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Petition

Volume 888: debated on Friday 21 March 1975

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Rates

My hon. Friend the Member for St. Marylebone (Mr. Baker) and I have the honour to present a petition signed by the ratepayers of the city of Westminster, to the effect that the burden of rates imposed upon them by the Greater London Council, which is Labour-controlled, and the Inner London Education Authority, which is also Labour-controlled, has become intolerable.

You will be aware, Mr. Deputy Speaker, that the Secretary of State for the Environment has said that the average increase in rates in the country this year will be about 25 per cent. Because of the intolerable increases imposed by those two local authorities the increase in the city of Westminster is well over 50 per cent.

Therefore, the humble petitioners from the city of Westminster, represented by my hon. Friend and myself, plead with the House to ease the burden of rates immediately and to institute a far-reaching reform in order that the whole rating system may be replaced, so that a more equitable and broadly-based system of local government finance may be introduced.

We regard this as a matter of urgency in order to prevent the city of London from being depopulated like the city of New York.

To lie upon the Table.

Dock Workers'employment Scheme

With permission, Mr. Speaker, I will make a statement on dock work.

I have today published a consultative document setting out proposals for legislation to enable the necessary extension of the Dock Workers' Employment Scheme to take place. The proposed legislation would replace the Dock Workers (Regulation of Employment) Act 1946 and relevant parts of the Docks and Harbours Act 1966.

In July I announced that the Government would carry out the pledge to extend the scheme to all significant commercial ports and would begin consultations in the preparation of the necessary draft order under the procedures laid down in the 1946 Act. At the same time, consultations began on possible changes to the statutory definitions which determine the scope and application of the scheme.

These consultations have led me to conclude that a more radical approach is needed. The present application of statutory regulation has remained virtually unchanged since the introduction of the original scheme. Moreover, the limitations of the present legislation prevent the extension of the scheme in many circumstances where this would be appropriate. This has proved—and would otherwise remain—a potent source of industrial unrest.

I have, therefore, decided that, as well as extending statutory control to significant non-scheme ports, it is necessary to ensure that there can be a continuous review of the need for changes in application of the scheme and speedy means of bringing about necessary changes.

A new definition of "dock work" which automatically carried with it an extension of statutory regulation would simply impose new rigidities where flexibility is required. What is needed is the broad identification of the type of operations to which, in appropriate circumstances, extension might be judged desirable and procedures to bring about such extensions and ensure that the coverage of the scheme can be continually reviewed.

The proposed legislation would, therefore, maintain the present coverage of the scheme, ensure that there is the necessary machinery to extend the scheme to significant non-scheme ports and, where appropriate, to other cargo-handling activities not now in scope, and provide protection for appropriate terms and conditions of employment of those involved in cargo-handling. All the essential features of the present scheme and the principles on which it is administered would also be retained, including joint regulation.

I am inviting the views of all interested parties on the proposals in the consultative document. The Government believe that urgent action is now needed to deal with what is both a long-recognised and a pressing problem and intend to introduce legislation just as quickly as possible.

With the publication of these proposals, I would again urge that the unofficial action continuing in London should now end and that there should be a full return to normal working. The Government are pledged to deal with the underlying problem, and consultations on the proposals should be undertaken without continuing industrial action which can only threaten employment ahead.

Is the right hon. Gentleman aware that I join with him in urging a full return to work pending consultations on the consultative document, which I hope will now take place speedily? Is he aware that the Opposition would wish to reserve their opinion both on his statement today and on the consultative document until we have had a chance to examine the document and discuss it?

Is the right hon. Gentleman also aware, however, that the decision to extend the dock labour scheme to cover a number of non-scheme ports will, I think, be regarded by many Opposition Members and many people outside the House as being a backward step? But the really important thing is that we should judge the proposals when we see them in the light of whether they will contribute to the greater efficiency of cargo handling in our docks. Anything which merely seeks to patch up arrangements which have been coming adrift in recent years will not satisfy either the dock workers in the long run or the workers in the other cargo-handling depots and so on who have become a much more important part of handling cargo in the past few years. Therefore, will the right hon. Gentleman undertake full consultations and then report back to the House as to the result of those consultations?

First, I naturally welcome the right hon. Gentleman's statement about the return to work. The Government certainly hope that there will be a return to work, because the damage that is being inflicted on London's trade and the nation's trade is very considerable. The right hon. Gentleman went on to say that he reserves judgment about our document—and then he gave several judgments. I think that he was wiser in his reservation than in his judgments. I hope, therefore, that he will look careully, in a completely objective spirit, at what we are proposing and possibly, as a result of that, come to different conclusions than those which he has appeared to come to at present.

We believe that these proposals will assist industrial relations. That is their purpose. We believe that they can thereby contribute greatly to the general efficiency of the whole system. What we are seeking to do, as the right hon. Gentleman will find, is to make a system which can deal with the new and changing conditions as they occur.

May I congratulate my right hon. Friend on his first-class statement? In many ways it is, as he will appreciate, long overdue. Does he agree that this decision is of vital importance to ports such as London and Liverpool and that it gives an opportunity for a completely new start in industrial relations but calls for a high order of industrial statesmanship from the trade union leaders of the dock industry?

I certainly think that the trade union leaders concerned have been doing everything they can to try to overcome these difficulties. Mr. Jack Jones in particular a few weeks ago appealed very strongly for the ending of this dispute. I agree with my hon. Friend that in a sense these proposals are long overdue. We do not want to have any delay in seeing that they reach the statute book. That does not mean—I did not answer fully the third question of the right hon. Member for Lowestoft (Mr. Prior) about consultations—that we shall not have any consultations about the document. Certainly the consultative document is issued for that purpose. But I wish to make it quite clear, particularly to the dockers, that this is not a proposal for a new investigation and a lengthy process of waiting to see the results of an investigation. That is not the proposal at all. There have been enough investigations. What the Government are proposing is action on the basis of this consultative document.

Will the Minister bear in mind the crushing burden of interest rates, particularly on very small firms? I have written to him this week about such a case of a little business which has no less than £30,000 worth of goods locked up in the docks at the moment. Every day counts if employment is to be protected. Will the Minister bear that in mind?

I shall look at the hon. Gentleman's letter carefully. I have not seen it yet. I am not quite sure whether it directly refers to action in the Department of Employment, but certainly I shall look at the letter.

Is there not at least a possibility that these proposals will be opposed by employers in road haulage and warehousing particularly? In the consultations that lie ahead, will the right hon. Gentleman try to make sure that these proposals do not succeed in buying off one industrial dispute at the risk of creating others?

I am fully aware of all these difficulties, but the place to decide this matter now is the House of Commons. I do not believe that we can go ahead with any further lengthy investigations to settle the matter. The judgment on the matter must be settled here. Of course, I believe that it will be a controversial measure, but some of the best measures introduced into the House have been controversial.

As Ministers, are, understandably, usually in the House only when matters concerning their own Departments are being discussed, may I take this opportunity of asking the Secretary of State, as Minister responsible for the Advisory, Conciliation and Arbitration Service, whether he will undertake to make a statement to the House next week, along with the Secretary of State for Social Services, in relation to the scandalous dispute at Westminster Hospital?

The hon. Gentleman can take the opportunity of putting the question now, but I should be quite out of order if I answered it.

