asked the Secretary of State for Employment if he will review the system of granting permits to domestic workers from overseas with a view to eliminating the exploitation of such workers.

My Department has recently carried out a review of this and various other aspects of the work permit scheme, and has sent proposals for a number of new safeguards to the CBI, TUC and Manpower Services Commission. I am now awaiting their comments and hope to make an announcement in the near future.

I thank my hon. Friend for that answer. Does he accept that his Department is responsible for ensuring that the conditions for foreign workers are fair, and will he accept that the onus for proving that such conditions are fair should rest upon the employer who is seeking to bring foreign labour into the domestic trade? Will he consider establishing a system of compulsory registration for agencies involved in this business, so that the worst of them can be eliminated?

I accept that responsibility and I am anxious to ensure that there is no exploitation of foreign workers. As for the agencies, we intend to tighten up the regulations to control agencies and to make sure that people are not exploited by having to repay excessive fares. I accept responsibility for trying to improve conditions for foreign workers.

asked the Secretary of State for Employment whether he intends to use the services of the proposed Equal Opportunities Commission to ensure that the objectives of the Equal Pay Act 1970 are fulfilled.

Yes, Sir. The main responsibilty for enforcement of the Equal Pay Act will rest with the industrial tribunals, but as the White Paper on "Equality for Women" indicates, it is envisaged that the Equal Opportunities Commission should have the power to assist individuals in presenting complaints and conducting legal proceedings, and that it should advise the Government about the operation of the Equal Pay Act.

I thank my hon. Friend for that reply. Does he agree that the Act needs the most careful monitoring, which will require all support at this difficult time? Does he accept that the Act also involves the principle of unimpeded progress towards majority rule?

The last principle is one which one always supports. The Act needs monitoring, and my Department does that. My hon. Friend will have noticed that through advertisements we have been most anxious to draw the requirements of the Act to the attention of employers and employees.

Is the Under-Secretary saying that his right hon. Friend the Secretary of State supports majority rule, or that he supports minority rule?

I am sure that the hon. Member for Yarmouth (Mr. Fell) will have the chance to put that question later.

My hon. Friend's reply betrays more than a hint of male chauvinism. Does he recognise that many women simply will not go to the industrial tribunals upon which he places so much reliance? Is he aware that four years after the passage of the Equal Pay Act women are still getting, on average, less than 55 per cent. or 60 per cent. of male wages? Is it not time, bearing in mind that employers will have to do something about this matter next year, that the Government pulled up their socks?

I must reject any suggestion that the Government have been inactive in giving effect to the provisions of the Equal Pay Act. Women's take-home pay is likely to be less than that of men's because they work less overtime—

Chauvinist.

I accept that some women will not present their own cases to tribunals. That is why we are giving the Equal Opportunities Commission the power to present claims on behalf of women. The more women who join trade unions, the more likely it is that their objectives will be achieved.

asked the Secretary of State for Employment if he remains satisfied with the operation of his policy on wage levels; and if he will make a statement.

asked the Secretary of State for Employment whether he is satisfied with the working of the social contract.

asked the Secretary of State for Employment what progress he has made in ensuring the success of the social contract.

asked the Secretary of State for Employment whether he is still satisfied with the working of the social contract.

asked the Secretary of State for Employment whether he is satisfied with the operation of the social contract.

The social contract covers the whole range of Government economic policies, and the degree of progress in its fulfilment cannot be covered in the answer to one Question. If Questions are referring more specifically to the TUC guidelines about wage negotiations involved in the social contract, my reply is that it has had a considerable measure of success and continues to provide the best basis for the conduct of Government policy.

Will my right hon. Friend stiffen his resistance to the goo-like blandishments coming from the Opposition Front Bench and from my right hon. Friend's colleagues in the Treasury, to the effect that Britain could solve its economic problems by this Government sacrificing the living standards of the workers they represent? Will my right hon. Friend circulate his Cabinet colleagues setting out the terms of the social contract, which are, as the TUC believes, that there should be one wage increase per year based on take-home pay and not gross pay, and equated with the rise in the retail price index, and that this in itself will ensure that the living standards of workers represented by trade unions will be maintained? Many people feel that in this way my right hon. Friend could now make a contribution towards a wider understanding of current wage agreements.

I hope that I shall resist such blandishments from any quarter, including that of the right hon. Member for Lowestoft (Mr. Prior) and his friends. We have had constant discussions with the TUC, including the discussions this week. I believe that there is a full understanding between the TUC General Council representatives and the Government about what we mean by the guidelines, and that there is agreement that one of the ways in which we can assist in dealing with the country's economic problems is to secure the best possible allegiance to those guidelines.

Is it not clear that the huge pay settlements supposedly within the social contract represent the biggest single threat to full employment at present? Will the right hon. Gentleman take immediate measures drastically to revise the guidelines within the social contract so as to secure a major reduction in the average level of wage settlements?

