwise it will not be bound by rules but will have great power and be able to pontificate on every kind of issue, flattered enormously and unreasonably by the tribute of omniscience and ubiquity. It is wrong to attribute to such a body the detailed knowledge which we are now apparently taking for granted that it possesses.

In their own interests, I hope that, as my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) said in a cogent speech, the Government take the Amendment seriously. It is a sad train of events, leading one through the same experience again and again, when a Government are confronted with cold reason and an element of restraint and modesty and tend away from a course which these virtues direct. I had hoped that both right hon. Gentlemen would have vied with each other to say how ready they were to accept these reasonable and modest arguments, based upon prudence and a lively concern about what further disasters will happen to Parliament if power passes to such remote bodies as this.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I support the Amendment. I am sorry that I do not agree with my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor) because this is a very important Amendment. I have no criticism to make of Mr. Aubrey Jones, who was a very distinguished Member of the House for very many years and a personal friend of mine. But in legislation we are not dealing with individuals.

Many of us feel that a great danger which confronts our society is the development of the corporate state in which Parliament has very little power. Such bodies as the Prices and Incomes Board and the Monopolies Commission, collectively forming their own rules and developing untrammelled very largely by Parliamentary control, could become a great danger to our society.

Although I have no criticism at the moment, I am disturbed when I hear that some reports of the Prices and Incomes Board are produced by an outside body of consultants. While I am sure that, with the present chairmanship of the Board, any outside body of consultants would be chosen with the utmost care, we must accept that such bodies or business efficiency experts work in the commercial field and, therefore, have interests outside the report which they are being asked to produce. It would be only too easy for a firm of consultants, either by design or by accident, to be appointed which had interests which were inimical to the report which it was being asked to produce.

There is, therefore, a danger—I do not put it higher—in the way in which matters could develop. There is no sign of it at the moment—

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

The hon. Gentleman said that reports are produced by outside firms of consultants. Would he give an example?

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I am reliably informed—if I am wrong—

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

Then the hon. Gentleman should not say it.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

I apologise if I am wrong.

Photo of Sir Eric Fletcher Sir Eric Fletcher , Islington East

There is nothing in the Amendment about outside consultants.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

This is what I have been told. If I have been wrongly informed, I willingly and happily withdraw.

The Amendment refers to a recommendation which arises from the terms of reference originally given to the Board". When a firm or organisation or group of firms is being investigated by the Board, we and the people concerned know what are the Board's terms of reference. If I know anything about human relations, the people who are being investigated will, rightly, try to produce an answer to what might arise as a result of the investigation. If, however, the Board exceeds its terms of reference and produces a report which is critical of the organisation concerned but which is outside the terms of reference, inevitably the people investigated will be asked to answer a case which they never expected to have to answer.

The Government, therefore, would be well advised to accept the Amendment because the matter would then be kept within Parliamentary control and everybody would know the terms of reference given by the Government, the report will be within those terms and the people concerned will have to answer to the Minister. There is a safeguard in the Amendment which there would not be if it were not accepted. However, we may look upon the matter in the House, people are under the impression that they are under a form of attack when a matter is referred to the Board. Therefore, they have a right to know that the report to the Government will be within the terms of reference given to the Board by the Government.

If the Government accepted the Amendment, the people concerned would know the case which they had to answer before the Government took a decision. If the Government allowed the Board to go beyond its terms of reference, a great sense of injustice would be created among the firms and organisations investigated. The Amendment is a safeguard not only or the power of the Government and Parliament but, perhaps more important, of the sense of justice of the people who are investigated. I hope that the Minister will accept the Amendment.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

I support what has been said by my hon. Friends and, in particular, by my hon. Friend the Member for Guildford (Mr. David Howell), who drew a very important distinction between the task of the National Board for Prices and Incomes concerning short run increases in wages or prices and its task concerning long run developments and the examination of long run trends.

Comment has been made about the reference of bank charges to the Prices and Incomes Board. There is no doubt that in that instance the Government took greater care in framing the terms of reference than they took in other cases. It s said on page 3 of the Board's Report No. 34 on Bank Charges that … it is, in the Government's view, desirable in the public interest that the system and level of charging customers should be reviewed by the National Board for Prices and Incomes in the light of the banks' profit and dividend record. Then it adds another sentence: It is not intended that the Board should concern itself with questions of monetary policy such as Bank Rate and the general level of interest rates. Yet in its Report the Board stated in paragraph 3: The references stated explicitly:'It is rot intended that the Board should concern itself with questions of monetary policy such as Bank Rate and the general level of interest rates.'We have interpreted this as meaning that we should not comment on the way in which monetary policy has been conducted or on the general level at which Bank Rate has been held. It would have been very surprising if it had done.

The Board continues: Nor do we consider that we should comment on aspects of monetary policy that touch only remotely and indirectly on interest rates charged by the clearing banks, e.g., certain aspects of debt management. In so far, however, as we recommend changes in the system of bank charges, such changes are likely to have considerable implications for the techniques of monetary control. We have accordingly thought it consistent with our terms of reference to indicate what these implications might be and what possibilities by way of offsetting action might be open to the authorities. It seems clear from that that the Board not only went beyond its terms of reference but was clear in its mind that it was doing so. It not only made recommendations but examined the much broader implications of those recommendations. The House is right to be jealous of this in considering the Amendment. There is no objection which the Government could legitimately have to the Amendment.

The position of the Opposition concerning the Prices and Incomes Board was clearly expressed by my right hon. Friend the Leader of the Opposition in a speech only last weekend when he said: Some restrictive practices would remain untouched by the measures which he mentioned earlier. He went on: These we will attack by adapting the instrument of the Aubrey Jones Board for that specific purpose. We will also use the power of Government spending to eradicate restrictive practices from the firms and industries which gain from public contracts". The Prices and Incomes Board has grown without any clear restraints on the form in which it should develop. For that reason it is important that the House should be jealous of its powers and should not delegate them to other quasi-judicial bodies such as this without considering and writing into legislation very carefully exactly what its powers should be.

8.0 p.m.

On the two previous occasions when the House decided to delegate powers in restrictive practices to outside bodies, a major Bill was introduced and debated in greatest detail and very severe restraints were placed on those two bodies. I refer to the Monopolies Commission and the Restrictive Practices Court. In debates on the Monopolies Commission—when it was first set up and when it has been changed in successive legislation—it has been made clear that the powers of the Commission are substantially less than those of the Jones Board. We were told when discussing an earlier Amendment that the Jones Board's references would restrict the extent to which the Government could take action in a particular case. The Monopolies Commission does not even have that power to limit the Government's control and it has been hemmed around with such severe restraints as the House has considered it right to put on the Commission.

Similarly with the Restrictive Practices Court. Lengthy debates took place on exactly the subject of the powers which the Court should have and the extent to which it could judge maters which were not essentially judicial but were considered to have elements of public policy in them. In that case the House not only imposed rigorous controls, but said that certain practices might be against the public interest unless they could go through some specified gateway.

In this case, on the other hand, the National Board for Prices and Incomes has very little control over its operations. Apparently it is not even being tied down to its terms of reference. I hope, therefore, that the Government will accept the Amendment.

Some anxiety was expressed earlier about the Board employing consultants. It seems clear that the Board's terms of reference may not only be extended by the Board itself—as they were, apparently, in this case—but in some cases may even be extended by its consultants. The First Secretary asked my hon. Friends to give an example of a case where one of the Board's reports was produced not by the Board but by its consultants. Obviously we cannot give such an example. We appreciate that, in formal terms, its reports are produced by the Board. However, we have no means of telling how those reports diverge from the advice the Board has received from its consultants.

The First Secretary went on to say that we could be sure that none of the consultants had any particular interest which might enable him to be biased in his views. But the House cannot be sure of that. We do not know who the consultants are, or even their nationality—that is, unless an hon. Member tables a Question and learns this information in a Parliamentary Answer. It is not sufficient for the First Secretary to say, "This is a straightforward procedure. We know exactly what happens". The House has been given remarkably little information about what happens either about the working of the Board or its consultants. We need to be sure that they are tied down to their terms of reference.

We do not even have a clear idea of the terms of reference affecting the operation of the Board. In the other two cases to which I referred we know exactly what is happening. There are clear procedural recommendations applying to the Monopolies Commission and any case to be answered is clearly set out for those who are called upon to give information. They have a clear idea of the case that must be answered and they can put forward their evidence accordingly.

It is not clear that those being investigated by the Board have an equal right of reply. There is no public hearing to correspond with that of the Monopolies Commission, and the Restrictive Practices Court has an even more rigid procedure which protects the interests of those who are being investigated—certainly far more than people appearing before the Prices and Incomes Board are protected.

I take issue with my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor), who expressed the hope that the Board's operations would not be too closely restricted. The essential element is that the Board's terms of reference should be specified in such a way that it can reasonably investigate the matter in hand and spread its net as wide as the Government feel that it ought. However, it is unreasonable that the Government should give the Board one set of terms of reference and that the Board should go on to decide whether or not it should go beyond them.

In these circumstances, as in the banking case, the right course would be for the Board to say to the Government, "We feel it necessary to examine other matters"—of the kind mentioned by my hon. Friend the Member for Cathcart—"and presumably you will revise our terms of reference accordingly". But, instead, the Government have been remarkably loose in framing the Board's terms of reference, and this reflects the Government's general woolly thinking.

I will give two instances of this. Report No. 31, on the Distribution Costs of Fresh Fruit and Vegetables, states that the Government had reason to refer the matter to the Board and, accordingly, the Board was asked to examine … the question of the costs and profit margins of the wholesale and retail fruit and vegetable trades. The Government should also have said that the demand for those goods, the way it fluctuates daily, seasonal aspects and other problems, should be looked into. Then the Board would have known where it was. Instead, the Government specified one aspect of the matter and left ii to the Board to do the work which the Government should have done themselves.

Time and again the reference given to the Board has been nebulous, and when the Government have given a specific reference the Board has often gone beyond it. Consider the case of laundry and dry cleaning charges, the only case where an Order has been issued. The Government considered it desirable … in the national interest that the justification for increases in charges from the middle of 1964 should be investigated by the National Board for Prices and Incomes. The Board went far beyond that and made recommendations on which the Government imposed an Order. If that is what the Government wanted, they should have said clearly to the Board what was desired and asked for specific recommendations. This has a strong bearing on the last Amendment we were discussing.

The Government are anxious to leave the whole thing as woolly and nebulous as possible, with the Board's terms of reference being so ill-defined that nobody can make head or tail of them. The Government then hope that the Board will come up with something that they can either reject or accept, as they think fit. This is not a matter of little consequence. The House of Commons should not be treated in this way. In the other two instances the House went to immense trouble to define the powers of such quasi-judicial bodies. I trust that the Government will now accept the Amendment because there is clearly a case for defining the Board's whole operation, its structure, consultants and the basis on which its activities are conducted.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

This has been a wide-ranging debate in which hon. Gentlemen opposite have expressed views about the way in which the National Board for Prices and Incomes interprets its terms of reference. I am not absolutely clear how this subject comes within the terms of the Amendment, or, indeed, of the Bill. After all, the Bill merely gives the Government powers to extend standstills and does not in any way, shape or form or discuss the terms of reference of the Board or give the Board power to go outside the terms of reference given it in the 1966 Act, which were explicit.

Hon. Gentlemen opposite will see that we are not in any way widening the Board's terms of reference. We are merely extending the time factor for delay, if the Board so recommends. The anxieties expressed by hon. Gentlemen opposite appear to be misplaced. Hon. Gentlemen opposite have contrasted a general reference, with fairly wide terms of reference, with more specific issues and have suggested that the Board might go wide in interpreting its terms of reference on the more general issues.

I would remind the House that we are discussing Clause 1. We know that it confers on the Government discretion to extend by Order, temporarily, a standstill of a price or pay increase beyond the three or four months provided for in Part II of the Act in cases where the Board have so recommended. The hon. Member for Worthing said that we were being woolly and nebulous, and were giving the Board powers that it could use too widely; that the Government was not limiting the Board. I will try to deal specifically with one or two items, because I want to disabuse the hon. Member of that idea.

By virtue of paragraph 2 of the Schedule the Government cannot take action which is more restrictive than that which the Board recommends. Whether the existing standstill has been imposed directly under Part II of the Act or by virtue of Clause 2 of the Bill it will operate in relation to the Board's reference on the particular price or pay increase in question.

We have been told that this Amendment is designed to ensure that a standstill cannot be extended by virtue of the Clause unless the Board's Report contains a recommendation that is adverse to the increase in price or charge, or the settlement, and which … arises from the terms of reference originally given to the Board". The hon. and learned Member for Darwen (Mr. Fletcher-Cooke), and other hon. Members, said that surely the Government could accept the Amendment, as it would do no harm in any event. I do not argue that the content of the Amendment is in any way harmful. The fact is that it is quite unnecessary. The point is covered time and again in the 1966 Act and in the Bill.

The Schedule makes it clear that the Government cannot impose anything wider than that which the Board recommends, whether it is done under Part II of the Act or Clause 2 of the Bill. That which the Board can recommend must relate to the specific reference given to it. Part II, or Clause 2 of the present Bill, can be effective only in relation to increases in prices or charges, awards or settlements to which the relevant reference to the Board applies.

Sections 7 and 14 deal with cases involving statutory notification of proposed increases in prices or pay. Sections 7(3) and 14(6) provide respectively for the reference to the Board of the notice of intention to increase the prices or charges, awards or settlements in question, as a prerequisite to the maintenance of the standstill. Again, Section 8(1) limits the application of the standstill to prices or charges and … matters to which the reference relates. Section 15(1) limits the application of a standstill to the award or settlement that has been referred to the Board.

It is pretty difficult in such circumstances to appreciate why hon. Members opposite believe that on specific references—the kinds of things that we discuss in Clause 1—the Board can rove far and wide outside the terms of reference. Indeed, the standstill powers contained in Clauses 1 and 3, like those in Part II of the 1966 Act, can be applied only to price increases and pay settlements referred to the Board, and only where the price increases or groups of workers are directly covered by the reference.

The hon. Member for Cathcart (Mr. Edward M. Taylor) was not far off the mark when he indicated that there could be certain limitations—

Photo of Mr Frederic Harris Mr Frederic Harris , Croydon North West

But my hon. Friends have, time and again, given very definite cases where the Board has roved widely.

8.15 p.m.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

I have emphasised that this Bill as a whole does nothing to widen the powers of the Board; it merely extends the time factor.

The reference can only be directly either to a given price increase or to a specific group of workers, but this does not of itself stop the Board from making recommendations on related matters. The hon. Member for Cathcart indicated one or two such related matters. He talked in terms of relative rates for apprentices, or for one kind of craftsman when another kind of craftsman has received an increase. The hon. Gentleman is quite right—these things generally do run together. But no matter what the Board might say on issues like that, we could not use the powers to implement a recommendation that went wider than the actual group of workers to whom the reference related.

