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Commons Chamber

Volume 649: debated on Tuesday 21 November 1961

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House Of Commons

Tuesday, 21st November, 1961

The House met at half-past Two o'clock


[Mr. SPEAKER in the Chair]

Oral Answers To Questions

National Finance

Shipping And Fishing Industries, Scotland


asked the Chancellor of Exchequer if he will make a statement regarding the effect of the pay pause on the shipping, shipbuilding, and fishing industries in Scotland, in view of the unemployment caused in these industries; and what steps he proposes to take to restore their prosperity.

I do not accept the suggestion that the pause in increases of personal incomes has caused unemployment in the industries referred to. The primary purpose of the pause is to prevent increases in costs. That is vital for the future of these industries.

Is the right hon. and learned Gentleman aware that his policy has reduced Scotland's coastal shipping from 1,000 ships to 600, that the pay pause has accentuated this, that the high Bank Rate has made it worse, and that both have increased unemployment there? Can the right hon. and learned Gentleman devise some means of rectifying the situation and restoring these industries to the prosperity which they enjoyed before his appointment as Chancellor of the Exchequer?

The hon. and learned Gentleman will not, of course, expect me to agree with the preliminary part of his supplementary question. As far as the second part is concerned, I think it important that the pay pause policy should be successful in the interests of those industries.

Would it not be disastrous to give up the pay pause at the present time just when the country is getting a grip on its exports? If costs can be kept down in shipbuilding in Scotland it is the surest way to help exports.

Decimal Coinage


asked the Chancellor of the Exchequer, in view of the possibility of the United Kingdom entering the Common Market, what is now the policy of Her Majesty's Government towards decimal coinage.

I would refer my hon. Friend to the reply which I gave to my hon. Friend the Member for Taunton (Mr. du Cann) on 14th November.

If my right hon. and learned Friend is going to make a statement in the future, may I suggest to him that he might be encouraged by the fact that the business community now seems to be coming round in favour of decimal coinage. The expenditure on new instruments, adding machines and computers would appear to be justified by the savings that would accrue to industry. Therefore, if we are going into the Common Market it would be a step which industry generally would welcome.



asked the Chancellor of the Exchequer by what percentage dividends declared in the first half of 1961 differed from the first half of 1960, after making due adjustment for increased capital employed.

Gross ordinary dividends declared in the first half of 1961 were about 15 per cent. higher than in the first half of 1960. The best estimate that I can make in answer to the second pant of my hon. Friend's Question is that there was on increase in the capital employed of roughly 2 per cent. by new issues of capital, and of roughly 5 or 6 per cent. by ploughing back of profits. It, therefore, seems likely that about half the increase in dividends can be attributed to an increase in the capital employed.

While thanking my right hon. and learned Friend for that Answer, may I ask him whether this does not, in fact, show that the true increase in dividends on the capital employed is, first of all, a great deal less than people had at one time been led to believe, and, secondly, is, in fact, very similar to the true increase in wages during the same period?

I think that my hon. Friend is right on both those points. Of course, these figures refer to the first half of 1961.

On the contrary, does not this show the complete unfairness of having a wage pause without a dividend pause?

The hon. Gentleman will know that there was no wage pause in the first six months to which I am referring. In fact, during the second quarter of this period wages and salaries went up by nearly 10 per cent.?

Will the right hon. and learned Gentleman tell us how he describes members of his own party who agree to a dividend increase and then vote in favour of a wage pause?

Is it not rather misleading to include profits ploughed back, since the shareholders were not asked to put up money in that sense at all?

Federation Of British Industries And Trades Union Congress (Discussions)

5 and 6.

asked the Chancellor of the Exchequer (1) how many times during this year he has met representatives of the Federation of British Industries to discuss export incentive schemes; and what were the results of these meetings;

(2) on what date he met the Trades Union Congress this year to discuss incentive schemes for exports to the Continent; and what was the result of the meeting.

My right hon. Friend the President of the Board of Trade and I are in frequent touch with the Federation of British Industries, the Trades Union Congress and other interested bodies on the means of promoting exports. For example, the National Production Advisory Council on Industry, on which both these bodies are represented, has had several discussions on this subject this year. On export incentives, I would refer my hon. Friend to my speech in the House of 7th November.

I thank my right hon. and learned Friend for that reply. Will he bear in mind that the F.B.I. told me this morning that there have been no official negotiations on this matter since 1955? Will he also bear in mind the letter from the Trades Union Council saying that the General Council has not met the Chancellor specifically for this purpose? I suggest that the Chancellor should be looking at this right away.

We have quarterly meetings of the N.P.A.C.I. That is the body on which both these bodies are represented, and this year we have discussed the matter on several occasions.

While the right hon. and learned Gentleman is pursuing his elephantine methods of thought on this question, will he—

On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise this matter at the earliest opportunity.

Will the Chancellor give particular consideration to two proposals, first, for a differential investment allowance which we on this side of the House voted for in Finance Bill after Finance Bill for many years, and, secondly, the question of the turnover tax which we suggested to him last July?

Government Employees (Wages)


asked the Chancellor of the Exchequer if he will take steps to raise the average wage rates and earnings of employees in Government establishments by 6 per cent. annually for the next 10 years so that they will be earning £1,000 a year in 1971.

The possibility of increasing average real weekly earnings of employees in Government service will depend upon preventing inflation, keeping our costs competitive and devoting adequate resources to exports. But it would be quite wrong to forecast a separate figure for the annual increase of one particular section of the community.

We have heard those views before. Will the hon. Gentleman deny or confirm the rumour going round that his right hon. and learned Friend is thinking in terms of trying to work the economy in such a way that we get a 2 per cent. or 2½ per cent.—

Order. It depends on the source of the rumour whether the question is in order not not, but the Minister cannot be asked to confirm or deny a rumour for which he is not responsible.

Is it not a fact that the Government are thinking in terms of getting the economy to work in such a way that there is a 2 per cent. or 2½ per cent. increase in incomes each year? If that is so, how are the workers in industrial establishments under the control of the Government going to have the promise made to them by the Prime Minister fulfilled?

What is true is that if we want to achieve a good rate of growth for industry we must keep the rise in personal incomes in line with rises in the national income.

Oecd Countries (Productivity)


asked the Chancellor of the Exchequer what proposals have been put before the Organisation for European Co-operation and Development for a plan for industrial expansion involving a growth of 50 per cent. in industrial output by 1970; and whether Her Majesty's Government have informed the Organisation of their support for this plan.


asked the Chancellor of the Exchequer whether Her Majesty's Government will support the proposals for a planned 50 per cent. economic growth in the Atlantic community by 1970, made by the United States Government to the Organisation for Economic Co-operation and Development.

