Duration and Reactivation of Part Ii

Orders of the Day — Counter-Inflation Bill – in the House of Commons at 12:00 am on 28th February 1973.

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Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral 12:00 am, 28th February 1973

Before I call the first amendment I should like to clear up the position with regard to Amendment No. 59, in page 3, line 37 at end insert 'being a period ending not later than 31st March 1976'. The subject matter of that amendment can be discussed with Government Amendment No. 3. If the Government amendment is agreed to, that amendment falls. Therefore, I shall select it only if the Government amendment is defeated, but it can be discussed with the Government amendment.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

I am most grateful for that elucidation, Mr. Speaker, but may I get the position clear? As I understand it, if Government Amendments Nos. 3 and 58 are selected we are faced with two alternative propositions—either the proposition in the Bill as it stands, that the power given shall be renewable by order on an annual basis indefinitely, or the proposition arising from a combination of the Government amendments, that the powers shall last for three years and then stop, unless terminated during that period. We shall not have before us, I understand, the third choice, which it is the purpose of my amendment to introduce, that the powers should last for a maximum of three years but that within those three years there should be annual renewability by Order in Council. In other words, that would give the best of both worlds.

Photo of Mr Selwyn Lloyd Mr Selwyn Lloyd , Wirral

This is a matter of argument, and I have nothing to add to my ruling at this stage. I shall call Government Amendment No. 3, with which can be discussed Government Amendments Nos. 58 and 16 and Amendment No. 59. Then we shall see how we get on.

3.40 p.m.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I beg to move Amendment No. 3, in page 3, line 34, leave out 'one year' and insert 'three years'.

I thank you for your ruling, Mr. Speaker. I think it is for the convenience of the House to discuss with this, and Amendment No. 59, the following amendments: No. 58, in page 3, line 36, leave out subsections (2) to (5) and insert— '(2) The period for which this Part of this Act is in force may at any time be terminated by Her Majesty by Order in Council.(3) If an Order is made under subsection (2) above, Her Majesty may by Order in Council again bring this Part of this Act into force for a period ending no later than 31st March 1976.(4) An Order under subsection (3) above shall not be made unless a draft of the Order has been approved by resolution of each House of Parliament.' No. 16, in page 17, line 16, leave out Clause 19.

Amendment No. 58 is complementary to Amendment No. 3 and replaces subsections (2) and (5) of Clause 4 with the version on the Order Paper. Amendment No. 59 is an alternative to the two Government amendments. Amendment No. 16 seeks to delete Clause 19. I should point out to the House that part of the substance of Clause 19 is affected by later amendments to Clauses 12 and 13, which seek to limit the operation of Clause 12 to the duration of Part II of the Bill and the operation of Clause 13 to one year. If the amendments are agreed by the House, Clause 19 will be concerned only with Part I of the Bill. What arises will, in effect, be the continuation of the agencies as a framework for a possible voluntary policy.

I do not want to dwell on this point, as the arguments for retaining Part I of the Bill are part of my argument for retaining the statutory powers of Part II for a potential period of three years, but, as now drafted on the Order Paper, not renewable thereafter except by fresh legislation, and for retaining the power within that three-year period to stop the statutory powers of Part II and reactivate them by order subject to approval in draft by the House.

In Committee considerable concern was expressed during the debates on Clause 4 and on other clauses, about the accountability of the agencies and of Ministers to Parliament. That concern about accountability to Parliament for the powers which we are seeking to operate for a statutory policy, and which are either contained in or made operable by Part II of the Bill, was shared by the Government.

That concern was indicated by the undertakings given in Committee by my hon. Friends and myself, most of which were embodied in amendments on the Order Paper which we shall be discussing later today. I shall remind the House about those undertakings as they are relevant to the discussion upon which we have embarked. The existing powers which are derived from paragraph (4) of Schedule 2 are reinforced by the requirement which is set out later to publish notices and consents as well as orders by Ministers and by the agencies. That was in response to the suggestion, which was a perfectly reasonable one, that it is difficult to question Ministers if those who wish to do so do not have the means of obtaining information.

In addition, there was the undertaking to arrange for the publication of quarterly reports by the agencies within 30 days. It was undertaken that these should be drafted within 30 days and put in the hands of Ministers within 30 days of the end of the quarter, and that they should be debateable in the House. There is also the undertaking which I gave to debate in draft any new code or any substantial addition or alteration to a code set up under the Bill. I warned the Committee that it would be unlikely that we should draft it in terms which would include it in the Bill because of the difficulty of identifying what would or would not be a substantial addition or alteration to a code.

I repeat the undertakings which I gave in Committee that the Government will ensure that any new code or any substantial addition or alteration to the code should be debated in draft by this House, as is happening on this occasion. Not only are we debating the consultative document, but we can debate the draft of it from which it is derived. Further concern was expressed in Committee about the duration of the statutory powers in Part II.

Photo of Mr John Biffen Mr John Biffen , Oswestry

Before my right hon. Friend passes from the elaboration of the code so that it may be adapted to the changing character of the policy itself, it probably would be helpful for the House during Report to have it made clear that in the autumn stage 3 will be accompanied by a new code rather than by the agencies being told by Ministers to take a somewhat different interpretation of the code from that which they have been taking hitherto.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I assure my hon. Friend that it is intended that stage 3 shall be governed by a new code. I am not saying that parts of it will not be familiar or the same as the existing code. The intention is, however, that it should be accompanied by a new code setting out the criteria for stage 3. I cannot give an undertaking now that there will be a consultative document, but of course there can be debates on the reports of the agencies and the conduct of stage 2.

Further concern was expressed about the duration of the statutory powers in Part II, especially the power to continue indefinitely by order Part II and to reactivate Part II once it had been put into suspension by Order in Council. I indicated in Committee that I would seek during Report to insert again the powers which the Committee removed from the Bill. I also said that I and the Government attached great importance to the initial three-year period and the ability to switch on and off again. The powers of Part II switch off by Order in Council, and they are switched on subject to a draft order being approved by the House.

I still attach great importance to these considerations. However, on reflection the Government have taken the view that there is no need to have the ability to extend the operation of Part II beyond the initial three years. If any statutory powers are still required then, in practice the situation might well require a different type of legislation. Although originally the Government thought that parliamentary control would be met by a full day's debate on a draft order, subject to an affirmative resolution when made, we now accept that new legislation will be appropriate, if there is any such requirement. So the new version of Clause 4, which I am proposing to insert by Amend- ment No. 3 and Amendment No. 58, recognises the situation. I hope that it allays the fears expressed by some of my hon. Friends and others about the duration of these powers.

The Government have throughout made two things clear. First, we are not seeking a confrontation with the trade unions. We are willing to reach agreement with them and with the employers on a voluntary policy for controlling inflation, provided that such a policy can be fully effective. We are willing to do this as soon as it seems possible. But, secondly, we have also made it clear that until such an effective voluntary policy can be agreed, we are determined to stand firm on our present policy through the operation of the Bill during phase 2 and phase 3.

It is for these reasons that I ask the House, first, to restore the initial three-year period for Part II of the Bill; secondly, to maintain the capacity to stop the powers by simple Order in Council; and, thirdly, to restore the ability to reactivate them, if once they have been stopped within the three-year period, by order, which again would be placed in draft form before the House and be subject to affirmative resolution.

By Amendment No. 3 and Amendment No. 58, Part II of the Bill would operate for the initial three years without an annual order to keep it going. Otherwise these debates would have to take place effectively in March 1974 and again in March 1975. I am seeking to make Part II operate for the initial three years without the need for such an annual order, but only for those three years, ending definitely on 31st March 1976. So, the Clause 4 arrangements, with the powers in Part II, can be stopped and, if necessary, restored as I have described.

I believe that this process is necessary in order to make our two points clear—our determination to stand firm on our policy and our willingness to agree an effective voluntary policy as soon as that is possible. I am sure that many members of trade unions, as well as my hon. Friends and others outside the House, would prefer a voluntary system. That is why I see the necessity to keep the capacity to switch off the statutory powers of Part II. But I hope that we have all learnt the lesson of the past—the fact that voluntary policies and declarations of intent have frequently ended in an ineffective control of inflation. So I think that it is necessary to keep the power to switch on and return to the statutory powers of Part II, subject to parliamentary approval by draft order. I hope, too, that, remembering the lessons of 1968, 1969 and 1970, the House will agree to show the country that the Government and the House will carry through the necessary policies.

That is the reason why I cannot accept Amendment No. 59. I agree that it, too, would limit Part II to three years, but it would make it subject to annual affirmative resolution. I believe that that would demonstrate to the country not so much our concern for parliamentary control as fears for the success of our policy and lack of will by the Conservative Party in supporting a firm stance by the Government. I believe those of my hon. Friends and others outside the House who tell me that the country expects the Government to stand firm. But I am also convinced that the firm stance they are demanding requires a base of a firm three years to be effective and to be seen by all concerned to be effective. That is why I ask the House to reject Amendment No. 59 and support the Government amendments.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

Before he sits down, will my right hon. Friend deal with one important point? He said that to have annual renewability by order might be interpreted as showing a lack of will. Would he argue that the fact that we have, for instance, annual renewability by order of the Rhodesian sanctions has shown lack of will?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I want to avoid being too derogatory, but the circumstances in which we find ourselves, where there is, if not an organised movement, then at least a clear determination on the part of a number of people within the trade union movement to use industrial action because of their dislike—I put it no higher—of the Government's policy, create an entirely different situation in which a three-year period is required to give a firm demonstration of the will not only of the Government but of the Conservative Party in backing the Government.

Photo of Mr Tony Benn Mr Tony Benn , Bristol South East

I suppose that after some of the recent speeches by Ministers the Secretary of State's reference to his desire to get an understanding with the trade union movement should be welcomed. But the amendment is very much more important than the right hon. Gentleman seems to realise. In the Bill the Government originally proposed three years plus annual renewals in perpetuity. Indeed, the Bill provided that members of the Pay Board and the Price Commission could remain in office for five years, renewable by a further five years. This indicated that the Government's original intention was that this legislation should be permanent. Then, in Committee, as a result of the efforts by the hon. Members for Oswestry (Mr. Biffen) and Cirencester and Tewkesbury (Mr. Ridley), the proposal for three years plus one, plus one renewal, was replaced by one year plus one, plus one renewal.

The Government now say that they want three years with a definite stop. Indeed, they say that they might go even further and stop before the three years period is up, in which case they could renew one plus one up to three but would then stop. This is evidence of the Government's determination to stand firm, we are told.

The proposal to some extent cuts across party lines—one of the few occasions on this measure when that happens. What we are discussing is the proper time and place for parliamentary intervention in a new departure of policy in the relationships between Government and industry. I want now to put our reasons why, if we have to have this Bill, the process should be on a one plus one basis.

First, the Bill represents a total reversal of the Government's original policy. When I heard the right hon. Gentleman say how important it was for the Government to stand firm, I could not but remember that the Prime Minister in 1970 warned the nation that the Conservative Government would not vary their policy. I therefore have some doubts whether this or any other current Government policy has the permanence that the right hon. Gentleman hopes for.

Secondly, there is not only no mandate for the Government's present policy but, in so far as the public voted for the Conservatives believing them to be against a statutory prices and incomes policy, there is a positive mandate against it.

The third reason why Parliament should intervene more regularly in the consideration of the policy is that the Government have reached a very solemn judgment about the mixed enterprise system which is in many ways the most important part of the Bill. They have concluded that we cannot rely upon a mixed enterprise economy to produce the necessary social and economic results.

4.0 p.m.

Coupled with that, the Bill introduces methods of control the effects of which upon industry are wholly unknown. Anyone trying to read the pay and prices code, which we shall be debating on Monday, must recognise that this code will introduce a high degree of uncertainty into business planning on the management side. First, it is an advisory code. It has no statutory backing. Second, we do not know for how long phase 2 will last. Sometimes it is pushed back to the autumn, sometimes, under the pressure of industrial unrest, it is brought forward to July.

We do not know the length of phase 2. We do not know whether it will be a statutory or voluntary phase. We do not know whether the Price Commission and Pay Board will be two separate bodies in the autumn or the summer or one body under another provision of the Bill. We do not know what interventions there will be. We do not know, and nor does management, whether the attitude of the Government towards profits is still that profits are to be the main engine for investment or whether profits are, as we on this side have often been accused of saying, something slightly immoral to be kept back, at any rate during the period when statutory wage control is in effect.

We do not know, with insurance for example—to take yesterday's amendment, which is highly relevant—the extent to which the Government are serious in moving into a large area of business enterprise with a view to keeping premiums up for profitability and down for counter-inflationary purposes. This is a wholly experimental policy. Where we have such a policy there is an overwhelming case for regular parliamentary scrutiny, review and even fresh legislation.

The second area into which the Bill moves is that of industrial relations. I do not have to stress to the House, nor even to the Minister, who may have been affected in his Department by yesterday's dispute, the effects of this legislation on industrial relations. What is important about the Bill, and what will be seen to be even more important in the months ahead, is that whereas up to now industrial relations have been a subject in which the Minister had a direct responsibility, this Bill pushes the conflict into one between a union and an appointed Pay Board with no direct ministerial responsibility.

If we exclude from those engaged in industrial negotiations both the possibility that their argument may be settled by collective bargaining and the possibility of hon. Members raising their case in the House, then we are diverting the greatest argument in British economic policy at the moment away from Parliament into an appointed agency. These are other reasons why there should be regular parliamentary scrutiny of and debate on this policy whatever view may be taken of it.