I wonder whether the right hon. Gentleman, although he would be out of order, would undertake to make such a statement early next week?

No temptation, not even from the right hon. Gentleman, will entice me into disorderly conduct in the House of Commons.

Savings

11.16 a.m.

I beg to move,

That this House, recognising that the present accelerating rate of inflation represents the most serious threat to the welfare of the British people since the Second World War and observing that its harshest effects are felt by those on small and fixed incomes, particularly retired persons, who can see the benefits of a lifetimes' work devalued daily by rising prices, falling dividends and sagging share values, calls upon Her Majesty's Government to ensure greater protection for the value of savings and to give every encouragement to the prime virtues of thrift and self-provision.
In November 1923, at the height of the inflation in the Weimar Republic, the rate of exchange was 4·2 billion marks to the dollar. Weekly payrolls were being trundled away from banks in wheelbarrows, and eventually bank notes, by the time they were printed, were worth more as waste paper and were promptly shredded and pulped. A simple wedding ring became a family fortune.

Of course, that was 50 years ago, and, of course, that could not happen here. But it happened again in Germany immediately after the Second World War, when cigarettes became the main negotiable currency. More recently, in South America countries have become notorious for high rates of inflation, salaries having, in some cases, to be doubled overnight to maintain their purchasing power.

There seems to be some general realisation that inflation of that order can come about only when there has been some major upheaval such as a war or a revolution. In this country we have had inflation, apart from the years of depression, since the beginning of the century. Prices are now some 10 times what they were in 1900. It seems that we are able to live with a mild degree of progressive inflation, but there is reason to think that the decision by the oil producers in the Arab countries to increase oil prices fourfold almost overnight was, in the perspective of history, such a major upheaval which could cause inflation of that order.

Here in the United Kingdom in the last 12 months inflation has been running at an annual rate of 19·9 per cent. There is wide agreement that when inflation reaches a rate of 20 per cent. it takes on not just a difference of degree but a difference of character. Here we stand, after 12 months of Labour Government, just one-tenth of 1 per cent. short of that critical point.

It is indeed ironic when we once again look at Ministers' statements to see the comparison of performance with such statements. It was less than six months ago that the Chancellor of the Exchequer, in a pre-election Press conference, made the claim, to reassure the public, that inflation was then running, on a three-month basis, at an annual rate of 8·4 per cent. Using that same basis of calculation, now, less than six months later, the rate is 25·9 per cent.—about three times as high.

Then there was the statement by the Prime Minister on 20th February of last year at Preston, when he said, again just before the first election of last year—
" The remorseless accelerating rise in prices is a menace which, unless checked, will destroy the fabric of our society. It is eating away at the savings, the security and the future of ordinary families."
We in the House have become accustomed to the gulf beween what the Prime Minister says and what he does, but who would have believed that after only 12 months one of the Prime Minister's hon. Friends could have said that in every month under this Government, with the exception of August, the rate of inflation has not only risen but accelerated?

So, despite that graphic description given by the Prime Minister before the first election of last year of the damage that can be done by high rates of inflation, we are now poised on a rate of inflation of 20 per cent. where people's savings are daily devaluing and where rising prices is the principal issue of concern to the people.

In medieval days philosophers used to dispute how many angels could stand on the point of a pin. With the Prime Minister, the only question is "how many convolutions does a corkscrew have?" Yet it is ironical that only some 400 days later we bring the issue of inflation to the House.

It is not just the issue of inflation, because that is commonplace. What is raised by the motion is the effect of inflation on those on small, fixed, and particularly retired incomes, because it is those who stand to lose most by high rates of inflation. When inflation rages, everybody loses. The universal currency is devalued and all of us are affected by that. However, some are better able to withstand those pressures than others.

This is particularly so when we concentrate on the social contract here in the House. That arises, perhaps, unfortunately, from the trend in recent years for tripartite talks at No. 10 Downing Street between the Government, the Confederation of British Industry, and the trade unions. They grapple with the major issues of State, but they represent in the main the big battalions, those who are best able to look after themselves—major manufacturing industry, on the one hand, and the leading trade union leaders, on the other, who, let it be pointed out, at best represent only their 9 million members and their families out of a work force of in excess of 23 million and who, at the very worst, represent only themselves.

So the motion attempts to focus attention on the much wider number of people who are affected by savage rates of inflation. If I choose to concentrate on the retired, it is because, as they are at the end of their lives in terms of active earning they are less able to withstand the competitive pressures that inflation puts upon society. The damage that the Prime Minister forecast in his statement last February is already being done, but most seriously to those who have no means of fighting back, no muscular industrial bargaining power with which to compete. Many of these people will have saved for a lifetime to provide for themselves in their old age. The value of their savings is diminishing daily. If they invest it in stocks or shares or Government loans which have interest rates, the interest comes nowhere near reaching the rate of inflation.

Particularly does the interest not come near to reaching the rate of inflation when it is subject to taxation, as it so often is. These people reel under the double impact of inflation and taxation. The message is beginning to get through to the public at large, if not to the Government.

Hon. Members may have seen recent advertisements by a major British bank of their "money doctor" service. Half the advertisement depicts some desert scene with vultures—rather gruesome vultures, with blood dripping from their beaks—crowding round the whitened bones of the corpse of life savings. The vultures are described as taxation, inflation, redundancy and recession. The most serious of those is inflation.

In a similar advertisement—equally brutal by British standards—life savings are shown as a small vessel being dashed on the rocks of taxation and being threatened with being overwhelmed by the rising tide of inflation—that same rising tide which echoes the report of the Price Commission last November for the three-month period immediately preceding, in which the commission said:
" This hope"—
of abating a big rise in prices—
" has now been swept away by a tide of rising wages and rising salaries."
So these people, peculiarly unable to defend themselves vigorously against the forces which have been unleashed, see the injustice of concentration on a social contract. It is a curious enough contract by anybody's standards. It is voluntary on one party, compulsory on the other. It is an obligation for the Government, an option for the trade unions.

The injustice of such an arrangement between the trade unions and the Labour Government is that many people outside that contract—in speaking of a social contract one would think that it applied to the country as a whole—see that the excessive and inflationary wage settlements achieved under the terms of the contract, and with the apparent approval of Ministers, or at least their tacit disapproval, are achieved only at the expense of people living on small and fixed incomes. Rising prices is the penalty that they pay for such inflationary wage increases.

Therefore, people in this category deserve the full consideration, sympathy and active support of the Government. They need the Government's support. They have no other resort. In view of recent events, one cannot be encouraged by the Government's attitude, because even in this short period of 12 months there have been a number of measures which have seemed to be spiteful and malicious as regards savings.

There has, first, been the lowering of the qualifying amount for the investment income surcharge to a level of £1,000. which hon. Members opposite still seem to regard as a large sum. With inflation at a rate of 20 per cent. a year, that will be a piffling amount before much longer. When one has saved all one's life to secure such an income and then finds that it is to be subject to taxation thereafter, it is disheartening and demoralising and can drive people to despair. That is the present situation.