Therefore, it is not the case that in these specific references under Clause 1 the Board would go wider in its recommendations than its terms of reference unless, afterwards, we gave it a further reference to deal with other types of worker who were not under surveillance in the original terms of reference—

Photo of Mr John Peyton Mr John Peyton , Yeovil

The right hon. Gentleman now seems to envisage a rather messy postscript being given to the reference, but what we on this side have been concerned with—and he has just handed the case to us—is that a reference is made and the Board comes back with a recommendation which covers people who are not within the terms of reference. That recommendation would be very embarrassing to the Government. That was my hon. Friend's point.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

The hon. Gentleman mistook reference for recommendation. I am talking, as was the hon. Member for Cathcart, in terms of a number of craftsmen working in a shipyard, engineering workshop, or the like, where there may have been a reference to one section—let us say, some kind of engineering job. By practice, movements of income as between those people and other comparable workers are generally kept in line. It tray well be that the reference merely relates narrowly to the one group of people to whom I have referred. Whilst in its Report, the Board could say that this rather got the thing out of balance, it would not be a recommendation on which we could act. If, however, the Board said that this got all the relativities out of balance we could make a further reference dealing with the specific people to whom the Board had made some reference in its report. To those of us not unused to that sort of thing in industry, there is nothing new or original in it, nor is there anything startling about it; in fact, it would he rather startling if there were not something like that.

I therefore hope that the apprehensions felt by such a wide number of hon. Members opposite will be assuaged when they read what I have said. I have given them some references both to the 1966 Act and to the Bill, including the Schedule to the Bill, in order to show them that it is not likely in these references under either Clause 1 or Clause 3 for the Board's recommendation to go outside their specific terms of reference; that, if it did so, the recommendation would carry no statutory weight whatever, and that before we could widen a standstill or an increase or anything else there would have to be a further reference to deal with other people outside those concerned in the original reference to the Board.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

My hon. Friend the Mmber for Guildford (Mr. David Howell) moved this important Amendment with his usual clarity, but the clarity somewhat disappeared during the speech of the Chancellor of the Duchy of Lancaster to which we have just listened. The right hon. Gentleman seemed to have got hold of a remarkable brief, on one or two points of which I would like to comment.

The right hon. Gentleman began by casting doubt on whether the speeches were relevant to the Bill. I remind him that subsection (1) of Clause 1 begins by saying: Where by virtue of a reference to the National Board … Clearly, therefore, the questions of the reference and how much of it is intra vires and how much of it is ultra vires are of the greatest importance. My hon. Friends were distinctly worried—I certainly was—as the right hon. Gentleman's explanation went on—

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

The right hon. Gentleman began to quote from subsection (1). Will he finish it?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

Of course— Where by virtue of a reference to the National Board for Prices and Incomes under section 2(1) or (3) of the Prices and Incomes Act 1966 [Interruption.] I can read the whole Bill if the First Secretary does not know it, but I suspect that he does, and he knows that I know it. Perhaps we can leave it at that. It is by virtue of a reference.

I join the alliance against my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). I do not see the Board as a roving band of "whizz-kids". Some of the Members of the Board are distinguished people. Mr. Hilary Marquand, for instance, is difficult to envisage in that guise. This is in no sense an attack on the Board. I admire much of the work that it does and I have considerable regard in particular for the chairman, Mr. Aubrey Jones. The question is whether there should be, either at first or at second hand, a true measure of Parliamentary control—my hon. Friend the Member for Ormskirk (Sir D. Glover) put his finger on this—over the question of what is in a reference.

By far the most startling example was the one which was first referred to by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) and also by my hon. Friend the Member for Worthing (Mr. T. Higgins)—that is, the the report on bank charges. I know of no evidence that there was widespread objection by the public to the level of servicing charges, but we can leave that aside for the moment. The key sentence for the reference was that published profits and dividends had increased substantially in recent years.

The report tries to justify that by showing that over the 13 years from 1951 to 1964, net profits and net dividends paid out increased by 3·7 and 3·9 times, respectively. All that arises out of the reference, and one can have no objection to it. The Board could, and, in my view, should, have gone on to say that in 1951, which it took as its base year, the Bank Rate was 2 per cent. and, therefore, the percentage of advances was subnormal. It should have said that for 20 years before then, from 1931 to 1951, dividends had been frozen, in some cases at levels made during the 1931 slump. At least, that was the Board's assignment and nobody can complain about that.

The Board could, on that point alone, have produced a quite short report had it adhered to its terms of reference. It makes clear in Chapter 6 of its report that 42 per cent. of private accounts pay no charges and that the overall average charge, remarkably enough—it surprised me very much—is only 44s. a year, which is scarcely an important item in most people's cost of living.

The Board could, and, in my judgment, should, have stopped, I will not necessarily say there, but either there or there-abouts. If anything, it had discharged fully the terms of reference given to it and it had found that the commission charges were subsidised from other profits and were being provided by the banks at less than cost. That could, hand should, have been the end of the matter.

Now comes the point which causes us concern. My hon. Friend the Member for Worthing quoted the key sentence from page 3 of the report. It is clear that what the Board went on to do was absurdly distant and different from its terms of reference. In paragraph 176 it stated that the Government was inviting us in effect to judge whether the depositor and the borrower had been equitably dealt with vis-à-vis the shareholder. I do not believe that the Government were doing any such thing. It is an extraordinary interpretation of the terms of reference.

At that point in his speech, the Chancellor of the Duchy argued that the Board cannot go outside its terms of reference. The short answer is that it goes outside them over and over again. We are picking only on the most obvious and the most recent of a number of examples. The Chancellor of the Duchy then said that no further action could be taken by the Government if the Board went outside its terms of reference because it was stopped from doing so by one of the provisions in the Schedule to the Bill.

I should like to ask this question. If the First Secretary is not thinking of replying to the debate, perhaps he can reply in one word. When the Board went, in my view, outwith its terms of reference, did it ask the Government whether it could do this, or was the Board simply interpreting to its own satisfaction the terms of reference which had been given to it? Was the First Secretary asked by the Board, "Can we go wider than these terms of reference", or was the Board, in the exercise of its private initiative, simply extending, in our view at least, the terms of reference which had been laid down for it by the Secretary of State? Would the First Secretary like to deal with this by intervention now or later?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

Very well. In my view, it is beyond argument that had the Board wanted to do that, it should have come back to the Secretary of State and said—this is not uncommon; we all have experience of this, those of us who have held ministerial office and, indeed, those who have not—"Should we go beyond the immediate terms of reference?" It is on this point that the question of the authority of Parliament, which my hon. Friend the Member for Ormskirk raised, is of real importance. We should be jealous of our position in this matter.

The Chancellor of the Duchy of Lancaster said that if the report of the Board went beyond its original terms of reference, there was no action that the Government should take in the matter. Perhaps the First Secretary will explain this point. I have not got the reference with me, but it is clearly in my mind that the First Secretary welcomed the full report on the banking industry when it was issued, which seems to me to be in considerable contrast with the attitude of the Chancellor of the Duchy of Lancaster, who has said, in effect, that the Board was wasting its time by going beyond the terms of reference given to it by the First Secretary.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

I was old-fashioned enough to be arguing an Amendment to Clause 1. Clause 1 gives the power to extend periods of standstill. I was therefore saying that the terms of reference are very different from the kind of thing the right hon. Gentleman is discussing.

8.30 p.m.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

I have got that. I left that point about a quarter of an hour ago. I entirely accept what the right hon. Gentleman says, but all of Clause 1 is governed by the opening words: Where by virtue of a reference and then we go on with this matter.

The Chancellor of the Duchy of Lancaster claimed at the end that the Amendment was unnecessary. He knows tie standard answer to that, which I dare say he leas given me in his time. If it is unnecessary, why not put it in, because at least this side of the House would be satisfied, a vote would be saved, and we should be a good deal clearer on a matter which touches on the heart of the Bill?

The terms of reference which the First Secretary gives will, as he knows full well, in some cases at least have the effect of putting a firm or an industry, or even conceivably an individual, although this has not happened so far, in the dock. It has to explain all sorts of things. It may be, and often is, extremely dissatisfied with the result. In the same way as anyone who has to face any sort of charge or investigation into his affairs—business affairs or other affairs, as the case may be—is always told specifically what the charges are against him and what will be investigated, so we seek to write into the Clause words which we think would have that effect. Of course the First Secretary would be able to continue to make references by virtue of the 1966 Act and the standstill in due course, when Parliament has finished discussing this, will no doubt be extended by the Clause.

We regard this as one of the most important points in the Bill. We regard it as very important indeed that the Board should not charge all over the countryside on all sorts of matters which may conceivably seem to it to arise at first or second or tenth hand from the reference which has been given to it by the First Secretary. We therefore seek deliberately to narrow the Board's reports to matters which arise from the terms of reference originally given to the Board". We naturally think that this is a bad Bill. We think that the parent Act is a bad one, too. We think that an important change would be made for the better if the First Secretary were to accept the Amendment.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

I will try to explain to the right hon. Gentleman not only why the Amendment is unnecessary but why its acceptance would make the Bill a worse Bill. The hon. Member for Guildford (Mr. David Howell) was much interested in what has sometimes been called general references to the Board. He instanced productivity agreements and restrictive practices. The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor), as one of the limited number of trade unionists on the Opposition benches, may have noticed the zeal amongst his colleagues for having restrictive practices investigated by the Board and the great alarm that possibly a banker might be upset by something the Board had said. He will notice this kind of thing more and more as he remains on those benches.

I come to the important point about the fondness of the hon. Member for Guildford—it is a fondness which I share—for general references of important questions to the Board. I think we must accept that, long term, this will be an important part of the Board's work—not just to be asked, "Ought this group of workers to have so many shillings per week more?" but to consider wider questions. It is common ground that the Board ought to have general as well as particular references. It could never do a useful job such as that which it has done on productivity agreements if an attempt were made to tie down its terms of reference as narrowly as the hon. Gentleman tried to tie down what the hon. Gentleman the Member for Worthing thought the terms of the fruit and vegetable reference should have been. A study of the report of his speech in HANSARD and of the way in which he said that we should have pegged down the reference about fruit and vegetables will show that it would have left the Board with nothing to do. The Government would have told the Board not only what they wanted done but exactly, at every stage, how they thought it should be done.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

No, not at every stage how they thought it should be done. All the Government should be doing is giving the Board clear terms of reference. The right hon. Gentleman is now saying that the Government are incapable of giving clear terms of reference.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

No. If the hon. Gentleman reads what he said, he will see that that would be treating the Board like a child, giving it terms of reference nailed down in that way. If we did that, the Board would never do the kind of job which the hon. Member for Guildford rightly wants to see it do. I make that general point with regard to terms of reference given to the Board.

I come now to some of the accusations made against the Board. I expect that the hon. Gentleman the Member for Ormskirk (Sir D. Glover) has from time to time in his Parliamentary work asked someone not in the House but with special knowledge to give him advice before he made a speech on some matter. Has he never done that? What would he say if it were then alleged that his speech was produced by outside advisers? That is the sort of accusation which he was making against the Board, without a shadow of evidence.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

The right hon. Gentleman is taking this too far. I gave a very generous apology. The right hon. Gentleman said that there was no truth in my allegation. Since then, he and his right hon. Friend have told me that there was a good deal of truth in my allegation and, in fact, specialists were consulted. There is not much point in consulting if one takes no notice of the people consulted.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

The hon. Gentleman is trying to have it both ways. No one disputes that the Board takes advice, as, occasionally, I imagine, the hon. Gentleman does, but that is not to say that its reports are produced for it by someone else. That accusation ought not to have been made, yet the hon. Gentleman is now trying to repeat it through the back door. I mention those matters since this general argument about the Board has been brought up.

If hon. Members opposite want to pursue this interesting and important question of how references to the Board should be drafted and the two kinds of work of the Board are to be undertaken, the particular reference and the general question—I think that it has to do both—they will need to devote a little more thought to the matter than they have shown by their contributions tonight, and they will have to be a little less influenced by purely malicious attacks on the Board.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

No. I think that I need say no more about that because none of it has anything to do with the Amendment before us. Even if every accusation made against the Board in this debate, with or without evidence, were true, there is nothing in the Amendment which would reduce the Board's power to do any of the things complained of. The hon. Member for Worthing thought that the Board went outside its terms of reference in regard to the banks. He said that that was the view on his side of the House. It is not everyone's view. It is a matter about which, on the words of the reference, different opinions can be held. But even if he is right, even if the Board did go outside its terms of reference, there is nothing in the Amendment which would prevent it doing so again. The Amendment is not directed to that problem at all.

What is the Amendment supposed to do? The right hon. Member for Enfield, West (Mr. Iain Macleod) recommended the Amendment to us as one which would stop what he would regard as a dangerous abuse of the rights of Parliament. The Amendment would do nothing of the kind. It does not bear on that problem at all. What would it do? It would provide that, if the Board went beyond its terms of reference, the Minister could not make an order on any matter on which it had gone outside its terms of reference. I agree that that is a proper provision to have in the Bill. It is there already. The Bill is concerned with prolonging standstills provided for under the 1966 Act, and those standstills can arise only out of a particular reference to the Board.

If the Amendment were carried, therefore, the Board's powers to interpret its terms of reference as it judged best would remain where they are. The Minister's incapacity to make Orders about things which are not in the terms of reference to the Board would remain as it is. If this is meant to be an Amendment disciplining the Board, it quite clearly fails in its objective. If it is intended to limit the powers of Ministers, it is unnecessary and it has this further peculiar result that the words: … the terms of reference originally given to the Board might leave the courts wondering what would be the position if, under the Prices and Incomes Act, 1966, the reference was given to the Board and later on was varied. As the first reference is known as the original reference, the courts might be genuinely left wondering whether, if that happened, the Board could only report, and the Government only act on the original terms of reference, and not the original reference as varied.

A large part of the argument for this Amendment has been directed to a matter with which the Amendment does not deal. It is an Amendment which is said to be due to a fear of excessive powers of Ministers, yet it does not limit those powers. They are already limited. It has the final disadvantage that it might leave the courts in some doubt as to what it meant. The House will be well advised rot to accept it.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

On the second point that the right hon. Gentleman was making, that the Amendment does not limit the Government, are we to understand that what he is now saying is that the Governmen would not be able to take any action under this Clause at all, unless they were acting in precisely the terms specified in the terms of reference of the Board?