I go further and say that in the excellent debates we had in Committee—and, speaking personally, I found it the most interesting Committee of which I have ever been a member—a number of different views began to emerge. There was the Government view, joined very largely by the Liberal Party, the post-capitalist party as the hon. Member for Cornwall, North (Mr. Pardoe) described it—[Interruption.] The Government are post-capitalist in the sense that they no longer believe in free enterprise as the means of solving these problems. There was the Government and the Liberal view emerging strongly, very much united, as one would expect. Then there were the monetarists, the school of economics from Oswestry and Cirencester and Tewkesbury, taking the view which was the view on which the Government were elected and therefore highly respectable in its ancestry, that the Government should stick to their programme and beliefs and let these forces work their way out.

Today the Labour movement has published its own view about tackling inflation. This view, a joint statement from the Labour Party and the TUC, represents a third alternative solution to these problems. If this measure remains on the statute book in such a way as to exclude effective parliamentary debate among these three views then we are heading for trouble. Why? Because we are diverting one of the central conflicts in our society outside Parliament, to be resolved by agencies dealing directly on the one hand with trade unions and on the other with business.

This is the danger to the House of Commons. Whatever one may think about the rôle of Parliament and its relative success in handling economic problems—and there are many who have doubts about our capacity to solve these problems—at any rate we do debate and discuss them here. We decide them here. The question that has been very much in the headlines recently, "Who Governs Britain?" is what this place is about. Who governs Britain is the argument we are always having in the House and, at proper intervals, through the ballot box.

If we divert this argument from the House of Commons either to the courts, as under the Industrial Relations Act, or to Pay Boards or Price Commissions which are not accountable to Parliament, operating under codes at which we are allowed to look only at periodic intervals but operating under statute which has a three-year period, then it amounts to the abdication by the Government and, I must say at the Government's insistence, by Parliament of their central responsibility to resolve these matters. It is because this statute is an abdication of ministerial and parliamentary responsibility for issues which everyone knows are in the forefront of debate in every advanced society that we believe that this Bill, if we have to have it at all, should operate for one year and then Parliament should look at it. If in its wisdom it chooses to renew the measure, that is a matter for Parliament.

If the Government insist, against the wishes of the Committee—and there was an all-party vote on this amendment—on taking this outside the arena of parliamentary responsibility and accountability for the next three years, then the responsibility for the failure of their policy will be one which rests peculiarly upon them. For that reason I suggest that we reject the amendment.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

I have a great deal of sympathy with the earlier remarks of the right hon. Member for Bristol, South-East (Mr. Benn). In his later remarks he was edging on to his rather hyperbolic participatory views. There are other arguments which must lead us to have considerable reservations about the proposals which my right hon. Friend is putting before the House. Before I refer to them I want to mention Amendment No. 59, standing in my name and the name of my hon. Friend the Member for Oswestry (Mr. Biffen).

As my right hon. Friend rightly pointed out, the amendment is designed to incorporate what in the view of some of us will be the best combination of the situation which emerged from the Committee, whereby these powers would require to be renewed by Order in Council on an annual basis, and the situation emerging from Amendment No. 58, by which the renewal could occur only for a maximum of three years. Acceptance of Amendment No. 59 would provide for a combination of these two features and it is on that basis that I commend it to the House.

I was not a member of the admirable Committee which studied this Bill. Everyone who has studied its debates has been deeply impressed by the care with which it dealt with the Bill and the high standard of argument. I have carefully read what my right hon. Friend said and I think he would agree that he gave the Committee a rather fuller argument than he has given us today as to why the Government seek to rebut the proposition put forward by my hon. Friends the Members for Cirencester and Tewkesbury (Mr. Ridley) and Oswestry on the three-year—one-year argument.

Basically my right hon. Friend made three propositions in Committee. The first was that by retaining the period of three years we would avoid an undesirable degree of uncertainty. He referred to …where a period of short, sharp restraint designed…to administer a shock to the economy, has been followed by a massive inflation when the provisions have been suddenly removed'.—[OFFICIAL REPORT, Standing Committee H, 13th February 1973; c. 622.] He was referring to what had happened in the past. We have all recognised in the past that this is the great problem about this sort of legislation. We used to describe it as trying to build a dam of ice which led to an embarrassing flood when the spring came. Today's proposition, presumably, is that we have devised something which will take the place of the block of ice when the spring comes. I am not totally convinced about this.

My right hon. Friend's second argument, which he repeated today, was that a three-year span for this legislation would make it easier to achieve agreement on a voluntary policy. Some of us, on both sides of the House, who regard a statutory policy as being objectionable, believe a voluntary policy to be even more so. Therefore, for those of us who take that view, this argument does not carry a great deal of weight.

I found rather fascinating the third argument which my right hon. Friend advanced in Committee. He did not advance it today. He argued that by having a three-year period for the legislation the Government would be absolved from the temptation to misbehave in an electoral period. I am not totally convinced of the power of this argument. If Governments are in a mood to misbehave in a pre-electoral period, they will misbehave, and the span of the legislation which they have put through will have very little to do with that propensity to misbehave.

Therefore, I was not totally convinced by the arguments of my right hon. Friend the Secretary of State in Committee. However, since then a number of things have changed. First, we have the draft code before us. Secondly, my right hon. Friend has provided for a considerably increased degree of accountability, and he has agreed to limit the action of the Bill to a maximum period of three years. It is only reasonable that we should pay tribute to the consideration which the Ministers gave to the views expressed in Committee. Also, it would perhaps not be remiss to congratulate my hon. Friends the Members for Oswestry and Cirencester and Tewkesbury on the powerful arguments which they advanced with a view to achieving this objective.

The third distinction which has arisen since the discussion in Committee is that substantial doubts have been thrown externally on one of the important strands of argument which ran through the dis- cussions in Committee, about the compatibility of the Bill with our obligations to the European Economic Community.

I find the three-year limit which has been introduced a little difficult to assess. My inclination is to feel that in matters of this kind three years is about as long as eternity. If this legislation remains on the Statute Book for three years without the Government being obliged to submit it for renewal by Order in Council subject to the affirmative procedure we are imposing what might be regarded as a life sentence for the free enterprise economy. Three years may not sound like a life sentence, but, in reality, if we retain the legislation for three years it will be very difficult to return to the sort of economy in which most of us on these benches believe and in which, I like to hope, many of my colleagues on the Government Front Bench, in their hearts, also continue to believe.

4.15 p.m.

The second argument on which I wish to touch is the question of the possibility of conflict between this legislation and our obligations under the European Economic Community. If we authorise the Government to maintain the legislation for three years, and if it is in conflict with our EEC obligations, we are putting ourselves and the Government in a very unfortunate and undesirable predicament. I read very carefully what my hon. Friend the Chief Secretary said in columns 734–6 and 760 of the OFFICIAL REPORT of the Committee proceedings when Clause 12 was being discussed. The crucial point which he made was the assurance which he gave that The Government's intention…is that during phase 2 we should comply with our Community obligations, that we should not take the power to override them."—[OFFICIAL REPORT, Standing Committee H, 15th February 1973, c. 736.] He insisted that the Community understood what was happening.

That was on 15th February. On 16th February an interesting article appeared in the Financial Times by Mr. A. H. Hermann headed UK Anti-inflation laws may conflict with EEC rules". It stated: The U.K. anti-inflation legislation might bring large companies who can be said to be in a market dominating position into conflict with EEC competition rules. At least one large group will be advised by its legal staff that the anti-inflation Bill can never become fully applicable law in as far as it would run contrary to directly applicable provisions of the Treaty of Rome. The discussion in Committee was concentrated on the essential issue of steel pricing, but a wider issue was introduced by the article in the Financial Times—a newspaper whose comments, as my right hon. and hon. Friends will agree, have to be taken with a certain degree of seriousness.

In Committee, the Chief Secretary drew attention to the letter which the Commission was reported to have written to the British Government and the Press statement it made about it. The important phrase in that statement, which my hon. Friend quoted in Committee, was: It"— that is, the Commission— has, however, reminded the British Government that Government measures to control prices set by coal and steel producers are incompatible with certain obligations under the Treaty".—[OFFICIAL REPORT, Standing Committee H, 15th February 1973; c. 760.] The Chief Secretary's argument was, "Yes, but these controls are for phase 1 only and thereafter ECS steel and coal recover their freedom".

I hope that my colleagues have studied carefully an article in today's Financial Times—I apologise for quoting the newspaper so frequently, but I think we all read it from time to time—which stated: In theory, the steel industry will move away from Government control on prices from May 1. It hopes to persuade the Government to accept a 10 per cent. price rise, although customer industries believe that not much more than 6 per cent. will be allowed in view of the Government's counter-inflationary policy'. Is that in conformity with the European Coal and Steel Community Treaty? I doubt it very much. I do not believe that we have any serious intention of releasing the British Steel Corporation from the steel bands of Government interfere lee and control over their pricing policies in phase 2. If we have not, the patience which the European Economic Community has shown with our behaviour to date will soon begin to wear thin.

Photo of Mr Tony Benn Mr Tony Benn , Bristol South East

The hon. Member will have noticed that Clause 8 gives the Government power to override the European Communities Act, for that clause says specifically that any provision of any Act, whether passed before this Act or later —and that includes the European Communities Act— …shall…have effect subject to such exceptions, modifications or adaptations as may be specified … That means any action taken or to be taken by the Government. Therefore, were there to be a conflict of policy, Clause 8 would take precedence over our obligations under the European Community.

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

This has been discussed on numerous occasions and was discussed in Committee. It is a rather deep legal point. Being no lawyer myself I am hesitant to get involved in it, but in any case I do not think it is strictly germane to my argument because my basic argument is that, not merely in the steel sector but in other respects, if we give the Government this authority for three years, then long before those three years are up we shall be in dead trouble with the European Community. I do not take the same view as the right hon. Member for Bristol, South-East on the question of the European Community, nor do I take the same view as my hon. Friend the Member for Oswestry. One of the reasons why for years I have been an enthusiastic supporter of British entry into the European Community is precisely that I have hoped and believed that once we were inside the European Community we would escape the temptation to succumb to the pipe dreams of people like Sir Frank Figgures and Sir William Armstrong and Mr. Campbell Adamson. What worries me about what we are doing at the moment is that we appear to be giving greater priority to the Figgures and Armstrongs and Campbell Adamsons than we are prepared to give to our obligations under the European Community Treaty.

After all, I put it to my right hon. Friend the Secretary of State, one of the prime objectives and purposes of this Government has been to bring this country into its rightful place in an enlarged European Community. What folly it would be if we passed legislation this afternoon which would lead us into an intolerable conflict with the Community of which we are a new member. This, I submit, is a weighty consideration which we cannot afford to ignore, because if we give the Government three years today then, long before those three years have been concluded, we shall be facing this dilemma in a very acute form, and this in itself is to me a major argument for deep concern about the desirability of giving my right hon. Friend the amendment which he seeks.

I turn to one more consideration. We now know, as I said, that a further distinction between our debate today and our debate in Committee is that we now have the draft code. Let us hope and pray that it is a draft, because I think we have seen already that it is less than word perfect in one or two important respects. We have this remarkable document, and my right hon. Friend told us today that stage 3 will be accompanied by a new code. The right hon. Member for Bristol, South-East pointed out that the date of stage 3 is as yet unknown. I cannot help wondering whether perhaps we may not find stage 3 is a little late coming this year. I cannot help wondering whether we may conceivably find that the progress which my right hon. Friends hope to make with stage 2 is somewhat long drawn out, and as a result stage 3 gets held back.

The important point for us to consider this afternoon is that if we give my right hon. Friend his substantive amendment on this clause we are in principle allocating to my right hon. Friend the right to operate on this document—we have no certainty that this document will be amended or substantially changed—for three years. I hope that my hon. and right hon. Friends will give very serious consideration to what that implies. After all, this document is one which has even made the CBI turn. I am not sure one need say very much more about it than that.

I come now to what is to me the most important argument against the course which my right hon. Friend has suggested and also the most important consideration which we have to bear in mind in making up our minds how we are to deal with this group of amendments. My right hon. Friend said that for the House to require the Government to seek renewal of this legislation on a yearly basis by Order in Council subject to the affirmative procedure would demonstrate, on the part of this side of the House at any rate, a lack of will. What worries me is that, as I have explained at earlier stages of our discussions on this Bill, I do not accept—I have never accepted; I do not think I can accept—that a statutory control of prices and incomes as such is the answer to inflation.

I can accept it on the assumption that it may have some impact in abating inflationary expectations, and thereby make it less painful for the Government to tackle inflation at source by abatement of their own expenditure policy and curtailment of their own deficit financing. But—and this is the crucial point for me—I put it to my right hon. Friend that to date we have not had very much in the way of clear evidence that the Government are indeed determined to tackle inflation at source. The cutting out of the hover train hardly adds up to a massive attack on public expenditure, particularly when it follows by only one week the decision to proceed with Maplin and the decision to provide another £350 million for Concorde, and so on.

We have very little evidence of a determined assault upon what to many of us is the fundamental generator of inflation at the present time; and what concerns me most of all is that if today we give my right hon. Friends the three-year provision of these powers, then these powers, which should be and can only be a top dressing added to the application of counter-inflation policies, will be taken as a substitute for those policies themselves; we shall find ourselves in a position where the cosmetics have become the substance.

If we are to rely exclusively on this legislation I do not believe we shall see much progress in the battle with inflation, and, indeed, it would appear to me that if that is to be the course we are to pursue it can only be said that we have no serious intention of abating inflation but only an intention to abate anxieties about it. Of course, we cannot abate those anxieties very long so long as inflation itself persists.

It may be that my anxieties are unfounded; it may be that my right hon. Friend the Chancellor of the Exchequer next week and my right hon. Friends in the months ahead will demonstrate determination to get on top of the rising wave of public expenditure and will demonstrate determination to bring back to tolerable proportions the enormous public sector borrowing which faces us in the year ahead. If so, this House will have no hesitation in giving to them the renewal of this legislation in a year's time when they come to ask for it. If, on the other hand, the anxieties which I have sought to express turn out—alas—to be well founded, then I do not imagine that my right hon. Friend would be seeking a renewal of this legislation in a year's time anyway.