I quote from a letter I have received from one of my constituents, whose sentiments I am sure will be echoed in letters to many other hon. Members:
" We are people who have worked hard for a full working life, hoping now to reap some benefit from investment of savings out of tax income."
I emphasise that savings are out of taxed income. So this is a three-way impact on savings. They are taxed at source. They are taxed when income is derived from them in later years. They are diminished by inflation.
" We have no means of updating our income by striking and cannot even maintain the value of our capital."
In another letter to me this same constituent says:
" The result of all this is that people who during the whole of their lives have been good citizens and endeavoured to make a contribution to the country are increasingly becoming anti-social."
There is a further twist of the screw for these people. Many of them—I had a letter only in this morning's post from one such person—are people who through sheer patriotism invested in Government stocks—in War Loan and, to mention a particular case, the 3½ per cent. Treasury Stock 1975. These people supported their country throughout these years. They invested in Government-encouraged loans. Yet those investments are most vulnerable to inflation on the pitifully inadequate interest rates they now enjoy. So savers generally are discouraged.

There are two kinds of savers. No doubt the Minister will tell us that savings are keeping up. They might be, because there was, with the excessive wage increases of last autumn, an increase momentarily in real income which was no doubt retained and which reflects savings as a ratio to the whole. But the National Institute for Economic and Social Research which forecast this high level of current savings running at 13 per cent. states that it is likely to drop in the fourth quarter of this year to 10·4 per cent. This will be the inevitable trend. If savings are seen to be a diminishing asset, fewer people will save.

I should like to point to the rather misleading advertisements by Government agencies. There is the current advertisement by the Post Office National Savings Bank which shows a peaceful country village scene—almost a "Toytown" scene—with little shops and people bustling about, and up in the sky there are three wild ducks, in the form of an enormous 9 per cent., flying into the sunset. It would seem to indicate that 9 per cent. is the measure of the generous return on people's investments. But it is nothing of the sort. It is a cruel deception. With single-figure interest rates trying to cope with double-figure inflation rates, the saver can only lose.

Another advertisement asks "Are you on to a cert?", implying that anyone investing in national savings is on to a certain winner. In fact, people who invest in national savings or any other form of Government savings are on to a certain loser. That is the injustice.

Measures like the capital transfer tax seem to strike at the principle of saving by one generation for the benefit of the next generations, implying that a father's ambition to save for his son is despicable and socially undesirable. If the Government do not give greater encouragement to savers, the suspicion will grow that they are concerned, by means of inflation, to achieve the redistribution of wealth and power in this country at the expense of people on small incomes. Socialism does not grow only on overt acts of aggrandisement such as the Industry Bill; it can work in other ways to make the small saver, the individual, increasingly dependent on the State. To quote from a letter from the Minister of State to me in response to an approach from another constituent:
" I am well aware of the difficulties facing pensioners and believe the best way of helping all pensioners is to increase the amount of the State pension ".
That may be one way of helping, but it is not in all cases the best way. People would prefer to be independent of the State. That is the purpose of saving throughout their working lives. Yet in practice, as a result of inflation and measures introduced by the Government, the value of people's savings is reduced.

All Governments are ready to rush forward with concessions to retired people. They may introduce rent rebates, rate rebates, beef tokens, food subsidies, free television and concessionary bus fares, but Socialist Governments seem unwilling to allow retired people to have what they prize above all else, and that is their independence. Philosophically, independence is anathema to Socialism. What the Socialist State would like to see is complete dependence on it. It is the relationship of the drug addict to the pusher. The State seduces retired people with more and more public money until they become totally dependent on it. That does a grave disservice to many forthright self-principled people who, through the years, have supported the country through thick and thin and who now, in the twilight of their lives, see their endeavours put at nought and they become increasingly dependent on the State.

There is the danger that people may welcome this situation. After all, what other choice do they have? May I quote from another constituent whose husband had his own professional practice until, because of ill-health, he was obliged to sell it. He was, of course, taxed on the capital gain. He now has a very small amount of capital as his only source of income, and there is no tax relief on that, even though it is his only source of income.

His wife writes:
" Maybe it would be better if we spent everything we have before my husband receives the pension at 65, and then we could do as a good many others do and get all we can from social security."
Do the Government wish to encourage this attitude, or do they genuinely wish to see people save for themselves and relieve the State of the increasingly heavy burden which has been put upon it?

There is another reason why the Government should consider encouraging savings. If the notion gets around that to save is pointless and that to spend is the best alternative, this too will merely fuel inflation. There is some indication that consumer spending is going into matters like wine, spirits, beer and gambling, to the detriment of productive industry and the production of goods which could be exported to enable us to earn our way in the world. Unless this is stopped, we shall be creating more trouble, and not less, for ourselves.

I call upon the Government to take specific and definite measures to encourage saving. They will have the opportunity very soon to do this when they introduce their next Budget. They have made a start, and I am sure the Minister will point to the Government's achievements. They have recently introduced an index-linked savings bond for retired people, but only up to £500 and only for five years. They have introduced a small scheme to enable people to save up to £20 a month for five years, with the option of another two years. That, too, is index-linked so that the money value is maintained. To the Government's credit, any bonus is tax-free.

These, however, are very small measures compared with the drastic effects of current rates of inflation. The abolition of the national savings stamp, although economically justified perhaps by its administrative cost, seems to me to have been a psychological error because it discards the thrifty practices of people, and particularly children, giving the impression that at a time of inflation to put money aside has little point and ought to be abandoned. I hope that we shall see the encouragement of greater measures of saving.

The Government face indictment from people such as Sir Robert Bellinger, Chairman of the National Savings Committee, who said:
" I have been deeply distressed that incentive to save has been inexcusably neglected by those responsible for it. The sorry result is that we in the United Kingdom have the slowest personal savings rates … of any of the developed nations of the world."
That is a very sad commentary on the current situation.

These measures to encourage savings can achieve some effect. They can raise some hopes in the increasingly despairing minds of those on small fixed incomes, particularly retirment pen- sioners. But they probably cannot do more than that. I am not arguing for complete annexation of savings, because that would have the effect of institutional-ising the rate of inflation and would make the situation more rigid than it otherwise might be. But there are opportunities for making concessionary moves towards easing the effect of inflation on people who are saving. This is something which the Government ought to do because it would be accepted as an alternative to heavier taxation.

What the Government can do, particularly to help these people, is to cut the rate of inflation by two main means. One is to reduce public expenditure, and this is a first priority. It has gone up in the current year by about 9½ per cent., and the people who support such a heavy burden are in many cases unable to bear it for much longer. Secondly, the Government can attempt to constrain the rate of wage increases much more vigorously than they have done so far. Here again I am asking for something short of a rigid incomes policy, for I can see the difficulties and defects of such a policy. Surely a social contract which seems to allow wage increases to run at approaching 30 per cent. is not achieving the desired end. Unless there is much firmer talking, it would seem to be an empty gesture. Whereas we have price control, dividend restraint and rent freezes, we have no restraint on the level of wage increases. Here again, the burden falls not on the able-bodied and active worker, who can achieve such increases by muscular bargaining power, but on those who have to stand by and watch helplessly as prices rise in the shops and the value of their savings diminishes.

I hope that in all those ways the Government will seek to alleviate the burdens and meet the needs of the people about whom I am here concerned, people who have so often been overlooked and neglected but who represent the very backbone of Britain. The Government have the power to do it. Indeed, they have a patriotic duty to respond to the plight of those who invested many years ago, or more recently, and to ensure that they do not end their lives in penury. If nothing is done, we shall have to conclude that the Government, for reasons of their own or through sheer negligence, are intent on the impoverishment of the savings classes.