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

The Goverment's powers are to prolong a standstill, of either prices or wages. They can only do that on proposals about prices or wages which have been referred to the Board. This kind of reference would be a particular reference, about particular prices or wages. It would not be possible for the Government to go beyond that. The Board might choose—and it might be right to choose in my judgment—to include in its report certain opinions about main matters, but that would not enlarge the powers of the Government.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

Leaving on one side the question whether the courts will be in some doubt, the right hon. Gentleman might like to recall the recent decision of the Court of Appeal in this matter, which shows fairly clearly that the Government are wrong in their legal views in these cases. I asked the right hon. Gentleman one specific question which he promised to answer. Did the Board come back to him?

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

The right hon. Gentleman knows that the decision of the Court of Appeal is not in the least connected with this Amendment. I am merely pointing out that the words in this Amendment would only create further ambiguity for the courts.

The answer to the right hon. Gentleman's question is, "No". It does not, and I cannot see why it is necessary to do so. If hon. Members look at the wording of the terms of reference, the Board could quite properly hold that its report was within the terms of reference. Interesting as it is, this question has no bearing on the Amendment.

Photo of Mr Frederic Harris Mr Frederic Harris , Croydon North West

I have listened to every part of this very interesting debate and I am tempted to make a few comments because every time I listen to the First Secretary he comes out with some offensive and irritating remark. In this case the Chancellor of the Duchy of Lancaster made a strong and rather complicated argument, but said clearly that it was in order to accept the Amendment, that there was no difficulty about it, but that it was felt to be unnecessary.

On the other hand, the First Secretary gets up and gives us a long-drawn-out story as to why the Amendment cannot be accepted under any circumstances. An ordinary layman, trying to understand Amendments to a most complex Bill such as this, should be able, at least, to expect that the two main Ministers concerned would have made up their minds as to what they would do about this. These are the facts and they cannot be denied. I strongly recommend the two Ministers to get together before we go on to the rest of the Amendments and come to some understanding about what they are recommending to the House. Whose advice do we take?

8.45 p.m.

My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), when he intervened, said exactly what I was going to say in very much better language, and the House will be pleased to know that I am now going to sit down and leave it to the Division.

Question put: That those words be there inserted in the Bill:—

The House divided: Ayes 143, Noes 209.

Division No. 430.]AYES[8.46 p.m.
Alison, Michael (Barkston Ash)Gurden, HaroldMurton, Oscar
Allason, James (Hemel Hempstead)Harris, Frederic (Croydon, N.W.)Noble, Rt. Hn. Michael
Astor, JohnHarris, Reader (Heston)Page, Graham (Crosby)
Atkins, Humphrey (M't'n & M'd'n)Harvie Anderson, MissPage, John (Harrow, W.)
Barber, Rt. Hn. AnthonyHawkins, PaulPardoe, John
Beamish, Col. Sir TuftonHeald, Rt. Hn. Sir LionelPeel, John
Biffen, JohnHeseltine, MichaelPercival, Ian
Boyle, Rt. Hn. Sir EdwardHiggins, Terence L.Peyton, John
Braine, BernardHiley, JosephPink, R. Bonner
Brewis, JohnHirst, GeoffreyPrior, J. M. L.
Bromley-Davenport, Lt.-Col. Sir WalterHogg, Rt. Hn. QuintinPym, Francis
Brown, Sir Edward (Bath)Holland, PhilipRamsden, Rt. Hn. James
Bruce-Gardyne, J.Hooson, EmlynRenton, Rt. Hn. Sir David
Bullus, Sir EricHordern, PeterRidley, Hn. Nicholas
Burden, F. A.Hornby, RichardRoyle, Anthony
Campbell, GordonHowell, David (Guildford)Russell, Sir Ronald
Carlisle, MarkHunt, JohnScott, Nicholas
Carr, Rt. Hn. RobertHutchison, Michael ClarkSharples, Richard
Chichester-Clark, R.Iremonger, T. L.Shaw, Michael (Sc'b'gh & Whitby)
Clegg, WalterIrvine, Bryant Godman (Rye)Sinclair, Sir George
Cooper-Key, Sir NeillJenkin, Patrick (Woodford)Steel, David (Roxburgh)
Corfield, F. V.Jennings, J. C. (Burton)Stoddart-Scott, Col. Sir M. (Ripon)
Costain, A. P.Johnson Smith, G. (E. Grinstead)Summers, Sir Spencer
Craddock, Sir Beresford (Spelthorne)Jopling, MichaelTapsell, Peter
Crosthwaite-Eyre, Sir OliverKaberry, Sir DonaldTaylor, Sir Charles (Eastbourne)
Crouch, DavidKimball, MarcusTaylor, Edward M.(G'gow, Cathcart)
Dance, JamesKing, Evelyn (Dorset, S.)Taylor, Frank (Moss Side)
Davidson, James(Aberdeenshire, W.)Kirk, PeterTemple, John M.
Dean, Paul (Somerset, N.)Knight, Mrs. JillThatcher, Mrs. Margaret
Deedes, Rt. Hn. W. F. (Ashford)Lambton, ViscountTilney, John
Dodds-Parker, DouglasLeadbitter, TedTurton, Rt. Hn. R. H.
Eden, Sir JohnLewis, Kenneth (Rutland)van Straubenzee, W. R.
Elliott, R.W.(N'c'tle-upon-Tyne, N.)Loveys, W. H.Wainwright, Richard (Colne Valley)
Emery, PeterLubbock, EricWalker-Smith, Rt. Hn. Sir Derek
Errington, Sir EricMcAdden, Sir StephenWalters, Dennis
Eyre, ReginaldMacArthur, IanWard, Dame Irene
Fisher, NigelMacleod, Rt. Hn. IainWeatherill, Bernard
Fletcher-Cooke, CharlesMcMaster, StanleyWebster, David
Fortescue, TimMaude, AngusWhitelaw, Rt. Hn. William
Fraser, Rt. Hn. Hugh(St'fford & Stone)Mawby, RayWills, Sir Gerald (Bridgwater)
Galbraith, Hon. T. G.Maxwell-Hyslop, R. J.Wilson, Geoffrey (Truro)
Gilmour, Sir John (Fife, E.)Maydon, Lt.-Cmdr. S. L. C.Wolrige-Gordon, Patrick
Glover, Sir DouglasMills, Peter (Torrington)Wood, Rt. Hn. Richard
Glyn, Sir RichardMiscampbell, NormanWright, Esmond
Gower, RaymondMitchell, David (Basingstoke)Wylie, N. R.
Grant, AnthonyMorgan, Geraint (Denbigh)
Grant-Ferris, R.Morrison, Charles (Devizes)TELLERS FOR THE AYES:
Griffiths, Eldon (Bury St. Edmunds)Mott-Radclyffe, Sir CharlesMr. Jasper More and
Grimond, Rt. Hn. J.Munro-Lucas-Tooth, Sir HughMr. Timothy Kitson.
NOES
Abse, LeoBeaney, AlanBradley, Tom
Alldritt, WalterBence, CyrilBray, Dr. Jeremy
Ashley, JackBenn, Rt. Hn. Anthony WedgwoodBrooks, Edwin
Atkins, Ronald (Preston, N.)Bidwell, SydneyBrown, Bob(N'c'tle-upon-Tyne, W.)
Atkinson, Norman (Tottenham)Bishop, E. S.Brown, R. W. (Shoreditch & F'bury)
Bacon, Rt. Hn. AliceBlackburn, F.Buchan, Norman
Bagier, Gordon A. T.Boardman, H.Buchanan, Richard (G'gow, Sp'burn)
Barnes, MichaelBowden, Rt. Hn. HerbertButler, Herbert (Hackney, C.)
Baxter, WilliamBraddock, Mrs. E. M.Callaghan, Rt. Hn. James
Carmichael NeilHenig, StanleyOakes, Gordon
Castle, Rt. Hn. BarbaraHerbison, Rt. Hn. MargaretOgden, Eric
Coe, DenisHooley, FrankO'Malley, Brian
Coleman, DonaldHoughton, Rt. Hn. DouglasOrbach, Maurice
Conlan, BernardHowarth, Harry (Wellingborough)Orme, Stanley
Craddock, George (Bradford, S.)Howarth, Robert (Bolton, E.)Owen, Dr. David (Plymouth, S'tn)
Crawshaw, RichardHowell, Denis (Small Heath)Owen, Will (Morpeth)
Cronin, JohnHowie, W.Page, Derek (King's Lynn)
Crosland, Rt. Hn. AnthonyHoy, JamesPannell, Rt. Hn. Charles
Crossman, Rt. Hn. RichardHuckfield, L.Parker, John (Dagenham)
Cullen, Mrs. AliceHughes, Hector (Aberdeen, N.)Parkyn, Brian (Bedford)
Dalyell, TamHughes, Roy (Newport)Pavitt, Laurence
Davidson, Arthur (Accrington)Hunter, AdamPearson, Arthur (Pontypridd)
Davies, G. Elfed (Rhondda, E.)Hynd, JohnPeart, Rt. Hn. Fred
Davies, Harold (Leek)Jackson, Colin (B'h'se & Spenb'gh)Pentland, Norman
Davies, Ifor (Gower)Jay, Rt. Hn, DouglasPerry, George H. (Nottingham, S.)
Davies, S. O. (Merthyr)Jeger, Mrs. Lena(H'b'n&St.P'cras, S.)Price, Thomas (Westhoughton)
de Freitas, Rt. Hon. Sir GeoffreyJenkins, Hugh (Putney)Rankin, John
Delargy, HughJohnson, James (K'ston-on-Hull, W.)Rees, Merlyn
Dell, EdmundJones, Dan (Burnley)Roberts, Gwilym (Bedfordshire, S.)
Dempsey, JamesJones, Rt. Hn. SirElwyn(W. Ham, S.)Robinson, W. O. J. (Walth'stow, E.)
Dewar, DonaldJones, T. Alec (Rhondda, West)Roebuck, Roy
Diamond, Rt. Hn. JohnJudd, FrankRose, Paul
Doig, PeterKelley, RichardShaw, Arnold (Ilford, S.)
Dunn, James A.Kerr, Russell (Feltham)Short, Rt. Hn. Edward(N'c'tle-u-Tyne)
Dunwoody, Mrs. Gwyneth (Exeter)Lawson, GeorgeShort, Mrs. Renée(W'hampton, N.E.)
Dunwoody, Dr. John (F'th & C'b'e)Leadbitter, TedSilkin, Rt. Hn. John (Deptford)
Eadie, AlexLedger, RonSilverman, Julius (Aston)
Edwards, Robert (Bilston)Lee, Rt. Hn. Frederick (Newton)Slater, Joseph
Ellis, JohnLee, John (Reading)Small, William
English, MichaelLewis, Ron (Carlisle)Snow, Julian
Ennals, DavidLipton, MarcusSpriggs, Leslie
Ensor, DavidLomas, KennethSteele, Thomas (Dunbartonshire, W.)
Evans, Albert (Islington, S.W.)Loughlin, CharlesStewart, Rt. Hn. Michael
Evans, Ioan L. (Birm'h'm, Yardley)Lyon, Alexander W. (York)Summerskill, Hn. Dr. Shirley
Fernyhough, E.Lyons, Edward (Bradford, E.)Swingler, Stephen
Fletcher, Raymond (Ilkeston)McBride, NeilThomas, George (Cardiff, W.)
Fletcher, Ted (Darlington)McCann, JohnTinn, James
Foot, Michael (Ebbw Vale)MacColl, JamesUrwin, T. W.
Forrester, JohnMacDermot, NiallWainwright, Edwin (Dearne Valley)
Fowler, GerryMackenzie, Gregor (Rutherglen)Walker, Harold (Doncaster)
Fraser, John (Norwood)Mackintosh, John P.Watkins, David (Consett)
Fraser, Rt. Hn. Tom (Hamilton)Maclennan, RobertWatkins, Tudor (Brecon & Radnor)
Freeson, ReginaldMcMillan, Tom (Glasgow, C.)Wellbeloved, James
Ginsburg, DavidMcNamara, J. KevinWells, William (Walsall, N.)
Gordon Walker, Rt. Hon. P. C.MacPherson, MalcolmWhite, Mrs. Eirene
Gourlay, HarryMahon, Peter (Preston S.)Whitlock, William
Gray, Dr. Hugh (Yarmouth)Mallalieu,J. P. W.(Huddersfield,E.)Willey, Rt. Hn. Frederick
Gregory, ArnoldManuel, ArchieWilliams, Alan (Swansea, W.)
Grey, Charles (Durham)Mapp, CharlesWilliams, Alan Lee (Hornchurch)
Griffiths, Will (Exchange)Marquand, DavidWilliams, Mrs. Shirley (Hitchln)
Hamilton, James (Bothwell)Mason, RoyWilliams, W. T. (Warrington)
Hamilton, William (Fife, W.)Mellish, RobertWillis, George (Edinburgh, E.)
Hamling, WilliamMendelson, J. J.Wilson, Rt. Hn. Harold (Huyton)
Hannan, WilliamMillan, BruceWilson, William (Coventry, S.)
Harper, JosephMiller, Dr. M. S.Winterbottom, R. E.
Harrison, Walter (Wakefield)Milne, Edward (Blyth)Woodburn, Rt. Hn. A.
Hart, Mrs. JudithMorris, Charles R. (Openshaw)Woof, Robert
Haseldine, NormanMorris, John (Aberavon)TELLERS FOR THE NOES:
Hattersley, RoyMurray, AlbertMr. Alan Fitch and
Hazell, BertNewene, StanMr. Ernest Armstrong.
Heffer, Eric S.Noel-Baker, Rt. Hn. Philip(Derby, S.)

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

I beg to move Amendment No. 11, in page 2, line 9, at the end to insert: 'or until 11th August 1968 whichever is the earlier'. The side heading of the Clause, on which we have had some discussion recently, is, "Power to extend periods of standstill under Part II of Prices and Incomes Act 1966."

Part II is not yet in operation, but it will be presumably when an Order on the Notice Paper is approved, if it is, by Parliament. It therefore follows that we are doubly against the Clause, against the original 1966 Act, and against the power that Clause 1 takes to extend it.

Subsection (2,a) of Clause I allows the standstill provision to continue … for a period ending ten days after the date of publication of the Board's report …". Subsection (2,b), to which we seek to add words, lays down that if notice is so given then the Secretary of State can direct by Order for a period up to six months. We wish to cut off this period at the date of 11th August, 1968, a year from the expiry of Part IV.

One of the main reasons why we seek to do this is that we have become more and more convinced—and there is a great deal of mounting evidence—that the Government have no intention of relinquishing powers in the real sense of the word this August, next August or any other August. What they do will vary. Part IV will come to an end, but, as I prophesied many months ago, something almost equally unattractive—the extended Part take its place. It is true—and this matter was exhaustively discussed in Committee—that this Bill will expire, but the original powers available to the Government under the permanent legislation of 1966 will go on.