With permission, I will circulate, in the OFFICIAL REPORT the full text of the communiqué issued after the first Ministerial meeting of O.E.C.D., which took place in Paris on 17th and 18th November. The meeting set as a collective target for the Organisation the attainment during the decade from 1960 to 1970 of a growth in real gross national product of 50 per cent. for the twenty Member Countries taken together. This initiative has the full support of H.M. Government.

Is the right hon. and learned Gentleman aware that Treasury sources were briefing the Press before last Thursday's meeting to the effect that the original American plan was too much for this country and that the Chancellor would argue for it to be cut down? Is it not time that the Government introduced an economic policy which will stop this country being a drag on our allies?

I do not accept that for a moment. As regards this target, I believe that it certainly is within the collective possibilities of the alliance. With regard to the briefing beforehand, I should like to make it quite clear that I had some doubts about the wisdom of bringing this forward at this meeting. I thought that further time was required to consider its presentation, in particular so that it would not appear to be a rich man's club meeting together to decide how to increase its own productivity without regard to the poorer countries of the world.

As the Chancellor says that the aim has the support of the Government, will his policies be designed to carry it out?

The following is the communiqué:

Press Communiqué Approved By The Oecd Council, November 17, 1961

1. The first Ministerial Council of the O.E.C.D. meeting in Paris 16th and 17th November under the Chairmanship of the Canadian Minister of Finance, the Honourable Donald M. Fleming, surveyed economic prospects of the vast community of member nations comprising more than five hundred million people in Europe and North America and examined its world responsibilities.

2. The Ministers noted the substantial economic growth that had taken place in most member countries during the past decade. They agreed on the desirability of establishing a target for further growth. Under conditions of price stability and the necessary provision for investment, rapid growth facilitates the harmonious development of world economy, helps to promote a liberal world trading system, provides a necessary foundation for rising living standards and ensures a high level of employment. It will enable industrialised member countries to contribute more effectively to the development of less advanced countries both through the provision of financial and technical assistance and through a widening of their export markets and the increase of their export revenues.

3. Accordingly the Ministers set as a collective target the attainment during the decade from 1960 to 1970 of a growth in real gross national product of 50 per cent. for the twenty member countries taken together. The rate of growth may vary from year to year and from country to country, moreover, being a collective target, individual countries may fall short of or exceed it in varying degrees.

4. Each country will have to make its contribution to collective growth in accordance with its own special circumstances. This contribution will be supported and made more effective by simultaneous expansion in other countries. The setting of a joint target for economic growth is itself recognition of the increasing inter-dependence of the separate economies of the twenty member countries. Given their needs, it is desirable that member countries in the process of development should have a relatively higher rate of growth. A 50 per cent. increase in output during the decade will call for deliberate national economic policies and their co-ordination through the organization's procedures of consultations and co-operation.

5. In this respect the Ministers put particular emphasis on the necessity of a proper equilibrium in the external payments of member countries as a condition for the fulfilment of the growth target mentioned above. It was, therefore, necessary to develop still further the close co-ordination of financial and economic policies and the mutual sense of responsibility between deficit and surplus countries in order to attain the common objective of accelerated economic growth while further improving the international payments mechanism. The various means already available to relieve temporary pressures on particular currencies were of great value, but they should be further developed.

6. Price stability is of the highest importance in order to assure to the population the full benefit of economic growth and to maintain equilibrium in international payments. Excess demand should, therefore, be prevented and efforts made to improve productivity and labour mobility. The gains through higher productivity should be fairly distributed, and increases in the level of money incomes should be kept generally in line with increases in productivity, which alone provide the means to a durable increase in the standard of living. In countries with payments deficits it is particularly important that the competitive position is not undermined through cost increases. Liberal import policies are another means of assuring price stability. The surplus countries have a special responsibility to use this and other means available to them which contribute to both external and internal equilibrium.

7. The Ministers emphasised that a special effort must be made to promote growth in less-developed member countries and thus endeavour to reduce the very great disparities in incomes per head. In these countries there are great possibilities for achieving a higher standard of living through more intensive use of natural and human resources. They stressed their conviction that more investment and more training are necessary conditions for such a development. To induce a real increase in the inadequate growth rates of such member countries the Ministers instructed the organisation to encourage and assist such countries in their efforts including the preparation and achievement of sound development plans.

8. In order to achieve the growth target, increasing use of scientific training and research is needed. Their utilisation in agriculture and industry should be closely studied. The organisation should further develop its work in these fields.

9. The Ministers noted that, thanks to increased productivity and mechanisation, agricultural production had risen considerably in the O.E.C.D. countries and they recognised that agriculture would also play an important rule in attaining the collective growth target. The Ministers agreed that necessary adjustments within agriculture should be carefully studied. They thought that increased productivity within agriculture should contribute to general price stability. In addition agriculture could, in many countries, make manpower available for the expansion of industry. In this connection the importance was recognised of ensuring that the agricultural population should share in the rising standard of living resulting from economic growth. The Ministers agreed with the O.E.C.D. Ministers of Agriculture meeting of October, 1961, that agricultural policies should be the subject of continuous consultation and confrontation within the organisation in order to secure that industrial and agricultural production developed harmoniously.

10. The Ministers were determined that increased production should lead to a significant increase in the aid to the less-developed countries. In 1960, the aggregate flow of resources, both public and private, from member countries and Japan, a member of the organisation's Development Assistance Committee, amounted to about Dollars 7·5 billion. The Ministers agreed that a further increase of development assistance was needed and they welcomed the intention of the Development Assistance Committee to institute, beginning in 1962, an annual review of aid efforts and policies of its member countries. The main purpose should be to increase the efforts and to adapt them better to the needs and circumstances of the recipient countries through exchange of experience regarding bilateral aid. The Ministers expressed the desire that the Development Assistance Committee should encourage greater co-operation among donor countries in their bilateral aid efforts and that a common approach should be applied increasingly to specific problems of economic development assistance. They also recognised the need for full co-operation with and support of multilateral institutions providing development aid, and they welcomed the work going on to define measures to encourage private capital exports to less-developed countries.

11. The Ministers recognised that successful economic expansion in less-developed countries can best be achieved through carefully prepared programmes based on an assessment of needs and resources. They, therefore, welcome individual and regional efforts by less-developed countries in drawing up such programmes. The Ministers instructed the organisation to study the functions and structure of the contemplated O.E.C.D. development centre which could help, in co-ordination with existing institutions, to meet the urgent need for more knowledge and for qualified persons to assist in the development efforts.

12. The Ministers stressed the importance of reducing barriers to the exchange of goods and services, in particular on the part of the more industrialised countries, as a means of promoting economic growth and of providing expanding markets. They emphasised the need to seek ways and means, both in the O.E.C.D. and in other international forums, to reduce barriers to trade among O.E.C.D. countries and between O.E.C.D. countries and the rest of the world. The main instrument of the organisation in achieving this aim should be periodic confrontations of trade policies. The Ministers underlined the significance of the negotiations between the European Economic Community and other European countries—the arrangements adopted should safeguard the legitimate interests of other countries. They expressed their satisfaction that the countries engaged in negotiations were willing to keep the O.E.C.D. informed of the progress of the negotiations. The aim of the organisation should be to contribute to the maximum freedom of trade and to enable the less-developed countries to obtain increasing export revenues.