Next month, in his quartely Budget, the Chancellor of the Exchequer will have a unique opportunity—unique to him—to do something, that is, to arrest the rate of inflation. If he does not take it, if he does not arrest the rate of inflation, if he does not attempt to mitigate the irreparable damage being done to people's life savings by the present situation, he will earn the undying resentment of many millions of his fellow citizens who are not in a position to fight but have merely to stand by and see their savings vanish. If he fails to take that opportunity, he will not be forgiven.

11.41 a.m.

I congratulate the hon. Member for Rom-ford (Mr. Neubert) on initiating this important debate through his motion, although, as I develop my theme, he will find that, although, on the whole, I agree with much of what he said about the danger created by the erosion of savings, I felt that his approach, especially towards the Treasury Bench, was rather narrow and, in fact, highly partisan. I think that some of his comments in the latter part of his speech would have been better delivered to the Bromley Conservative Association.

In my view, the hon. Gentleman did not put his speech in the proper context. In the first place, he gave the impression that there was no history to this matter, but I am sure that he realises that the problem of inflation has affected several administrations. For example, several decisions were taken by the previous Conservative Government which were more than partly responsible for the present high rate of inflation which the nation faces. Among some of the policy decisions adopted by the Conservative Government, I think, in particular, of the printing of money by the then Chancellor of the Exchequer, Mr. Anthony Barber, as he was at that time. For my part, I wish to discuss the motion not in the context of a party debate—I think that that is where the hon. Gentleman missed his opportunity, if I may say so—but in a far broader setting.

The problem of inflation affects the whole Western world, but where it is to be found at its gravest and most damaging is in Central and Latin America. There are some lessons to be drawn from events in that part of the world which we should be foolish totally to ignore simply because we were too interested in making party-political points about the present Chancellor of the Exchequer and Government. It would be far better if we examined precisely what happened, and is still happening, there and drew guidance from it.

The terrifying situation in Latin America is not without warnings for us. Among the Latin American countries, there are rates of inflation of over 200 per cent., and it is a striking feature that the societies in those countries are almost all dictatorships. The only way one can deal with the situation when the rate of inflation is at 200 per cent. is to govern by dictatorships, which cannot easily be turned out of office and replaced.

The only exception, which stands out like a beacon in Central and Latin America, is Uruguay. There are certain similarities between Uruguay and Britain. Uruguay has a tradition of parliamentary democracy not unlike our own. It, too, has faced, and is facing, problems not unlike ours. It has had structural problems in the economy, it has an old industrial base, and it has very high rates of inflation. Moreover, one cannot be sure that its parliamentary democracy will be able to survive the strain of such rates of inflation and the terrible problems which that creates. Nevertheless, Uruguay is the only country where parliamentary democracy does survive in Central and Latin America, with traditions similar to our own, while at the same time facing serious inflation.

Turning to Europe, we can, I believe, be encouraged by the example of France, and I hope that my hon. Friend the Financial Secretary will look at what has happened there. The French have had quite remarkable success in slowing down their rate of inflation at a time when in this country, as the hon. Member for Rom-ford said, the rate of inflation has been over 19 per cent. per annum. The French have managed to bring their rate of inflation down to between 8 per cent. and 9 per cent. in round terms.

Admittedly, the French have been able to do that at the same time as having a high rate of unemployment, and I do not recommend that to my hon. Friend as a way to proceed. However, that is not the whole story. The French have energetically tackled Government expenditure, and they have done it in a way which, I imagine, my hon. Friend would in many respects envy because they have been able to make drastic cuts in capital expenditure. Indeed, that is why I, for one, believe they were not too unhappy about the cancellation of the Channel Tunnel, in spite of what has been said by hon. Members opposite and by some of my hon. Friends. The French have seen that this is the way in which the problem can basically be tackled.

Naturally, my hon. Friend the Financial Secretary will not be able to tell the House very much today because he, like the Chancellor of the Exchequer, is in purdah, as it were, being unable to comment on what may be proposed in the Budget. There is no doubt, nevertheless, that the Chancellor must rise to the occasion.

The first phase of the social contract, which we all welcome, I believe, as an alternative to compulsion—even the hon. Member for Romford welcomed the social contract—is now moving towards its end, and we can sec the need now for fresh guidelines. The lesson of the past six months is that, unless a new impetus can be given to the social contract, the Chancellor of the Exchequer may have to be exceedingly tough in his Budget. Indeed, he will have to be swingeingly tough if the social contract fails to keep wages within reasonable bounds.

I have a deep concern, which, I believe, is shared by some of my hon. Friends, about the wage explosion which is taking place and which in many respects shows no present sign of abating. One of the most disappointing aspects of this state of affairs is that the whole idea of the social contract, the whole imaginative concept, has somehow or other not got through to the shop floor. This may be due to a failure of trade union leadership to explain exactly what it is all about, but what I find so disturbing as I meet active trade unionists on the shop floor is that so many vague interpretations are put on the social contract.

This is just not good enough, and I hope that our debate today, for which we are indebted to the hon. Member for Romford, will be taken as an opportunity for my hon. Friend the Financial Secretary not only to consider what can be done in respect of the Budget but to pass on to his right hon. Friend the Secretary of State for Employment the urgent need to ensure that the social contract is tightened up and that there is a willingness on all sides, especially on the trade union side, to recognise that if the social contract were to fail not only would the future of the Labour Government be in jeopardy but the very fabric of our society and the very essence of our parliamentary democracy would, in my belief, be endangered.

Without doubt, the Central and Latin American experience shows that if one allows rates of inflation to exceed 20 per cent. the escalation becomes very fast, and once we go beyond 20 per cent. and up to 30 per cent. and 40 per cent. our kind of society will inevitably find it extremely difficult to survive.

11.50 a.m.

I welcome this opportunity of taking part in the debate. I congratulate my hon. Friend the Member for Romford (Mr. Neubert) not only on the precise wordinig of the motion, with which I agree 100 per cent., but on the manner in which he moved it.

I represent a constituency with a very high home ownership level, and I am conscious that there are many people in it who are living on fixed incomes. You, Mr. Deputy Speaker, and I know that "fixed incomes" is a wicked euphemism. It means that people have less coming in every week and, at the same time, their rates and other charges are increasing. My hon. Friend has spotlighted a most important matter.

We must as a nation do all we can to encourage people to save for the future, to think of their retirement and to try put a small nest egg aside. Goodness knows, that is difficult enough these days. We cannot get away from the fact that the Government's policies have greatly damaged the idea of saving for the future. Iain Macleod once said that savings were the harvest of a good man's life. That is an approach which I share.

The hon. Member for Hornchurch (Mr. Williams), in a reasonably toned speech, criticised my hon. Friend the Member for Romford for making a partisan speech. I have no doubt that he will find that I fall into the same trap, if it is a trap, but I believe that my party's approach is the right approach and that we should not think that because a man makes party points they are necessarily false points. The hon. Member for Hornchurch talked about the social contract. This is the essence of the debate. How can we protect the small saver and investor if we do not control inflation?

The Government's main weapon apparently is the social contract. I should remind the House of the origins of the social contract. For this purpose we must look back to 1973, when the Labour Party, in opposition, was encouraging every form of strike for more pay and then condemning the resulting price increases. Hansard records this only too clearly. But it was seen to be a hopeless position for a party facing a General Election. Therefore, the Prime Minister was the leading light in producing out of the hat the social contract. We remember only too well the solemn and binding pact with the unions which preceded it. It was not solemn or binding, and, unfortunately, it has not been kept.