I dare say that we will have another schoolmasterly lecture from the First Secretary of State, as on the last occasion, either about drafting or about the meaning of the words. My reference to the courts was not that I thought it directly related to the last Amendment, but simply to suggest to the First Secretary of State that he is not the best person to talk about dubiety in the courts in relation to the Prices and Incomes Act, because the Court of Appeal has found, as we warned it would long ago, that the main provision of Section 29 does not mean what he and presumably the Attorney-General, who no doubt advised him, thought it meant.

We have no reason to put any confidence in the words of the Government. The first reason for this is a statement made by the Prime Minister, which has been quoted on a number of occasions, when he was asked on B.B.C.1 on the programme "24-Hours" When the powers of the Act come to an end in August, Prime Minister, won't there have to be a continuation of them?", to which the Prime Minister replied, In terms of legislative powers, no. It is clear that the Bill extends the legislative powers with regard to the control of prices and that it goes far beyond the period of Part IV, which, we were assured, was to be a temporary measure, and there is no assurance that this so-called temporary measure will not be extended again and again and again until this Parliament in due course comes to an end. The Prime Minister has gone back on what he clearly said to the nation in that quotation which I have just given.

9.0 p.m.

My second point—I distinguish my first and my third; the second relates to the First Secretary and is in no sense an accusation of breach of faith as the first certainly is—relates to a matter which I should now like to clear up. The First Secretary will remember making a statement on powers on 17th April and he will remember a number of questions which I put to him designed to elicit from him an admission that these powers were really not for 12 but for 18 months. I said: Secondly, it is now quite clear that this is an extension not for 12 months, but for 18 months. That is to say, on the last day or so of a year to which the proposals relate, the First Secretary could make as many references as he wished. The First Secretary replied: When the right hon. Gentleman says 18 months I think that he is adding together two things which are not in the same category. He went on to say: The purpose of the arrangement that the Order can continue after the powers have lapsed is to see that the six months' power of delay does not operate unequally in one case or another."—[OFFICIAL REPORT, 17th April, 1967; Vol. 745, c. 94–5.] I should be grateful if the right hon. Gentleman would clear that up.

I do not think that I put together two matters which were not in the same category. In any case, is the point I made valid or not? Is it possible for the First Secretary to make as many Orders as he wishes within weeks, or days, or hours, of the expiry of the Bill? Could such Orders go on for a further six months? If so, is it not abundantly clear that in fact the powers which are here being taken are not for 12, but for 18 months, and that the House ought to judge them accordingly?

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

Will the right hon. Gentleman explain something? In his earlier statement he was talking about prices. Am I to assume that if this proposal applied only to prices, he would oppose it, but that if it applied to wages, he would be quite happy about it?

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

I am against these powers both for wages and prices. I do not understand the hon. Gentleman and I will gladly give way if he wants to intervene again. However, that was the subject of an earlier debate and is not now the issue before us. In short, I am against everything in the Bill.

The third matter is the speech, to which we must refer, which was made by the Loader of the House over the weekend. It surprised people very much, because it was exactly the point of the Amendment. Can we trust the Government to bring these powers to an end in due course, as they say they will? I know of one statement issued today by the Labour Party and purporting to correct the account of the speech of the Leader of the House. I am told that another pigeon is on its way, or on the tape, which I have not seen. I can deal only with the first correction.

The first correction says: Nowhere in the speech did Mr. Crossman either say or imply that the Government is contemplating a return to compulsory wage restraint under any circumstances whatever.On the contrary, his theme was the temporary character of July, 1966, measures and the Government's recognition of the need to make the voluntary system work …". The Press Association, who reported this speech—the correspondent was Mr. Binnersley, a reporter of the highest repute—has published his full shorthand note of what the Leader of the House said, and perhaps I might quote this sentence: Now we have Part IV coming off and, if they fail to do it voluntarily, then exactly the same thing will happen again. This is hard, economic fact. I do not see how the Leader of the House can for a second pretend that he was saying anything other than that if the T.U.C., the C.B.I., and the rest of us do not behave ourselves Part IV is coming back. This is the only conceivable meaning of his speech, and it is for this reason that we distrust the Government so much. It is for this reason that when we hear these speeches made and reported over the weekend we do not believe that the Government intend to give up the powers which they have, or, rather, if they give those up, that they will not take something equally unpleasant in their place.

I have one more quotation from the right hon. Gentleman's speech: We never want to let things get to the plight they got to last time, when we had wages soaring ahead and productivity dragging behind.We have to face the fact that if it happens again and economic forces reassert themselves, the same sort of medicine would have to be given to the people. What on earth does that mean, except that Part IV is coming back in certain circumstances, and all the assurances given by the Prime Minister and everybody else are worthless? Either that, or the speech of the Leader of the House is worthless, and the First Secretary will no doubt select which of those interpretations he wishes to offer to the House in due course.

Photo of Mr Norman Atkinson Mr Norman Atkinson , Tottenham

I hope that we can have the Leader of the House present in a moment to clear up this question. According to the tape, the denial which the Leader of the House has made is that his words did not apply to Part IV, but to the word "unemployment" and he has asked the nation to believe that it should read "unemployment" for the term "Part IV".

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

This is very interesting. I think that the Leader of the House ought to come here. I have been Leader of the House. There are means of conveying this message, and I would be grateful if it was conveyed to the Leader of the House that both sides of the House, with the exception of the Government Front Bench, desire his presence for this debate.

I take up the point raised by the hon. Member for Tottenham (Mr. Atkinson) about whether the Leader of the House did, or did not, mean Part IV. All that I can do is to quote the sentence again from the shorthand note of the right hon. Gentleman's speech: Now we have Part IV coming off and, if they fail to do it voluntarily, then exactly the same thing will happen again. It is not a question of my reading the words "Part IV" into his speech. They are there, and they were taken down by a shorthand writer of the very highest repute. The right hon. Gentleman really must explain this matter.

Our case about the Bill is that it has been an unrelieved failure from the beginning and the sooner the curtain comes down on it the better. It has had very little effect indeed on prices, and, as we showed in an earlier debate, the record since last July is on the whole worse than the annual record over the last ten years. Its effect on wages during the period of the freeze itself was fairly dramatic. But even on the evidence given, or the prophesies made, by the Government Front Bench we can expect that the increase in wages will be at least as high as that in the previous cycle over which my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) presided.

Some of these matters are perhaps more appropriate to go into on Third Reading, and in due course we shall vote against that. At the moment we are on the special point of the Amendment. We would like to bring the Bill and this subsection to an end as soon as we reasonably can. I think that I have shown that we—and not only we but the House as a whole and the country as a whole—have little reason to believe the statements of intent made by at least some of Her Majesty's Ministers. We have no reason to believe that when this new Part II disappears, as no doubt it will, it will not come back again.

We have had words in the clearest terms from the Leader of the House, which I have just quoted and which he owes a duty to the House to explain in the House and not by a series of different messages on the tape, which I gather is what is now happening.

I have moved this Amendment. There is another Amendment which has not been selected and which would equally have the effect of shortening the period which we are considering. We should like to insert words into the Bill which, in itself, gives power to extend the period of standstill under Part II of the principal Act, and we take the view that under no circumstances should these powers continue beyond 11th August, 1968.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

Many hon. Members on this side of the House are extremely concerned about when and how these Measures will terminate. From the statements made by the Government it seems that we are now in a transitional stage between the first Measure and the voluntary system, in terms of this Bill, and that as Part IV of the principal Act comes to an end on 11th August we shall be in a completely voluntary era.

Much of the Government's case has been based on this assumption. I have had the advantage of listening to George Woodcock and other responsible leaders of the T.U.C., and it is apparent that their interpretation of Government policy is that this Measure merely allows the Government to have a long-stop—although some of us will give it another name. It is a let-out for the Government's change of policy, but it is a welcome change away from compulsion to the voluntary system.

Unfortunately, whenever we seem to be going along that road something happens to cause consternation. The right hon. Member for Enfield, West (Mr. Iain Macleod) has referred to the speech made by my right hon. Friend the Leader of the House, and I also wish to refer to it. I have notified my right hon. Friend that I intended to raise the question. Many of us are concerned that, at a time when we are trying to achieve a general acceptance of the voluntary system, threats are made of administering the same sort of medicine as before, and the use of compulsory powers and a return to something akin to Part IV, of which we now hope to see the end.

9.15 p.m.

I have not seen the statement on the tape, but, during the passage of the Bill, the Leader of the House owes us a clarification of his statement. If he has been badly misreported, it is here that he should make his position clear. This statement can only cause consternation and problems with the trade union movement and queries about whether Government statements of their stand on compulsion mean anything and can be relied upon.

I object to the fact that we are told that compulsion is out and we are moving into a voluntary period, as I do not know how that is possible with compulsion overhead. But this seems to be the way the Government are working. The statement by the Leader of the House is retrogressive in relation to the Bill, and the extension provisions and the Amendment would lay down clearly that the Bill would end on that date and could not be extended without a fresh Bill—

Photo of Sir Edward Brown Sir Edward Brown , Bath

We who were on the Committee put this as a direct question to the First Secretary, whether a policy document would be published before or after 11th August, and he never gave a clear reply. Perhaps the hon. Gentleman should ask his right hon. Friend for this assurance, as he can give it.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

I should have liked to have made these remarks to my right hon. Friend in Committee, but I never saw that Committee. The minority point of view was never democratically represented, and many of us resent that. I hope that the First Secretary will give us a clear assurance, because whatever his right hon. Friend has said outside, he is responsible for legislation here. But I think that my right hon. Friend has already raised this matter.

We are entitled to know, because I was under the clear impression that the Bill would end on 11th August, 1968, and much of the Government's policy is based on that presumption. If there are conflicting statements by other Members of the Government, that can only do harm to the voluntary system, to which both they and we attach importance. Therefore, I want a categorical assurance on that point.

Photo of Mr John Biffen Mr John Biffen , Oswestry

My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) has moved an Amendment of very considerable significance. As the hon. Member for Salford, West (Mr. Orme) rightly appreciates, this is a test of the good faith and good intentions of the Government to move towards a voluntary prices and incomes policy—if such an animal exists. I am prepared to accept the definitions of the Government that such an animal does exist. I should be out of order if I were to think otherwise. The question whether the Bill is a bridge away from a compulsory system as embodied in the Prices and Incomes Act to a voluntary system calls from hon. Members a degree of credulity which has been severely strained over the weekend.

The proposition throughout on the Bill is that it is a bridge not only in terms of legislation but, even more im- portant, in terms of time, and it is in that respect that the Amendment is so significant. It is a bridge towards some other system of determining price and income.

In Committee, on which I was privileged to serve and where I sadly missed, as all of us in the Opposition did, the assistance of the hon. Member for Salford, West, the First Secretary of State commented: I described on Second Reading how the country had to move from the fully voluntary Statement of Intent to the undoubtedly stringent powers of Part IV. We are now moving in the opposite direction, towards a voluntary system."—[OFFICIAL REPORT, Standing Committee A, 20th June, 1967; c. 44.] Anyone who has followed the Government's activities in pursuit of their prices and incomes policy has, of necessity, to become an acute student of semantics. It was in the pursuit of that art that my right hon. Friend the Member for Enfield, West undoubtedly felt it necessary to table an Amendment determining, in this specific form, the date on which these powers should terminate. But in pursuing that art, I invite hon. Members opposite—and I know that the hon. Member for Salford, West is a keen student of these affairs—to reflect on the two sentences which I have quoted from the speech of the First Secretary. What existed before Part IV was, apparently, a "fully voluntary" system. Those are the adjectives adjoined to the Statement of Intent. We now move towards not a "fully voluntary" system but the "voluntary" system.

I would normally think that this was an absurd, almost mediaeval theological discussion were it not for the fact that we are constantly told that we are moving towards a voluntary system, but not a fully voluntary system. That is the system we abandoned. During one of the nocturnal discussions which we had on various Orders laid under Part IV, I remember the hon. Member for Liverpool, Walton (Mr. Heller) describing how the voluntary system which was apparently being pursued was of the voluntary nature of the sergeant major's request—and how right he was, and how right he is under the legislation and Amendment which we are considering.

We all know that the Leader of the House was employed during the war in psychological warfare. That is a warning, if ever one was needed, to all of us to examine and weigh every calculated word very carefully. The Leader of the House talks of selfish trade unionists—never of selfish intellectuals, presumably—and we will have a chance to debate that on a later Amendment. Meanwhile, the matter at stake in the Amendment is of immense significance because if the Government wish to demonstrate that they want to return to the system that existed before Part IV, they would surely interrupt me now and say, "That is our intention. We accept the Amendment as a token of our conviction and determination to revert to the situation that existed before the prices and incomes legislation of last year".

But that is not what the Government intend at all. They will reject the Amendment because they want these powers and will find an excuse to use them. The seamen blew them off course last year and enabled them to rationalise their instinctive yearning to control prices and incomes through the legislative system. No doubt, the consequences of the Middle East situation on our balance of payments will give them exactly the relationalisation for their instinctive yearning for more detailed control.

The speeches of the First Secretary in Committee are among my favourite reading. The right hon. Gentleman said: As a result partly of voluntary agreements, but also through the work of the Board, sometimes with the use or possibility with the use of powers, price increases which undoubtedly would otherwise have occurred have been held back …"—[OFFICIAL REPORT, Standing Committee A, 20th June, 1967; c. 47.] I am totally indifferent to whether the argument is about prices or incomes, and I accept that there are serious distinctions from the point of view of the sheer practicabilities involved in enforcing legislation in either direction. On the broad issues of principle, we have a confusion of thought about what is freely accepted and what is freely accepted under duress. The Government choose, as their definition of "freely accepted", free acceptance under the final duress of reference to the Board or reference through legislation consequential on any adverse report of the Board.

This is not freedom for manufacturers to price according to the workings of the economy, or of trade union leaders to seek to determine the price of labour of their members according to the law of supply and demand, the forces to which the Leader of the House apparently referred—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. I hesitate to interrupt the hon. Gentleman in his enthusiasm, but he must address his remarks to the Amendment.

9.30 p.m.

Photo of Mr John Biffen Mr John Biffen , Oswestry

—the economic forces, as the Leader of the House called them, because economic forces cannot conceivably be permitted under this legislation.

The Amendment tests the Government. If they believe that it is the rôle of trade unionists to seek to maximise the potential earnings of their members they will accept the Amendment, because they will know, and the First Secretary will be advised by that master of psychology, the Leader of the House, that this will be a gesture that will be widely appreciated below the Gangway, for we know from the representations from below the Gangway we have heard this evening that a method of this sort is required.