4.30 p.m.

Photo of Mr Robert Sheldon Mr Robert Sheldon , Ashton-under-Lyne

In one respect I agree with the hon. Member for South Angus (Mr. Bruce-Gardyne). He got the equation right. One year equals temporary, three years equals permanent. In so far as the amendment deals with that aspect of the legislation, it is crucial to the future involvement of Government. It is clear that one cannot have a policy of intervention on prices and on the basic fundamentals with which industry is concerned which goes on for three years without the issue of permanent control being raised during that period. Because of that, it is not the incomes policy that is the important part of the legislation. I fully understand the pernicious nature of the legislation, which my hon. Friends have rightly opposed, but we have been through it before and we may perhaps go through it again without achieving a resolution of the problem. The innovation in this legislation is the likelihood of permanent control, permanent involvement by the Government in prices and perhaps in the most intimate areas of industry.

One problem that the Opposition have had to face following the nationalisation measures of the 1945 to 1951 Labour Government is to find ways of continuing the progress that was initiated in those years. It is no secret that many proposals have been put forward from time to time. Sometimes those proposals lacked a credible coherent intellectual base. They contained no basis of argument that certain industries should be nationalised for certain reasons. But that was not always so.

The industries that were taken into public ownership between 1945 and 1951 were not taken haphazardly. In the words of Nye Bevan, they formed the commanding heights of the economy. They were the basic industries on which others depended—steel and coal, and the transport industries—the railways, roads and, to a limited extent, aircraft. They were the industries—coal, gas and electricity—which provided the energy requirements for other industry. That was a coherent policy that found ready implementation.

Subsequently, people have looked for a coherent attitude to take in assessing the industries in which the Government should become involved in a greater degree, either through take-over or through more intimate forms of control. Attempts to find such a coherent attitude have always been unsuccessful.

In the legislation before us the Government are selecting the areas in which Government involvement will increase. The criteria for that level of involvement—or by a future Labour Government conceivably nationalisation or public ownership—are laid down both in the Bill and in the draft code. There are certain industries which because of their size—category I—are considered to be sufficiently important to require certain Government intervention.

It would be foolish to assume that at the end of three years a Government who are in favour of greater intervention will readily dismantle controls once they are in working order. I draw an analogy between the war-time controls, which enabled nationalisation to be put into effect with ease, and these controls brought in by a Conservative Government which will force private industry into a closer relationship with the Government.

It has been said that private industry can be left on its own if it delivers the goods. But when the Government involve themselves in prices, profitability and the crucial decisions taken within industry, how much remains for industry itself to operate in the interest of the country? The whole spur of private industry is its profitability, leading to investment, which past socialist and Labour Governments have tended to accept as of special value. Once that profitability is taken away, once the element of competition that might benefit the country are reduced, what is left will not remain in private hands for all time.

By introducing the code the Government will bluff small industry. The Government can control large industry, but the effect of the code on small industry is a nonsense and everyone knows it. It is an attempt to import from the United States a system that worked quite well there because it was a novelty. The United States had not been round the treadmill of prices and incomes, as we have time and again. The policy had a drastic effect. It took the Americans a year or two to respond, by which time they were able to reduce the inflationary expectations. No one can conceivably say that that is so in Britain today. We are punch drunk with prices and incomes policies. This is just another one which we all know will fail. The only question is, what comes after it?

Photo of Mr Jock Bruce-Gardyne Mr Jock Bruce-Gardyne , South Angus

The hon. Gentleman said that the Government can control large firms but that the idea of controlling small firms is nonsense. I take it that he means that there will be no control over small firms. It is not inconceivable that the situation will be far more painful for small firms. Many large firms controlled by the Government will be the price leaders in their industries and will be able to operate on a much narrower margin than will the small firms which are not controlled. Yet in practice the small firms will have to abide by the prices dictated by the Government through the large firms.

Photo of Mr Robert Sheldon Mr Robert Sheldon , Ashton-under-Lyne

The point was put very well yesterday by my hon. Friend the Member for Birmingham, All Saints (Mr. Brian Walden) when he spoke of certain nonsensical attitudes in the draft code and pointed out its uselessness. The danger will occur when some over-officious person in the agency tries to assert an authority which he is not entitled to assert. As a result there will be bitterness rather than anything which is beneficial either to the present policy or to the country.

The implications of the Government's certain failure in this area over the next few years will give way to a much greater control of industry than any we have known before. What will happen is that civil servants do not apply themselves to problems and, having failed, leave the matter there. They turn to new methods for solution.

Anybody who looks at these new methods must appreciate that we shall see more rather than less Government intervention as the Government try to make up what has been lost in a policy which surely will fail. In three years' time we shall have a very different prices and incomes policy from that which we see today. There will be certain areas which the new Labour Government will want to reject out of hand and there will be other areas which they will want to take over and develop. If the present Government insist on giving us a faulty tool, they will not be surprised if the next Government improve it and use it.

Photo of Mr Peter Hordern Mr Peter Hordern , Horsham

The hon. Member for Ashton-under-Lyne (Mr. Sheldon) is the Chairman of the General Sub-Committee of the Committee on Expenditure whose report more closely reveals the real reason for inflation than does the Bill which we are discussing today. I thought that some of his remarks could well have been made from the Conservative benches, but I will embarrass him no further on that subject.

I was not a member of the Standing Committee that considered this Bill, but I have had the privilege of reading the debates on Clause 4. It struck me that the arguments were very much concerned with the position of Parliament and the constitutional position, which was referred to earlier in this debate by the right hon. Member for Bristol, South-East (Mr. Benn). I do not wish to add to those arguments, although I hold them to be perfectly true. What I wish to say relates to the three-year period proposed in the amendment, compared with the one year proposed by my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne), in the context of the value of this Bill at all. It seems to me that although it is called the Counter-Inflation Bill, it has a limited value in terms of inflation but a great deal of importance in its concern with industry and the economy.

One of the points put forward by my right hon. Friend the Secretary of State for Employment was that the statutory part of the proposal could be suspended at any time and a voluntary provision could be brought in. I do not know what the circumstances will be for the introduction of this voluntary agreement. I hope that first there will be clear evidence that inflation has been completely controlled and mastered before any voluntary arrangements are brought in.

There has been a great deal of experience in the last few years of attempts at voluntary agreements between the Government and the TUC and CBI. We have had what have been called "solemn and binding" agreements, we have had treaties drawn up at Lancaster House and all the rest of it. But in my opinion these voluntary arrangements are of no purpose if they seek to control inflation unless other means are provided for that control—in which case the voluntary arrangement will hardly be necessary.

The problem of controlling inflation is a universal one in every free country in the world. Various countries from time to time have applied themselves to a prices and incomes control policy, sometimes voluntary and sometimes statutory. I do not know why we in this country believe that we are unique in facing this problem, but this is how we seem to regard ourselves when seeking to deal with it. I believe that we are the only country that places such importance on control of prices and incomes by legislative means and such little importance on proper monetary and fiscal control.

4.45 p.m.

It must be observed that the countries which have placed less reliance on prices and incomes control, for example West Germany, which has yet to produce any form of prices and incomes control, over a long period of years have had the best record in containing inflation. It is also noticeable that the most recent country to introduce prices and incomes control, the United States, has discarded controls at the earliest opportunity. It is also evident that the reason the United States was able to do so was that it had a close control of money supply in the United States economy and has had, if not an absolute achievement, certainly the intention of controlling the rate of public expenditure.

President Nixon in his New Year message referred to this topic and said that it was essential that public expenditure should be kept within the growth of GNP. Our recent debate on public expenditure showed that there is no such intention in this country in the forseeable future. Whether we look at the Dutch economy with their efforts at controlling prices and incomes by legislative action and their continued failure to control inflation, or whether we look at the French economy where there has been a similar experience, we can only arrive at the conclusion that to seek to control the system by statutory action and by legislative means is only to invite disaster.

On the question whether this should be a three-year or one-year programme, it is important to examine what is in the Green Paper because of its effects on the economy. This is not only a question whether the provisions in that document will have any effect in controlling inflation but a question of the real damage that can be caused by sticking to the prices and pay provisions.

Paragraph 36 of the Green Paper says: In addition prices should be reduced where other factors (such as an increase in the volume of sales since the last price increase) lead to a significant fall in allowable costs per unit". That can mean only that if a company by being efficient increases its productivity by better methods and has been able to attract a higher volume of sales, it will have to reduce its prices. That is the effect of the proposition contained in paragraph 36. But a further paragraph appears to state that it is perfectly all right if that company wishes to say to the Prices Commission that some of its profits could be devoted to investment.

I hope the House recognises the distinction to be drawn between profits and investment as if each were entirely unrelated to the other. In the one case profits, if gained by whatever efficient means, are something of a dubious kind to be returned to the Government or to whoever they have to be returned to in the form of lower prices. The other is that investment is highly desirable and socially good and should be undertaken no matter what little prospect of profit there is before it. That is the proposition, and I must say that it is an extraordinary notion. I hope that my right hon. Friend will be able to put my fears at rest. To separate profit from investment and the pursuit of profit out of investment seems to be an extraordinary move and it is one which I hope will not last.

The level of investment generally has been very low in this country for many years past. But so also has the level of company profits for many years past. That is the reason for the low level of investment. My right hon. Friend the Secretary of State for Trade and Industry is very conscious of this and he is doing his best, quite rightly, to revive confidence in industry. Sometimes I feel that he is striving to plumb the commanding depths of the economy and that the sectors which he feels worthy of support are not those which some of us or the market would feel worthy of support. But at least it appears a genuine effort to revive investment.

However, my right hon. Friend's efforts like many others in other Government Departments are all very expensive. This is the point which the hon. Member for Ashton-under-Lyne mentioned in his excellent report—the very large and substantial increase in public expenditure occasioned just over a year ago, with which one must put the large deficit which will be revealed in next week's Budget and the borrowing requirement which will become necessary. It is that borrowing requirement and the difficulty of fulfilling it which are the real causes and will continue to be the real causes of inflation for the next year or two.

If we are talking about counter-inflation, the solution now is in reducing the growth in public expenditure. It does not lie in trying to impose statutory control over the conduct of business and industry in the way that this consultative paper does.

I hope that the one-year argument as compared with the three-year argument will not prove necessary. I like to be optimistic about these matters. I like to feel that as events unfold we shall get better control of public expenditure, and it will not be for the want of trying from some of my right hon. and hon. Friends and myself if that is not the case. If that is so and the borrowing requirement is not so large and if proper monetary policy is carried through, of which there is a possibility, the necessity for statutory prices and incomes policies and voluntary prices and incomes policies will disappear. But it may be some time in coming. It may even need more than one year for this situation to arise. It may even need three years. Provided that the Government follow proper measures to reduce inflation and do not depend upon this absurd document to do so, I shall be happy to support them.

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

If I were a leading capitalist in this country I should undoubtedly be in favour of one year as against three years and even more in favour of no such policy at all.

We are in a remarkable situation. The Green Paper says: Where an enterprise is making a loss, it may increase prices to cover its costs. It goes on to prices and profit margins, saying: Prices should be determined so as to secure that net profit margins do not exceed the average level of the best two of the last five years.… We all know that profits in this country have been falling for some time. The explanation for it which I put forward is not the same as that of some right hon. and hon. Gentlemen on the Government benches. But if I had been in a situation where my rate of profit was falling and I was then told that I had to determine the level on the basis of the best two of the last five years, I should not be very enthusiastic about this code.

We are not debating the code at the moment. That will come on Monday. But it has a certain relevance to this debate. We know that a falling rate of profit leads to a falling rate of investment. But from where are those who are in capitalist industry to get their investment?

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

Exactly. But there are problems about that which I shall not dwell on at this stage. I may have a chance to do so on Monday.

This Government have got themselves into a dilemma. The prices and incomes policy of the Labour Government, despite all the arguments about helping low-paid workers and so on, was designed only to hold down wages. That is why some Labour Members had the traumatic experience of sitting on the Government benches and arguing day and night about the various orders coming before the House. Prices were not held down.

This Government want to hold down wages. But they know, because of what went on during the time of the Labour Government, that no one has any confidence that wages will be held down and that prices will not go up. For that reason they feel that they have to do something about prices, and by doing something in these terms they are hitting at the very heart of the nature of the capitalist society in which we live——

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

One does not have to be a genius to understand that. One has only to have left school at 14, as I did. It is understood very easily. But that is the problem, and it is here that the Government are getting themselves into difficulty.

I do not believe that we are living in any post-capitalist situation. I have heard these arguments before. I remember a book written by one of my right hon. Friends called, "The Future of Socialism", in which he argued that we were not living in a capitalist society any more and that we were in a post-capitalist society. That is a lot of rubbish.

The argument is about uncontrolled capitalism or controlled capitalism——

Photo of Mr Tony Benn Mr Tony Benn , Bristol South East

My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) did not serve on the Standing Committee. I was quoting the hon. Member for Cornwall, North (Mr. Pardoe), who described himself as a post-capitalist. I share my hon. Friend's view.

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

I apologise to my right hon. Friend. I misunderstood his point.

Photo of Mr John Pardoe Mr John Pardoe , North Cornwall

It is true—and it is becoming a great phrase which is regularly thrown round in this House—that I described the Liberal Party as "the post-capitalist party". I did not suggest that we were living in a post-capitalist society. If we were, we might be in a Liberal society, and certainly we are not there yet.

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

I do not know what a Liberal society is, other than a capitalist society writ large. However, I do not feel that we ought to get involved in an argument about what a Liberal society is.

The Government are in a dilemma, as would be any other Government who succeeded them. The dilemma is that in order to appear to be fair, they must control wages, which they intend to do anyway, and at the same time they must endeavour to control prices. That is the heart of the problem. That is an attempt to control the capitalist system. To follow that road is to end up with continuous legislation of a repressive kind. Hon. Gentlemen opposite do not want that, and nor do I. But nor do I want a capitalist society, and that is the fundamental divide between us.