The social contract was a publicity exercise in its infancy which, unfortunately, the Labour Party was forced to take seriously when it unexpectedly won the February election last year. The pact was originally between a minority Labour Government and a major sectional interest, and it was strongly resented in my constituency. People sometimes forget that there are about 14 million people who are non-union workers, and they resent being left out of this cosy pact between the big battalions and the Labour Government.

The Government would be most critical if the Conservative Party or, for that matter, the Liberal Party, whose members are conspicuous by their absence this morning, made a pact with a powerful pressure group, perhaps the motorists, farmers or shopkeepers, because they do not represent all the community. The Government must have a social contract with the nation and not just with an important part of it. No one denies that trade unions are a most important estate of the realm, but I resent the fact that the Government seem to regard them as the realm.

My right hon. Friend the Member for Sidcup (Mr. Heath), when he was Prime Minister, had long and comprehensive talks with the unions. I believe that they were the most detailed talks which have ever taken place on the problem of controlling wages. Unfortunately, the present Prime Minister has not adopted the same approach. He merely said to the unions "This is our problem. Can you help us out? What do you want in return?" A bargain was struck, and there were two items in it—defence cuts and certain proposals on picketing—among a number of others.

Is it realistic to expect the country to support the defence cut proposals? I do not wish to stray over the line, but this is a subject dear to my heart. It is utterly irresponsible at this time of crisis in NATO to propose major defence cuts. Many people resent the Government's attitude to picketing. How can one go to the CBI and say "The social contract wants a bit of back-up. Will you join in this pact with us?" How can any respectable industrialist, knowing that the social contract is tied in with "Bennery ", say "I will do my bit too "?

The social contract has got us off to a very bad start. The unions are increasing their demands. Many distinguished union leaders—and I mention just two, Ray Buckton and Arthur Scargill—have made it perfectly clear that they will have nothing to do with the social contract. I am conscious that a number of trade union leaders—probably the majority—have behaved responsibly and have tried to make the contract work. All credit to them. But they have been given an impossible framework within which to work. Unfortunately, the strike figures are appalling. One needs only to consider what is happening in Glasgow where British Service men are being used to clear up the refuse.

I have no doubt that, apart from Europe, inflation is the most important issue facing our country, and, apart from Europe, it is the issue on which the Government are most divided. A few days ago the Home Secretary made a robust speech supporting wage control. It is curious how attention focused on the speech of the Secretary of State for Education and Science, which, to my mind, carried less weight than that of the Home Secretary. I quote briefly from the Home Secretary's speech, with which I agree entirely:
" Let there be no doubt that our present rate of inflation is the main cause of our economic difficulties. There never has been a more mistaken piece of economic analysis than the view that we should accept inflation to avoid unemployment. Inflation today, so far from being an alternative to unemployment, is its main cause."
I am sure that the right hon. Gentleman was right to state that so clearly and vigorously.

In my first election, in February last year, it was being said "Inflation is 12 per cent. Unless we support the Government, it could go up to 15 per cent." Now it is touching 20 per cent., and the hon. Member for Hornchurch rightly warned of the dangers if it goes beyond the magic 20 per cent. I have a horrible feeling that it will.

The Government are lucky. Thank goodness, world commodity prices are falling, and in the newspapers the Sunday before last there was talk of oil prices coming down. I hope that they will. But the Government seem to be relying on a miracle rather than putting forward their own practical policies. The figures show that the wages explosion is way out of control—about 30 per cent. Alas, I was not present when the Chancellor addressed members of the Labour Party upstairs, but The Times quotes him as giving a clear warning of the threat of wage inflation. Labour Members will not need reminding of his words.

But perhaps I could remind them that Germany is one of our major competitors, whether we are in the Community or outside. I was told the other day that Germany's rate of inflation is about 5·8 per cent. and that in recent years it has never been over 7 per cent. One does not need to be an economist to realise the danger when a major competitor is containing wage inflation within 5 per cent. and we are fighting desperately to keep it at our present level. Why are the Germans taking such a robust line? It is because they have suffered the effects of inflation and because they have a Government who appreciate the dangers and are taking suitable action.

The fault lies not in our stars—not with the oil sheikhs—but with ourselves and the Government that the country has elected. We are simply paying ourselves more than we earn. We are ordering new carpets while borrowing to pay the rent. I hope that the Minister will tell us the Government's current borrowing requirement. I saw an estimate the other day that it is £6,000 million a year. I hope that that is not true, but I have heard even higher figures. If so, they are terrifying.

It could be said that we are in a large tanker heading towards the land. Land is in sight, and if we stay on our present inflationary course we shall hit the rocks and suffer mass unemployment, mass bankruptcy and mass misery. The ship takes a long time to respond to orders from the bridge. The passengers were at first surprised that the captain took so little action: now they are appalled. One reason why the captain is taking so little action is that there is a dispute among his officers on the bridge.

The right hon. Member for Newham, North-East (Mr. Prentice) did his duty as a responsible Cabinet Minister. He simply said that we must control wage inflation, which is surely the task of every responsible Cabinet Minister at this time. He was most unfairly singled out for criticism in the House yesterday by the Prime Minister, and to our astonishment we read that, instead of getting its backing as a man who, with all his faults, at least states the blunt facts, he is now in trouble with his local association.

I have been proved wrong. Like the Leader of the Liberal Party, at the time of the last election I thought that the Government would be forced into a statutory wage freeze by Easter. One remembers that after the 1966 General Election the Labour Government were forced into statutory wage controls, and I was terribly conscious of the struggles within my own party. It was committed in 1970 to free collective bargaining, but under the sheer pressure of inflationary events—and what were the rates then compared to present rates?—it was forced to take tougher action than it had intended.

It seemed to me in October that any responsible Government would be forced, faced with the mass unemployment that inflation of 20 per cent. involves, to take firm action and have some form of statutory incomes control. I am the first to admit that there are all kinds of problems with statutory controls. To name an obvious one, what happens about the self-employed? But how can we be serious about combating wage inflation if we ignore in our discussions the possibility of a short freeze?

What should the orders from the bridge be? The first should be to drop the social contract, or what is left of it. So long as it is around our necks like an albatross, it is very hard for the facts to penetrate to the people on the shop floor. Instead, we should have a national contract. Surely the Government must have a contract with all the nation, not just with one important and powerful section of the nation. We want fair guidelines. How monstrous it is that, day after day, we ask Ministers whether something is within the social contract only to find that no one knows because there are no clear guidelines.

There must be proper talks among the Government, the CBI and the TUC, not just a private pact with the trade unions. There must be signed agreements, and they must be presented to Parliament. Parliament has never approved the social contract. I want a national agreement which is brought to the House by the Secretary of State and agreed by Parliament. There should be some body to which the most difficult problems of differentials could be referred—a sort of long-stop. The Prime Minister should tell the people the truth. In Lord Randolph Churchill's phrase, he should trust the people. One cannot always appease lions by feeding them Christians. In addition, there must be restraint of public expenditure, nationally and locally, and rigorous control of the money supply. I agree that the Government have a good record on the last point.