I suggest, therefore, that all the evidence points to the one clear conclusion that the First Secretary of State should use this constructive opportunity presented by the Amendment to assert that the Government mean that in a voluntary prices and incomes policy it is the word "voluntary" that can be construed and understood by every ordinary, thinking individual.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

I am now a hard-bitten old Member of this hard-bitten old House and it is not very often that any of its proceedings twang the strings of my emotions, but I must say that a few moments ago I was greatly moved by the account given by the hon. Member for Oswestry (Mr. Biffen) of the way he sat in the Standing Committee on this Bill feeling disappointed, frustrated and unhappy because there he was lacking the company of my hon. Friend the Member for Salford, West (Mr. Orme). That account, Mr. Speaker, of the sufferings of the hon. Gentleman jerked my tear glands and reduced me to an advanced state of lachrimosity.

Photo of Mr John Biffen Mr John Biffen , Oswestry

Does the hon. Gentleman realise that he will quite soon have an opportunity to assuage the pangs of conscience, and redeem the hurt feelings I had from that Standing Committee by joining with me in the same Division Lobby?

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. We must move now from the tears to the Amendment.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

Yes, Mr. Speaker. May I say to the hon. Member that I am not unacquainted with the opportunities which the procedures of the House provide from time to time to its hon. Members.

I should like now to refer to a point made by the hon. Member, and earlier in an intervention by the hon. Member for Bath (Sir E. Brown). If it is a fact, and it is, that some of my hon. Friends and I are devoting a little more attention to this Report stage than we otherwise would have done, and have, as hon. Members will have observed from the Notice Paper, sought leave to move a number of Amendments, we do so because none of my hon. Friends who feel as I do were selected by the Committee of Selection to serve on the Standing Committee.

You know me well enough, Mr. Speaker, to know that I am the very last Member to imply by so much as a breath any criticism of the Committee of Selection. It would be grossly out of order to do so. It is in so sense criticism of the Committee of Selection, but merely a statement of fact to say that of the three major trends of view existing in this House about the Bill, and all represented on Second Reading—those of the Government and their supporters, who support the Bill, those of hon. and right hon. Members opposite who, for one set of reasons oppose it, and those of some of my hon. Friends and myself who oppose it for a different set of reasons—only two were represented on the Committee.

I repeat that I say this, not by way of criticism but simply as a statement of fact, and it is equally not a criticism of the Committee of Selection but, again, a simple statement of fact, to say that the last time the list of Members added to the Committee on a Bill differed from the lists presented by the Chief Whips on either side was about the same as the last time the Derby was won by a grey, which is a long time ago—

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. Now that the hon. Gentleman has refrained from criticism, will he come to the Amendment?

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

I do not criticise at all, Mr. Speaker. I was merely uttering two statements of absolute incontrovertible fact.

I come to the Amendment. The key thing about it was said by the hon. Member for Oswestry: that the question of whether the Government resist it is a crucial test of good faith. If they mean what they say and what they have said over and over again—that they look upon the prices and incomes legislation, with its statutory and compulsory provisions, as a necessary and temporary evil to be got rid of at the earliest reasonable date—there can be no grounds on which they could resist the Amendment.

The French in their ineffable wisdom have many interesting sayings, one of which is C'est seulement le provisoire qui dure—it is only the provisional which lasts for ever. A story is told in my constituency of a docker who was once taken to task by his parish priest for having lived, as the expression goes, in sin with the same lady for 35 years. He was asked why, if he liked her that much, he did not marry her, and he replied that it was a purely temporary arrangement—"One Thursday afternoon in 1922, between unloading one ship and loading another, I popped in to the lady to have a cup of tea, and I have been there ever since." I have a horrible feeling that that is what is happening and will happen to the prices and incomes legislation. It will go on being temporary for ever. It will always be temporary but it will always be there.

There were warning flags at the head of the mast even before the speech of my right hon. Friend the Leader of the House at the weekend. We had presented to us the other day a Report by the Government Actuary on the Financial Provisions of the National Insurance (No. 2) Bill, 1967. Paragraph 10 of that Report states that on Government instructions, certain assumptions have been made in the calculations. I will not quote the first assumption because, although it is serious, it is not germane to the matter which is before us. The second assumption is that Throughout the period covered by the estimates"— which is three years— earnings are assumed to remain constant at the level expected to apply at the end of October, 1967. If my right hon. Friend says that there is no intention on the part of the Government to carry forward the powers in the Bill beyond August next year, and if he resists the Amendment, as I suspect that he will, on the ground not that it is wrong but that it is not necessary, I ask him to answer the following question.

How is it that the Government can assume constant earnings at the level of those of October, 1967, for a further three years without a continuation of legislative control of wages? If my right hon. Friend can find an answer to that which makes sense to me, he might even, though I doubt the possibility, persuade me to go into the Lobby with him in the Division at the end of the debate. I cannot see how he can.

Photo of Mr Stanley McMaster Mr Stanley McMaster , Belfast East

Has the hon. Member considered the possibility of heavier and heavier unemployment?

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

There is an assumption in the Report about unemployment, but I deliberately did not comment on it because I am trying, as always, to keep closely within the rules of order. I am, therefore, keeping purely to the question of earnings, which is what is covered by the Bill. We have a situation in which this temporary legislation will take effect for three years, for two years after it ceases to have effect. I want to know how this miracle will be achieved.

I say with sorrow that if my right hon. Friend resists the Amendment, millions of people will draw their own conclusions from that, and they will be conclusions which he will not find welcome.

Photo of Sir Frederick Burden Sir Frederick Burden , Gillingham

There is no doubt from the beginning of the suggestion of a Prices and Incomes Bill many hon. Members opposite took very strong exception to the restraint on wages. There is also no doubt that many of them believed that the Government were in good faith determined to bring it to an end at the earliest possible moment and return to a system of voluntary wage restraint. There is also no doubt that, if the Government do not accept the Amendment, it is clearly their intention that the powers of compulsion shall remain. There is also no doubt that the comments of the Leader of the House over the weekend—it is not the first time that comments of the Leader of the House have caused serious embarrassment to the Labour Party, even before it took office—have blown the gaff and caused the Government serious concern.

I am sure that the hon. Member for Salford, West (Mr. Orme) and other hon. Members opposite below the Gangway who are critical of the Government's actions in relation to the Bill would, in common with my right hon. and hon. Friends, very much like to hear the Leader of the House explain exactly what he meant. If the Leader of the House stays away tonight, we can only conclude that, despite all his denials, the report put out by the Press was accurate and that he is deliberately staying away hoping that this exchange with the reporter will preclude him from coming and answering in person tonight.

There is plenty of time. A message could have gone to him by now. If he held for the House the respect which is due to it from a Leader of the House, he would certainly be here before the end of the debate. If he does not appear before the end of the debate, and if the First Secretary does not accept the Amendment, it will be perfectly clear that the Government have kidded the unions regarding the ending of compulsion, that they have kidded the people regarding the ending of compulsion, that they have kidded Parliament as a whole, and, above all, they have kidded the members of their own party who have been critical of the policy from the time the Bill was introduced. No only will it be shown that the Labour Government generally have kidded the people but that, in particular, the Prime Minister when he appeared on television, as referred to by my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod), was more culpable than anybody else. But I hope that, before the debate ends, the Leader of the House will come here and in person explain the words which he used over the weekend.

9.45 p.m.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

I wish to put several questions to my right hon. Friend. I have been particularly disturbed by the speech made by my right hon. Friend the Leader of the House because, unlike some hon. Members, perhaps, I believed that the Government intended to give up the compulsory powers by August next year. Perhaps I was a little naïve. Perhaps I was a little too trusting. But everyone assured mc, "You chaps have really won the battle. Although this Bill is coming along, it is nothing like what was intended, and we can assure you that, by August next year, all the powers will have gone and we shall then have the beginnings of our voluntary system".

I believed it. Then, this morning, I read the speech of the Leader of the House. There were in it remarks about "another dose of medicine", as though my right hon. Friend was talking to a bunch of school kids who were going to get the medicine whether they wanted it or not.

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

And without a spoonful of sugar.

Photo of Mr Eric Heffer Mr Eric Heffer , Liverpool, Walton

We are, after all, talking to adults, to grown-up trade unionists, to workers who work in the docks, in the mines and on the building sites. We do not need to talk about "medicine". They understand the realities of life very well. They experience the realities of life. They do not need lectures by intellectuals or anybody else—certainly no' by right hon. Members opposite.

We need a clear statement on this matter from the Government. Frankly, I do not understand why the Government cannot accept the Amendment. It was not put down by my hon. Friends and myself, but it is an Amendment which we could easily have put down. As far as I can see, it is a perfectly sensible Amendment, on the basis of the statements which we have been given, that the voluntary system will come into operation from August next year.

My hon. Friend the Member for Poplar (Mr. Mikardo) is right when he says that millions of working people will be closely watching the Government's attitude on this question tonight. Unless they can have a categorical assurance that the powers will cease by August next year, they can be forgiven if they honestly believe that they are being kidded. I warn my right hon. Friends that one can kid people for a little while and get away with it, but, if the working class of this country believe that they are being kidded, particularly by a Government whom they themselves have elected, the results can be disastrous.

I say this in all seriousness and as a real warning to my right hon. Friends. I put this question to them: Did my right hon. Friend's speech which was reported this morning mean what it said, or what it was reported to have said, or are we going to have the end of the compulsory powers by next August? This is the 64,000-dollar question, and we are entitled to an answer. On the basis of that answer, the people of this country, certainly the trade unionists, will decide their future attitude towards the Government, particularly on this question.

Photo of Sir Edward Brown Sir Edward Brown , Bath

This is one of the most vital matters which we fought during Committee, attempting to obtain an answer from the Minister. While the Leader of the House is absent tonight, despite the invitation to come and join in the discussion on this Amendment, in my opinion the culprits are sitting on the Government Front Bench. They are the three Ministers responsible for the attitude taken when we were pressing them during that debate.

The answer which we will get tonight from the right hon. Gentleman is clearly that the Prices and Incomes (No. 2) Act will finish on 11th August, 1968. What the right hon. Gentleman and his friends will not tell us is whether there will be another Bill in its place, either before it, or at the same time as this one ends.

This is the answer which we want from the right hon. Gentleman. Everyone knows that this Bill, when it becomes an Act, will end on 11th August, 1968. The 64,000-dollar question which we know will not be answered is: "Will there be another Prices and Incomes Bill in its place?" If the Minister accepts my right hon. Friend's Amendment, we shall know that the Government are acting in good faith, acting honestly. I doubt whether we shall get an honest answer. We shall be told when this Bill will die, but as to the prospects of a Prices and Incomes (No. 3) Bill, we shall just have to wait until next year.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

It would be much more to the point not to throw about terms like "honesty" and other moral attitudes too much. It would be better to concentrate on the practical importance of the issues before us. The other preliminary point that I would like to make is that I do not complain of the absence of my right hon. Friend the Leader of the House. We have the responsible Minister, the First Secretary of State and Secretary of State for Economic Affairs, who is in charge of the Bill. It is the custom and convention of the House, as the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) will confirm, with his experience of Government office, that there cannot be two Ministers in charge of one Bill, from two different Departments.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

I cannot give way. We have serious business to attend to, and this is a serious problem. I do not complain of the absence of my right hon. Friend. It is only natural that the First Secretary should regard it as his duty and responsibility to reply to this debate, and to make all the points which have been raised, on behalf of his Department and the Government.

Nor do I take kindly to the attitude of the right hon. Gentleman the Member for Enfield, West who spoke in such a high moral tone when moving this Amendment. He and other hon. Members opposite seem to give the impression that this Government are the only one who have ever contemplated or are contemplating, some form of legislation that might be regarded by the trade unions as interfering with their traditional rights.

We are meeting today on the Monday following the Saturday when the right hon. Gentleman the Leader of the Opposition, in a major speech at Carshalton, spoke of a far-reaching and serious programme of legal interference with the rights of trade unions. When the party opposite was last in office, it announced on several occasions, through the mouths of various Prime Ministers, that it intended to introduce very severe legislation to curtail the rights of the trade unions.

Photo of Mr John Peyton Mr John Peyton , Yeovil

Mr. Peyton rose

Photo of Mr John Mendelson Mr John Mendelson , Penistone

I will give way to the hon. Gentleman in a moment. He knows that I always give way to him. It is important to put these facts on record before the moral tone, set for a definite political purpose in this debate by hon. Members opposite, becomes an established and accepted fact.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I do not wish to tempt the hon. Member out of order in discussing the speech of my right hon. Friend the Leader of the Opposition, but will he as least acknowledge that my right hon. Friend could not, under any circumstances, be accused of presenting this as being on a voluntary basis? The core of this evening's controversy lies in whether the Government's policy is genuinely voluntary or is compulsory.

Photo of Mr John Mendelson Mr John Mendelson , Penistone

I need no instruction on either the nature of this legislation, which hon. Members, including myself, have studied for a long time now, or the plain intents of the Leader of the Opposition, because his intentions are a deliberate continuation of what the party opposite has now been saying it wants to do for more than five years—introduce legislation to put the clock back and put the trade unions into a straitjacket. Hon. Members opposite cannot get away with it by putting on a display of high moral indignation in this debate.

As the First Secretary knows—he has always indicated it in all the contributions that he has made to these debates—this is a matter which very much concerns trade unionists, members on his own back benches and the best supporters, and the supporters in general, of Labour and the Labour Movement in the country. This is a Measure of great importance to them. My right hon. Friend has an opportunity tonight to deal with this point in a way that would give reassurance to the trade union movement and the supporters of Labour in the country.

The point is this. It would be understandable that on the technical point about legislation my right hon. Friend could say—he has said it on previous occasions—that there is involved here the effectiveness of an Order beyond a certain date once it had been legally introduced. That is one thing. I would not expect my right hon. Friend when piloting the legislation and replying to a debate on an Amendment suddenly to change course and give an interpretation different from that of the Law Officers of the Government and different from his own intentions. But he will recall that on a previous occasion I put a supplementary question to him on whether he would give the House an assurance that no further legislation of this kind would be introduced, and he said at the time—this is the kernel of the argument that I am putting to him—that ho and the Government would not be reasonably advised to give such an assurance in such categorical terms.

I say in conclusion to my right hon. Friend that there have been various events that have been mentioned and also interpretations and re-interpretations of one kind and another for which he need not be necessarily personally responsible, but this is an important opportunity for him, as the member of the Government concerned with piloting the Bill, to give an assurance on further actions going beyond the effectiveness of particular Orders under the current legislation that he is piloting, and he should not under-estimate the concern that has been created and the great duty that he has to make the position clear when he replies.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

It will be necessary, I think—I trust that I can do it without

getting out of order—to reply not merely on the particular matter that is involved in this Amendment but on the general question which so many hon. Members have raised. A connection has been drawn—as I shall hope to show, not altogether correctly drawn—between the precise terms of the Amendment and the situation 12 months from now. I trust that I shall be in order in replying—I am sure that it will be the wish of the House—on both these points—the nature of the Amendment itself and the whole question of the relationship of statutory powers to prices and incomes policy. It is rather a large question, but I shall try to do it as briefly as it can be done.