13. In conclusion, the Ministers noted that these measures were but first steps in a collective effort that must extend increasingly beyond the relationships among their own countries and the material well-being of their citizens. Member countries will pursue together the three objectives of the O.E.C.D. convention pertaining to economic growth, aid and trade in order to ensure a sound expanding free world economy.

National Theatre


asked the Chancellor of the Exchequer what progress has been made in formulating a national theatre scheme in response to his offer of 12th July this year.

I am awaiting the submission of a scheme by the Joint Council of the National Theatre.

Is the Chancellor aware of the strong opposition expressed in many quarters, particularly by the Actors' Equity Association, against this proposal that a national theatre company should formed by a combination of the Stratford Company and the Old Vic Company? Is he further aware of the concern held by all those who have supported the national theatre idea that his proposal will mean that there will be only one drama theatre, only one drama auditorium? Will he consider all these matters and discuss them with all the interests concerned?

The position now is for the Joint Committee of the National Theatre to put forward its proposals to me.

Capital Gains Tax


asked the Chancellor of the Exchequer if, in his forthcoming legislation regarding a tax on short-term speculative gains on property and share deals, he will include provisions making such a tax retrospective to the date of his original announcement.

I have nothing to add to what I said in the House on 7th November on this point.

But, quite seriously, in view of the precedents, some of them highly respectable, including the Prime Minister's retrospective activity in connection with the suspension of investment allowances back to the date of the announcement, will the Chancellor be wise and safeguard himself at this point, at any rate, by making it plain that when he introduces it he will make it retrospective to this date? Is he aware that when he does introduce this tax, which he is obviously taking a long time to work out, it will be much more difficult then to announce that it will be retrospective to the date of his original announcement?

Quite seriously, I think it is better not to anticipate what the provisions will be.

If there were any element of retrospection, would it not be just and in accord with our fiscal statutes that losses should be taken into account retrospectively as well, especially in view of the sliding downwards of the equity market on the Stock Exchange at the present time?

No, Sir. I would add to that that it will be produced in the next Budget, if not before.

When the Chancellor is giving further consideration to this matter, will he also take into account the enormous amount of social damage which is being done by holding on to large blocks of land for speculative purposes round every large city? Will he try to make some assessment of the amount of land being held in anticipation of speculative gains and bring this within the terms of his fiscal remedy?

I assure the hon. Gentleman that all relevant matters are being considered.

Stock Exchange Transactions (Stamp Duty)


asked the Chancellor of the Exchequer whether he will consider legislation abolishing the 2 per cent. Stamp Duty on Stock Exchange transactions.

Will the Chancellor please re-examine this matter in the context of his forthcoming speculative gains tax? Does he know that foreign investors, who are traditional users of the London Stock Exchange and other facilities, are increasingly carrying out their transactions in overseas centres, where there is no such duty, to the exclusion of this country? Is it not a pity to keep on making sad noises about the country's loss of invisible exports while keeping in being discriminatory obstacles against the services we can offer?

I think that my hon. Friend would be wise not to expect a further reply. I have no doubt that my right hon. and learned Friend has listened to, and will take note of, the point made by my hon. Friend.

While no more optimistic of a reply from the hon. Gentleman, but noting that the Chancellor is listening to ideas, as we are told that he is anxious to tax short-term speculations, will he consider applying the Stamp Duty to transactions that take place during the period of the Stock Exchange account?

Will my hon. Friend bear in mind that when introducing measures to penalise investors it would be fair and reasonable to give some encouragement to the genuine investor by removing this tax?

Cambridge University (Applied Economics)


asked the Chancellor of the Exchequer what additional grant will be made by the University Grants Committee to Cambridge University to help finance the new work being undertaken by the Department of Applied Economics in the study of economic planning.

The proposals submitted by Cambridge University will be taken into account by the University Grants Committee, which is at present considering what recommendations to make on the general level of recurrent grant to the universities for the next quinquennium 1962–67.

Is not this a question of too little too late? Is he aware that the university has applied for and received a three-year grant from the American foundation to investigate planning in this country which is now one of the pet babies of his right hon. and learned Friend?

I am glad that universities are taking an interest in planning, and doubtless they will note past successes and also past failures in the public sector of our economy. I think that I have given a fair answer to the Question put down by the hon. Gentleman.

Income Tax Assessments


asked the Chancellor of the Exchequer whether he will introduce legislation to mitigate the hardship to persons of widely fluctuating incomes due to their liability to pay large taxation on a notional previous year's assessment which may be in excess of the income being currently received.

Is noting it quite enough, in view of the fact that we did have a three-year average which was abolished by the Tories during one of their tax reduction pauses? Is not it a fact that many people who find their income fluctuating by drops of 50 per cent., 60 per cent. or 70 per cent. in any year face real hardship, and will the Minister do more than note it?

I think there are real difficulties about a general system of averaging, and also, I suggest, to allow averaging only where income has fallen by a specific amount. I agree with the hon. Gentleman about the importance of justice being seen to be done. Perhaps he would care to pursue the matter by correspondence or talk to me about it.

Tax Liability (Non-Residence)


asked the Chancellor of the Exchequer how many British subjects during the last 20 years who were paying British Income Tax ceased to do so because they changed their country of domicile.

I assume that the hon. Member's Question relates to individuals who have ceased to be resident in the United Kingdom for tax purposes. No information is available as to their numbers. They would, of course, in general remain liable to British Income Tax on income arising in this country.

This is very good news indeed. Does it mean that if I stop filling in my tax assessment form no one will make a note of it on a piece of paper and there will be no record?

I hope that it will be long before the sad eventuality mentioned by my hon. Friend arises. The answer to the hon. Gentleman is, "No". If people have not filled in a tax form for a long time, sooner or later routine checks are made. In his Question, the hon. Member, who seldom makes an error, has referred to "domicile" when he really means "residence".

Development Assistance Group


asked the Chancellor of the Exchequer what steps have been taken by the Development Assistance Group towards extending the investment of capital in under-developed countries; and what contribution Her Majesty's Government are planning to make in 1962.

The Development Assistance Group has now become the Development Assistance Committee of the O.E.C.D. The rôle of the new Organisation in encouraging the provision of capital to under-developed countries is described in the communiqué issued on 17th November, which I have said is being circulated in the OFFICIAL REPORT. Our own governmental aid expenditure is running at about £180 million this year, as compared with £150 million last year.