5.0 p.m.

Where exactly are we going? That is the question that we have to ask ourselves. We have been all through this before. My hon. Friend is right. It is like a recurring nightmare. It goes on and on. There is a break for about a year, and then the whole process starts up again and gets worse. That is the trouble. It is a terrible situation for us in the House, and what the Government are proposing will not solve any of the basic problems.

I warn hon. Gentlemen opposite that if they follow this line of controlling prices, controlling 100 companies, getting information, and so on, it will be that much easier for us eventually to take over these companies. What hon. Gentlemen opposite have to ask themselves is where all this is going to end. If there is controlled capitalism to begin with, the next stage is the elimination of capital, with a controlled economy on the basis of a Socialist plan. That is what I want, but I want it done democratically. Into such a plan I should introduce democratic management and control, which is what we are not getting here.

Hon. Gentlemen opposite should be prepared today, like some of us were on earlier occasions, to say to their right hon. Friends on the Front Bench that this time they will not go along with them that they are not going to support them. We had to say that. It took a lot of courage. It is not easy for someone to get up and tell his own side that he is not prepared to go along with what it is doing. Such action is always misrepresented in the country. People who take that line are called a bunch of loony rebels. But if one feels strongly about an issue one has to say so, and I hope that this proposal to reverse a democratically arrived at decision of the Committee will be defeated this afternoon.

Photo of Mr Robert Cant Mr Robert Cant , Stoke-on-Trent Central

In the Lobby there are a number of members of the Press who have a memorandum giving information about the agreement reached between the Labour Party and the TUC. The embargo is lifted at five o'clock. Can my hon. Friend say whether there is anything in that document that is likely to help us?

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

With respect to my hon. Friend, I was not a member of the committee which drew up the document and I am as anxious to read it as he is. I have seen only the brief document given to the Press a few weeks ago. If Members of the Liberal Party have received this memorandum before I have been given it I shall be very annoyed. I do not know the full details. All I know is that a future Labour Government must have the full support and agreement of the trade union movement. That is the lesson that we learned during our six years in office. The document sets out the alternative economic strategy that will be required to deal with the problems of inflation and advance us towards a Socialist society, but that has nothing to do with this amendment.

Sooner or later there will be a vote on the Government's proposal. I hope that as a result of that vote the position will be as it is set out in the Bill now. If we have this provision for one year, we can have another look at the situation at the end of that time and if necessary extend the period for a further year. At each stage we can decide what we want to do. We shall not be able to do that if we are saddled with this policy for three years.

Every Government who begin something on a temporary basis say that it is to run for only a short period, for two or three years, but we then find that the temporary period becomes permanent and we are saddled with the provisions for ever more. That is the situation that we have to face, and that is why I hope the Government will be defeated this afternoon.

Photo of Mr Hugh Fraser Mr Hugh Fraser , Stafford and Stone

It falls to me on this occasion—something which does not happen very often—to congratulate the hon. Member for Liverpool, Walton (Mr. Heffer) most warmly. His imperishable words should be inscribed in some Conservative Central Office pamphlet. Seldom has there been a better analysis of the problems facing the House than that given by the hon. Gentleman.

To his words should be added a few from The Times this morning, where the right hon. Member for Coventry, East (Mr. Crossman) described the great advantages which could lie in store for some future Labour Government in having readily to hand the necessary instruments for carrying out massive nationalisation. I hope that all those present from the Press will take these remarks down and rush them off in a cleft stick, or with a flaming torch, to Smith Square.

As the hon. Member for Walton said, there is nothing more certain in legislation than that the provisional becomes the permanent. There is a French phrase, with which I shall not weary the House, which bears that out precisely. The so-called provisional becomes permanent. We see the provisional steel houses put up 30 years ago mucking up the country, but still being inhabited by unfortunate people. The so called provisional rapidly becomes permanent.

We are dealing with what is called emergency legislation. I gave the hon. Member for Walton my attention, and perhaps I may have his now. I see a great deal of economic confusion, not only in the House but in the Treasury itself, about what should be done, Occasionally, the best guidelines for Parliament are the guidelines of what is in the democratic interest without bringing in special pleading, one way or another, for one's pet solution to the financial problems.

There are still some points that are worth making about economic theory. To imagine for a moment that the cure to inflation is enshrined in cost-push inflation engendered by higher prices or higher costs is not true. There are far wider and more fundamental matters involved, including the money supply, the budgetary deficit, and many other matters which are not, and cannot be, dealt with in these papers.

There is a grave danger that if we use these instruments as the main and central point of Conservative policy, round them will be built a whole series of economic myths which will become central to the whole of the fiscal and budgetary policy of the Government, and that would be extremely dangerous.

The Government have many attributes, but one of their attributes is not merely inflexibility but, when certain situations have been achieved, of total stubbornness and refusal to move. There is a grave danger that, having adopted this policy, they will think it right to stick to it, whether it is working or not.

I back the idea of this policy for a limited period before it is reviewed by the House, but that period should be precisely one year—and it is on that one year that we shall vote tonight. My right hon. Friend has made some concessions for which I am sure the House is grateful. For instance, the House will be permitted to review annually the workings of the Price Commission and the Pay Board. The Italian Grand Council of Corporations was permitted annually to review the detailed reports of some of its concomitant Darts but never to review general Government policy. It is precisely this right, once a year, on which the House must insist.

Some confusion exists, which one sees in Government proposals at the moment, about fighting inflation when we have a Budget deficit—that is a more accurate description than "net borrowing requirement"—running into several thousands of millions of pounds. There is also VAT and the new proposals on company taxation, to encourage companies, quite rightly, to distribute more. All these things are moving us into an era of some economic confusion. If any hon. Members think that they know all the answers to these problems, they should be immediately promoted to another place.

We blunder on with a worsening economic situation. In these circumstances, it is the duty of Members of Parliament to see that their rôle is pro- perly fulfilled. That rôle is to control the executive and study emergency legislation once a year.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

The major point that the Government have to answer is the fact that, in Committee, all their arguments were thoroughly defeated by hon. Members on both sides on the questions of parliamentary accountability and the length of time that this legislation should be on the statute book before it is reviewed.

The central argument, about parliamentary accountability is sharpened by the loss of sovereignty that we have suffered in recent times, not least in regard to the EEC. It would be a very weak Parliament that allowed other measures to be taken to remove further powers from this House. I was an opponent of the Labour Government's prices and incomes policy, but at least that policy was accountable to Parliament. Hon Members opposite, especially the present Secretary of State for Employment, deployed their arguments and talents in opposing orders on this subject between 1966 and 1970. They could do that because the legislation provided for parliamentary accountability and for those orders to be prayed against.

The Pay Board will be able to operate independently, outside the House, in conclave, not answerable to the publicly-elected representatives, except perhaps when we have an annual omnibus report on which we shall be able to raise all sorts of conflicting issues. What we would prefer to do is deal with specific issues as they arise—the restriction of a firm's price increase or the holding up of a wage claim. In a democracy, we should be able to argue these issues, and if necessary vote on them.

5.15 p.m.

My experience of voting is that one does not often win, but after a tough debate, when the pressure has been put on the Government, the Government often respond. If the only pressure comes from outside, from a corporate body, we have no means of influencing the Government. So the restriction to one year is an important democratic safeguard. The Government are flying in the face of majority opinion on this matter.

After one year, if they want to renew the legislation, they will be able to come forward in a proper parliamentary way and seek to convince the House that a year's extension is necessary. The amendment in the Secretary of State's name means that, for three years, the Government will be completely free from scrutiny.

Three years does not sound a long time, but I remember a right hon. Friend of mine saying that seven days was a long time in politics. Three years is a considerable time in politics, particularly if we consider the change which has taken place, in less than three years, in this Government's policies. God knows what they will be like in three more years. At least an election will intervene.

This is a point that I feel passionately about. I believe in parliamentary accountability. I do not care whether we are talking about publicly-owned industries or anything else. We have a right to debate such matters in this Chamber. The hon. Member for South Angus (Mr. Bruce-Gardyne) mentioned the distinguished gentlemen who will be appointed to head these boards, and one thinks also of people like the General Secretary of the TUC. I do not denigrate these people, who are leading people in our society, but they are not elected representatives of the people, directly responsible and answerable to this Parliament.

A three-year period would represent a basic erosion in this system. I only hope that the House has the courage tonight to maintain the position that we insisted upon in Committee.

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

So far, from back benchers on both sides I have not heard one word with which I would disagree. It is extraordinary that unanimity can come upon people who hold such disparate views on the substance of a prices and incomes policy or upon economic theory itself. But what we are talking about is parliamentary accountability, and that is what I want to say something about.

There are two separate points. The first is the duration of a prices and incomes policy and the second is whether the Government should come back to Parliament for annual powers to carry on. Although those issues are closely linked, they are in fact different. On the question of duration, I for one am extremely grateful and very much impressed by the Government's listening to our pleas in Committee to put a time limit of three years on the whole of this operation. This must be registered as a major improvement and it would be quite wrong and churlish of me not to acknowledge that.

I must also tell the House, however, that in my opinion three years is a pipe dream. The real world will intervene before this summer's leaves have left the trees, perhaps even before they have grown. When the world of business, of economics and of economic crises takes over again as soon as the Bill has left this House, the idea that we even spent time debating whether the duration of the operation should be three years or one year will seem totally unrealistic.

One has only to study the code and to look at the effect upon investment of the prices section of the code. One has already heard what leading industrialists say about it. One has heard the opinions of those who are in business and concerned with investment of the effects that this legislation will have on investment. Yet it is one of the Government's main worries and priorities to raise the level of investment.

One remembers that in a capitalist economy, about which the hon. Member for Ashton-under-Lyne (Mr. Sheldon) so rightly talked, it is the free decisions to invest, to manufacture goods and to sell them, and to offer one's labour for reward which produce the dynamics in society. If people think that it is not worth their while to invest, to produce and to labour, they cease to do those things. That leads to an immediate requirement for more Draconian and stringent powers and interventions than even hon. Members on the Opposition benches of the most Leftist persuasion could ask for. Perhaps the House will listen to one short sentence from Adam Smith. I believe that is as true today as it was true then.

It is not from the benevolence of the butcher, the baker, or the brewer, that we expect our dinner, but from their regard to their own self-interest. That is the force which will overtake this policy.

On the wages side, it may be that the policy will last even less long. The Government are already invoking stage 3 to solve particular problems even before stage 1 has been completed. The pressures of strikes and industrial disputes which will build up—they are building up already—will force the flexibility of the system to be used before the Bill is even law. It will not be long before it is discredited.

I turn to the question of the annual renewal of the powers. Those of us who believe that the powers should be renewed annually have argued that it is not very much to ask the Government to come back to Parliament for an hour and a half for an affirmative order. If the present Parliament is to last for another three years, that would be twice. There would be two occasions when the Government would come back to Parliament for a debate lasting an hour and a half. We do not think that that is asking a great lot.

There are those outside Parliament, however, who are cynics of this House, who say that it is a myth that an hour and a half of debate twice a year in some curious way will change the course of policy or the control of the executive. They say that we are in any case like a lot of sheep when we troop through the Lobbies, and the fact that we have talked about the matter in a debate does not mean that that is real parliamentary control.

Then there is the Government's argument that they do not want to have a 1½-hour debate because it is possible that it would in some way show a weakness of resolve if they were to submit to it. I do not believe that the great trade union leaders are sitting quivering as to whether the amendment is accepted or whether they should proceed on their own to decide whether they will have the authority to push over this policy, or that the great companies are waiting to hear whether the clause is carried before deciding whether to comply with the price code.

This is not the real world. The people who make the decisions will not be influenced one way or the other by whether or not there is a debate after a year. But the Government are no doubt slightly frightened. The only precedent that has been mentioned has been that of the Rhodesia sanctions and their annual renewal. I detect each year, year after year, a slight quivering, a slight intensification of activity in the Whips' offices, as we near Christmas and the annual renewal of Rhodesia sanctions. But the occasion always passes by, and the Government get their way.

This argument is largely academic. It does not matter which amendment is accepted tonight. We kid ourselves if we believe that our scrutiny and control will in some way hold down a tyrannical Government. Nor do I believe that the Government's protestations that they do not sound convincing if they do not get their way mean anything. The debate has a deeper, more symbolic meaning. It is not about the arguments which have been put forward recently and just now by myself. The debate is about where this House stands in relation to the executive and to the growing and changing troubles in our economic system.

Parliament first sat with the sole object of controlling the executive and stopping it from raising too many taxes to pursue causes which the people did not want to back. But lately Parliament has sat to force the Government, on occasion after occasion, to spend more money, to give way on this, that and the other wage claim, to start new programmes to provide the facilities required in the constituency of each hon. Member. Parliamentary control was devised as a means of limiting the Government's expenditure but has now become the engine for increasing it. That is why we have the problem of inflation.

I shall not go over the arguments of my hon. Friend the Member for Horsham (Mr. Hordern) and my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser). They said that we are spending too much money. What lies at the back of this is that the Government have found that they are unable to resist the pressures of Parliament. If Parliament is in disrepute in the public eye, it is not because it is futile but because it has exerted its pressure over the years towards increasing the demands upon the public purse instead of limiting them.

There are those who say "Let us set up these agencies. Let us take the decisions away from Parliament and keep them for three years in these agencies, so that the agencies can be immune from political pressures and can control the economy in this way." That is the wrong way to defeat inflation. It is merely hiding from ourselves the reality of what is happening.