I would start in this way. It is possible to think of having no policy about prices and incomes at all, except what is sometimes called a "free-for-all". That is the proposition that every group of workers, every person or group of persons fixing a price or every landlord and every tenant can fix all these prices and wages solely according to their individual bargaining power and nothing else. As I understand it, most people, with the possible exceptions of the hon. Member for Oswestry (Mr. Biffen) and the right hon. Member for Wolverhampton, South-West (Mr. Powell), reject that free-for-all approach and that rejection has become the more impressive in recent years—

It being Ten o'clock, the debate stood adjourned.

Motion made, and Question put,That the Proceedings on the Prices and Incomes (No. 2) Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Stewart.]

The House divided: Ayes 200, Noes 138.

Division No. 431.]AYES[10.0 p.m.
Abse, LeoBray, Dr. JeremyCullen, Mrs. Alice
Alldritt, WalterBrooks, EdwinDalyell, Tam
Armstrong, ErnestBrown, Hugh D. (G'gow, Provan)Davidson, Arthur (Accrington)
Ashley, JackBrown, Bob (N'c'tle-upon-Tyne, W)Davies, G. Elfed (Rhondda, E.)
Atkins, Ronald (Preston, N.)Brown, R. W. (Shoreditch & F'bury)Davies, Harold (Leek)
Bacon, Rt. Hn. AliceBuchan, NormanDavies, Ifor (Gower)
Bagler, Gordon A. T.Buchanan, Richard (G'gow, Sp'burn)de Freitas, Rt. Hn. Sir Geoffrey
Barnes, MichaelButler, Herbert (Hackney, C.)Delargy, Hugh
Baxter, WilliamCallaghan, Rt. Hn. JamesDell, Edmund
Bence, CyrilCarmichael, NeilDempsey, James
Benn, Rt. Hn. Anthony WedgwoodCastle, Rt. Hn. BarbaraDewar, Donald
Bidwell, SydneyCoe, DenisDiamond, Rt. Hn. John
Binns, JohnColeman, DonaldDoig, Peter
Bishop, E. S.Conlan, BernardDunn, James A.
Blackburn, F.Crawshaw, RichardDunwoody, Mrs. Gwyneth (Exeter)
Boardman, H.Cronin, JohnDunwoody, Dr. John (F'th & C'b'e)
Bradley, TomCrosland, Rt. Hn. AnthonyEadie, Alex
Edwards, Robert (Bilston)Jones, T. Alec (Rhondda, West)Parkyn, Brian (Bedford)
Ellis, JohnJudd, FrankPavitt, Laurence
English, MichaelKelley, RichardPearson, Arthur (Pontypridd)
Ensor, DavidKerr, Russell (Feltham)Peart, Rt. Hn. Fred
Evans, Albert (Islington, S.W.)Lawson, GeorgePentland, Norman
Fernyhough, E.Leadbitter, TedPerry, George H. (Nottingham, S.)
Fletcher, Raymond (Ilkeston)Ledger, RonRankin, John
Fletcher, Ted (Darlington)Lee, Rt. Hn. Frederick (Newton)Rees, Merlyn
Foot, Michael (Ebbw Vale)Lee, John (Reading)Reynolds, G. W.
Forrester, JohnLewis, Ron (Carlisle)Roberts, Gwilym (Bedfordshire, S.)
Fowler, GerryLipton, MarcusRobinson, W. O. J. (Walth'stow, E.)
Fraser, John (Norwood)Lomas, KennethRoebuck, Roy
Fraser, Rt. Hn. Tom (Hamilton)Loughlin, CharlesRose, Paul
Freeson, ReginaldLyon, Alexander W. (York)Shaw, Arnold (Ilford, S.)
Ginsburg, DavidLyons, Edward (Bradford, E.)Shore, Peter (Stepney)
Gordon Walker, Rt. Hn. P. C.McBride, NeilShort, Rt. Hn. Edward (N'c'tle-u-Tyne)
Gourlay, HarryMcCann, JohnShort, Mrs. Renée (W'hampton, N.E.)
Gray, Dr. Hugh (Yarmouth)MacColl, JamesSilkin, Rt. Hn. John (Deptford)
Gregory, ArnoldMacDermot, NiallSilverman, Julius (Aston)
Grey, Charles (Durham)Mackenzie, Gregor (Rutherglen)Slater, Joseph
Griffiths, David (Rother Valley)Mackintosh, John P.Small, William
Hamilton, James (Bothwell)Maclennan, RobertSnow, Julian
Hamilton, William (Fife, W.)McMillan, Tom (Glasgow, C.)Spriggs, Leslie
Hamling, WilliamMcNamara, J. KevinSteele, Thomas (Dunbartonshire, W.)
Hannan, WilliamMacPherson, MalcolmStewart, Rt. Hn. Michael
Harper, JosephMahon, Peter (Preston, S.)Summerskill, Hn. Dr. Shirley
Harrison, Walter (Wakefield)Mallalieu, J.P.W. (Huddersfield, E.)Swingler, Stephen
Hart, Mrs. JudithManuel, ArchieThomas, George (Cardiff, W.)
Haseldine, NormanMapp, CharlesTinn, James
Hattersley, RoyMarquand, DavidUrwin, T. W.
Hazell, BertMason, RoyWainwright, Edwin (Dearne Valley)
Heffer, Eric S.Maxwell, RobertWalker, Harold (Doncaster)
Henig, StanleyMellish, RobertWatkins, David (Consett)
Herbison, Rt. Hn. MargaretMendelson, J. J.Watkins, Tudor (Brecon & Radnor)
Hooley, FrankMikardo, IanWells, William (Walsall, N.)
Houghton, Rt. Hn. DouglasMillan, BruceWhite, Mrs. Eirene
Howarth, Harry (Wellingborough)Miller, Dr. M. S.Whitlock, William
Howarth, Robert (Bolton, E.)Milne, Edward (Blyth)Willey, Rt. Hn. Frederick
Howell, Denis (Small Heath)Morris, Alfred (Wythenshawe)Williams, Alan (Swansea, W.)
Howie, W.Morris, John (Aberavon)Williams, Alan Lee (Hornchurch)
Hoy, JamesMurray, AlbertWilliams, W. T. (Warrington)
Huckfield, L.Oakes, GordonWillis, George (Edinburgh, E.)
Hughes, Roy (Newport)Ogden, EricWilson, Rt. Hn. Harold (Huyton)
Hunter, AdamO'Malley, BrianWilson, William (Coventry, S.)
Hynd, JohnOrbach, MauriceWinterbottom, R. E.
Jackson, Colin (B'h'se & Spenb'gh)Orme, StanleyWoodburn, Rt. Hn. A.
Jay, Rt. Hn. DouglasOwen, Dr. David (Plymouth, S'tn)Woof, Robert
Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)Owen, Will (Morpeth)
Johnson, James (K'ston-on-Hull, W.)Page, Derek (King's Lynn)TELLERS FOR THE AYES:
Jones, Dan (Burnley)Paget, R. T.Mr. Alan Fitch and
Jones, Rt. Hn. SirElwyn (W. Ham, S.)Pannell, Rt. Hn. CharlesMr. Ioan L. Evans.
NOES
Alison, Michael (Barkston Ash)Elliott, R.W.(N'c'tle-upon-Tyne, N.)Iremonger, T. L.
Allason, James (Hemel Hempstead)Errington, Sir EricIrvine, Bryant Godman (Rye)
Astor, JohnEyre, ReginaldJenkin, Patrick (Woodford)
Baker, W. H. K.Fisher, NigelJennings, J. C. (Burton)
Biffen, JohnFletcher-Cooke, CharlesJohnson Smith, G. (E. Grinstead)
Boyle, Rt. Hn. Sir EdwardFortescue, TimJopling, Michael
Braine, BernardFraser, Rt. Hn. Hugh (St'fford & Stone)Kaberry, Sir Donald
Brewis, JohnGalbraith, Hn. T. G.Kimball, Marcus
Bromley-Davenport, Lt.-Col. Sir WalterGilmour, Sir John (Fife, E.)King, Evelyn (Dorset, S.)
Brown, Sir Edward (Bath)Glover, Sir DouglasKirk, Peter
Bruce-Gardyne, J.Glyn, Sir RichardKnight, Mrs. Jill
Bullus, Sir EricGower, RaymondLambton, Viscount
Burden, F. A.Grant-Ferris, R.Lewis, Kenneth (Rutland)
Campbell, GordonGriffiths, Eldon (Bury St. Edmunds)Lubbock, Eric
Carlisle, MarkGrimond, Rt. Hn. J.McAdden, Sir Stephen
Carr, Rt. Hn. RobertGurden, HaroldMacArthur, Ian
Chichester-Clark, R.Harris, Frederic (Croydon, N.W.)Macleod, Rt. Hn. Iain
Clegg, WalterHarvie Anderson, MissMcMaster, Stanley
Cooper-Key, Sir NeillHawkins, PaulMaude, Angus
Corfield, F. V.Heald, Rt. Hn. Sir LionelMawby, Ray
Costain, A. P.Heseltine, MichaelMaxwell-Hyslop, R. J.
Craddock, Sir Beresford (Spelthorne)Higgins, Terence L.Maydon, Lt.-Cmdr. S. L. C.
Crosthwaite-Eyre, Sir OliverHiley, JosephMills, Peter (Torrington)
Crouch, DavidHirst, GeoffreyMiscampbell, Norman
Dance, JamesHolland, PhilipMitchell, David (Basingstoke)
Davidson, James (Aberdeenshire, W.)Hooson, EmlynMonro, Hector
Dean, Paul (Somerset, N.)Hordern, PeterMore, Jasper
Deedes, Rt. Hn. W. F. (Ashford)Hornby, RichardMorgan, Geraint (Denbigh)
Dodds-Parker, DouglasHunt, JohnMorrison, Charles (Devizes)
Eden, Sir JohnHutchison, Michael ClarkMunro-Lucas-Tooth, Sir Hugh
Murton, OscarScott, NicholasWalker-Smith, Rt. Hn. Sir Derek
Noble, Rt. Hn. MichaelSharples, RichardWalters, Dennis
Onslow, CranleyShaw, Michael (Sc'b'gh & Whitby)Ward, Dame Irene
Page, Graham (Crosby)Sinclair, Sir GeorgeWeatherill, Bernard
Page, John (Harrow, W.)Steel, David (Roxburgh)Webster, David
Pardoe, JohnStoddart-Scott, Col. Sir M. (Ripon)Wells, John (Maidstone)
Peel, JohnSummers, Sir SpencerWhitelaw, Rt. Hn. William
Percival, IanTapsell, PeterWills, Sir Gerald (Bridgwater)
Peyton, JohnTaylor, Sir Charles (Eastbourne)Wilson, Geoffrey (Truro)
Pink, R. BonnerTaylor, Edward M. (G'gow, Cathcart)Winstanley, Dr. M. P.
Prior, J. M. L.Taylor, Frank (Moss Side)Wolrige-Gordon, Patrick
Pym, FrancisTemple, John M.Wood, Rt. Hn. Richard
Ramsden, Rt. Hn. JamesThatcher, Mrs. MargaretWright, Esmond
Renton, Rt. Hn. Sir DavidTilney, JohnWylie, N. R.
Ridley, Hn. NicholasTurton, Rt. Hn. R. H.
Royle, Anthonyvan Straubenzee, W. R.TELLERS FOR THE NOES:
Russell, Sir RonaldWainwright, Richard (Colne Valley)Mr. Anthony Grant and
Mr. Timothy Kitson.

Question again proposed, That the proposed words be there inserted in the Bill.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

I was saying that, with a few exceptions, there was a widespread and general rejection in the House and the country of that approach to prices and incomes which is sometimes described as a free-for-all, which would mean that every manufacturer, every supplier, every trade union, every landlord, would use his own bargaining power as seemed most appropriate at the moment, without regard to any wider considerations.

This rejection has gathered strength because of what has been happening in recent years in the trade union movement, the growing realisation that a single trade union acting on the doctrine of a free-for-all would not, except in the very short term, even be serving the best interests of its own members, the general recognition, not only on the trade union side but among management as well, that the pursuit by each particular group of a free-for-all was liable to have such effects on the economy as a whole that all groups would be the losers. That is the philosophy which lies behind the growing rejection of a free-for-all which is now becoming accepted belief.

It was that belief which was behind the statement of intent—that, without any powers of legal compulsion, there should be resolutely accepted and acted upon the concept that prices and incomes should not be left to work themselves out in a free-for-all, but should be a matter of policy to be worked out by common consent, and that, as part of the machinery necessary to that process, there should be a body like the Prices and Incomes Board which would help those involved in reaching judgments as to what claims with regard to prices and incomes were and were not reasonable.

I assert both as my own belief and as the policy of the Government that that is the situation which one wants to create. That was the situation which we hoped to create when the statement of intent was signed. We were overtaken by the balance of payments difficulties and other factors which the House knows, but I repeat that that is what the Government believe to be the right way of handling the problem and that this should be something accepted universally by all groups of workers.

I understand the feelings of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) about this matter. I ask him to believe that those of us who have taken a rather different view have not done so out of mere expediency and that what I am saying now is out of my deep conviction that we must avoid a free-for-all and if humanly possible avoid it without legal compulsion as something vital to the national welfare and something which ought to be acceptable, particularly to members of our party.

It rather distresses me that he has so usually found it necessary when referring to this matter to add a smear about people who earn their livings by intellectual occupations, because if this rejection of a free-for-all is to mean anything, it surely has to mean the unity of purpose, to use a phrase with which we on this side of the House are familiar, of workers by hand and by brain. We ought to foster the mutual understanding between different kinds of workers with their different backgrounds and the common objective which they all have of avoiding the evils of a free-for-all and gradually getting more and more justice and common sense into the whole question of the distribution of incomes and the distribution of wealth. I believe that I carry many on both sides with me so far.

10.15 p.m.

We come now to the question raised by the Amendment. if our object is the kind which I have just described, and which was set forth in the Statement of Intent, what part, if any, ought statutory powers by the Government to play? I think it will be accepted that there will be such minimum statutory powers as are needed to set up a Prices and Incomes Board and enable it to do its work, but the critical question is: If the degree of self-control exercised on either the prices or the wages side is not big enough voluntarily to prevent the nation from running into grave economic difficulties, ought the Government, even temporarily, to take what are sometimes called long-stop powers, and particularly ought they to take that kind of power if the situation is, as I am sure it was last October, that the great majority of trade unionists are willing to work the thing voluntarily, and do not want to see their voluntary effort frustrated by the actions of a very small minority among them?