Inflation is destroying our economy. Certainly it is destroying the small savings of many people in my constituency and is actually damaging our institutions. War unites a country, but inflation is a secret enemy which destroys the people's unity. Tomorrow, unless it is brought under control, it could destroy the peace and stability of the realm. In the next few weeks the Government must get away from the social contract, attack inflation head-on and eventually destroy it.

12.6 p.m.

My first task, of course, is to congratulate the hon. Member for Romford (Mr. Neubert) on raising this subject so that hon. Members can seriously think about the effects of inflation on savings. However, I agree with my hon. Friend the Member for Hornchurch (Mr. Williams) that both speakers from the other side have tried to put a scare into people about savings. I intend to try to encourage people to save rather than to go along with their approach.

My whole training in life has been to put something by for later on. Despite what hon. Members opposite have said, I want to pay tribute to the national savings movement for the wonderful work that it has done for many years in inspiring people to save. The thanks of the House should go to those in the movement, particularly those who trudge around year after year collecting small sums.

It is the hardest thing to get people to save. The emphasis of our society is on spending. Every newspaper, ITV, BBC —all the media ask people to spend money. The hon. Member for Bexley-heath (Mr. Townsend) said that people are now buying carpets and other things instead of saving money. The hon. Member for Romford emphasised that people were now putting their money into wines and spirits and gambling instead of saving.

Just to get the record straight, I was saying that as a nation we are buying carpets when we have to borrow to pay the rent. I would be delighted to join the hon. Gentleman in a tribute to the national savings movement and to those who, against all the odds, are saving. But can he honestly say as a good constituency Member that he would encourage someone in his advice bureau tonight to take out national savings?

I would certainly advise anyone who came to see me tonight to save money and to put his money into national savings or a building society if he wished to do so. What is more, as I said a fortnight ago, I would advise people to put their money into good traditional insurance companies. I cannot go further than that.

The emphasis today is on spending, not saving. We must try to change the emphasis, to make people realise that if this country is to survive we need a better form of saving and we need more savings. I do not want to decry the efforts of the building societies and the insurance companies over the past few years. Although throughout most of last year there was a recession in the movement, at the end of last year and the beginning of this year the amount of money pouring into building societies has been steadily improving. There was an increase last year in the gross income of insurance companies of 22 per cent. for traditional life offices.

The hon. Gentleman must take into account the effect of inflation in increasing the percentage to 22 per cent.

I was about to deal with this point, but I shall do so now. Listening to the hon. Gentleman, the House might imagine that inflation only started 12 months ago when the Labour Government took office. It might almost be thought that the word "inflation" had not been heard of in the English language before then.

The hon. Member for Romford said that since 1900 inflation had increased tenfold. Since 1900 the Conservative Party has been in power for the longest period, followed by the Liberals and then by the Labour Party. In 1971–72 the Chancellor was at pains to introduce measures to encourage more investment in industry. He reduced taxation on wealthy people to such an extent that hundreds of millions of pounds were put into their pockets. While his motive might have been good, the effect was not the one he desired. Money was not invested in industry. Quite a lot of it was invested in property. Hence we saw an enormous rise in property prices in London. We must not create the impression that inflation is something new or that the Labour Government, in office for 10 months last year and now with a small majority, are responsible for inflation, because they are not.

The savings movement is to be congratulated, because there is now pressure on people to spend their money. In this movement I include building societies, insurance companies, the national savings movement and any other organisation which encourages people to invest. It is to its credit that it is trying to make this country more stable and prosperous.

The hon. Member for Romford referred to the quarterly Budgets of the Chancellor. This was rather unfair. It could lead people to believe that an interim Budget had never previously been introduced. I have been a Member of Parliament for 10 years, and even before that Budgets were often introduced when something happened. Usually there was one in July. In the present situation there must be continuous control and alteration of the monetary policy. The idea of a Budget once a year, in April, is wishful thinking. Chancellors in Tory Governments have introduced interim Budgets.

Savings are the seed corn of this country. If we do not save more, we shall suffer more economic ills. We have to find a happy medium between spending and saving. If everyone saved everything and did not spend any money, our shops and factories would be overloaded with goods they could not sell. This would give rise to unemployment.

Like other hon. Members, I am not happy about the present economic situation. We have to tackle this problem. It does not make any difference what the Government say or do. We shall not be successful if people do not carry out the policies of the Government. This applied to the policies of the Tory Government between 1970 and 1974, and it applies today. I cast no stones at that Tory Government. They carried out policies which they thought were correct. Some of them have proved to be wrong.

No matter which Government is in power, current policies may prove to be wrong in a year's time. I want to see the savings movement encouraged. We know that people on fixed incomes are suffering greatly from inflation. People who have saved money, invested it in a building society or a company and received dividends are to some extent suffering because of the rate of inflation. The Government must tackle it. I am sure that they are as concerned about it as we are. When the time comes I have no doubt that the Government, with the co-operation of industry, the trade unions and most hon. Members, will try to solve this problem of inflation so that those who save may have the benefit of their savings in their retirement.

12.22 p.m.

I congratulate my hon. Friends the Members for Romford (Mr. Neubert) and Bexleyheath (Mr. Townsend) on their speeches, and particularly the former for giving us the opportunity to discuss these matters. I hope I shall be forgiven if I also pay tribute to the most interesting and courageous speech by the hon. Member for Hornchurch (Mr. Williams). I could not disagree with a great deal of what he said, especially when he warned us of the disaster which had resulted in South American States when the rate of inflation went into orbit at about 20 per cent. "Disaster is a frequently-used word and its use is not always justified. In this case, however, the hon. Member was perfectly justified.

I have visited South America, too, and seen the miseries that result and the almost inevitable dictatorship which supervenes. The hon. Member has done the House a service in warning us about the need to combat inflation if we are not to be confronted by that sort of situation.

I listened with great interest to what the hon. Member had to say about the social contract. I hope that my hon. Friends will forgive me if I try, as far as possible on such a controversial subject, to adopt a slightly more bipartisan approach by conceding that if there was the slightest chance of the social contract succeeding it would deserve to receive the blessing of every hon. Member.

The hon. Member for Hornchurch told us that the guidelines of the social contract have to be revised. He warned us of the difficulties of a wage freeze. My hon. Friend the Member for Bexleyheath seemed to go along with a short, sharp wage freeze. I do not disagree except to say that it is not so much a wage freeze that troubles me but what takes the place of it when the freeze ends. It is clear in retrospect that statutory policies introduced in the past by Governments of both parties have not worked. I hope I shall be forgiven if I say that it is equally clear that the social contract is not working in the way in which the Government and the TUC envisaged.

My hon. Friend said that incomes policies have not worked. However, if we look at the details of the wage settlements achieved during the last half of the period in office of the Conservative administration, there are good grounds for thinking that their incomes policy was remarkably effective in the circumstances.

When I recollect the host of anomalies which resulted, the bitterness of the low paid, and the resultant pressures for considerable wage claims, my satisfaction is more controlled.