Will the right hon. and learned Gentleman say what percentage of the gross national product is represented and whether he thinks it is enough?

National Economic Development Council


asked the Chancellor of the Exchequer what conclusions he has now reached about the representation of consumers on the proposed National Economic Development Council.

I have nothing to add at present to the reply I gave to the hon. Member's supplementary question on 14th November.

Is not consumer satisfaction the final test of sound economic planning, and ought not organisations of consumers to be represented equally with organisations of producers? Will the right hon. and learned Gentleman consider the possibility of extending the number of proposed independent members and include among them someone conversant with consumer interests?

I have heard with interest what the hon. Gentleman has said, and I will certainly bear it in mind.

Has my right hon. and learned Friend noted that at least one hon. Lady opposite who is in the Chamber hopes that absolute chaos will be produced in the planning council by the presence there of the Trades Union Congress?

Will the Chancellor consider allowing representation to the Co-operative Movement, which represents 12 million consumers?

Personal Incomes, Scotland


asked the Chancellor of the Exchequer what number of incomes before tax, for the latest convenient 12-month period in Scotland, totalled under £400 per annum, and under £600 per annum, respectively; and if he will state the comparable figures in respect of England and Wales together.

The latest year for which estimates have been made is 1954–55 and they relate only to incomes within the purview of the Inland Revenue Department, so that they exclude most incomes below the effective exemption limit (then £155 a year). The figures for Scotland are 1 million and 1·6 million, respectively, and for England and Wales 8·5 million and 14·3 million. The combined incomes of a married couple are counted as one unit.

No wonder the Prime Minister apologised at the Guildhall the other week for his speech some years ago about never having had it so good. Is the hon. Gentleman aware that the figures he has quoted represent the actual position in Scotland, not only then but at present, much more accurately than the reference to the misleading average of £15 per week so often quoted by his right hon. Friends? Will the Minister give us some indication of how he intends to ensure that those earning less than £7 14s. a week at present will be raised to the £20 a week level promised at Brighton by the Prime Minister?

If the hon. Gentleman would care to debate the issue of the widely diffused increase living standards of the 1950s I should be pleased to do so at any appropriate time either in this Chamber or outside. I should like to remind him of the simple Fabian calculation that over the country as a whole there was a 20 per cent. rise in living standards in the 1950s, and I hope that the hon. Gentleman will not forget the large improvement in the position from matters not directly related to personal income, like, for example, the improvement in the education service.

Property Companies (Usa Office Building)


asked the Chancellor of the Exchequer what applications he has received from two British property companies for capital exports sanction to enable them to build a 20 million dollar office building in Boston, Massachusetts; and what action he is taking to protect the United Kingdom balance of payments position in this and similar transactions.

The transfer of a small proportion of this sum was authorised in April and May last. The bulk of the money was to be raised abroad. As to the general question, I am carrying out the policy which I stated to the House on 25th July.

Will not the Chancellor be a little more forthcoming than that? Is he aware that the chairman of one of the property companies concerned has said that if it is not possible to raise money in the United States it will be raised here? Cannot the Chancellor give a categoric assurance that this sort of speculative transaction will not be allowed if it involves a drain on our balance of payments? What is the good of appealing to our exporters to increase their efforts if this sort of thing is allowed to continue?

Within the limits of the general policy I laid down, each case is looked at on its merits from the point of view of what advantage it has for this country's balance of payments and visible or invisible earnings. I have nothing to add to my original answer.

Has the Chancellor seen figures published recently by the United States Department of Commerce showing that the return, in terms of current earnings, on capital invested by this country in America is far less than the return on American capital invested in this country up to a comparable amount? In view of this and the clear detriment to our current capital balance of payments, will the Chancellor look at these cases very carefully indeed?

Certainly I will. But I do not think it would be wise to exclude us from what might be very profitable undertakings.

Can the Chancellor say whether the overseas trading corporation legislation will apply to transactions of this kind? May I remind him that that legislation, which was enacted by his House some years ago, did not require the revenue from investments not registered in London to be returned to this country. If, in fact, profits made by this kind of investment are not returnable to this country, what contribution is this kind of transaction making to the economy of Great Britain?

That is a rather different issue. If the hon. Gentleman wishes to put down a Question, I will try to answer it. Regarding approval of individual cases, what the hon. Gentleman said in the latter part of his supplementary question is relevant.

Is my right hon. and learned Friend satisfied that sufficient income is brought back to this country from capital invested abroad? Is he satisfied that the recent steps he has taken are proving satisfactory?

Regarding the first part of my hon. Friend's supplementary question, I am not satisfied. Regarding the second part, I am doing what I can to see that the position is improved.

Shipbuilding (Credit Facilities)


asked the Chancellor of the Exchequer what proposals he now has for improving the facilities available for credit financing for British exporters, particularly those engaged in heavy industry such as shipbuilding.

Will the Chancellor say whether we may expect some definite statement from him? Is he aware that there is increasing concern among exporters and particularly in the shipbuilding industry over this matter, and quite definite charges have been made that British shipbuilders are very much worse off than many of their competitors abroad, despite the Peat, Marwick, and Mitchell report? May we have something definite soon; if not a definite Government proposal, at least some fuller statement of the facts?

I think that the hon Gentleman, with his experience of this matter, knows how extremely complicated it is. I will certainly make a statement as soon as possible.



asked the Chancellor of the Exchequer whether, in view of the special difficulties through which the Scottish economy is now going, he will take steps to ease his credit policy in such a way as to take account of those specific difficulties.

In all our economic arrangements we take full account of the special problems of Scotland, and will continue to do so.

The Question was put down precisely because the Government do not do that. Does the hon. Gentleman recollect that in the discussions on the Local Employment Act the point was made by hon. Members on this side of the House that special measures ought to be taken to deal with the particular problems in Scotland and that the Scottish economy was suffering unduly harshly from the present restrictions imposed by the Government? Would not he consider being more discriminatory in the application of this policy?

I understand the point which the hon. Member puts, but my answer is that I do not agree with him. At the present time there are 28,000 new jobs in prospect in Scotland, and of those 24,000 are in the Development Districts. I certainly would not agree with the hon. Gentleman that the Local Employment Act has failed in Scotland.

Is the hon. Gentleman aware that as a result of the "special considerations" given to Scotland there are now more unemployed there than there were in 1951 in spite of the fact that a quarter of a million people have left Scotland?

The hon. Member asks me about 1951. I am simply pointing out that so far the results of the Local Employment Act, which we passed at the end of 1959, have proved decidedly beneficial to Scotland.

Will the hon. Gentleman consult the Prime Minister and the Secretary of State for Scotland? If they cannot agree on anything else, at least they might agree on the figures they publicise. The figures they have given for jobs in the pipe-line have been three different figures from three different Ministers in the same Government.