That was the situation last October. It was that which caused the trade union movement to accept the idea of activating Part IV of the Prices and Incomes Act, despite the natural concern with which anyone with a trade union or a professional background must look at a statute like Part IV. I would have thought that I would still carry many of the House with me if I said that while a voluntary system—and I hope that I have made it clear what I mean by a voluntary system—is what we want, in times of grave emergency there is a case for the Government having what are called long-stop powers.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

Will my right hon. Friend explain how a thing can he voluntary if it is surrounded by compulsion?

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

I think that I can answer my hon. Friend. I said that I distinguished very clearly between a voluntary system, and one in which there was any element of compulsion. I said that I believed that what we want to work for is the voluntary system as I described it. I then said, however, that I thought there were many people who would agree that in times of grave emergency, and if the great majority of trade unionists wanted the thing to be voluntary, but were worried that their voluntary effort would be frustrated by a few, we might temporarily, in an emergency, take a degree of compulsory power.

I accept that the moment we do that we cannot call it a voluntary system in the full sense of the term. I have never disputed that, and I do not do so now, but to describe that situation as if it were one in which the Government, by their own absolute will, imposed compulsion on a whole unwilling mass of trade unionists is a complete misrepresentation of the position, because it would be a physical impossibility for any Government to have even the moderate degree of statutory powers which I have mentioned unless the great majority of the people believed in the working of a prices and incomes policy.

That is why I think it is fair in some circumstances to use the term "fully voluntary" to make it clear that we are describing what I described earlier, namely, the kind of situation set out in the Statement of Intent, where there is no measure of legal compulsion, even long-stop compulsion. It is wrong to represent the imposition of limited emergency powers as an imposition, by the Government's absolute will, of compulsion on a great mass of unwilling people. If anyone thinks that, let him look at the situation as it has developed in the last twelve months. This has not been a voluntary period, but it has been a period in which the great majority of trade unionists have assented to the existence and to the use of the powers. I have never used powers concerning wages without consultation with the T.U.C. It has never objected to any particular use of those powers.

Photo of Mr John Biffen Mr John Biffen , Oswestry

I am grateful to the right hon. Gentleman for the semantic distinction that he has drawn, but may we have a clear understanding that it is now the Government's policy, unequivocally, not to return to the system which he designated as "fully voluntary", but to proceed with the system which he designates as "voluntary"?

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

The hon. Member is putting into my mouth things that I did not say. I have used the terms "voluntary" and "fully voluntary" in the same sense. I have never disputed the fact that if we have something like Part IV the system is not voluntary. What I have said is that to describe it as an exercise of tyrannical power is a misrepresentation of the facts.

Part IV was an example of the introduction into what had previously been a voluntary system of a degree of compulsory legal powers. Part IV ends in August of this year. The present Bill gives the Government far fewer powers, in time and in circumstances, than did Part IV. That is why I have previously described it as a step towards the voluntary system—a step on the road of return to the voluntary system.

Now we come to the question: what about the period after 12 months from now or, to be exact, in August of next year? As the House, and especially my hon. Friend the Member for Penistone (Mr. Mendelson), will be aware, I have already answered this question. In the Second Reading debate my hon. Friend asked me whether I could give a definite assurance not only that the Bill would run out in 12 months' time—which was net in dispute—but that from that date there would be no legal power whatever.

I replied that I could not give my hon. Friend that assurance; I could tell him that it was the Government's most earnest hope that it would be possible to do that, but I thought that it would be neither wise nor prudent to give that undertaking now. It is possible for any hon. Member, on either side, to say that he does not like that answer. It is not open to any hon. Member to say that he has been deceived by that question. If I tried to give an undertaking which I do not think it would be wise or prudent to give now I may be criticised for deceiving the House. I do not attempt to do that.

I assure the House of one other thing. I have said that it is the Government's most earnest hope that we shall be able to be free of legal powers altogether in August of next year. The charge has been levelled in some speeches that the Government do not really nourish that hope and that, behind my refusal to give the categorical undertaking for which my hon. Friend asks, there lies a deliberate resolve, already established in the Government's mind, to continue the powers after next August. I can only ask the House to accept my firm and absolute assurance that this is not true and that I meant exactly what I said in answer to my hon. Friend. I do not think it right to give him the undertaking now. I can go no further than saying that it is my earnest hope that we shall achieve what we both want in August next year—

Photo of Sir Edward Brown Sir Edward Brown , Bath

Does this mean that we will come to the end on 11th August next year and return to the free-for-all which the right hon. Gentleman says we should not have?

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

The hon. Gentleman has left out one vital stage in the argument, on which I laid much of the stress. I rejected the free-for-all. I said that I thought that what we all wanted was the ideal enshrined in the Statement of Intent, whereby groups decided deliberately to limit their own action, not because of statutory compulsion but because they believed it just and in the long-term interests of their members as well as anyone else. That is what I want us to return to in August next year and what I thought most of us wanted.

I must ask the House to accept on my behalf and that of the Government my assurance that my answer to my hon. Friend meant exactly what it said. It is suggested that I could give an earnest of that by accepting the Amendment, but its nature stands that argument on its head. If the Government or I had a secret resolve to bring in legislation next August, I could readily accept the Amendment and allow all the anomalies which would follow, knowing that I could tidy it up by legislation next August. It is, on the contrary, because it is my most earnest desire that there shall be no further legislation of this kind next August that I want to see this piece not ending up with what would otherwise be a ragged untidy and unjust arrangement.

It would be unjust because, so far as the powers are to be used at all—I remind the House how few workers have had their pay restricted by Order in the last 12 months how it might work out? A group of workers might try to get a claim clearly in conflict with policy and with a recommendation against it from the Board, so that we felt justified in making an Order. That might happen in November this year and, with the Bill amended as is proposed, their pay could be held back for six months. But a group of workers behaving in exactly the same way in April or May next year would have a limit imposed perhaps for only one or two months. That would not be just or reasonable—

Photo of Mr Ian Mikardo Mr Ian Mikardo , Poplar

Would that not be exactly what has happened under the existing legislation—totally different treatment of different groups of workers, some of them held back for two months, some for three or six months and some for longer? Why is my right hon. Friend making a virtue of a consistency which he does not possess?

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

There have been some differences, but, so far as our present legal powers have allowed, in deciding how long an order should run, we have always considered where the balance of fairness and justice lay. It is true that, under the present legislation, there cannot be as satisfactory and consistent a result as under this legislation. But I see no reason why shortcomings in the existing legislation should be repeated in the Bill.

10.30 p.m.

The whole of the argument which I am advancing would be unnecessary if the Government or I had a secret intent to bring in new legislation of this sort in 12 months' time, because it would be possible in such legislation to pick up any untidy or awkward bits and deal with them then. It is because I trust most earnestly that I shall not be doing that that I ask the House to pass the Bill in a form in which it gives more justice and consistency than one would get from the Amendment.

But what is in issue is not only the merits of the Amendment, but the relationship of this to the whole of prices and incomes policy.

Photo of Mr Terence Higgins Mr Terence Higgins , Worthing

The right hon. Gentleman says that he could introduce legislation next year and pick up all the anomalies. Would not he agree that that is not so? There are specific Clauses in the Bill designed as links and he could not do it next year in a new Bill.

Photo of Mr Michael Maitland Stewart Mr Michael Maitland Stewart , Fulham

Such is the power of Parliament that in a new Bill one could make whatever arrangements Parliament was prepared to agree to. But we are concerned, not only with the Amendment, but with the whole nature of prices and incomes policy.

In previous Parliaments, when our party was in opposition, I was very much concerned with housing and the operation of the Rent Acts. I saw the Rent Act, 1965, which we introduced when we came to power, as the beginning of the establishment of something like justice in one field of prices. But in that field, for historical reasons, it could and should be done by legislation. What I want to see is the same concept of justice in the distribution of incomes established by the voluntary acceptance by workers and management of the fact that the pursuit of a free-for-all is not only morally wrong, but is not, in the end, except on the shortest view, in the interests of those who pursue it. To get the whole nation to accept that is not easily done.

We have been driven by the pressure of events to try, as I think one of my hon. Friends said on Second Reading, to get short-term as well as long-term results. That it is which has caused some of the differences we have had with the trade union movement and management and between the Government and some of my hon. Friends. I have sought to understand their arguments and tried to share their feelings. They must do the same for the Government. We are taking the course we are taking because we believe that these measures are a necessary step in the very difficult period we are going through. We do not want argument over them to sour or spoil the achievement which I think we all have in mind of a just productivity, prices and incomes policy.

Photo of Mr John Peyton Mr John Peyton , Yeovil

I apologise to the First Secretary and the House for not having been here for the first part of the right hon. Gentleman's speech. I feel that his speech is an important one. I do not charge him with insincerity, because I believe that the sincerity and earnestness of what he said was unchallengeable, but we have grave doubts about how far this policy is practicable and how far the measures he is propounding will endure; how long a time will be necessary before the right hon. Gentleman must take further steps to reinforce measures which none of us find very acceptable.

The First Secretary claimed that it was an accepted belief that free-for-all methods should be rejected. But that rejection does not imply acceptance of impracticable and illusory alternatives. He said his aim was to introduce more and more justice into the distribution of incomes. Considering the events of the past two-and-a-half years, we have no ground to accept that there is a reasonable prospect of even that kind of fairness and justice being secured.

The right hon. Gentleman then talked about the voluntary system, said how it was wanted and urged that in times of grave emergency the Government needed long-stop powers. But for how long will this grape emergency last? We are fearful that so long as the Labour Party lasts, this emergency will endure. And how far from the wicket are these long-stop powers? The hon. Member for Poplar (Mr. Mikardo) asked this question but did not get an answer. It is all very well to employ a loose sporting metaphor of this kind, but the right hon. Gentleman must explain its effect on the lives and affairs of ordinary people.

The First Secretary was asked how something could be voluntary yet surrounded by compulsion, but he did not reply. From the look on his face at the moment he seems in pain. It does not come from listening to me, but because he must be realising the impracticability of his policy. Hon. Gentlemen opposite have a tendency—they have caught it from the Prime Minister—to push out a smokescreen of words which sound fine but which have not been thought out. This smokescreen of phrases does not go to the heart of the problem and, because it is a smokescreen, it is sometimes difficult to disagree with the argument.

The right hon. Gentleman said that it would be a complete misrepresentation to say that the Government had imposed their will on the mass of trade unionists. I wonder how far that is true? Perhaps measures of this kind can be tolerated for a time, but, after the events of the past 12 months, the Government are in grave danger. They have run out of time. They told that great mass of trade unionists that they needed a year. They gave the impression that they would not need to continue to resort to such powers as these. But they have done so, and I believe that in British industry today there is a great impatience, and that when people realise that the Government have not, in fact, moved very substantially from the bad position they took up a year ago there will be a wave of anger.

I do not for one moment say that we on this side have been able completely to produce a solution for the most difficult problem of our time, but if we are true to our beliefs, as we are not always, we must say that we believe that a free market, free competition, a really competitive system backed by a sensible taxation system, is a far more efficient way of producing the fair and just consequences which the right hon. Gentleman has as his objectives than any of these hotchpotch measures which may sound good but which, in the end, will prove to be useless.

I do not want to go on with the semantic argument about what is or what is not voluntary, though the right hon. Gentleman is in difficulty here. It has not been a voluntary period but the great majority of people have assented, apparently, to compulsion, and the First Secretary himself told us that when he said "voluntary" it meant much the same thing as when he said "fully voluntary". His difficulties in expressing his case in words are an indication, and only a very small indication, of the far greater difficulties that underlie the whole problem with which he and the Government have been wholly incapable of grappling in the long term.

He protested that the claim that the Government have exercised tyrannical powers over the trade unions is a misrepresentation, but he went on to claim that this Bill represented a step on the road to the return to a voluntary system. With great respect to the right hon. Gentleman—one does not want to be unkind to him in his present terribly awkward predicament, or to his right hon. Friend, who must find it even more acutely uncomfortable—one must say that it is a very small step. The road on which his predecessor the Foreign Secretary embarked last year was a difficult and dangerous road, and retracing steps along that road will be an even more difficult operation. I wish I could feel that the Government's heart was committed to the task of retracing their steps. I do not believe that it is, nor do I believe such a retracing to be possible for the Government.

The right hon. Gentleman was absolutely fair. I am quite sure that even those of his hon. Friends who do not share his ideas will have accepted that he was not in any way deceiving the House. He went out of his way to say that it would be wrong, that it would be imprudent, to give any assurance that no continuation of legal powers would be necessary in any circumstances. But we are in some difficulty. Over the weekend, we have had a speech, and it is no good denying it, from the Leader of the House, whom we miss here—[HON. MEMBERS: "Where is he?"]—though when he is here he does not always contribute to the harmony as one might expect from the Leader of the House—[Interruption.]

Photo of Dr Horace King Dr Horace King , Southampton, Itchen

Order. Let us have only one debater at a time.

Photo of Mr John Peyton Mr John Peyton , Yeovil

The hon. Member for Coatbridge and Airdrie (Mr. Dempsey) never loses his charm by the fact that he speaks when sitting down.

Tonight it is necessary to give attention to the fact that the Labour Party thought it necessary to make a statement on the speech made by the Leader of the House. It said, in particular, that Nowhere in the speech did Mr. Crossman either say or imply that the Government is contemplating a return to compulsory wage restraint under any circumstances whatever. Amongst other things, the right hon. Gentleman said this: Now we have Part IV coming off and, if they fail to do it voluntarily, then exactly the same thing will happen again. This is hard, economic fact. It may be hard, economic fact, but it does not exactly tie in with what the right hon. Gentleman has just told the House.

10.45 p.m.

At the end of the report of the speech made by the Leader of the House, we have these words: We have to face the fact that if it happens again and economic forces reassert themselves, the same sort of medicine would have to be given to the people. What intolerable arrogance this is. I do not believe that even the Leader of the House, arrogant as he so often is, would be inclined to use those words to a House of Commons his contempt for which he has never bothered to conceal.

The issues which we are discussing in the Bill are fundamental. They are of great importance to the future of the Government and of the country. One of the charges which I sincerely make against the Government is that faced with really serious issues, they have fumbled and grabbed from the air an ill-thought-out solution which, they hoped, would buy them a year's peace. Now, they face the moment of having to pay the bill and, once again, they are having to put up a facade of words unsatisfactory even to their own supporters, a facade of words, moreover, which threatens to divide and wreck the party opposite and which certainly does nothing to convince us.

Photo of Mr Iain Macleod Mr Iain Macleod , Enfield West

To deal first with a point which worried the hon. Member for Poplar (Mr. Mikardo), the last time that a full grey won the Derby was Airborne, in 1946, at 50 to one. The hon. Member will remember it. It was the year he first became a Member of the House.

We have been discussing a matter of great importance. My hon. Friend the Member for Oswestry (Mr. Biffen) and several hon. Members opposite said that the Amendment, perhaps above all others on Report, was a test of the sincerity of the Government. If that be the test, one can only charge that the Government have failed it, although the First Secretary honourably did his best with the case that was made to him.