All hon. Members are guilty of having found it convenient to press the Government, and the Government are guilty of having always given way. Until we as a Parliament can command respect through our ability not just to press each good cause which arises, each industry in trouble, each constituency needing a new bypass and each wage claim, there will always be the tendency to try to take the power away from us, to give it to the agencies or, later still, to the CBI and the TUC in stage 3—if, God forbid, that should ever come to pass. That is why I believe that the debate is more deeply symbolic than just the mere question of parliamentary control.

5.30 p.m.

There is a stench of decay about the British economy, about our position as a great trading nation, as a nation earning its living in the world and as a nation which is growing and prospering. Until we face up to the realities which have caused us to slide into this position, all legislation will be of no avail and this Parliament itself will be of no avail. It is not only a question of the Parliament having control of the executive for one, three or any number of years; it is a question of Parliament taking an attitude to its responsibility so that when people entrust it to control the executive it does so in a way which will cure the problems of inflation instead of in a way which will increase them.

I for one am content to follow the majority on whether the term should be one or three years. But if my right hon. Friends on the Front Bench can learn anything from this little incident, let it be that, in the absence of Parliament controlling them properly, they have to control their own expenditure properly. There is no short cut to defeating inflation and the economic problems which bedevil us.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

I have been provoked to rise to my feet by the fact that so far there has been unanimity throughout the House among those who are opposed to a prices and incomes policy. I am an unrepentant supporter of it. This has been a most remarkable debate in that on the Labour side I have heard arguments urging the Government "Please do not proceed; you might make it easier for a Labour Government to take over industry"—which is passing strange to me.

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

If my right hon. Friend does not understand what we are saying, that is too bad.

Photo of Mr Frederick Lee Mr Frederick Lee , Newton

I understand what my hon. Friends are saying. I have been here a few years longer than my hon. Friend the Member for Liverpool, Walton (Mr. Heffer).

For those on the Government side of the House this may be a matter of conscience because every one of them came to the House avowing complete animosity to a statutory prices and incomes policy and now the Government, which consists of men who have done more to discredit a prices and incomes policy than any other men in Britain, are asking the House to reverse the position and to provide for a three-year period instead of a one-year term.

For my part I hope that the House will defeat the Government because I believe that the reformation that we have seen is not a sincere one. I believe, and here I agree with my hon. Friend the Member for Salford, West (Mr. Orme), that now to try to take out of the control of Parliament an annual scrutiny of where we are going on these vastly important issues is wrong. It robs Parliament of its role, function and purpose. The Labour Government never tried to do that. The Conservatives took full advantage of the fact that we asked Parliament's permission on every occasion when we laid an Order in Council. My feeling of sorrow about all this is that the true purpose of a prices and incomes policy has nothing to do with whether the period is three years or one year.

Recently the right hon. Member for Barnet (Mr. Maudling) was saying that we are suffering from a monopoly of trade union power. But the Government of which he was a member have been forced to bring into operation the family income supplement because the breadwinner in many families, who is engaged in full-time employment, cannot earn enough money to keep his family in existence. Is that proof of trade union monopoly power? I recall making a few comments at the Labour Party conference some years ago in which I pointed out that we had had 25 years of full employment—ideal conditions for the trade union negotiator. Everyone was worried sick about the millions of low-paid workers. Yet that is the system which everyone apparently wishes to perpetuate.

Of course, respective Governments have used a prices and incomes policy for the wrong purposes. It is not merely a creature for economic crises; whether the House examines it every three years or one, it can never be that. I understand that members of my party are committed to the idea of evolving a better and fuller life, and yet they really believe in the stupid nonsense of so-called free collective bargaining, which is using any economic power one has and God help the bloke who does not have it. That cannot evolve into something which is fuller and better. That is why I do not understand the speeches made by some of my hon. Friends. They, like me are rightly indignant at the conditions under which millions of people have to live, and like me they assert that they want a planned economy. But they want it in every other sense because they say "By God, you must not interfere with free collective bargaining"—the golden calf to which we must all bow down.

I remember the arguments between the TUC and the Government a few weeks ago about whether incomes took 61 per cent. or 62 per cent. of gross national product. Whichever of those figures it is, it is a large part of the economy which some of us want to plan. I am not calling anyone a 38 per cent. Socialist because he does not want to plan 62 per cent. of the economy. But we are in a situation in which a Tory Government are driven to contradict everything they have said or done for six or seven years and it does not become us to begin to try to get them out of that jam by saying "Do not proceed with this, because if you plan the economy you make it easier for us to take over industry."

I know that there is now a belief throughout the nation that a prices and incomes policy is synonymous with restriction. It is nothing of the sort, or it should not be if properly used. It should ensure that without resorting to the frauds of inflation we pay every man and woman the highest possible amount we can, consistent with carrying out other policies such as an increase in the social services, housing and all the other amenities which our economy should increase. These are the objectives of a properly constituted prices and incomes policy.

I listened to my hon. Friend the Member for Walton telling us about the failure of the Labour Government's policy because prices were going ahead of incomes. I challenge him to tell me of one period between 1966 and mid-1968 when incomes did not go ahead of prices. I know that we ratted on the policy in the end, not because it was an economic failure but because of the political consequences which the Conservatives forced upon us for purely party political reasons. They won the election, but then they faced precisely the same problems as we faced.

I agree with the hon. Member for Cirencester and Tewkesbury (Mr. Ridley) that it is wrong to try to get out of problems by emasculating the House of Commons, which is the body that should have the say-so. I think that there were 25 occasions on which the Conservative Opposition divided on Prayers. They had every right to do so. The principle behind what they were doing was wrong, because they had a purely party political purpose, but we were right to give them the opportunity.

The Government, having discredited the whole conception of an incomes policy, have been driven to use it as an emergency measure in a crisis. For them then to try to rob the House of the opportunity to criticise them on it is the last refuge of cowardice.

Photo of Mr Robin Turton Mr Robin Turton , Thirsk and Malton

The right hon. Member for Newton (Mr. Frederick Lee) is a strong and compelling advocate of the principle of the Bill, but he overlooks the Bill's origin. It was because the Government failed to obtain agreement with the trade unions on a voluntary scheme that it was necessary to have this Bill of an emergency character.

I want to speak for just a few minutes on the parliamentary angle. After the last war, in 1945, the then Labour Government introduced the Supplies and Services (Transitional Powers) Bill, giving emergency control of the economy, with a time limit of five years. My party bitterly opposed that, because we said that emergency control of the economy could not be taken from the House for longer than one year. Eventually both sides agreed about that, and the emergency controls that remained were embodied in the Expiring Laws Continuance Bill.

What worries me about the present situation is that we are handing over the control of the economy, under my right hon. Friend's proposal, for a period outside the lifetime of this Parliament. That is contrary to everything my party has argued for and contrary to the practice and procedures of Parliament.

My right hon. Friend the Secretary of State is obviously trying to meet the point by his other amendments, but I ask him to try to deal with the problem of providing some form of annual renewal. I cannot see that the insertion of such a provision would cause any degree of uncertainty about the policy. With all the other examples that I could give, including the Supplies and Services Act and immigration controls, all for annual renewal, there was never any belief that the Government were hesitating. The reason for annual renewal was the question whether the need for the controls would last more than 12 months.

That is exactly the position now. We all support my right hon. Friend in the psychological drive to make the nation realise how essential a prices and incomes policy is, as the right hon. Member for Newton said. Our doubt arises because we wonder whether in two years or one year we may have moved on to stage 3 and may well want different legislation for the House to consider.

My right hon. Friend would not lose any of the support of the country for his policy by making an annual review to Parliament, within the three years' basis in Part II. If he does not, I do not think that he can find any precedent, outside wartime or the immediate post-war period, for the House handing over to the executive the control of the economy for such a long period.

5.45 p.m.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am in a quite peculiar situation, because I seem to be the first Conservative Member to speak in great support of the Government. I have often been described as a troublesome rebel. I only wish that all my hon. Friends who have spoken today had given me a little support in the past on some of the matters that I thought important for the country.

I shall not pursue that point. I intend just to say what I want to say, as I always try to do. We have not so much been discussing the Government's amendment today as slipping over into a discussion about matters that should be discussed at the time of the Budget.

I support the Government amendment, but I want also to say something about the speeches made by a number of my hon. Friends about Government expenditure. The time has come when my right hon. Friend the Chancellor of the Exchequer, whom I support generally in almost everything he does, might point out to all his hon. Friends that the vast bulk of Government expenditure, which I agree is very large, has been spent to make the country modern and competitive, which it will be, to support the policies that must be pursued in the world.

I am staggered that so many of my hon. Friends, who are just as entitled to their views as I am to mine, do not seem to have realised that a great deal of Government expenditure has been allocated entirely with the objective of making us an up-to-date Power. For example, when the massive capital sum to be spent on the steel industry was announced, my right hon. Friend the Secretary of State for Trade and Industry rightly said that when that money had been spent to modernise the industry we should have the most important steel-producing industry in the world. Most of my hon. Friends who have spoken today, who have been much more in support of the Government's theories, should have been delighted.

I find it odd that my hon. Friends should be so critical. Do they all now say that it was not right to build new hospitals, to build and modernise schools to increase educational opportunities and to do all the things that will help create a first-class future for our country?

Photo of Sir John Hall Sir John Hall , Wycombe

I think my hon. Friend will agree that my hon. Friends have shown some doubt about the wisdom of the extent of Government spending. They have not been questioning the objectives or the subjects of that spending. They have been pointing out that Government expenditure of that size is bound to add to the inflationary pressure. We must take that into account when deciding what our political programme will be.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

With great respect to my hon. Friend, I have listened carefully to all my hon. Friends' speeches today. Not one of them referred to inflationary expenditure. They were criticising general expenditure. Maybe they think that Government expenditure at the present level will add to the inflationary pressure, but they did not say so. If we modernise our steel industry to the extent that is proposed, that will be economically beneficial to the country. I cannot understand how anybody could argue that that is inflationary. If it is inflationary, it means that we cannot do anything to bring industry up to date and that we cannot spend money on industry or technological education. However, my hon. Friends have not argued that; they have simply said that the Government have been spending too much.

I am a fairly regular attender at this House and I notice that my hon. Friends, who are entitled to their views, do not go into the Lobby against the Government. If I feel strongly about a matter, I go into the Lobby against the Government. It seems that I am the only Member on the Government benches who supports the Government on this occasion. That causes me some pleasure and some amusement. I do not gain pleasure from hearing some of the comments that have been made, although most of them were not related to the amendments which we are discussing.

My hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) made a most interesting, comprehensive and reasonable speech. I have a limited knowledge of finance and of the problems of joining the EEC, although I am a great supporter of entry. However, I happen to have faith in what my Government are doing and how the Bill fits in with the policies which are essential now that we have become a member of the EEC.

I try not to talk about things that I do not think I know anything about. I am not sufficiently politically motivated to do so. Perhaps that sounds arrogant, but I do not mean to be arrogant. Whether people agree with me or not, I always feel when I am speaking that I am speaking about something of which I have some knowledge. I do not get myself involved in matters about which I have no knowledge to contribute. I accept exactly what the Government have said about the Bill in relation to Europe. I say that because I believe that it is necessary to say it.

I have noticed that most hon. Members who made the criticisms and who spoke in Committee and won the battle about whether there should be powers for three years or one year have not had the experience that I have had in representing an industrial area. I am sure that they are all financial wizards. I am sure that they all have very good brains and can argue about financial matters. However, different attitudes exist in an industrial area. I am devoted to most of my opponents in my part of the country and we have a very good relationship. However, most hon. Members who have spoken today have no idea about the problems of representing a highly industrial area. It is very much easier to put forward financial wizardry when one does not represent an industrial area. Probably in other types of area there are more people with financial knowledge who are not committed to trying to destroy the capitalist system and the present Government by strikes and demands for wages which would be almost impossible to accept.

My policy is simple. I want the Government to make as much money as they possibly can and then to divide it fairly. When that has been achieved, and when we are a modernised country—and I doubt whether so many of my hon. Friends who have spoken today will support me as much as I would wish—I shall want to see the money more evenly divided and given to people who have had much harder times in life than those experienced by most of my hon. Friends who have spoken today.

Photo of Mr Don Concannon Mr Don Concannon , Mansfield

Come over to this side of the House, love.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

When the time comes, and if I still happen to be here before the next General Election, I shall produce a list to the Treasury setting out what I want to see provided for the community. It will be better than the lists of my hon. Friends who have spoken today or the lists put forward by the Opposition. I know that they too have hearts, but sometimes their hearts do not agree with policies which will produce the money and satisfy people's hearts.

We have listened to all the blah about being able to have a debate in a year's time. If those hon. Members have taken an active interest in what has gone on recently they will realise that there are many people on the Labour benches as well as in the country who want to destroy not only the present Government but Parliament as well. I do not wish that to happen. I do not wish there to be a row every year in an attempt to reduce inflation. That would create a feeling among the public that they have no security. That would be an unwise position in which to place Parliament.

6.0 p.m.

I speak with the only thing I have to contribute to the debate—my experience in industrial constituencies—when I say that it is very much better to have the three-year period because then the general public, who are very interested in the Bill and support the Government wholeheartedly, will feel much more secure against the operations of militants. Even militants get bored, but if they have only a year in which to work they will not settle down but will continue to stir the pot, as they have been doing in the North East and in other industrial areas.

The country is longing for a time of peace during which we can get on top of inflation, as I am sure we will. The Government are right to stand by their three-year period. I would not give an inch of ground to any of the militants either in the House of Commons or in the country. I am speaking politically but from the country's point of view. If hon. Members opposite are on the Left wing of their party or on a more even keel it makes no difference to our personal relationships, but it makes a difference politically. In the same way, a lot of the Right-wingers on this side of the House are delightful people, but I would like them to come to the North East and stand up for their views in my area. I do not think they had penknives or even chairs thrown at them, as I have, or that anyone has tried to drown them, as happened to me on one occasion. If that had happened to them, they would really know what the militants within industry and the trade union movement mean.