The hon. Member must recognise that figures for jobs in prospect do not remain constant the whole time. I should have thought that was commonsense.

Universities (Admissions)


asked the Chancellor of the Exchequer whether he will consult the university authorities with a view to establishing a central clearing house to facilitate a more simple and orderly process for admissions to universities.

Admission of students is a matter for the universities themselves, and the universities are already examining the possibilities of a clearing house system such as is suggested by the hon. Member.

As the Chancellor is responsible for finding most of the money for the universities, will he ask them to deal with this as a matter of urgency? As the matter stands, they find it almost impossible to get admissions this year and will find it even worse in the years ahead. Will he bear in mind, in particular, the difficulties of women students and have a better arrangement before the next year begins?

I am sure that what the hon. Member has said, with which I agree, will be taken note of by those concerned.

Wages, Salaries And Dividends


asked the Chancellor of the Exchequer when he now expects the Government's pay pause policy to be discontinued.

I have nothing to add to or subtract from what I said in the House on 7th November in reply to the right hon. Gentleman the Leader of the Opposition.

Is the Chancellor aware that that was a most unsatisfactory reply? In view of recent developments, is he not behaving very like the emperor without clothes? Does he know that the rest of the country see that his pay pause policy has collapsed in ruins around him? What has he done to fulfil the pledge he gave on 25th July, as reported in column 223 of HANSARD for that day, to the effect that the policy on wages would be worked out to relate them to productivity?

On the first part of that question, I do not agree with the hon. Member at all. As I have said, the purpose of the pay pause is to try to check increases in costs, which is of primary interest to British industry and exporters. If it fails, it will be a very bad day for the people who have to earn their living in this country. In reply to the second part of the question, I am certainly carrying out what on 25th July I said I would carry out, but I do not think the time is yet ripe to make a statement on it.

Is the Chancellor aware that support for his pay pause has rested largely on the assumption that it would be fair to all sections of the community, whether organised or not? Will he bear this in mind in negotiations which are taking place, or have taken place in the last week?

In view of the Chancellor's notable triumph at London Airport in this matter last week, would he now agree that all he has achieved is that the Government are standing firm on the principle that agreements can be broken but, so far as the purpose of the pay pause is concerned—namely, keeping wages down—they have utterly failed in that wages have been raised at London Airport more than they would have been under the original application? If that is to be the pattern in future, could he not have solved the problem for teachers by promoting everyone to be a headmaster?

The Question deals with the general issue. I still maintain that it is in the national interest that there should be restraint in increases in personal incomes. The problem facing the country is to export enough to earn our living in the world. That depends on costs, and, as the right hon. Member knows full well, personal incomes, wages and salaries are a very large element in costs.

Will the Chancellor now say, in view of all that has happened in the last week in the pay pause, whether the Government now intend to reverse their decision in respect of some of the agreements that have been broken? Secondly, will he say whether in his view the pay pause is intended to extend to dividends and rents?

In reply to the first part of that question, I have nothing to add to the original Answer or to the statement I made in reply to the Leader of the Opposition in the debate on 7th November. In regard to dividends—[HON. MEMBERS: "Rents."] The right hon. Member asked about dividends—[HON. MEMBERS: "And rents."] In regard to dividends and all other forms of increases in personal incomes, I hope that my request will be taken note of.

Is the Chancellor oblivious to what has been happening in the real world in the last two or three days? Does he still go on saying that he hopes this policy will succeed in face of what is happening before all our eyes? How does he reconcile what is happening with his refusal to do justice to white-collared workers?

I do not accept at all what the right hon. Member says. With reference to the one specific matter, the settlement in the electricity supply industry, the Prime Minister is to make a statement at the end of Questions.

Would my right hon. and learned Friend agree that it is abundantly clear that the results of his policy are that strikes pay?

Trade And Commerce

Fielden Bridge, Auckland (Site)


asked the President of the Board of Trade what progress is being made with the development for industrial purposes of the Fielden Bridge area, adjacent to the St. Helen's, Auckland, site; and how many inquiries have been received for industrial development there.

The Board's regional office in Newcastle-upon-Tyne, has shown this site to six firms so far, as well as suggesting it to other inquirers. One firm is known to be interested in the site.

Would not one of the answers to this problem be building roads and making other improvements to this site? Would the right hon. Gentleman follow his hon. Friend's statement in Scotland and take full account of the problems of South-West Durham? May I remind him that there has been no reduction in male unemployment in this area since the passing of the Local Employment Act?

I noticed the hon. Member's Question about roads asked to the Minister of Transport on 15th November. As to employment in Durham generally, I gladly give the assurance the hon. Member asks.

Census Of Production


asked the President of the Board of Trade whether he will reallocate the items included under the different headings in the Census of Production in order to give more useful information to the metal working industries.

Representatives of industry are consulted about the Census of Production questions to ensure that the information collected is in a useful and practicable form. If the hon. Member has any suggestions to make I shall be glad to consider them.

Is my right hon. Friend aware that a number of industrialists are very dissatisfied with the information which is produced? Is he aware, for instance, that under the heading, "Art Metal Ware," reproduction brass ware is merged with ornamental gates and under "Agricultural and Horticultural Appliances," brass sprays and spraying equipment are merged with apparatus for keeping chickens, and the resulting information is not very helpful to the trades concerned?

I should be very glad to look into the cases brought to notice. We try to make the information collected as useful as possible to industry, and to this end well over 250 trade associations are consulted. We shall be glad to hear other representations corresponding to those mentioned by my hon. Friend.


asked the President of the Board of Trade what is the annual cost of producing the Census of Production; and why three years elapse between the end of the year to which it refers and the publication of the Report.

The average annual cost of taking the censuses of production is estimated to be about £220,000. Most of the information is made available well within three years, but the Census is a basic inquiry directed to many firms, and to collect all the returns and publish all the results inevitably takes time, though less than formerly.

Is my right hon. Friend aware that stale information is quite useless to industry, if not dangerous? In view of the costs concerned and also the fact that if we enter the Common Market we shall need quick and accurate information, will he do what he can to expedite production of this information.

The first results are made available within a period of twelve months and on the census as a whole we do quite well—much better than the United States.

Exempt Private Companies


asked the President of the Board of Trade how many exempt private companies have been registered in the last 12 months for which figures are available, and for the immediately preceding 12 months.

Exempt private companies are not registered as such and exemption is often not claimed until many months after incorporation. The number of private companies registered in 1959 was 28,989, in 1960, 34,058, and in the first ten months of 1961, 28,365. On past experience some four out of every five companies on the register file exemption certificates in due course.

is not my right hon. Friend aware that one of the conclusions which one is forced to draw from these figures is that the opportunities deliberately to mislead the public are increasing every day? In view of the fact that there still seems to be no prospect of the Jenkins Committee reporting in the foreseeable future, will not my right hon. Friend now take steps to redeem the Government's promise to introduce legislation during this Session to deal with the more obvious abuses in company law?