I do not think that what the hon. Gentleman suggests is the right way to go about it. Any attempt to rewrite the guidelines along the lines he suggested would only cause confusion and injustice. It certainly would not contribute to the end we have in mind of a successful fight against inflation. I believe that the best way is by securing a strict allegiance to the guidelines as they stand. I also believe that that is the desire of the trade unions, along with ourselves.

Will the right hon. Gentleman say—preferably in two words, if not in two sentences—whether the present rate of wage settlements, to which the Chancellor of the Exchequer has drawn attention, is a mark of the success or the failure of the social contract?

Some of the settlements are successes and some are failures. We have not sought to conceal that. I have had a correspondence on the subject with the right hon. Member for Lowestoft, who accused me of having in some mysterious way concealed these matters. I have not done so. I hope that our exchange of letters on the subject will be published in the Official Report. Then the hon. Gentleman may see even more clearly what view we take of these settlements.

Does my right hon. Friend appreciate that he should not get involved in appearing to lay the blame for inflation upon workers and their attempts to improve or even maintain their standard of living, especially in the light of the recent announcement by the Government that they will agree to salary increases of up to £8,000 a year for those at the top of the armed forces and in the higher echelons of other institutions within our Establishment? Surely my right hon. Friend cannot reconcile that sort of increase with some of the paltry rises that my right hon. Friend, in particular, constantly talks about—and seemingly talked about again last night.

The Boyle Report—if that is the document to which my hon. Friend is referring; I expect it is—certainly presented the Government with great difficulties, because it did not take account of the TUC guidelines and, in a sense, was produced without relevance to them. The Government did not accept the report in anything like its full degree. For any further comment on that matter, however, I refer my hon. Friend to the statement made by my right hon. Friend the Prime Minister on the subject.

Will the right hon. Gentleman explain how his oft-repeated plea for free collective bargaining can be reconciled with policies aimed at achieving full employment?

Yes, Sir, but that is a much bigger subject than anyone would seek to deal with in a short answer. We are trying to work the matter out in this way because the attempt to combine statutory policies with any policy of maintaining full employment collapsed completely. We are not going back to the statutory method of trying to control these matters.

Will my right hon. Friend draw the attention of the Press to more meaningful figures than those given such publicity in the newspapers this morning? In particular, will he draw attention to the real income after tax, which is the figure with which hon. Members on the Government benches are concerned?

The worst example of misleading figures in the newspapers this morning was the headline in The Times saying,

"Earnings may be rising by 37 per cent. a year, figures show".

If the social contract is concerned with lower-paid workers, why did the Government reject the idea of a statutory minimum wage within the social contract? Is 28·5 per cent. taken as being within the social contract, in terms of average wage increases?

I shall take the hon. Gentleman's last point first. It is a very important matter, and nobody minimises its significance. About two-fifths of the 28·5 per cent. annual increase quoted in the reports today and in the figures published by my Department is the result of threshold agreements reached in accordance with the stage 3 code. A further 0·5 per cent. stems from the London allowance, in accordance with the recommendations of the Pay Board. In addition, nearly 2 per cent. is attributable to special cases for coal miners, railwaymen and postmen, leaving roughly 14½ per cent.—about the same as the figures we were getting under the basic stage 3 rules—[Interruption.] These are the facts of the matter. My figures happen to be correct—very different from those used in The Times.

In his last answer the right hon. Gentleman has shown that he either does not understand what is happening or is deliberately trying to mislead the House on the information available. Does he not know perfectly well that the 28·5 per cent. includes the threshold payments, which should have been taken into account in the assessment of new wage increases? Were the figures given by the Chancellor of the Exchequer on Panorama last night—when he said that one out of four settlements fell outside the social contract—based on information available to the right hon. Gentleman's Department, or was what the Chancellor said just speculation? If it was based on figures available to the Department, why cannot the House have the same information?

If the right hon Gentleman had done me the courtesy of listening to the past two speeches that I have made in the House he would have learnt that I referred to 75 per cent. of settlements having been within the social contract. That is exactly the same figure as was referred to by my right hon. Friend the Chancellor. Perhaps I should translate these percentages into other kinds of figures for the benefit of the right hon. Gentleman. What the Chancellor said in that respect accords exactly with what I said on previous occasions. If the right hon. Gentleman is asking whether and how we should give futher figures on these matters, I must point out that many of the figures are given, with some of the details, in the Department of Employment's statement which was published yesterday. Everyone who knows anything about the figures knows that. If the right hon. Gentleman will study the reply that I sent to his letter, on the question why we think it would be wrong for the Government to adjudicate on every settlement, we may be able to have a proper discussion of the subject. I repudiate entirely the argument that the Government are withholding any figures from the House. We publish the figures on the same basis as did the previous Conservative Government.

asked the Secretary of State for Employment if he will initiate an equal opportunity in employment programme in order to improve race relations in the field of employment.