We have heard a good deal—in my view rightly, because it both worried and angered people—about the speech of the Leader of the House. The hon. Member for Penistone (Mr. Mendelson) said that he made no complaint that his right hon. Friend the Leader of the House was not present. I do complain. The hon. Member for Penistone said that he was content for the First Secretary, who is in charge of the Bill, to answer the debate and deal with these matters. The First Secretary said not a word about it from beginning to end of a rather lengthy reply to the debate.

I have no doubt that the Leader of the House has been told of what has been said. I have no doubt that the Whips, with their usual efficiency, have discharged that task. The Leader of the House has heard the request that he should come, and he has ignored it. That is a disgraceful way to treat the House of Commons. It is not a question of who is in charge of the Bill. Of course, the First Secretary is in charge of it, but what was said by the Leader of the House undermines the whole basis of the Bill.

If the First Secretary, whose embarrassment at that appalling speech by the Leader of the House I can understand, wishes to shuffle it over in silence, at least he should see that the Leader of the House was present to explain what he said. The truth of the matter is that tin speech of the Leader of the House was a hectoring, arrogant and bombastic speech and no explanation of it is credible if one studies closely, as I have done, the shorthand account of it. I cannot believe that when the Leader of the House spoke of medicine being given—I ask the House to note the arrogance of the phrase "being given"—to the people he meant unemployment. Of course he did not. He meant Part IV and what goes with it, or a new version of Part II when the time comes.

The hon. Member for Liverpool, Wilton (Mr. Heffer) said that he for one believed the Government when they said that they were moving towards a voluntary system or, perhaps, towards in the end a version of what is called a free-for-all with a longstop, whatever it may be. The hon. Gentleman believed it and he believed the Government. I can understand, therefore, that it is even worse for him than it is for us, because we never believed it. We expected and we prophesied the double cross that we have seen particularly appropriately in the speech that the Leader of the House made a day or two ago. All these statements are, at the very best, devious and, at the worse, a good deal less attractive than that.

I want to make it absolutely clear—I did so in my first speech, but I spell it out now—that I accept absolutely the First Secretary's good faith. I think I would be joined in that by every one of my right hon. and hon. Friends. But I must say frankly that we do not extend that same belief to the Prime Minister, nor to the Leader of the House. A few moments ago the First Secretary said that these powers of Part IV were, I think his words were, not tyrannical. When the Prime Minister wished to play up the effectiveness of Part IV—he was in Washington, not in the House—this is what he said: We have taken steps which have not been taken by any other democratic government in the world. We are taking steps with regard to prices and wages which no other Government, even in wartime, has taken. That is what the Prime Minister said when he wanted to sell the effectiveness of Part IV in Washington. It is no good using soft, dove-like words here. It was the hawk speaking in Washington. It is not possible to believe a Government whose spokesmen say such utterly different things.

The First Secretary very fairly said that he could not give a guarantee for next year. He will understand that it is precisely this that makes us so suspicious.

The Government's spokesman in another place, the Parliamentary Secretary to the Minister of Public Building and Works, Lord Winterbottom, in the debate on the incomes policy in another place last week, said this: Whether or not by 1968 we shall have a further Prices and Incomes Bill is in the lap of the gods."—[OFFICIAL REPORT, House of Lords, 5th July, 1967; Vol. 284, c. 172.] I have no doubt that that is the position. I have no doubt that the First Secretary has not made up his mind. He tells us that he has not. The words which Lord Winterbottom used—I will not weary the House by reading on—show that he is at least more than dubious as to whether we shall be able to move away from compulsory legislation, but I accept the First Secretary's good faith. Indeed, I have never doubted it; and no words of mine have impugned it. However, I do impugn what the Prime Minister said in Washington and the reality in this country of Part IV. I attack the Prime Minister for saying what he said on B.B.C. television in "24 Hours", which I quoted in my opening remarks, as contrasted with the reality of the Bill.

Above all, we attack the Leader of the House for his speech last weekend, both

for what he said and for his cowardice in not coming to explain it to the House of Commons.

Photo of Sir Douglas Glover Sir Douglas Glover , Ormskirk

Sir D. Glover rose

Question put, That the Question be now put:—

The House divided: Ayes 189. Noes 129.

Division No. 432.]AYES[10.54 p.m.
Abse, LeoFraser, Rt. Hn. Tom (Hamilton)McMillan, Tom (Glasgow, C.)
Alldritt, WalterFreeson, ReginaldMcNamara, J. Kevin
Armstrong, ErnestGardner, TonyMacPherson, Malcolm
Ashley, JackGordon Walker, Rt. Hn. P. C.Mahon, Peter (Preston, S.)
Atkins, Ronald (Preston, N.)Gourlay, HarryMallalieu, J.P.W. (Huddersfield, E.)
Atkinson, Norman (Tottenham)Gray, Dr. Hugh (Yarmouth)Manuel, Archie
Bacon, Rt. Hn. AliceGregory, ArnoldMapp, Charles
Bagier, Gordon A. T.Grey, Charles (Durham)Marquand, David
Barnes, MichaelGriffiths, Will (Exchange)Mason, Roy
Baxter, WilliamHamilton, James (Bothwell)Maxwell, Robert
Bence, CyrilHannan, WilliamMellish, Robert
Benn, Rt. Hn. Anthony WedgwoodHarper, JosephMendelson, J. J.
Bidwell, SydneyHarrison, Walter (Wakefield)Mikardo, Ian
Binns, JohnHart, Mrs. JudithMillan, Bruce
Bishop, E. S.Haseldine, NormanMilne, Edward (Blyth)
Blackburn, F.Hattersley, RoyMorris, Charles R. (Openshaw)
Bradley, TomHazell, BertMorris, John (Aberavon)
Bray, Dr. JeremyHeffer, Eric S.Murray, Albert
Brooks, EdwinHenig, StanleyNewens, Stan
Brown, Rt. Hn, George (Belper)Herbison, Rt. Hn. MargaretOakes, Gordon
Brown, Hugh D. (G'gow, Provan)Hooley, FrankOgden, Eric
Brown, Bob (N'c'tle-upon-Tyne, W)Houghton, Rt. Hn. DouglasO'Malley, Brian
Brown, R. W. (Shoreditch & F'bury)Howarth, Robert (Bolton, E.)Orbach, Maurice
Buchan, NormanHowell, Denis (Small Heath)Orme, Stanley
Buchanan, Richard (G'gow, Sp'burn)Howie, W.Owen, Dr. David (Plymouth, S'tn)
Callaghan, Rt. Hn. JamesHoy, JamesPage, Derek (King's Lynn)
Carmichael, NeilHuckfield, L.Paget, R. T.
Coe, DenisHughes, Roy (Newport)Parkyn, Brian (Bedford)
Coleman, DonaldHunter, AdamPavitt, Laurence
Conlan, BernardJackson, Colin (B'h'se & Spenb'gh)Pearson, Arthur (Pontypridd)
Crawshaw, RichardJay, Rt. Hn. DouglasPentland, Norman
Crosland, Rt. Hn. AnthonyJeger, Mrs. Lena (H'b'n & St. P'cras, S.)Perry, George H. (Nottingham, S.)
Cullen, Mrs. AliceJenkins, Hugh (Putney)Rees, Merlyn
Dalyell, TamJohnson, James (K'ston-on-Hull, W.)Reynolds, G. W.
Davidson, Arthur (Accrington)Jones, Dan (Burnley)Roberts, Albert (Normanton)
Davies, Harold (Leek)Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)Roberts, Gwilym (Bedfordshire, S.)
Davies, Ifor (Gower)Jones, T. Alec (Rhondda, West)Robinson, W. O. J. (Walth'stow, E.)
de Freitas, Rt. Hn. Sir GeoffreyJudd, FrankRoebuck, Roy
Dell, EdmundKerr, Russell (Feltham)Rose, Paul
Dempsey, JamesLawson, GeorgeShaw, Arnold (Ilford, S.)
Dewar, DonaldLeadbitter, TedShore, Peter (Stepney)
Diamond, Rt. Hn. JohnLedger, RonShort, Rt. Hn. Edward (N'c'tle-u-Tyne)
Doig, Peter
Lee, Rt. Hn. Frederick (Newton)Short, Mrs. Renée (W'hampton, N. E.)
Dunn, James A.Lee, John (Reading)Silkin, Rt. Hn. John (Deptford)
Dunwoody, Mrs. Gwyneth (Exeter)
Dunwoody, Dr. John (F'th & C'b'e)Lewis, Ron (Carlisle)Silverman, Julius (Aston)
Eadie, AlexLipton, MarcusSlater, Joseph
Ellis, JohnLomas, KennethSmall, William
English, MichaelLoughlin, CharlesSpriggs, Leslie
Ennals, DavidLyon, Alexander W. (York)Stewart, Rt. Hn. Michael
Ensor, DavidLyons, Edward (Bradford, E.)Summerskill, Hn. Dr. Shirley
Evans, Albert (Islington, S.W.)McBride, NeilSwingler, Stephen
Evans, Ioan L. (Birm'h'm, Yardley)McCann, JohnThomas, George (Cardiff, W.)
Fernyhough, E.MacColl, JamesTinn, James
Fletcher, Raymond (Ilkeston)MacDermot, NiallUrwin, T. W.
Fletcher, Ted (Darlington)McGuire, MichaelWainwright, Edwin (Dearne Valley)
Foot, Michael (Ebbw Vale)Mackenzie, Gregor (Rutherglen)Watkins, David (Consett)
Forrester, JohnMackie, JohnWatkins, Tudor (Brecon & Radnor)
Fowler, GerryMackintosh, John P.Wells, William (Walsall, N.)
Fraser, John (Norwood)Maclennan, RobertWhite, Mrs. Eirene
Whitlock, WilliamWilliams, W. T. (Warrington)Woof, Robert
Willey, Rt. Hn. FrederickWillis, George (Edinburgh, E.)
Williams, Alan (Swansea, W.)Wilson, Rt. Hn. Harold (Huyton)TELLERS FOR THE AYES:
Williams, Alan Lee (Hornchurch)Wilson, William (Coventry, S.)Mr. Alan Fitch and
Williams, Mrs. Shirley (Hitchin)Woodburn, Rt. Hn. A.Mr. Harold Walker.
NOES
Alison, Michael (Barkston Ash)Hawkins, PaulPeel, John
Allason, James (Hemel Hempstead)Heald, Rt. Hn. Sir LionelPercival, Ian
Astor, JohnHeseltine, MichaelPeyton, John
Atkins, Humphrey (M't'n & M'd'n)Higgins, Terence L.Pink, R. Bonner
Baker, W. H. K.Hiley, JosephPrice, David (Eastleigh)
Biffen, JohnHill, J. E. B.Prior, J. M. L.
Boyle, Rt. Hn. Sir EdwardHirst, GeoffreyPym, Francis
Braine, BernardHolland, PhilipRamsden, Rt. Hn. James
Brewis, JohnHooson, EmlynRenton, Rt. Hn. Sir David
Bromley-Davenport, Lt.-Col. Sir WalterHordern, PeterRidley, Hn. Nicholas
Brown, Sir Edward (Bath)Hornby, RichardRoyle, Anthony
Bruce-Gardyne, J.Howell, David (Guildford)Russell, Sir Ronald
Carlisle, MarkHunt, JohnScott, Nicholas
Carr, Rt. Hn. RobertHutchison, Michael ClarkSharples, Richard
Chichester-Clark, R.Iremonger, T. L.Shaw, Michael (Sc'b'gh & Whitby)
Clegg, WalterJenkin, Patrick (Woodford)Sinclair, Sir George
Cooper-Key, Sir NeillJohnson Smith, G. (E. Grinstead)Smith, John
Corfield, F. V.Jopling, MichaelSteel, David (Roxburgh)
Dance, JamesKaberry, Sir DonaldStoddart-Scott, Col. Sir M. (Ripon)
Davidson, James (Aberdeenshire, W.)Kimball, MarcusSummers, Sir Spencer
Dean, Paul (Somerset, N.)King, Evelyn (Dorset, S.)Tapsell, Peter
Deedes, Rt. Hn. W. F. (Ashford)Kirk, PeterTaylor, Sir Charles (Eastbourne)
Dodds-Parker, DouglasKitson, TimothyTaylor, Edward M. (G'gow, Cathcart)
Eden, Sir JohnKnight, Mrs. JillTaylor, Frank (Moss Side)
Elliott, R.W. (N'c'tle-upon-Tyne, N.)Lambton, ViscountThatcher, Mrs. Margaret
Emery, PeterLewis, Kenneth (Rutland)Tilney, John
Errington, Sir EricLubbock, EricTurton, Rt. Hn. R. H.
Fisher, NigelMacArthur, Ianvan Straubenzee, W. R.
Fletcher-Cooke, CharlesMacleod, Rt. Hn. IainWainwright, Richard (Colne Valley)
Fortescue, TimMaude, AngusWalker, Peter (Worcester)
Fraser, Rt. Hn. Hugh (St'fford & Stone)Maxwell-Hyslop, R. J.Ward, Dame Irene
Gilmour, Sir John (Fife, E.)Maydon, Lt.-Cmdr. S. L. C.Weatherill, Bernard
Glover, Sir DouglasMills, Peter (Torrington)Webster, David
Glyn, Sir RichardMiscampbell, NormanWells, John (Maidstone)
Goodhew, VictorMitchell, David (Basingstoke)Whitelaw, Rt. Hn. William
Gower, RaymondMonro, HectorWills, Sir Gerald (Bridgwater)
Grant, AnthonyMorrison, Charles (Devizes)Wilson, Geoffrey (Truro)
Grant-Ferris, R.Munro-Lucas-Tooth, Sir HughWinstanley, Dr. M. P.
Griffiths, Eldon (Bury St. Edmunds)Murton, OscarWolrige-Gordon, Patrick
Grimond, Rt. Hn. J.Noble, Rt. Hn. MichaelWylie, N. R.
Gurden, HaroldOnslow, CranleyYounger, Hn. George
Harris, Frederic (Croydon, N.W.)Page, Graham (Crosby)TELLERS FOR THE NOES:
Harris, Reader (Heston)Page, John (Harrow, W.)Mr. Jasper More
Harvie Anderson, MissPardoe, Johnand Mr. Reginald Eyre.

Question put accordingly, That the proposed words be there inserted in the Bill:—

The House divided: Ayes 129, Noes 174.

Division No. 433.]AYES[11.4 p.m.
Alison, Michael (Barkston Ash)Dodds-Parker, DouglasHawkins, Paul
Allason, James (Hemel Hempstead)Eden, Sir JohnHeald, Rt. Hn. Sir Lionel
Astor, JohnEmery, PeterHeseltine, Michael
Atkins, Humphrey (M't'n & M'd'n)Errington, Sir EricHiggins, T