I do not agree with the conclusion which my hon. Friend chooses to draw from my answer. The Jenkins Committee is working hard, and I do not think that it will be so very long before it is able to produce its report. In the circumstances, I do not agree with the third part of my hon. Friend's supplementary question.

Imports (Cost)


asked the President of the Board of Trade how much more United Kingdom imports for 1960 would have cost if the terms of trade had remained the same as in 1954.

If import prices had remained unchanged from 1954, the goods imported in 1960 would have cost £83,000,000 more.

I am staggered by that figure, because I have seen it calculated as nearer £500 million. Could the figure be checked once more? What proportion of the extra money would have gone to the poorer parts of the Commonwealth to help raise their standard of living?

I will gladly check my figures again. It might be best if I wrote to my hon. Friend and told him how I arrived at the figures given in my Answer. It does not follow that if the terms of trade were different there would necessarily have been a bigger surplus available for overseas investment.

Internal Reserves


asked the President of the Board of Trade to what extent the improvement in the United Kingdom physical trade gap is due to the running down of internal reserves; how much lower they are today than on 1st July, 1961; and if he will make a statement.

The reduction in the deficit on visible trade since the second half of last year has been associated with a sharp decline in the rate of stock-building, but total stocks in the economy continued to grow up to the end of June. Information at present available about stock movements during the third quarter suggests that there was no substantial change.

Is it fair to assume that if there has been no drop in our internal material resources, therefore the real position between imports and exports has improved and there is no fake about it?

Communist Bloc Countries


asked the President of the Board of Trade what is the present rate of annual value of Great Britain's import and export trade with countries of the Communist bloc; what are the prospects for the expansion of this trade; and what estimate he has made of the extent to which these prospects would be affected by Great Britain's entry into the Common Market.

As the answer to the first part of the Question contains a table of figures, I will, with permission, circulate it in the OFFICIAL REPORT. The prospects are that the trade in both directions will in general continue to expand steadily. As trade between the Six and the Communist bloc has increased steadily since the formation of the Common Market, there is no reason to suppose that our own trade prospects with the bloc will be significantly affected if we join the European Economic Community.

Can the right hon. Gentleman give a firm assurance that any present negotiations for the expansion of East-West trade and trade between the United Kingdom and the countries of the Eastern bloc are in no way being jeopardised by the negotiations to enter the Common Market?

Is the Minister aware of a report recently published by the Joint Economic Committee of the United States Congress advocating an economic embargo against trade with the Eastern countries in support of N.A.T.O.'s strategy. In view of the danger to this country's balance of payments, which was admitted in that Report, will the Minister take this opportunity of dissociating this Government from any such ideas of an embargo?

I have not studied the Report but I can assure the hon. Member that at present our policy of trading with the countries of the Soviet bloc remains unchanged.

Will the Minister note that neither the political prejudices of West Germany nor its dependence on American good will inhibits West Germany in developing its trade with the Communist bloc? Will he take the moral?

Following is the information:

CountryCurrent Annual Rate*
United Kingdom ImportsUnited Kingdom ExportsUnited Kingdom Re-Exports
East Germany7·17·92·1

* 9 months of 1961 expressed as annual rate.

General Agreement On Tariffs And Trade


asked the President of the Board of Trade what progress is being made in the current General Agreement on Tariffs and Trade negotiations for a 20 per cent. all-round tariff cut; and if he will make a statement.

Negotiations continue, but I cannot disclose details of them while they are in progress.

Will the Minister give an assurance that notwithstanding our entry into the Common Market—which, in fact, makes this more urgent—the Government will energetically pursue a policy of getting all-round reductions in G.A.T.T. in order that when we enter the Common Market the discrimination which would otherwise affect our trade with the rest of the world will be lessened?

We are anxious to secure further liberalisation through tariff reductions, as much as ever before.

Prime Minister (Speeches)


asked the Prime Minister whether he will make available in the House of Commons Library the full text of his speech upon national policies at the Mansion House on 13th November, 1961.

Is the Prime Minister aware that I am particularly interested in his belated defence of his phrase "We have never had it so good" as a warning? In view of the fact that the Prime Minister has always been ready to ignore it himself and in view of what the Chancellor of the Exchequer said today, will he undertake to remove it from the mausoleum and to bury it in some appropriate seclusion?

I thought that the hon. Member had asked for a copy of the speech to be placed in the Library in order that he might ask questions after he had read it, not before.


asked the Prime Minister whether he will place a copy of the speech he made to industrialists in Glasgow on 3rd November on the subject of the Scottish economy in the House of Commons Library.

No, Sir. My speech at Glasgow on 3rd November was made at a private luncheon, and I do not think that it would be usual or appropriate to place a copy of it in the Library.

Does the right hon. Gentleman recall that he created the impression in the House last week that this occasion was of great moment for the Scottish economy as a whole and that it was important for him to meet industrialists? Is he aware that the president of the Scottish Unionist Association, a former Secretary of State for Scotland, said that the primary purpose of the Prime Minister's visit was to reorganise the Scottish Tory Party? Will the right hon. Gentleman therefore place in the Library a copy of his speech so that we may find out whether his journey was really necessary?

I feel sympathetic towards the hon. Gentleman's request because it is always very flattering if people want to read one's speeches after they have been made. One of the difficulties is that no copy of it exists.

Does not the right hon. Gentleman recall that he told us last week that this speech referred to the need for expansion in the Scottish economy and that he was appealing to businessmen? Does he understand that we are anxious to see what in fact he said because, according to the reports, his speech was followed by an appeal from Sir Hugh Fraser to a great many men who had made huge sums of money in capital gains on which they had paid no tax to be generous in their contributions to Tory Party funds?

The other difficulty is that the hon. Gentleman seems to take too narrow a view. Of course, I spoke largely about the future of the economy of Scotland and of course, it is true that the strength and future success of this island depends very much upon the return of the Conservative Party to power.

Would not the amount of money which the Prime Minister raised for Conservative Party funds at this lucrative luncheon be quite sufficient to provide for the extra old-age pension at Christmas?

That kind of observation is not only foolish but is quite out of scale with the problem.

Is my right hon. Friend aware that the general view expressed in Scotland is one of great pleasure that he visited our country recently, that we hope he enjoyed his luncheon, and we hope that he will return many times to give us the benefit of his views on the economy in which he takes so much personal interest?

Is the Prime Minister aware that there is strong public opinion in the West of Scotland that it is below the dignity of a British Prime Minister to travel to Scotland to get money for the Tory Party funds out of take-over bidders?

Of course I understand the hon. Gentleman's views about the people in the West of Scotland and their feelings and he is quite at liberty to express them. He is not a Scotsman and perhaps he expresses them all the better for that, but I have as much right to express my views, just as much as anyone else—just as much as any Welsh hon. Member.