As I stated in reply to a Question on 3rd December, we are planning to extend the Department's work in promoting equal opportunity between workers of different races. I hope to hold discussions in the near future with the various agencies concerned with this field to consider how the work can best be developed: [Vol. 882, c. 398.]

I am grateful to my hon. Friend for that reply. Does he agree that the problem is widespread, that it represents a great loss of talent and skill to the community at large and that it causes a great deal of frustration to those on the receiving end of discrimination? Does he accept that such frustration can easily lead to anti-social and even criminal behaviour?

I agree with my hon. Friend. It would be wrong not to use the full range of talents of people who have settled in this country and who are of a different colour from that of the white indigenous population. Having good race relations is of benefit not only to the minority but to the white community.

Does the Minister agree that the problem is exacerbated at a time when unemployment is increasing? Will he give an indication of any special action being taken by his Department to deal with the problem in the present circumstances?

There is no evidence before me—the figures are not available at present—of special problems arising out of unemployment. We are trying to develop language programmes. A Question has been tabled on that subject. If people have a skill and a command of the English language their chances of re-employment are much greater than if they suffer the disadvantage of not speaking English.

asked the Secretary of State for Employment whether he will arrange to meet the Executive of the National Union of Mineworkers to discuss industrial relations.

asked the Secretary of State for Employment what meetings he has had with the executive of the National Union of Mineworkers or the National Coal Board on industrial relations; and whether he will make a statement.

My right hon. Friend has had no such meetings, nor has he any plans for them.

Will the Minister tell the House what his right hon. Friend's attitude would be and what action he might take were the NUM to press for wage increases which, by common consent, were totally outside the terms of the social contract and which, because of that, the NCB refused, with the result that industrial action was threatened?

I can think of few areas in which it is less appropriate to answer hypothetical questions than in industrial relations. If any difficulty were to arise in negotiations, including that to which the hon. Gentleman has referred, I would indicate that the Advisory Conciliation and Arbitration Service is available to employers, managements and union negotiators.

asked the Secretary of State for Employment what study he has made of the number of firms which in 1974 had an eight-day holiday from Christmas to the New Year; and if, as a boost to the social contract, he will initiate discussions with the Trades Union Congress and the Confederation of British Industry on the possibilities of having an eight-day national holiday week covering Christmas to New Year's Day.

I do not think it would be timely, in present circumstances, to pursue this proposal for an extended national holiday at Christmas and the New Year.

Does my hon. Friend accept that working people generally have been adversely affected by rising prices, and that it would be extremely helpful if some indication were given that there was a positive side to the concept of the social contract? We all accept that holidays are basically a matter for local negotiation, but does my hon. Friend agree that an initiative of this sort taken by my right hon. Friend the Secretary of State might be welcomed by the CBI—bearing in mind the disruption which takes place in the week in question—and by the TUC? Further, does he agree that the additional days which might be involved would be more than offset by the boost in productivity which would be generated?

I would hope that any negotiations which led to increased holidays would produce the desirable result to which my hon. Friend has referred. The wage guidelines that the TUC has issued in connection with the social contract do not make specific mention of public holidays. However, negotiators are recommended to make progress towards an annual holiday entitlement of four weeks.

Will the Minister take into account the fact that this country has fewer public holidays than most other European countries? Secondly, does he agree that what is happening is that an eight-day holiday from Christmas to the New Year is in existence? Will he give that his official backing?

It is correct that there are other countries in Europe which have longer holidays than we have. I understand that our position is similar to that of the Netherlands. Some other members of the Community have more public holidays. Practice varies widely among member countries. I know of no suggestion that there should be a common approach between all countries on this matter.

Would it be a better boost to the social contract if a clause were inserted into that slightly doubtful document to the effect that for a complete year's work people could have a bonus of a few extra days off?

As the overwhelming majority of people working in British industry and services put in a complete year's work I think that the hon. Gentleman's suggestion would result in a general bonus.

asked the Secretary of State for Employment whether the TUC has informed him of the date on which the TUC review body on exclusions and exemptions from union membership will come into operation.

No, but the TUC has said that it intends the independent review committee to be in operation early this year, and I understand it has been giving the matter consideration with a view to achieving this.

Does the Minister realise that many ordinary people still think it grossly unfair that the only redress against exclusion or expulsion from a trade union is an appeal to a body appointed by the TUC? Will he try to persuade the TUC to agree that there should be an appeal from this home-grown tribunal to the ordinary courts of the land? Further, will he try to get the TUC to agree that the procedure of the tribunal should be subject to the supervision and approval of the Council on Tribunals?

The appointment of the members of the tribunal will be made in consultation with the Chairman of the Advisory Conciliation and Arbitration Service and my right hon. Friend. The legislation which we are introducing and the steps that the TUC is taking to set up the tribunal in no way infringe the common law rights of people affected by exclusion or expulsion in the closed shop situation. I take the view that the majority of people will not consider this matter anything but a most reasonable and practical step in dealing with what is admitted to be an important but a small minority problem.

asked the Secretary of State for Employment whether he remains satisfied with the work of the Conciliation and Arbitration Service.