I hope that the Government will get an overwhelming vote in support of the amendment. The members of the present Government have some first-class knowledge compared with members of the Government in office when I first entered the House of Commons. I believe that members of the present Government are modern, up-to-date and likeable and I propose to support them. But I shall not do so solely because I like them. I shall do so because I believe that, in the struggle to deal with inflation, we have to ensure that the militants in the trade unions do not continue to try to destroy our capitalist system by making the goods we sell after we have modernised industry too expensive for our customers overseas to buy.

I do not want to talk for very long. I could talk for a long time, but I shall not. I will only say that, having listened to the speeches of my hon. Friends, I think, "My goodness! I would like them all to come and struggle with the militant industrial workers."

Photo of Hon. Nicholas Ridley Hon. Nicholas Ridley , Cirencester and Tewkesbury

I came and spoke for my hon. Friend at the last election, and we had an audience of three between the two of us.

Photo of Miss Irene Ward Miss Irene Ward , Tynemouth

I am delighted that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) has intervened, because when he used to live in my part of the country he was very much on the Left—much more on the Left than I was. It was only when he went to Cirencester and Tewkesbury that he became such a Right-winger. I am sorry to have to say that it was very rude of people not to come and listen to him, but the fact is that they did not want to listen to him because they had made up their minds to vote for me and what he had to contribute would not have made any difference one way or the other. So all I have to say to him is that he would be better advised not to take me on, because I can deal with him.

We should support the Government's amendment in the interests of the vast majority of the people in the country, who are behind the Government, and in order to offset the many militants in the trade union movement in my part of the country. I get on well with the militants. They are awfully nice. [Laughter.] They are awfully nice. My hon. Friend the Member for Cirencester and Tewkesbury talked about heart, and his heart and blossom and things. The militants in my part of the country are awfully nice because, at the bottom of their hearts, I am glad to say, they know that when I think the Government are on the wrong track I jolly well say so.

Today I think that the Government are on the right track, and I am delighted that they are trying to restore the three-year period. I hope that they will have an overwhelming majority for doing so. I am delighted for once in a while to be on their side and—the only hon. Member on this side who has done so,—to have spoken in their favour.

Photo of Mr John Biffen Mr John Biffen , Oswestry

One of the sadnesses of the prospective Parliament is that we shall be deprived of the continuing, public and special relationship between my hon. Friends the Members for Tynemouth (Dame Irene Ward) and Cirencester and Tewkesbury (Mr. Ridley). I think that doubtless there is a very responsible case to be made for the views expressed by the Government today, and I hope that my hon. Friend the Member for Tynemouth will not take it amiss when I say that she, having said that she does not talk about subjects of which she has little or no knowledge, wisely desisted from arguing the merits of the amendment. Although the House enjoyed her closely-argued economic and social observations, they did not address themselves to what is essentially a constitutional issue. This is an issue of some substance and would have been seen as such in any previous Parliament. We would be betraying the trust and the traditions of this House if we shied away from the debate because of some of the present economic and social considerations referred to by my hon. Friend.

I thank my right hon. Friend the Secretary of State for the considerable altera- tions he proposes in Clause 4. The debate has proceeded in a much more relaxed and good-natured atmosphere than it did upstairs. The atmosphere in Committee was always good-natured but it took on a certain degree of high drama when we were discussing the amendments to make Part II of the Bill annually renewable. At that point it seemed to me that the whole policy was being invested with an unfairly important significance.

Last night the hon. Member for Plymouth, Sutton (Dr. David Owen) said it was a recurring characteristic of Governments to place on prices and incomes policies loads that they could not reasonably bear. After all, my right hon. Friend said in Committee: for it is the belief in our will to continue our policies that will make them acceptable. Referring to Parliament, he added: It has the responsibility of ensuring that continuation of the Government …"—[OFFICIAL REPORT, Standing Committee H, 13th February 1973; c. 627–8.] I think that we have moved measurably and sensibly away from those considerations. What we are now confronted with is a policy which proposes that Part II of the Bill shall last for three years and then end. It is almost as though my right hon. Friend, with suitable apologies to St. Augustine, has said "Lord, make me perfect within three years."

There is a respectable case to be made for the 12-month annual renewal period without the terminal point of three years because this introduces a degree of rigidity into the whole voluntary character of the policy which one would not have expected to come from the lips of Treasury spokesmen during the proceedings in Committee. The House must still return to the constitutional aspects of this debate because of the nature of the agencies.

Clause 6 says that The Price Commission shall exercise the powers conferred by this section in such a way as appears to them appropriate". If the Committee had had before it the consultative document dealing with the guidance that is likely to be given to the agencies, I believe that the wide-ranging power conferred upon this somewhat extra-parliamentary body would have excited even more adverse comment than that which we then entertained. Leaving aside that constitutional aspect, there is a point about the sheer practicality of our annual economic debates.

This was a point to which I referred in Committee and I make no apology for returning to it now before a wider audience. My right hon. Friend said that the amendment successfully moved in Committee by my hon. Friend the Member for Cirencester and Tewkesbury and myself ensured that the order renewing the powers under Part II of the Bill would come forward every March. We would be presented every spring with the prospect of a three-pronged economic debate.

The first prong would be the debate on the report of the Expenditure Committee. I must say that having the report of that Committee debated does not immediately, noticeably and necessarily have a direct impact upon the levels of public expenditure. There is, however, a growing understanding of the importance of public expenditure for the way in which the economy behaves but this takes no view at all of the desirability or otherwise of those levels of public expenditure. I say that for the benefit of my hon. Friend the Member for Tyne-mouth. The second prong is the Budget. Surely it must be wholly appropriate that once a year, when we are talking about public expenditure and taxation, we should have at least one debate dealing with the renewal of the wide-ranging powers conferred upon the executive and the agencies it uses for pay and prices.

Against this narrow but, I believe, highly respectable constitutional argument there have been set a number of other arguments that are somewhat extraneous in character. There is a sort of nursery food which is served up by the Whips' office for those whose diet lies in that direction. One of the arguments I have had come back to me is that it would be undesirable to have an annual debate because it would lead to an annual wrangle and we all know the difficulties created by the necessity annually to renew the Rhodesia sanctions order.

If anyone believes that it is the existence of Parliament's authority annually to renew Part II of the Bill which would result in prices and incomes legislation obtruding on to our political affairs, he lives in a world of complete and utter innocence. Prices and incomes policies will be with us in a large measure from this moment onwards. Almost every action of the Government will be measured against what is believed to be one of the central features of their economic policy. So central a feature is it that it was launched in the most dramatic and novel fashion by my right hon. Friend the Prime Minister at Lancaster House.

6.15 p.m.

If we needed evidence of that we have only to think of the Private Notice Question on Monday dealing with the price of processed meats. This kind of constant and continual debate will run through our proceedings. Do not let anyone believe that somehow or other the subject will go away and we will thereby be disembarrassed if we can be excused having the right once a year to renew this order which is of such a fundamental economic and political character.

The second argument put around to counter the militant and disruptive arguments of my hon. Friends the Members for Cirencester and Tewkesbury and South Angus (Mr. Bruce-Gardyne) is that we need the three-year period to reach some kind of longer-term arrangement with the unions so that we can return to some form of tripartite arrangement involving the TUC and the CBI. This is the long march back to Downing Street. Vital to this proposition is the argument that we must somehow woo the moderates away from the militants.

These two propositions are closely interwined. They are not too publicly stated but I am certain that the argument is that if Parliament had to debate the order every year it would make it that degree more difficult for the Government to conduct their policies because in some way the militants would be encouraged. It is felt that Parliament and the Government would, presumably in the way in which they conducted the debate in March, create some uncertainty. There is the feeling that the trumpet would sound an uncertain note, encouraging militants to think that given one more push the policy would collapse.

We will discover that the search for trade union leaders who are willing to become subcontractors for Government policy is predestined to fail. Once trade union leaders become subcontractors for Government policy they will in that process lose a great deal of the support of their members. Indeed, that was precisely the argument that we elaborated when we were sitting on the opposite side of the House. We have to ask ourselves whether the early experience of phase 2 has enhanced the moderate status of Mr. Alan Fisher or Mr. David Basnett. That is one early and simply test to apply.

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

Is not my hon. Friend making out the case for the present policy? "Subcontracting" is a powerful term. Is it not because of the lack of cooperation with a voluntary policy that we need this one?

Photo of Mr John Biffen Mr John Biffen , Oswestry

I will gladly deal with that point because, within the discipline set by this debate, when I come to my peroration I will state exactly what I believe to be the appropriate form of Clause 4 and relate that to the economic policy against which it could operate in my opinion. My hon. Friends must address themselves with immense caution to the proposition that we are engaged on a series of policies in which in our hearts we disbelieve because in the process we will woo away the moderate trade union leadership. In that direction ultimately lies food subsidies, control over interest rates and further concessions, as concessions they are, which will infringe those areas of economic freedom which are left after the application of the policy as it stands.

Notwithstanding those concessions, we cannot get away from the basic proposition that trade union leaders, particularly in today's social climate, are not expected by their members to become agents of the Government. If the CBI membership eventually begins to turn in its tracks, it will be merely the most mild and modest indication to us that many others will do likewise in respect of organised labour. I know that what I propose to say is immensely disagreeable to many of my hon. Friends, but there is a mood abroad which challenges traditional patterns of social order and traditional economic and social relationships.

The House must see how best society can bend, adjust and cope with the turbulence of the social change which is self-evident in society today. We shall not be doing a service to this House or to society outside if we try to institutionalise trade union leadership, trade association leadership—that is really what the CBI is—and the Government into some kind of tripartite organising body for the economy. Yet that is the philosophy which lies behind the request for a three-year period uncluttered by annual parliamentary renewability.

I wish to bring my remarks to a conclusion and, in so doing, to deal with the point raised by my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis), although not, I suppose, to his satisfaction. The condition on which this legislation can recommend itself to hon. Members on this side of the House, and possibly even to hon. Members opposite, is that it is to be seen as essentially short-term legislation. I am not setting any terminal date on its operation, but all the experience of prices and incomes legislation leads us to believe that it has the psychological effect of a short-term period.

That was certainly the view of the hon. Member for Ashton-under-Lyne (Mr. Sheldon), who said that repeated use of it had blunted even its effectiveness as a psychological instrument. But psychological instrument I believe it to be, and it will enable my right hon. and hon. Friends to contrive a Budget by which, in both their expenditure and taxation polices, it will be possible to have a net-borrowing requirement which is more related to the Government's genuine ability to borrow from the non-banking public. In those circumstances, the economic climate against which this legislation will have to operate will be altered to advantage. There would still remain Part I of the legislation—the institutions.

I point out to my hon. Friend the Member for Rutland and Stamford that the Conservative Government established the National Incomes Commission. In its reasoned amendment to the 1966 prices and incomes legislation the Conservative Party specifically avoided direct opposition to the establishment of the National Board for Prices and Incomes. As my hon. Friend will know, because he was with me in the Standing Committee which debated that legislation, we did not vote against Part I of that Bill which established the board. The bodies set up by this Bill would still be in existence. The Pay Board may well prove to be a useful addition to the institutional arrangements available to the Government and, above all, help to determine the public sector levels of wages. That was the use made of the National Board for Prices and Incomes, particularly in connection with the pay of the Armed Forces.

All this adds up to a much more realistic assessment of what we can do with this legislation. It is a much more modest assessment than has been claimed for it by some of the more enthusiastic evangelists. I suppose that their recent conversion underlines their evangelism. But the danger of evangelism is that one decries those who have not suffered instant conversion. The remarks of my right hon. Friend the Secretary of State for Northern Ireland were probably incautious, but at least they were deliberate to the extent that they were contained in a Press release issued by the Conservative Central Office.

There is a danger that in our anxiety to promote the new policy we shall exacerbate perhaps just as much as mollify the social tensions and discords in society. I therefore hope that my right hon. and hon. Friends will retain annual renewability, not merely because it is what the constitutional situation requires and is wholly appropriate to a Parliament which retains some shred of self-respect but, above all, because it invests in the policy that element of modesty which is essential if it is to have any success.

Photo of Mr John Page Mr John Page , Harrow West

In order not to allow the House to forget the distinctive flavour of the distinguished speech of my hon. Friend the Member for Oswestry (Mr. Biffen), I shall speak in shorthand and be very quick.

It is sad and embarrassing that the Government have found it necessary to introduce Amendment No. 3 and again to bring in the three-year period. However, we must be thankful that the Government have introduced Amendment No. 58, which means that at the end of the three years the legislation will die. As the Government have gone half way to meeting me in my dislike, I shall go half way to meeting them and abstain in the vote instead of voting against them, as it was my original intention to do.

As I said on Second Reading, these measures can be effective, and the Government will do their best to ensure that they are effective, only if they last not more than about a year. If they last more than a year, if they last for two years or for the full period of three years, they will kill the freedom and enterprise which the Government say it is their purpose to defend. The detail and sophistication of the Green Paper are such, and their effect will embrace so many aspects of our business and industrial life, that if the Government try to block up loophole after loophole and screw down loose plank after loose plank for more than a year it will be very difficult for a Conservative Government or any other Government to release the controls. That is the greatest danger.

Apart from some control of investment and the appointment of the chairman, the new regulations give the Government more control over private industry, commerce, business and the professions than they have at ordinary times over the nationalised industries. That is extremely dangerous. It is said that phase 2 will last only until the autumn of this year. If that is so, what is the point of building up this great edifice of sophisticated bureaucrats, producing unbelievably complicated measures which will probably take three or four months to work through the system so that if a question is asked of one of the agencies it will probably be three or four months before an answer is given? It seems extremely hollow for the Government to say that this is only a temporary measure. That, again, is one of the things that cause dissatisfaction with allowing more than one year at a time before it comes back to the House for renewal.