The hon. Member for Hornchurch said that we must make the social contract work between now and the Budget; in other words, in the next few weeks. That worried me because I thought that he implied that we must move away from the social contract, which is effectively a voluntary wages policy, and from a statutory wages policy, which I think he agreed had not succeeded, to a period when the only way of controlling wages, salaries and incomes would be by tax methods. It may be that he is right. Perhaps the Chancellor is taking those suggestions into account. If so, I suggest that the unfairness of statutory policies and the social contract will be exceeded by the unfairness resulting from an incomes policy which attacks wage increases by means of taxation, because that will affect not only those who obtain increases as a result of the exercise of industrial power but those who do not. I underline that if the Government and the TUC, with employers' participation, can make the social contract work, I suspect that the Opposition's criticism of the social contract will decline.

As regards the effect of inflation on savings, I declare an interest. I am associated with a life assurance company. However, my interest is much broader than that. It springs from what I may modestly call a lifetime of dedication to the encouragement of small savings. That interest flows from a personal experience of the contentment which can result from the application of thrift and the prevention of unforeseen domestic disasters which befall every family from time to time. The idea of millions of small contributors pooling their contributions to make the ordinary man more secure and more self-reliant is something of which this country can be proud. It has created a private savings business which is the envy of a great many other Western countries, and which invests the savings of the ordinary man in British industry, thus helping to create the jobs from which the ordinary man benefits.

All that has recently changed. Whereas most insurance companies would have been able to boast effectively a few years ago that money invested over a period of time would have kept pace with the value of money, they are not able to claim that today. In a period which hovers on the brink of hyper-inflation, savings can only be returned with benefit if they have been invested in a productive end. I challenge the Minister to tell me of the areas of productive investment today which can produce a return equivalent to the present rate of inflation.

The tragedy is that people have become suspicious of and disillusioned with savings. In the near future, as a result of the reduction in the savings of ordinary people, industry will be affected. Jobs will no longer be created by the investment of these moneys in industry, which in turn means that there will be less wealth to invest, since the workers will be unemployed, on short time, or living on reduced incomes. Thus we have the appalling vicious circle that inflation creates for people's savings.

Retired persons, and those on the point of retiring, are especially worried about the way in which the pensions to which they have looked forward for up to 40 years can be eroded progressively by the effects of inflation. It is not only the pension, which stands as an inadequate protection against the ravages of inflation; it is the nest-egg, the family protection, and the amount that was thought to be adequate to maintain the family left behind in the event of early death which are affected.

It would be irresponsible to give the impression that people are looking forward to retirement with occupational pensions have nothing to fear. I think that it must be recognised that in view of the high final salaries on which pensions are based, and low returns on investments, the time may come when the absolute promise of a pension being paid through a firm can no longer be realised.

I hope that that will not be so. I emphasise that that is not the case now. But that is the threat which inflation, in my view, poses to the ordinary man.

I should like to pay tribute to the virtue of self-support. I recall the description by Sir Winston Churchill when I first entered politics of the ideal situation of this country. He said that he wanted to see a ladder and net society—a ladder up which everyone would be encouraged to climb, and a net into which those who were less fortunate could fall. That is still my view of society as it should be. It is right to encourage those who are the strong members of society to rely upon themselves. However, encouragement reaches an appallingly low ebb when inflation takes over.

I want to be more specific in recommending a course of action upon the Government than has any of the other contributors to this debate, because I believe that this is a time for greater encouragement from the Government and from the private savings media. I recognise that the greatest encouragement that the Government can give is to combat inflation. That is a desirable course which all Governments contend they support. However, why should there not be more specific encouragement? The tax relief given to those effecting life assurance policies could be reconsidered. That tax relief has not been changed for many years. Because of the introduction by the Home Secretary of the device known as qualifying policies, a major abuse, in the form of the opportunity to take advantage of tax relief on life assurance policies, has substantially evaporated.

Although I do not expect a firm answer from the Financial Secretary, I ask him to put this proposition to the Chancellor of the Exchequer. Indeed, I ask him to go further and to inquire from his right hon. Friend why there is an underlying reason which says that tax relief to encourage saving in life assurance is right but tax relief to encourage regular saving in, for example, building societies or unit trusts without the presence of life assurance is not justified. I know that a number of reasons have been given in the past, but, in the new circumstances, I wonder whether the time has not arrived for the Government to undertake a very extensive review of tax relief to encourage savings.

My hon. Friend the Member for Rom. ford referred to the introduction by the Government of index-linked savings. I join my hon. Friend in congratulating the Government on taking a step which flows from the Page Report on national savings a couple of years ago. But I wonder whether it is right to restrict that index-linked saving to such a narrow sector of society and whether it would not be right to issue some Government stock on an index-linked basis which could be taken up by insurance companies and other institutions and could have built round it some of the life assurance benefits which they as private institutions could provide, so that we had a combination of the private and the public approach to attracting people's savings.

In my judgment, competition for savings is good. As one who is involved in the private savings industry, it falls to me to say that I would welcome an encouragement to national savings. In that regard, the Financial Secretary might be well advised to reconsider the Save As You Earn scheme. I think that it attracted considerable money at the time that it was introduced and, to be fair, offered a reasonable bargain. But I wonder whether the basis upon which SAYE is established is altogether right in these inflationary times.

I turn for a moment to the building societies. I say now what I have said many times before only to be told that it is either impracticable or impossible. But again I appeal through this House to the building society movement, and I ask the societies to consider whether in a period of inflation, when perhaps one of the best hedges against inflation is private property, they could not issue shares which, in return for accepting a lower rate of interest—which, incidentally, would allow lower mortgage rates to the borrower—could be tied to the average value of a range of properties; in other words, the saver would have some involvement in the capital gain which at the moment results only to the borrower—the owner-occupier. I think that that is worth exploring.

With property still in mind, I want to say a passing word about investment in property bonds. Here I speak with personal knowledge. Those who invested in property bonds a year or so ago have not done well. On the other hand, if we look at property investment by the small man in this unitised way over perhaps the past 10 years, it will be seen that it is a sufficiently good hedge against inflation that to jettison it and to criticise it without redemption is quite unjustified.

We hear a great deal these days about the pressures being mounted by the self-employed. I had some evidence of that pressure yesterday at a mass meeting in the Grand Committee Room in Westminster Hall. But, there again, I wonder whether self-reliant people who often have given up jobs to take upon themselves the running of businesses with irregular hours and great challenges are not the sort of people who could be more easily encouraged to save by providing for their retirement in the shape of the self-employed retirement annuities first introduced in 1965 and whether the limitations based upon what a self-employed man can invest are themselves up to date.

Having started on the general and moved on to make recommendations, I come back to congratulating my hon. Friend the Member for Romford for giving us the opportunity to consider the devastating effect which inflation has on savings, especially those of people who have retired or who are on the point of doing so. To assist the House and the country and to give some reassurance to people who are so worried by the present rate of inflation, I hope that the Financial Secretary will give real consideration—if not today, in consultation with the Chancellor of the Exchequer—to seeing whether there are not revised ways of encouraging saving. Most of all, I hope that the hon. Gentleman will be able to persuade his right hon. Friend of the real and deep fears which exist about the ravages of inflation upon personal savings.

12.37 p.m.

I think we all agree that my hon. Friend the Member for Romford (Mr. Neubert) has done the House a real service in giving us the opportunity to debate this crucial and central issue in the relatively quiet atmosphere which rather limited numbers generate. It has also provided an oppor- tunity for some extremely constructive speeches from my hon. Friends and for some candid and forthright speeches from Government supporters, especially the speech of the hon. Member for Horn-church (Mr. Williams), which had that flavour of candour about it which we are beginning to hear, alas a little late in the day, from more and more hon. Gentlemen opposite as they realise the appalling course upon which the policies of the Labour administration have set the country.