Yes, Sir. The Advisory Conciliation and Arbitration Service continues to receive an increasing number of requests for advice on a range of industrial relations matters and for assistance in settling disputes. We have received tributes from all quarters—employers and trade unions—on the splendid way in which it has started its work.

In view of the Secretary of State's desire to give the House the fullest possible information on these matters, will he say how many settlements assisted by the ACAS have been in breach of the social contract? If he is serious in maintaining—he has done so constantly this afternoon—that strict allegiance to the guidelines is his main purpose, should he not instruct the ACAS to withdraw publicly from any negotiations at the point where the parties begin to discuss proposals which are in clear breach of the guidelines?

The hon. Gentleman misunderstands what we believe to be the purpose and possibility of success of the Advisory Conciliation and Arbitration Service. The chairman of the service, Mr. Mortimer, has publicly said that in present circumstances the service must have regard to the broad conceptions of the social contract and that it is right, when called in to assist, for it to inquire whether the parties to the dispute have taken account of the social contract. However, the responsibility for settlements rests with employers and unions. The service is absolutely independent of the Government. It is entitled to make up its mind on the basis of the facts put to it. If we interfered with that independence in the way the hon. Gentleman has suggested we would destroy the effectiveness of this body as a conciliative and arbitrating body. We have no intention of doing so. I believe that many disputes have already been settled because of the intervention of the service. Many more will be avoided because of the service, and I advise the hon. Gentleman, if I may be presumptuous enough to do so, to assist us in making the service work instead of attempting, by this kind of question, to undermine its independence.

Is my right hon. Friend aware that even before negotiations reach the stage where the service he has mentioned is called in, the whole atmosphere at shop-floor level is shrouded by the evil penumbra of the legislation introduced by the Conservative Party? Does he realise that this makes it terribly difficult for unions and management, which have not been at all assisted by the absurdities of the Industrial Relations Act which has done so much damage? May I say—

The hon. Member may not "say" things. He may ask questions.

In response to my hon. Friend's question, I assure him that we are seeking to do our best to get rid of all the evil penumbra of the 1971 Act. We have not long to wait before that is achieved. Even before the abolition of that Act we have got this service into operation. It is not yet operating on a statutory basis. This will come in our later legislation. We believe that the service is in working order, and the House ought to pay tribute to the way in which Mr. Mortimer and his colleagues are doing the job.

asked the Secretary of State for Employment whether he is yet in a position to estimate the effect on employment in civil shipyards of the cuts in the Royal Navy and the decision to concentrate naval work in the Royal Navy shipyards.

Until final decisions are taken on the proposals contained in the statement of my right hon. Friend the Secretary of State for Defence, following consultation with our allies and interested parties including shipbuilders, we cannot estimate the effects that changes in the defence programme will have on shipbuilders.

Is the right hon. Gentleman aware that the defence review provides for substantial reductions in the number of warships in the Navy and for no less than a one-third cut in the number of Royal fleet auxiliaries? Does he not accept that this must affect employment, particularly in yards which are situated in areas of present high unemployment? Will he press the Government to withdraw restrictions on the sale of warships to countries like Greece and Portugal?

The last part of that question is a matter for my right hon. Friend the Secretary of State for Defence rather than for my own Department. There will be an effective transfer of ship refitting from commercial yards. The only significant effect will be on those yards which undertook the refit of Royal fleet auxiliaries, including the yard in the hon. Gentleman's constituency. The absorption of this work into the Royal dockyards will take place only as capacity becomes available.

Since my hon. Friend has recently talked to Swan Hunter, the shipbuilding firm which has yards in my constituency and that of my hon. Friend the Member for Wallsend (Mr. Garrett), will he say whether it was the view of Swan Hunter that this would be likely to increase unemployment on a dramatic scale? Was that firm worried about employment prospects? I am told that it is not so worried.

My recent talks were with the shop stewards and management of Swan Hunter, in the ship repair division. They did not indicate any general concern about this effect. They were satisfied that they could operate efficiently and highly competitively. I hope that they will co-operate in this exercise in the belief that the Government are committed to maintaining the highest possible level of employment and that we are conscious that a great deal of shipbuilding and ship repair work takes place in the development areas.

asked the Secretary of State for Employment if he has had any recent talks with employers or trade unionists from the textile industry.

My right hon. Friend met Mr. Fred Dyson, Secretary of the National Association of Unions in the Textile Trade, on 14th November and discussed some of the problems facing the industry.