In view of the grossly unsatisfactory nature of the reply, I give notice that I shall raise this matter on the Adjournment.

Diplomatic Functions (Government Representation)


asked the Prime Minister if he will instruct all Ministers to boycott official functions arranged by diplomatic representatives of Governments with whose defence and foreign policies Her Majesty's Government is not in agreement.

Is the Prime Minister aware that recently his Foreign Secretary boycotted a function at the Russian Embassy on the ground that their Government were dropping bombs? Was similar action taken with regard to American and French diplomatic functions when their Governments were dropping bombs? Will he be surprised if other nations apply the precedent which he has created to us if we begin to experiment with the neutron bomb?

My noble Friend cannot attend all the receptions held by all the embassies on all their national days. On this occasion, as on many others, he was represented by a Foreign Office Minister.

Is the Prime Minister not aware that a statement was issued making it clear that the Foreign Secretary was not only boycotting the function himself but was seeking to get other people on both sides of the House, who had been invited, to boycott it, too?

No, Sir. I think that in these circumstances it was appropriate that the Minister of State at the Foreign Office should represent the Foreign Office at this function.

Is the Prime Minister aware that, generally speaking, this was a rather pathetic gesture for a great country like ours not to attend the national day of one of the greatest countries in the world? We ought to try to do better. They are not a bit impressed with it.

Is the Prime Minister not aware that according to many of the newspapers, which have not been repudiated, the Foreign Secretary himself let it be known that his failure to attend was intended as a protest against the Russian unilateral resumption of bomb tests? If he stayed away for that reason, will the Prime Minister say what useful purpose is served by these displays of moral indignation and self-righteousness? Is he not aware that all over the world these things are regarded as merely another example of the characteristic British Tory attitude that when they have the ace up their sleeves it is God Almighty who put it there?

In reply to the last two questions, I still think that in the circumstances my noble Friend was very properly represented by a Foreign Office Minister.

Is the Prime Minister aware that the Foreign Secretary's action met the wishes and instincts of the great majority of the British people?

Yes, Sir. I think that in the circumstances he made the right decision.

Secretary Of State For Air (Speech)


asked the Prime Minister whether the speech of the Secretary of State for Air at Preston on 3rd November, on air strategy, represents the policy of Her Majesty's Government.

Is the Prime Minister aware that this speech appears to have been one of a series of speeches in which Service Ministers discussed the question of our capacity to bomb the civil population of the Soviet Union? Does he think that such speeches ease international tension? Would it not be a good thing, in view of what would happen to our civil population in similar circumstances, if statesmen on both sides stopped threatening each other?

My right hon. Friend made no threats. Our air strategy is deterrent; it is a form of defence, not attack.



asked the Prime Minister whether he will now invite President Kennedy, Chairman Krushchev and President de Gaulle to join with him in discussions on the basic principles of a peace treaty with Germany.

While I would not exclude any means of reaching a solution to the wider problems such as a peace treaty with Germany, we are at present searching for the basis of an understanding with the Soviet Union on Berlin. This is the immediate question which must be dealt with.

I recognise the difficulties of a Prime Minister who has had to take over the Treasury as well as the Foreign Office, but does the right hon. Gentleman recognise that there can be no lasting solution of the Berlin problem without a settlement of the German question as well, and will not this certainly require a meeting at the highest level if we are to have a satisfactory result?

Does the Prime Minister agree that tension appears to be rising in Berlin, with the action of the East German Government in creating another wall, and so on? In the circumstances, can we afford to be complacent? Ought not some action to be taken, and has there not been undue delay?

I hope that we shall be able to take action to try to deal with the problem of Berlin.

Minister Of Pensions And National Insurance


asked the Prime Minister, in order to further the policy of Her Majesty's Government regarding assistance for old people, as announced in his recent speech at Guildhall, if he will consider appointing the Minister of Pensions and National Insurance to the Cabinet.

I am confident that my right hon. Friend the Minister of Pensions and National Insurance will be fully able to forward the Government's policies for old people, whether he is a member of the Cabinet or not.

Does my right hon. Friend realise that it would mean a great deal to the older folk to have someone with a specialised knowledge inside the Cabinet rather than outside, and would it not underline the words in the Queen's Speech about maintaining the strength of sterling because no one has a greater interest in preventing inflation than the Minister of Pensions and National Insurance, since he knows the cost to the pensioner, to the Government and to the country if inflation is not stopped? Also, would it not allay the growing concern in the country about the resolution of the Government in maintaining the strength of sterling following the wage pause?

Of the 21 member of the present Cabinet, 14 are in charge of Departments, and there are nine Ministers outside the Cabinet also in charge of Departments. We try to work as a whole, and I do not think that the power and authority on a special subject of a particular Minister is affected by any question of his membership of the Cabinet.

Does not the Prime Minister realise that, while it might help to have a Minister in the Cabinet, what the old people want is a practical demonstration of help, and the inference to be drawn, apparently, from what the Prime Minister said in his speech is that old people must wait for that practical demonstration?

As regards a practical demonstration, the value of the pension now is higher than it has ever been at Christmas in the past. It is 16s. 6d. higher for a single person than it was at Christmas, 1951. What I was appealing for was not only for things on the material side but for the personal interest that people might take in old people to help them in other than purely material ways.

Old-Age Pensioners


asked the Prime Minister what instructions he has given to the departmental Ministers concerned to implement the policy, outlined in his speech at Guildhall on 13th November, concerning benefits for old-age pensioners at Christmas.

In my speech at Guildhall I said that I hoped we would all try to see that old people are not lonely at Christmas.

Since the Prime Minister recognised in his speech that the old people had not shared in the general level of prosperity, is that all that he meant? Is it good enough for him to raise false hopes that something is to be done to help their material well-being, when what he really meant was that people should, perhaps, be a little kind to old folk at Christmas, which, important though it is, does not meet the real needs of the old-age pensioner? Will the Prime Minister consider asking the Minister of Pensions and National Insurance to double the old-age pension at least for Christmas week?

No, Sir; I do not think that that would be a practical suggestion. [HON. MEMBERS: "Why not?"] We have discussed in detail the material questions of the rate of pension, and so on, and, as I have said, ours is the highest and most effective that there has ever been in the country. What I was trying to say on that occasion—I am happy to think that Members of all parties join in it—is that there is still room, whatever may be the material arrangements made, for personal effort and work on a different plane. It was for that that I was trying to appeal, and I am happy to feel that many hon. Members of all parties join in that appeal.

Is the Prime Minister aware that, while old people will, I am sure, greatly appreciate his concern for their loneliness, they would nevertheless appreciate a practical measure which only the Government can take? Will he explain just why it is impossible to double the old-age pension over Christmas?