6.30 p.m.

On a previous occasion, when the Labour Government were in office, my noble Friend the Lord Chancellor described that Government, who were spending a lot of money and also imposing restraints, as being like someone who turns on the gas under the kettle and then sits on the lid to ensure that it does not get blown off. That, he said, was a painful and undignified position. I regret to say that that seems to be the position which the Government are now showing themselves to be in.

My right hon. Friend at the end of his speech said—I think I got his words down correctly—"it is the clear intention of a group of people inside the trade union movement to oppose Government policy by industrial action". He said that clearly, and he is right. But I would ask him: what real defence is there in the Counter-Inflation (Temporary Provisions) Act and what real defence is there in this Bill against trade union militancy? The present Act has done nothing except cause discomfort and bewilderment to my constituents, who are bewildered at the very packed underground trains this morning. What have those provisions done to renew the gas supply to their houses? What has the existing Act done which is going to open their places of work closed either by lack of power or by industrial action? What will it do to ensure that proper transport facilities are provided for them? My constituents and other people in the country will not be impressed when it appears that the Government are holding most fast to a proposition to change that part of the Bill which now says that the Bill should cease to have effect after a year and to replace it with a period three years long? It will be three years before it can be examined again by the House, which is a very unsatisfactory situation.

Photo of Mr Tony Benn Mr Tony Benn , Bristol South East

By leave of the House, I would say that this has been a very remarkable debate and, whatever may happen in the Division Lobbies, it should not pass without notice that with the exception of the hon. Lady the Member for Tynemouth (Dame Irene Ward) the Minister has really had no enthusiastic support from any one of the many speakers who have spoken since we entered upon this business at half-past three.

I wanted to appeal to the right hon. Gentleman, to ask him whether he would consider withdrawing his amendment, considering the arguments that have been put forward from both sides of the House, and, if necessary, have a further amendment introduced in another place, when he will have had time to take account of what has been said. I appeal to him that he should do that rather than persist with an amendment which clearly does not command the support of those who have been present at and listened to the debate.

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I am not at all sure that the right hon. Member for Bristol, South-East (Mr. Benn) is correct in saying that a number of my hon. Friends who have spoken in this debate, using the terms they did, are necessarily representative of the views of others of my hon. Friends who have not spoken in this debate.

The hon. Member for Liverpool, Walton (Mr. Heffer) I think summarised the debate, or some parts of it, in referring to the problem of the Government as being what he called an attempt to control the capitalist system. This was expressed in the debate as an argument, on the one hand, between liberalism and repression, or Socialism and capitalism, on the other hand. I think that to some extent on this side it was an argument whether the Conservative Party is Whig or Tory.

I was very glad to have the far from silent support of my hon. Friend the Member for Tynemouth (Dame Irene Ward) on the Tory side. I think she was quite right in saying that a great deal of the debate went on to fields not primarily concerned with or relevant to this amendment or the duration of stage 2 but dealt with matters which will be raised, as she said, in the Budget debate.

In this context I would assure my right hon. Friend the Member for Thirsk and Malton (Sir Robin Turton) that this Bill does not seek by any means to hand over control of the whole economy to the Government or to the agencies.

Again in this context I would say first of all to my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) that we have never considered that these policies should be alone in the control of inflation, and, although it would be out of place for me to go into that now, I would accept the importance of the control of public expenditure and the role of monetary policy in the control of public expenditure. However, I do not think that that line of argument is relevant to the difference between a one-year or three-year duration of the Bill.

The second point made by my hon. Friend was about the stringency of the Bill in relation to profits, and my hon. Friend the Member for Horsham (Mr. Hordern) made the same point. I must point out, though I shall return to this question of profits later, that my hon. Friend was referring to the code for stage 2 only rather than to the powers contained in the Bill itself. He implied that stage 2 would go on for three years. This is one of the major arguments against the three-year period. I can assure him that the Government have not changed their position or their concept at all on stage 2. The whole point of it and the reason for this debate is that the policy in stage 2 is to move to stage 3. From the very beginning—it is nothing new—we have made it plain that we are prepared to consider some of the anomalies which may—which obviously will—arise from the standstill and in stage 2.

Photo of Mr Joel Barnett Mr Joel Barnett , Heywood and Royton

Is the right hon. Gentleman telling us that the code for phase 3 will be very different from the present one before us?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

No. I am not saying anything of the sort. I was merely pointing out that this consultative document, this draft, is for stage 2 only.

I would say to my hon. Friend the Member for Harrow, West (Mr. John Page) that I am grateful for his sort of modified lack of support. [Laughter.] I was not quite sure which way round to put it. I would tell him that there is not going to be any vast bureaucracy. We have already said that the number of people on the agencies will be some 700. The point is that these are agencies and their object is to act.

Quickly to deal with the third point which my hon. Friend the Member for South Angus made when he was referring to Europe—so far as his arguments were relevant, they were relevant to the code rather than the Bill—European Coal and Steel Community products as defined in the Treaty of Paris are excluded from price control in the code, and the appendix in the White Paper also exempts goods and services where prices are regulated as a result of international agreement or arrangement. I hope that that makes the position clear to my hon. Friend.

Article 85 of the treaty relates to agreements and concerted practices by under- takings affecting trade between member States and distorting competition within the Common Market. Firms complying with any general price restriction made by the Price Commission would not be doing anything prohibited by Article 85. Article 86 is concerned only with actions of large monopolies, and, like Article 85, it refers to the improper exploitation by the undertakings themselves rather than to anything done by a national regulatory body such as the Price Commission. So the conflict my hon. Friend was afraid of does not arise.

There have been three main arguments. First, there is the argument of accountability, to which my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) and the hon. Member for Salford, West (Mr. Orme) referred. My right hon. Friend implied that the termination of the Bill on 31st March 1976 made no difference. His argument in favour of an annual order took no account of the considerable improvements which were made in Committee, partly by my hon. Friends and partly by hon. Gentlemen on the Labour benches. In Committee it was made clear that it would be possible to answer parliamentary questions on individual cases. The publication of orders, notices and consents, and the institution of quarterly debates on reports of the agencies more than meet the case made by my right hon. Friend, especially in the light of the wise remark made by the hon. Member for Salford, West that the effect of a debate is frequently not on the issues immediately debated but on the future conduct of the Government. I agree with him. A quarterly debate on an agency's report to Ministers which is available to the House is likely to be as effective an instrument of parliamentary control and accountability as a debate once a year on an order renewing the powers.

My hon. Friend the Member for Oswestry (Mr. Biffen), who has strong and justifiable feelings on the constitutional issue, suggested that a debate once a year on an order to renew stage 2 achieves closer constitutional control than can he achieved by debating the quarterly report and the draft code. Hon. Members who have spoken in this way have not taken account of the full effect of the arrangements that have already been made to improve parliamentary control accountability.

Photo of Mr Stan Orme Mr Stan Orme , Salford West

Does not the right hon. Gentleman agree that there is a great deal of difference between quarterly debates on a report on which Parliament will have no sanction, and a yearly debate in which the House, if necessary, can vote either to reverse or continue the policy?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I do not think there is—certainly not in the terms of my hon. Friend's argument. The rejection by the House of an agency's report would have as profound an effect on the Government of the day as the rejection of any other measure.

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

Can the right hon. Gentleman guarantee a quarterly debate?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

The agencies will report quarterly. That has not yet been written into the Bill; it is the subject of a future amendment. I gave an undertaking that the Bill would be amended to include provision for a quarterly report.

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

And a quarterly debate?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

That will be arranged through the usual channels. Ministers will be susceptible to the ordinary pressures of the House.

I do not think that my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) fully believes that the agencies are immune from parliamentary influence or control, or that the three-year period will somehow increase their degree of immunity. The suggestion he made would not add to the degree of accountability of the agencies to Parliament. He appealed as much to Parliament as to the Government to face the realities of public expenditure. My hon. Friend the Member for Tynemouth pointed the dilemma which he put to the House.

6.45 p.m.

The second main criticism of the three-year period was that it would lead inevitably to Socialism. The hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred to the involvement of Government in industry; but all Governments since the war in some degree have had to involve themselves in industry and to accept the limitations of a mixed economy. It is nonsense to suggest that intervention of this kind equates with Socialism.

My hon. Friend the Member for South Angus goes too far in calling three years a life sentence for the market economy and in saying that it involves an irreversible degree of market distortion. As the hon. Member for Ashton-under-Lyne said, before setting up our system we consulted the United States and other countries and took into account the lessons they had learnt. Those countries also took into account the lessons they had learnt from other countries and the lessons of the Second World War and the Korean War. The decision to concentrate on the major companies was designed to lessen the degree of bureaucracy, and there is no question that the adoption of this feature of the United States system will allow future Governments to command the heights of Socialism.

The Government are not despairing of the free enterprise system. I am sure that all my right hon. and hon. Friends are convinced that whatever deficiencies it may have in some aspects—and no system is perfect—free enterprise and the profit motive bring success in generating economic growth and prosperity for the people.

I have not had time to see the full version of the Opposition's alternative, but one has heard stories. It is the Opposition's alternative which despairs of free enterprise and which, if put into effect, would cripple the private sector.

Although, admittedly, our means have altered, our objectives have been consistent over the last two-and-a-half years. Our objectives are the achievement of a sustained level of growth and a higher prosperity in real terms. To attain those objectives we have reduced taxation to an unprecedented degree and raised the level of social benefits. We have passed the Industry Act and we are trying to develop regional policies and regional regeneration on an unprecedented scale. I place the whole counter-inflation programme and the formulation of the code in the context of growth. I recognise the importance of profit for expansion and investment and in securing full employment. The code does not prevent increase in profit deriving from expansion. The code is framed not to distort the market but to ensure the maximum degree of flexibility for enterprise in determining a prices control policy which is consistent with the overriding need to reduce the rate of inflation.

Of course there is less flexibility in stage 2. That is why it lasts only until the autumn. My right hon. Friend the Member for Thirsk and Malton asked for an annual renewal, but it is the code that will be the effective instrument of the agencies, and the draft code will come before the House and be debated before the affirmative resolution procedure.

Photo of Mr Peter Trew Mr Peter Trew , Dartford

Will my right hon. Friend tell us what form the debate on the code will take? Will it be on a motion to take note of the code? If the House voted against the motion, would the result be that the Government's prices and incomes policy would be in suspense until such time as the code was again submitted to the House and approved?

Photo of Mr Maurice Macmillan Mr Maurice Macmillan , Farnham

I should not like to be precise about the form the debate would take. All that the Government and I have done has been to give an undertaking that a future code will always be debated in draft before it is the subject of a debate on the affirmative resolution. That is to give an occasion for noting the

opinion of the House and for the possibility of alteration. It is the debate on the affirmative resolution which, if the code were to act, the Government would have to carry.

Those who have opposed these amendments have been fundamentally opposed to or deeply sceptical about the policy as a whole, and that is why they wish to limit the period to one year. But it is because I believe that, however regrettable some may find it, we must be seen to be firm that I ask the House to accept the amendments.

Unlike my hon. Friend the Member for Oswestry, I do not despair of resuming a dialogue with the unions, nor do I believe that in the absence of such dialogue we should refrain from action ourselves. I remind my hon. Friend that even in the Standing Committee I placed greater emphasis on the three-year period than on any other aspect. In doing so I quoted him, and I quote him again, as saying that inflation is not only about experience but about expectation. There is a strong psychological element involved in it.

Question put, That the amendment be made:—

The House divided: Ayes 276, Noes 218.