Is my hon. Friend aware that the textile industry is facing its worst crisis for 30 years, that over 50,000 people have been on short-time working of one form or another since Christmas, that more than five mills have been closed in the past two months and that many of the difficulties the industry is facing are caused by our membership of the Common Market? Will my hon. Friend discuss with his colleagues the possibility of obtaining some concessions—if we are not to leave the Common Market—so that the textile industry in this country is not killed off?

I appreciate the concern inside the textile industry. The figures I have, for November, show that 18,200 operatives in textiles were on short time. This is about 4·2 per cent of all the operatives in the industry. The import matters raised by my hon. Friend are the concern of the Department of Industry. I am sure that Ministers in that Department will study my hon. Friend's remarks.

Is the hon. Gentleman aware that what is happening in the textile industry is also happening in the shoe industry? Is he aware that both industries are seriously threatened by imports, not from the Community but from very much outside that, from COMECON countries and also from the Indian subcontinent? He said that these are matters for the Secretary of State for Industry, but I felt that the tone of his reply implied that his Department was not particularly interested in the problem. I hope that that is not correct. Will he confirm that the Department is taking an acute interest in something which involves substantial unemployment in many constituencies?

I give the hon. Member the fullest assurance that there is close co-operation between my Department and the Department of Industry. We are concerned whenever there is short-time working.

Does my hon. Friend accept that the figures he has given are a little outdated, since the situation in textiles changes from day to day? Will he impress upon his colleagues that we hope that in future they will be meeting more than one trade union official in the textile industry? Is he aware that the workers in the industry are becoming increasingly militant about the situation and that Members of Parliament representing textile interests are also becoming increasingly bloody-minded?

I ought to remind my hon. Friend that, apart from my right hon. Friend having a meeting with Mr. Fred Dyson, there have been meetings between the Under-Secretary of State for Industry and the National Joint Industrial Council for Hosiery and Knitwear, and a further meeting between the Secretary of State for Industry and the textile group of Members of Parliament. There is concern about this industry and wherever there is short-time working.

Is the Minister aware that there is considerable concern in the textile industry about the proposals contained in the consultative document relating to the Employment Protection Bill? We welcome the fact that consultations have been held with the unions, but may we have an assurance that careful consideration will be given to representations being made from the other side of this important industry?

I cannot give the hon. Gentleman a lot of help, but of course my right hon. Friend takes very seriously all representations made to him. I understand the point that is made.

asked the Secretary of State for Employment what is the latest unemployment figure for Birmingham.

On 9th September 1974, 20,135 people were unemployed in the Birmingham travel-to-work area. I regret that later figures are not available because of industrial action.

Is the Minister aware that the employment situation in Birmingham is giving rise to serious concern and that the current problems within the car industry—in particular, those of British Leyland—are adding to the fears? Will he ensure, in the investigations into the future of British Leyland, that employment and its prospects remain a top priority? He must be aware that if British Leyland catches a cold Birmingham and the West Midlands might catch pneumonia?

I am sure that that point is fully taken by my right hon. Friends. It will be helpful to my hon. Friend to know that British Leyland has so far no plans for short-time working and has recently received new export orders worth £10 million for commercial vehicles. I hope that that healthy atmosphere will continue.

Is the Minister aware that the people in Birmingham will regard it as very strange and highly suspicious that no reasonably accurate estimate of the numbers of people unemployed has been brought forward today? What rise has there been in the number of unemployed building industry workers in Birmingham? Is it not tragic that men in this category should be out of work when there is such a need for housing in the city?

I am sorry, but I cannot give the hon. Gentleman the figures. My right hon. Friend has made clear that he will make them available to the House as soon as possible. I congratulate the hon. Gentleman on taking such an interest in the housing programme now that he is on the back benches.

Is the Minister aware that trade union officials in the West Midlands are saying that the unemployment figures are rising rapidly and that they are concerned about them? Will my hon. Friend make representations to the Department of Industry that IDC policy should be less stringently applied to the West Midlands?

Of course, the unemployment situation is taken into account when IDCs are granted. If I recall rightly, the Department of Industry recently granted an IDC for an extension to the British Leyland works in the Midlands.

Is the Minister aware that the lack of success of the social contract is resulting in unemployment reaching higher levels than would otherwise be necessary? Will he impress on his right hon. Friend that the social contract involves the maintenance of a high level of employment and should not be just an excuse for causing unemployment, as is happening at present? Will the hon. Gentleman also ask his right hon. Friend to look at a reply which I gave in the summer in answer to a supplementary question, to the effect that the Opposition would co-operate in a review of the unemployment statistics so that the whole House and the country could be better aware of the true unemployment figures, and so that we might get a better balance into our economic judgment?

The latter part of the supplementary question hardly arises out of the original Question, and it is not a matter to be pursued here. In reply to the first part of the supplementary question, of course, one purpose of the social contract is to maintain the Government's objective in economic policy, which is a high level of employment. The observance of the social contract and a high level of employment go together.

asked the Secretary of State for Employment what steps he is taking to encourage language training for immigrants at their places of employment.