That is an entirely different question as to the material benefits which are given by the pension. I think no one was under any misunderstanding about what I said, which was to make an appeal—I am happy to know that hon. Members join in it—to ensure that, even in the Welfare State and with all our various social services, people do remember that there is a great place for personal and human relations.

Is the Prime Minister aware that the old-age pensioners will take a very dim view of that explanation? Would he not have been well advised, before offering sympathy, to have devised some practical means of helping them?

I do not think that they will take a dim view if they look back to 1951 and remember what their pension was like then.

As old-age pensioners are so much better off now than they were in 1951, what about taking some of the old people out of the Cabinet and putting them on the old-age pension in order that they may have the benefits?

If we were to make a fair examination of the two sides of the House, it would be quite clear where the old-age pensioners were.

Wages, Salaries And Dividends

With permission, Mr. Speaker, I will now make a statement.

When announcing the series of measures introduced on 25th July in order to strengthen the economy at a time when sterling was under considerable pressure, the Government asked for a pause in increases in personal wages, salaries and other incomes. This was because for a number of years increases in money wages had persistently outstripped increases in production, with a consequent serious impact on costs and prices. The pause was also designed to give time for a long-term policy to be worked out, in consultation with both sides of industry, which would ensure a more satisfactory continuing relationship between incomes and production.

The policy of the pause has been maintained in the case of direct employees of the Government. It has been generally followed by local authorities and private industry. Here, the Government have had to depend upon those responsible for decisions being willing to follow the Government's advice: there can be no question of coercion. The same is true in the case of the nationalised industries, since the Government have no authority under the relevant legislation to issue a direction concerning a particular wage claim.

It is against this background that the recent decision in the electricity supply industry must be judged. The decision in that case rested with the Electricity Council, but the Government had left the Council under no doubt as to the importance which the Government attached to their policy about the pay pause. It is the case that previous settlements in the electricity supply industry have run either from the date of agreement or have been backdated, whereas the recent settlement dealing with a claim entered on 20th July, 1961, will not come into effect until 28th January, 1962.

Nevertheless, the Government do not regard this settlement as being consistent with the policy of the pay pause as announced by my right hon. and learned Friend the Chancellor of the Exchequer on 25th July. Accordingly, when my right hon. Friend the Minister of Power was informed, late on Thursday evening, that a final offer was about to be made, he expressed great disquiet and anxiety and emphasised the damage that a settlement in the terms proposed would do.

While there has been some improvement as a result of our short-term policies the economic situation remains serious, and it is still vitally important to prevent costs rising so as to avoid inflation and expand our exports. I must, therefore, urge all concerned, whether in nationalised industry, local authorities, or private industry, to make every effort to maintain a policy of restraint over wages, salaries and dividends.

Could the Prime Minister explain what is the purpose of this rebuke to the electricity supply industry? Would it not have been fairer to have presented its point of view in a statement in Parliament? Is the right hon. Gentleman proposing to take any steps about this? If the Government have no power in the matter, does not all this point to the impossibility of trying to carry out a policy of wage restraint without the full agreement of both sides of industry? Will the right hon. Gentleman say what steps have been taken, or are being taken, to work out the long-term policy to which he refers in his statement?

It is, of course, true, as the House knows, that the Government have no statutory powers to settle the wages of any except their direct employees. It might be urged that they should take powers over the nationalised industries, but should they then take powers over private industry and local authorities? In that case we are moving a long way from a free society, which it is our purpose to preserve.

I am, therefore, convinced that the right way is to trust—as the right hon. Gentleman the Leader of the Opposition suggests—to influence and to suggest ways in which we should try to get general understanding. I am impressed by the willingness of all sides of industry to join together in trying to work out such a policy. We cannot, in a free society, do it by taking full authority over the whole wage structure of the country. We can try gradually to work towards a general understanding of what is best for all, and the Government will not abandon their policy because of a set-back in a particular instance. They will continue with their campaign.

While recognising all the complex reasons which have led to the inconsistency between the policy of Her Majesty's Government and the award by the electricity supply industry, could my right hon. Friend the Prime Minister tell the House what steps are being taken to prevent a repetition of this kind of thing in the nationalised industries, notably in view of the large pay claims at present pending from railwaymen and coal miners, both of whom are employed by the nationalised industries?

We must rely on those who manage this industry—public servants—to carry out what they think to be right. I am not dismayed merely because there has been one instance which has not fully carried out our policy.

Have not the Government been in office for ten years? Are they now telling us that only now are they beginning even to think about a policy for wages, dividends and profits? The truth is that they are not abandoning a policy because they never have had one. They have had temporary expedients year by year which have totally broken down because there has been no indication of what is the Government's long-term policy. How does the Prime Minister reconcile the gross injustice between one group of workers and another?

No policy can operate successfully in a free society except by general acceptance and working together. The right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) seems to be suggesting that we should move towards a kind of Fascist society, where we would impose our will. That is not my view. Taking the past ten years as a whole, we have made an enormous advance in the standard of living of our people. This represents a great advance on anything known in the past. I do not abandon hope, for I am a democrat and I believe in doing this by democratic means.

Am I not right in assuming that my right hon. and learned Friend the Chancellor of the Exchequer said at the time of outlining his policy that he had had conversations with the chairmen of the nationalised boards? If so, did the chairman of the Electricity Council tell my right hon. and learned Friend that he did not agree with the Government's policy? What was the relationship between the chairmen of the nationalised industries and my right hon. and learned Friend? Is it not very unfair that the chairman of the Electricity Council did not tell the Government about this at that time?

The chairman of this particular board was well aware of the Government's views. That he made a settlement not altogether in accordance with our views I regret, but it would be a dangerous and revolutionary measure if the Government tried to make themselves responsible for the precise wage agreements of all the nationalised industries.

Will the Prime Minister tell us what the chairman of the Electricity Council said to the Minister of Power and why he decided to make this agreement? Is the right hon. Gentleman aware that his answer to my earlier question absolutely confirmed the view which is strongly held on this side of the House, that the Government: have got themselves into an impossible position with their pay pause because of its unfairness between different: groups of workers? Would it not be wise, at this stage, to drop the pay pause as such and to start free and frank negotiation with the unions and employers and, in so doing, at least to try to give the impression that the Government are anxious to achieve social justice in the community?

I quite understand the right hon. Gentleman's view. It is exactly those negotiations and discussions which are going on. But these claims come in from time to time, dated on this day or another, and they must be dealt with. In my view, the main purpose and interest of all concerned, including especially the wage earners, is that wages should maintain their real value.

Does not my right hon. Friend think that further claims from the nationalised industries will inevitably point to the precedent of the electricity settlement and that claims in the private sector will inevitably point to the settlements made in the nationalised industry?

On a point of order. Is it not the practice in this House for a Member who is a director of a company which has increased its dividends recently to declare his interest in that company?