Division No. 71.]AYES[6.52 p.m.
Adley, RobertButler, Adam (Bosworth)Elliot, Capt. Walter (Carshalton)
Alison, Michael (Barkston Ash)Campbell, Rt. Hn. G. (Moray & Nairn)Elliott, R. W. (N'c'tle-upon-Tyne, N.)
Allason, James (Hemel Hempstead)Carlisle, MarkEmery, Peter
Amery, Rt. Hn. JulianCarr, Rt. Hn. RobertEyre, Reginald
Archer, Jeffrey (Louth)Channon, PaulFarr, John
Astor, JohnChapman, SydneyFenner, Mrs. Peggy
Atkins, HumphreyChataway, Rt. Hn. ChristopherFidler, Michael
Awdry, DanielChichester-Clark, R.Finsberg, Geoffrey (Hampstead)
Baker, Kenneth (St. Marylebone)Churchill, W. S.Fisher, Nigel (Surbiton)
Baker, W. H. K. (Banff)Clark, William (Surrey, E.)Fletcher-Cooke, Charles
Balniel, Rt. Hn. LordClarke, Kenneth (Rushcliffe)Fookes, Miss Janet
Batsford, BrianClegg, WalterFortescue, Tim
Beamish, Col. Sir TuftonCockeram, EricFoster, Sir John
Bennett, Dr. Reginald (Gosport)Cooke, RobertFowler, Norman
Benyon, W.Coombs, DerekFox, Marcus
Berry, Hn. AnthonyCooper, A. E.Fry, Peter
Biggs-Davison, JohnCormack, PatrickGalbraith, Hn. T. G. D.
Blaker, PeterCostain, A. P.Gardner, Edward
Boardman, Tom (Leicester, S.W.)Critchley, JulianGibson-Watt, David
Boscawen, Hn. RobertCrouch, DavidGilmour, Ian (Norfolk, C.)
Bossom, Sir CliveCrowder, F. P.Gilmour, Sir John (File, E.)
Bowden, AndrewDavies, Rt. Hn. John (Knutsford)Glyn, Dr. Alan
Braine, Sir Bernardd'Avigdor-Goldsmid, Sir HenryGodber, Rt. Hn. J. B.
Bray, Ronaldd'Avigdor-Goldsmid, Maj.-Gen.JackGoodhart, Philip
Brewis, JohnDean, PaulGoodhew, Victor
Brinton, Sir TattonDeedes, Rt. Hn. W. F.Gorst, John
Brocklebank-Fowler, ChristopherDixon, PiersGower, Raymond
Brown, Sir Edward (Bath)Dodds-Parker, Sir DouglasGrant, Anthony (Harrow, C.)
Bryan, Sir PaulDrayson, G. B.Gray, Hamish
Buchanan-Smith, Alick (Angus, N&M)du Cann, Rt. Hn. EdwardGreen, Alan
Buck, AntonyDykes, HughGrieve, Percy
Bullus, Sir EricEden, Rt. Hn. Sir JohnGriffiths, Eldon (Bury St. Edmunds)
Burden, F. A.Edwards, Nicholas (Pembroke)Grylls, Michael
Gummer, J. SelwynMcMaster, StanleySt. John-Stevas, Norman
Gurden, HaroldMacmillan, Rt. Hn. Maurice (Farnham)Sandys, Rt. Hn. D.
Hall, Miss Joan (Keighley)McNair-Wilson, MichaelScott, Nicholas
Hall, John (Wycombe)McNair-Wilson, Patrick (New Forest)Shaw, Michael (Sc'b'gh & Whitby)
Hall-Davis, A. G. F.Maddan, MartinShelton, William (Clapham)
Hamilton, Michael (Salisbury)Madel, DavidShersby, Michael
Hannam, John (Exeter)Maginnis, John E.Simeons, Charles
Harrison, Brian (Maldon)Marples, Rt. Hn. ErnestSinclair, Sir George
Harrison, Col. Sir Harwood (Eye)Marten, NeilSkeet, T. H. H.
Haselhurst, AlanMather, CarolSoref, Harold
Hastings, StephenMaudling, Rt. Hn. ReginaldSpeed, Keith
Havers, Sir MichaelMawby, RaySpence, John
Hayhoe, BarneyMaxwell-Hyslop, R. J.Sproat, Iain
Heath, Rt. Hn. EdwardMiscampbell, NormanStainton, Keith
Mitchell, Lt.-Col. C. (Aberdeenshire, W)
Heseltine, MichaelStanbrook, Ivor
Hicks, RobertMoate, RogerStewart-Smith, Geoffrey (Belper)
Higgins, Terence L.Molyneaux, JamesStodart, Antnony (Edinburgh, W.)
Hiley, JosephMoney, ErnieStoddart-Scott, Col. Sir M.
Hill, John E. B. (Norfolk, S.)Monks, Mrs. ConnieStuttaford, Dr. Tom
Hill, James (Southampton, Test)Sutcliffe, John
Holland, PhilipMontgomery, FergusTapsell, Peter
Holt, Miss MaryMore, JasperTaylor, Sir Charles (Eastbourne)
Morgan-Giles, Rear-Adm.
Hornby, RichardMorrison, CharlesTaylor, Edward M. (G'gow, Cathcart)
Hornsby-Smith, Rt. Hn. Dame PatriciaMudd, DavidTaylor, Frank (Moss Side)
Howe, Rt. Hn. Sir GeoffreyNabarro, Sir GeraldTebbit, Norman
Howell, David (Guildford)Neave, AireyTemple, John M.
Hunt, JohnNicholls, Sir HarmarThatcher, Rt. Hn. Mrs. Margaret
Hutchison, Michael ClarkNoble, Rt. Hn. MichaelThomas, Rt. Hn. Peter (Hendon, S.)
Iremonger, T. L.Normanton, TomThompson, Sir Richard (Croydon, S.)
Irvine, Bryant Godman (Rye)Nott, JohnTilney, John
James, DavidOnslow, CranleyTrafford, Dr. Anthony
Jenkin, Patrick (Woodford)Oppenheim, Mrs. SallyTrew, Peter
Jennings, J. C. (Burton)Orr. Capt. L. P. S.Tugendhat, Christopher
Jessel, TobyOsborn, Johnvan Straubenzee, W. R.
Johnson Smith, G. (E. Grinstead)Owen, Idris (Stockport, N.)Vaughan, Dr. Gerard
Jones, Arthur (Northants, S.)Page, Rt. Hn. Graham (Crosby)Vickers, Dame Joan
Jopling, MichaelParkinson, CecilWaddington, David
Kaberry, Sir DonaldPeel, Sir JohnWalder, David (Clitheroe)
Kellett-Bowman, Mrs. ElainePercival, IanWalker, Rt. Hn. Peter (Worcester)
Kilfedder, JamesPeyton, Rt. Hn. JohnWalker-Smith, Rt. Hn. Sir Derek
Kimball, MarcusPink, R. BonnerWall, Patrick
King, Tom (Bridgwater)Price, David (Eastleigh)Walters, Dennis
Kinsey, J. R.Prior, Rt. Hn. J. M. L.Ward, Dame Irene
Kitson, TimothyProudfoot, WilfredWarren, Kenneth
Knight, Mrs. JillPym, Rt. Hn. FrancisWeatherill, Bernard
Knox, DavidRaison, TimothyWells, John (Maidstone)
Lambton, LordRamsden, Rt. Hn. JamesWhite, Roger (Gravesend)
Lamont, NormanRawlinson, Rt. Hn. Sir PeterWiggin, Jerry
Lane, DavidRedmond, RobertWilkinson, John
Langford-Holt, Sir JohnReed, Laurance (Bolton, E.)Winterton, Nicholas
Le Marchant, SpencerRees, Peter (Dover)Wolrige-Gordon, Patrick
Lewis, Kenneth (Rutland)Rees-Davies, W. R.Wood, Rt. Hn. Richard
Lloyd, Rt. Hn. Geoffrey(Sut'nC'field)Renton, Rt. Hn. Sir DavidWoodnutt, Mark
Longden, Sir GilbertRhys Williams, Sir BrandonWorsley, Marcus
Loveridge, JohnRidsdale, JulianWylie, Rt. Hn. N. R.
Luce, R. N.Roberts, Michael (Cardiff, N.)Younger, Hn. George
McAdden, Sir StephenRodgers, Sir John (Sevenoaks)
McCrindle, R. A.Rossi, Hugh (Hornsey)TELLERS FOR THE AYES:
McLaren, MartinRost, PeterMr. Paul Hawkins and
Maclean, Sir FitzroyRussell, Sir RonaldMr. Oscar Murton.
NOES
Abse, LeoBrown, Ronald (Shoreditch & F'bury)Cunningham, G. (Islington, S.W.)
Allaun, Frank (Salford, E.)Bruce-Gardyne, J.Dalyell, Tam
Archer, Peter (Rowley Regis)Buchan, NormanDavies, Denzil (Llanelly)
Ashley, JackButler, Mrs. Joyce (Wood Green)Davis, Clinton (Hackney, C.)
Atkinson, NormanCallaghan, Rt. Hn. JamesDavis, Terry (Bromsgrove)
Barnes, MichaelCant, R. B.Deakins, Eric
Barnett, Guy (Greenwich)Carmichael, Neilde Freitas, Rt. Hn. Sir Geoffrey
Barnett, Joel (Heywood and Royton)Carter, Ray (Birmingh'm, Northfield)Delargy, Hugh
Beaney, AlanCarter-Jones, Lewis (Eccles)Dell, Rt. Hn. Edmund
Benn, Rt. Hn. Anthony WedgwoodCastle, Rt. Hn. BarbaraDempsey, James
Bidwell, SydneyClark, David (Colne Valley)Douglas, Dick (Stirlingshire, E.)
Biffen, JohnCocks, Michael (Bristol, S.)Douglas-Mann, Bruce
Blenkinsop, ArthurCohen, StanleyDriberg, Tom
Boardman, H. (Leigh)Coleman, DonaldDuffy, A. E. P.
Body, RichardConcannon, J. D.Dunn, James A.
Booth, AlbertCorbet, Mrs. FredaEadie, Alex
Bottomley, Rt. Hn. ArthurCox, Thomas (Wandsworth, C.)Edeiman, Maurice
Boyden, James (Bishop Auckland)Crawshaw, RichardEdwards, Robert (Bilston)
Bradley, TomCronin, JohnEdwards, William (Merioneth)
Broughton, Sir AlfredCrosland, Rt. Hn. AnthonyEllis, Tom
Brown, Hugh D. (G'gow, Provan)Crossman, Rt. Hn. RichardEnglish, Michael
Evans, FredLestor, Miss JoanRoberts, Albert (Normanton)
Faulds, AndrewLewis, Arthur (W. Ham, N.)Roberts, Rt. Hn. Goronwy (Caernarvon)
Fisher, Mrs. Doris(B'ham, Ladywood)Lewis, Ron (Carlisle)Robertson, John (Paisley)
Filch, Alan (Wigan)Lipton, MarcusRoderick, Caerwyn E. (Brc'n&R'dnor)
Fletcher, Raymond (Ilkeston)Lomas, KennethRoper, John
Foot, MichaelLyon, Alexander W. (York)Rose, Paul B.
Ford, BenLyons, Edward (Bradford, E.)Rowlands, Ted
Forrester, JohnMabon, Dr. J. DicksonSheldon, Robert (Ashton-under-Lyne)
Fraser, Rt. Hn. Hugh(St'fford & Stone)McBride, NeilShore, Rt. Hn. Peter (Stepney)
Fraser, John (Norwood)McGuire, MichaelShort, Mrs. Renée (W'hampton, N.E.)
Freeson, ReginaldMahon, Simon (Bootle)Silkin, Rt. Hn. John (Deptford)
Galpern, Sir MyerMallalieu, J. P. W. (Huddersfield, E.)Silkin, Hn. S. C. (Dulwich)
Gilbert, Dr. JohnMarks, KennethSillars, James
Ginsburg, David (Dewsbury)Marquand, DavidSilverman, Julius
Grant, John D. (Islington, E.)Marshall, Dr. EdmundSkinner, Dennis
Mason, Rt. Hn. Roy
Griffiths, Eddie (Brightside)small, William
Griffiths, Will (Exchange)Meacher, MichaelSmith, John (Lanarkshire N.)
Grimond, Rt. Hn. J.Mellish, Rt. Hn. RobertSpearing, Nigel
Hamilton, James (Bothwell)Mendelson, JohnSpriggs, Leslie
Hamilton, William (Fife, W.)Mikardo, IanStallard, A. W.
Millan Bruce
Hardy, PeterMiller, Dr. M. S.Steel, David
Hattersley, RoyMilne, EdwardStewart, Rt. Hn. Michael (Fulham)
Healey, Rt. Hn. DenisMitchell, R. C. (S'hampton, Itchen)Stoddart, David (Swindon)
Heffer, Erie S.Molloy, WilliamStonehouse, Rt. Hn. John
Hooson, EmlynMorgan, Elystan (Cardiganshire)Strauss, Rt. Hn. G. R.
Houghton, Rt. Hn. DouglasMorris, Alfred (Wythenshawe)Summerskill, Hn. Dr. Shirley
Howell, Denis (Small Heath)Morris, Charles R. (Openshaw)Swain, Thomas
Huckfield, LeslieMorris, Rt. Hn. John (Aberavon)Thomas, Rt. Hn. George (Cardiff, W.)
Hughes, Rt. Hn. Cledwyn (Anglesey)Mulley, Rt. Hn. FrederickThomas, Jeffrey (Abertillery)
Hughes, Roy (Newport)Murray, Ronald KingThorpe, Rt. Hn. Jeremy
Hunter, AdamOakes, GordonTomney, Frank
Irvine, Rt. Hn. Sir Arthur (Edge Hill)Ogden, EricTope, Graham
Janner, GrevilleO'Halloran, MichaelTorney, Tom
Jay, Rt. Hn. DouglasO'Malley, BrianTuck, Raphael
Jeger, Mrs. LenaOram, BertVarley, Eric G.
Jenkins, Hugh (Putney)Orbach, MauriceWainwright, Edwin
John, BrynmorOrme, StanleyWalden, Brian (B'm'ham, All Saints)
Johnson, James (K'ston-on-Hull, W.)Owen, Dr. David (Plymouth, Sutton)Walker, Harold (Doncaster)
Johnson, Walter (Derby, S.)Padley, WalterWallace, George
Jones, Barry (Flint, E.)Palmer, ArthurWeitzman, David
Jones, Rt. Hn. Sir Elwyn (W. Ham, S.)Pardoe, JohnWells, William (Walsall, N.)
Jones, Gwynoro (Carmarthen)Parker, John (Dagenham)Whitehead, Phillip
Jones, T. Alec (Rhondda, W.)Parry, Robert (Liverpool, Exchange)Whitlock, William
Judd, FrankPavitt, LaurieWilley, Rt. Hn. Frederick
Kaufman, GeraldPeart, Rt. Hn. FredWilliams, Alan (Swansea, W.)
Kelley, RichardPerry, Ernest G.Williams, Mrs. Shirley (Hitchin)
Kerr, RussellPowell, Rt. Hn. J. EnochWilson, Alexander (Hamilton)
Kinnock, NeilPrentice, Rt. Hn. Reg.Wilson, William (Coventry, S.)
Lambie, DavidProbert, Arthur
Lamborn, HarryRankin, JohnTELLERS FOR THE NOES:
Latham, ArthurRees, Merlyn (Leeds, S.)Mr. Tom Pendry and
Lawson, GeorgeRhodes, GeoffreyMr. Walter Harrison.
Lee, Rt. Hn. FrederickRichard, Ivor

Question accordingly agreed to.

Amendment made: No. 58, in line 36, leave out subsections (2) to (5) and insert: '(2) The period for which this Part of this Act is in force may at any time be terminated by Her Majesty by Order in Council.(3) If an Order is made under subsection (2) above, Her Majesty may by Order in Council again bring this Part of this Act into force for a period ending no later than 31st March 1976.(4) An Order under subsection (3) above shall not be made unless a draft of the Order has been approved by resolution of each House of Parliament.'—[Mr. Kenneth Baker.]