The Government have launched a scheme to encourage local education authorities to establish language training units at the place of work. Proposals have now been submitted by authorities covering the main areas of need, and schemes for 18 authorities have already been approved. A national centre financed by the training services agency has been established to support the units and will become fully operational early this year. I am in correspondence with the Chairman of the Manpower Services Commission about the general development of language training in employment, and he has assured me that the training services agency will aim to ensure that where a need for language training exists it is properly met.

I thank my hon. Friend for that encouraging reply. I ask that the scheme should go ahead as quickly as possible because it will give all immigrants the opportunity to learn the language, it will help race relations and health and safety at work, and result in greater efficiency.

I am grateful for my hon. Friend's support. Language training helps immigrants to develop their skill and potential, increases productivity and helps race relations.

Will the hon. Gentleman ensure that the opportunities afforded by the national training centre are equally available to women in employment as they are to men?

Yes, we shall certainly make sure that training facilities are available irrespective of sex.

Does the scheme extend to National Health Service hospitals? Does the Minister accept that a true understanding of the English language is immensely important in securing accuracy of diagnosis?

The facilities which we are developing for language training will be available throughout the whole of industry if the services are called upon.

asked the Prime Minister what further talks he intends to have with the Heads of State of EEC Governments before the decision is taken to make a recommendation to the British people on the United Kingdom's future in or out of the Common Market.

asked the Prime Miinster when he next plans to have an official meeting with EEC Heads of Government.

asked the Prime Minister whether he plans to invite the Heads of EEC Governments to meet him in London.

asked the Prime Minister when he next intends to meet the other EEC Heads of Government.

I expect to meet other Heads of Government at the next meeting of the European Council, which, as I explained to my hon. Friend the Member for Nuneaton (Mr. Huckfield) on 17th December, is for the Irish Government to convene.

Does my right hon. Friend agree that it is important that he should explain to the other Heads of State that he speaks for the Government, in view of the conflicting statements which have been made by Cabinet Ministers on British membership of the Common Market? Will my right hon. Friend make clear that the almost neurotic speech made by the Secretary of State for Trade in Brighton on Friday and the apparently deliberate misuse of figures produced by his Department do not represent the official policy of the Government?

I do not accept my hon. Friend's strictures on these statistics, or the misuse of them, but I accept that our partners in Europe are well aware, in all negotiations, that my right hon. Friend the Foreign and Commonwealth Secretary—who is our representative on the Council of Ministers—and I speak for the Government, and I shall do so at the next meeting of the Heads of Government.

Does not the Secretary of State for Trade, as a member of the Cabinet, have a collective responsibility for the Government's attitude towards the renegotiation? As the Secretary of State has declared himself as having no confidence in our future within the EEC, should not the Prime Minister ask for his resignation?

No, Sir. I read the speech very carefully. It contains a number of statistics from which my right hon. Friend drew conclusions, as he had the right to do—[Interruption.]—as he had the right to do. My experience of Common Market debates both within parties and between them from 1961 onwards is that in statistical matters on the Common Market truth is many-sided—[Interruption.]

Order. Last week complaints were made about the few Questions that the Prime Minister was able to answer. It would be much easier to get on if there were less noise.

We are concerned with renegotiating, in accordance with our manifesto, the terms entered into by hon. and right hon. Gentlemen opposite, and that we shall do.

Will my right hon. Friend discuss with his colleagues our adverse trade balances with other countries in the Common Market, including £800 million with West Germany, £600 million with the Netherlands, £400 million with France and £200 million with Italy? Is my right hon. Friend satisfied that we have sufficient freedom within the Common Market to take the corrective action necessary to remedy these adverse balances?

I answered that question last week. Certainly we have taken up these questions. They are very serious. That is what my right hon. Friend was talking about at the weekend.

Is the Prime Minister aware that his hon. Friend the Member for Fife, Central (Mr. Hamilton) has a great deal more courage than the Prime Minister himself and that the Heads of Government in the EEC and millions of people in this country are crying out for leadership from him on this and on other issues? Is there any chance that, sooner or later, the Prime Minister will start to do what he believes to be right with the nation rather than what he hopes will be popular with his party?

On this question I shall, unlike my predecessor, fight for British interests in these negotiations.

Will the Prime Minister promise the Heads of State when he meets them that in initiating the results of the referendum he will establish a clear position on the question whether the people of Scotland have either supported it or, as is more likely, rejected it and the consequences thereof?

I cannot anticipate the votes of any part of the United Kingdom when the decision is taken. I assure the hon. Lady that I intend to make a statement on Thursday on all relevant aspects of the test of British public opinion on this matter. The arrangements which we are proposing will be subject to the final authority of this House in the matter of legislation.

Will my right hon. Friend make clear to the Heads of State when he meets them that he has no intention of attempting to gag or remove any Minister who is trying, in his own sincere way, to advocate party policy, and that if he attempted to do so it would invoke a great deal of anger?

I agree with my right hon. Friend. The difference between the Labour Government and their Conservative predecessors is that we are not a Cabinet of cronies.

rose—

Mr. Thorpe.

Is the right hon. Gentleman aware—

Order. I had already called the right hon. Member for Devon, North (Mr. Thorpe).

I have always backed the idea that on this issue there should be a free vote, unlike the right hon. Gentleman the Prime Minister, who is moving in that direction, which I welcome. Will he say whether, if it be a fact that the Government are negotiating in good faith with the hope that they may reach a solution which they will be able to recommend to the British people, they will find the speeches made by the right hon. Gentleman the Secretary of State for Trade and the Secretary of State for Industry—who are pathological, if not congenial, in their hatred of the Common Market—hopeful or helpful to the negotiations, or whether they are treated by our European colleagues as irrelevant?

I do not accept the strictures which have been made, as I made clear to my hon. Friend the Member for Fife, Central (Mr. Hamilton). The right hon. Member for Devon, North (Mr. Thorpe) talks of a free vote. I must tell him that the Labour Government will get, without support from his or any other Opposition Party, a free vote of the whole British people. I should make an exception, because the hon. Member for Rochdale (Mr. Smith), when speaking in the election, said that he supported a referendum on this matter—[Interruption.] Yes, he said so at the time. But the right hon. Gentleman fought the two recent elections opposing the right of a free vote of the British people.

In the public debate for which the Prime Minister called yesterday—which has been going on for 15 years—will he recognise that the important element is the debate in this House and that this House should have the opportunity of coming to its own conclusion again—and should do so this time on a free vote of the whole House? Will he give an undertaking that as he has not the political courage to enforce collective responsibility in his Cabinet, at least he will have the political wisdom, this time, to give a free vote to everybody on his own side of the House?

I have already said that I shall be making a statement on this matter on Thursday. Traditionally, the question of a free vote is a matter of advice by the Chief Whips of any party. [Interruption.] I can remember this having been said many times by Mr. Macmillan when he was Leader of the Conservative Party. Since he is looked back on with great nostalgia, I thought I would remind the House of that fact. The right hon. Gentleman the Leader of the Opposition referred to the public debate for which I called yesterday. I think that he and I may be in agreement on that matter. I said that in regard to the test of public opinion later this year the rules must be made by this House and that we not only intend to have a debate on the result of the renegotiations for which the right hon. Gentleman asked today and last week but also, when we have put forward our proposals for a test of opinion, that it would probably be right, after consultation through the usual channels, to have a debate on the general rules for the test of public opinion by the free vote of the British people, which the right hon. Gentleman, when Prime Minister, refused to give them.

asked the Prime Minister whether the public statement on inflation made in Washington, DC, on 10th December by the Secretary of State for Prices and Consumer Protection represented Government policy.

asked the Prime Minister if the public statement on inflation by the Secretary of State for Prices and Consumer Protection in Washington, DC, on 10th December represents the policy of Her Majesty's Government.

I would refer the hon. Members to the reply which I gave to the hon. Member for Mid-Sussex (Mr. Renton) on 19th December.—[Official Report, 19th December 1974; Vol. 882, c. 528.]

In her statement on 10th December the right hon. Lady forecast inflation at a rate of 17 per cent. We now have a rate of 19 per cent., and wage rates have risen by 28 per cent. What has happened to the Prime Minister's newfound determination in this matter? How could Ministers yesterday go to the TUC and tamely say that they are satisfied with guidelines which have produced this disastrous combination of figures, which, so far as I can see, are without parallel in the Western world?

The hon. Gentleman has read a particular report of my right hon. Friend's speech. I have read what she actually said, which does not bear out the hon. Gentleman's summary. With regard to the meeting with the TUC yesterday, we did not say that we were satisfied with the situation. We said exactly what I said in the House last week—namely, that we should like to see more compliance with the social contract. I remind the hon. Gentleman that the figures which have been published by the Government show that two-fifths of the increases in the past year have been due to the threshold payments under agreements reached in accordance with the Conservative Government's statutory policy, which on thresholds we supported. In addition, some of the special increases awarded since then were in respect of people who had suffered serious anomalies under statutory controls, such as the miners, the railwaymen and the postmen—and London weighting had not been substantially reconsidered for some seven years.

Is my right hon. Friend aware that there is considerable confusion about the purpose of the social contract? Does he think it appropriate to spell out the purpose of the terms contained within it? Does he agree that if it is the purpose of the social contract to maintain workers' living standards—workers whom the Labour Party are here to represent—then what the social contract refers to is take-home pay and not gross wages? Does this not suggest that it is take-home pay that should equate with rises in the retail price index?

There is no ministerial responsibility for any confusion that there may be in my hon. Friend's mind. There is no confusion whatever, as was made clear yesterday by the leaders of the TUC with whom my colleagues and I discussed these questions.

Will the Prime Minister not answer the question put to him by the hon. Member for Tottenham (Mr. Atkinson)? Will he not inform him that there is no possibility whatever that take-home pay can be maintained in the corning year?

No, Sir. The argument yesterday, the argument last week in the House, and the argument throughout, has been about the guidelines. We consider those guidelines to be right. We believe that they will make a marked impact on the rate of inflation that we inherited from the Conservative Government—[Interruption.] We believe that this will happen. We should like to see greater compliance with the social contract than the 75 per cent. figure we have seen so far. The House will have seen the report made by independent commentators—not members of the Labour Party—showing that in the latest period the rate of increase has been falling. The fact that the rate of increase has been higher in public industries than in private industries is due to the essential catching-up operation, which was inevitable after the statutory policy pursued by the Conservative Government.

Is my right hon. Friend aware that the social contract has had a far greater impact on local bargaining than could ever have been expected in the circumstances in which it was introduced after the Tory repressive legislation? Is he aware that local trade union officials throughout the country are doing their best to ensure that it will succeed?

Yes, Sir. My hon. Friend has had much more experience of these matters, in terms both of national and local bargaining within the trade union movement, than most of those who have been putting questions this afternoon. I entirely agree with him. He is, of course, concerned with one of the public industries that were gravely attacked by the previous Government, not only during the statutory period but during the period of the Leader of the Opposition's confrontation with the Post Office workers a little earlier.

Is the Prime Minister aware that there is no justification for the argument that he constantly puts forward that threshold agreements are the cause of the massive increases the figures for which were published yesterday? The guidelines of the TUC are that the threshold payments should be taken into account in settlements which are now being made. The plain fact is that the threshold agreements are not being taken into account—hence the very high figures that we saw yesterday. As, in the lifetime of the present administration, since March last year, the rate of price increases has doubled and the rate of wage earnings has more than doubled, and the Secretary of State for Prices and Consumer Protection says that in this year it will get worse, when will the Prime Minister have the political courage to take action, instead of merely talking?

In the first place, I do not accept the right hon. Gentleman's statement about thresholds. The latest increases—those which appeared in yesterday's figures—included a considerable number in which the threshold system was incorporated into the wage settlements. This was inevitable; the Leader of the Opposition must have had it in mind when he introduced thresholds. I do not accept that either prices or wages—this is what the right hon. Gentleman said—are double what they were a year ago. He is totally wrong about that.

On a point of order, Mr. Thomas. It relates to Clause 16 and the selection of amendments. I do not query the selection as a matter of accuracy. However, the clause gives relief for certain businesses which may otherwise find themselves in financial difficulties. That relief is restricted to companies. Knowing that other people were in financial difficulties in running their businesses, it was our wish to extend that relief to sole traders and partnerships, whose need is just as great. I understand that the Opposition amendments which were tabled to enable us to discuss the scope of the tax are out of order and that the reason is that the Budget resolution has been very tightly drawn to restrict the relief to companies. What is more, another amendment has been ruled out of order because of the Budget resolution which prevents those with accounting periods falling between 31st March and 5th April from profiting by the clause.

I am obliged to the right hon. Member for Finchley (Mrs. Thatcher). She has interpreted the ruling much better than I was about to try to do. Resolution No. 16, which this House approved on 12th November, is narrowly drawn, and Providence protects me from responsibility for the way that the Government draw their resolutions. I am afraid that I can only rule that the amendments are out of order because they are beyond the scope of the resolution.

I am grateful to you, Mr. Thomas, but I am a little more impatient than that. Will it be in order to raise these matters on the Question "That the clause stand part of the Bill"?

Yes, it will be.

On a further point of order, Mr. Thomas. Like the right hon. Member for Finchley (Mrs. Thatcher), I do not query the accuracy of the selection of amendments. However, perhaps I might question its fairness. Neither the Scottish National Party nor Plaid Cymru is represented on the Standing Committee considering the Finance Bill. No amendment tabled in the name of either party has been selected for discussion. I suggest that none of those of us who represent the true voices of Scotland and Wales will be able to take part in any discussion of such important matters as agriculture, forestry and fishing.

If the hon. Member for Perth and East Perthshire (Mr. Crawford) tabled these amendments to the schedule, which is the proper place, he could have his discussion in the Standing Committee.

Further to that point of order, Mr. Thomas. The whole point is that the schedule is being considered in the Standing Committee, in which neither the Scottish National Party nor Plaid Cymru is represented. We have no voice on the Standing Committee. Indeed, the only hon. Member representing a Welsh constituency serving on the Standing Committee represents an industrial area of Wales which has nothing to do with these important social problems. That is why it is essential to discuss these matters in Committee here, if we have a chance to do so.

The hon. Member for Caernarvon (Mr. Wigley) knows that there will be a Report stage. At that stage it will be possible for him to table his amendments and, if they are selected, to discuss them.