To come back to savings, it looks as though the overall savings picture presents something of a paradox. I have no doubt that the Financial Secretary will tell us in a moment or two that personal savings in national savings and the building societies have been rather high and rose rapidly in 1974. At first glance the personal savings situation could be interpreted as looking not too bad, but the overall savings situation from the nation's point of view is appalling. It is totally inadequate.

At the moment we are overspending grotesquely. Last week the Chancellor of the Exchequer said that as a nation we were living 5 per cent. beyond our income, and many people would regard that as a very conservative estimate.

It is a piece of evidence beyond dispute wherever one looks at Britain from outside in the Western world that this country is persistently and unrestrainedly overspending in relation to our earnings; in other words we are dissaving, whatever we may be told. There is no hope of getting into equilibrium again until savings match investment and exports and until investment and exports are far higher than they are today.

The paradox is explained by two factors. It is explained by the fact that, although personal savings may be high temporarily, the surplus of the company sector is down disastrously. The company sector is in deficit to the tune of about £4,000 million, and there is still a dangerous level of illiquidity. That is one reason why personal savings are being offset. Probably the major reason, however, lies in the Government sector. Here we see the Government dissaving on a grand and spectacular scale.

My hon. Friend the Member for Bexleyheath (Mr. Townsend) said that he had heard about a £6,000 million borrowing requirement. I am afraid he has worse news coming to him. We shall not get from the Financial Secretary today the level of our present borrowing requirement, but it is certainly higher than the £6·3 billion which emerged when the Chancellor discussed these matters in November.

The Government are the big dissaver. They are doing the opposite of saving on such a massive scale that at the moment they are totally overshadowing any efforts at saving that are being made in the personal sector. Indeed, they are outbidding the company sector in its deficit as well.

This creates a thoroughly precarious situation. Precariousness is the quality which most outside commentators would now attribute to our economic policy and our economic situation. There is the feeling that we are on the edge of an enormous avalanche which could slip at any moment. Much of our borrowing is based on rather ill-defined terms, but they are terms which may carry with them great difficulties for the future.

That creates overall an appallingly precarious situation for three major reasons. First, the high level of personal saving could begin to shrink. It could shrink quite quickly as people begin to realise the basic arithmetic of the situation—namely, that there is a negative rate of interest on most savings. That applies even to Consols at 2½ per cent. Even if an investor is earning 13½ per cent.—very few small savers are doing that—how can that compare with an inflation rate of just under 20 per cent.? Probably the real rate of inflation is considerably higher than 20 per cent. Of course, the answer is that such interest rates do not compare with the present rate of inflation.

Small savers are not being paid for lending money to the Government. They are paying for the privilege of lending money to the Government. They have had—this is no news to anyone who follows these matters—an appallingly rough deal. Everyone knows that small savers get their 9½ or 10 per cent. That may seem a high interest rate compared with the past, but they are watching their money shrink every day while it is invested.

I am not sure how long that situation can continue, I wonder how long the illusion will remain. How long will it be before reality and understanding emerge? I wonder when the money illusion will disappear and when we shall begin to see a rapid decline in personal savings as a different philosophy takes over. The hon. Member for Battersea, South (Mr. Perry) referred to that philosophy. It is the philosophy of "Spend now; eat, drink and be merry, because tomorrow the savings will go ". It may even be that the present high level of savings—I would value the views of the Financial Secretary on this matter—is in the form of tactical saving. It may well be saving up to spend on larger items rather than saving in the sense of permanent thrift. The idea of permanent thrift is something that my hon. Friends strongly welcome and we believe that it should be encouraged. It seems that that view is also shared by the hon. Member for Battersea, South.

So for a number of reasons personal savings are a precarious quantity on which to pin any faith. They are precarious because of the rate of inflation and because there is no example from the Government. On the contrary, the Government's example is to spend. As the days go by the Government are putting further measures on the statute book which make it more and more difficult to undertake the process of saving and less and less worth while to do so.

My hon. Friend the Member for Romford (Mr. Neubert) mentioned the capital transfer tax. That is one measure which will make a more devastating attack on the whole motive for saving and for accumulating possessions such as productive assets, or a business or farm, to pass on to the family than any other Socialist measure. It is only beginning to dawn on the country outside what a lethal proposal the capital transfer tax represents. We know that it is complicated to the point of administrative craziness. We know that it is an unfinished measure, a half-sculptured piece. There are many more amendments and changes that the Chancellor of the Exchequer wishes to effect. When it was rushed through the House, time did not allow those amendments and changes to be made.

What the country does not yet realise—I believe that it will soon appreciate this —is how that tax will strike into every transaction between families and between individuals regardless of motive and regardless of the effect it has in discouraging more thrift, more saving and the handing on of a thriving family business. The capital transfer tax will be there to strike at personal and intimate transactions and to undermine the basis of saving for the family. That is a major contribution, if that is not too sardonic an expression, by the Government to the savings effort of this country. Those are some reasons for personal savings being in a precarious position despite their present reasonably encouraging level.

The second reason for the whole situation being so worrying is the deficit in the company sector. Because it is so big now, investment is not taking place in the way that everyone would wish. Companies are still dangerously illiquid. The stock appreciation tax measures taken by the Chancellor in the autumn helped to a small extent, but against those measures have to be offset the soaring costs of labour and materials and price controls. The recipe for bankruptcy is control on prices with soaring costs. What is squeezed between the two are profits for investment and savings in the company sector. That is what is now happening.

The third element is one that I have mentioned already—namely, the Government's contribution or non-contribution to savings. The Government are the great dissaver. We are now depending very heavily on Arab money. The nation is asking how long the situation can continue. How long can we continue with a borrowing requirement that may now be heading towards £8 billion for the coming year? For how long can we rely upon the good will of the Arab countries and the oil producers to reinvest funds here and to allow us to continue to overspend? To suggest that we are ordering pile carpets and Wilton carpets in the front room while we cannot even pay the rent is a correct analogy. How long can it continue?

The Financial Secretary must know that the situation as I have described it cannot continue. We have to take remedial measures. I believe that somehow personal domestic savings must be jacked up to cover the immense borrowing requirement, or else the revenue expenditure balance of the Government has to be improved, and improved notably by cutting Government spending. We have a number of proposals for how that should be done.

I believe that we shall have to operate on both fronts. We shall have to determine how personal domestic savings can be increased so that we are no longer relying, in this hair-raising way, on foreign borrowing which might be withdrawn at any moment. In addition we have to determine how we can improve the Government expenditure balance by cutting public spending. Let us have no doubt that that is also essential. Even the Government's Public Expenditure White Paper—paradoxically it is blue—made that absolutely clear. In the development of public finances over the next five years savings by the nation will need to rise by one-third from their present level as a proportion of our gross national product. That is what is required if the aims of the White Paper are to be achieved, although most people will realise that those aims are relative fantasy compared with the realities now staring us in the face.

Against the need to increase savings by that dramatic amount, the outlook is for a decline in personal savings from their present high levels. Personal savings from personal income are bound to become more difficult because when the Government do what they have to do, and what I hope they will do—namely, increase nationalised industry prices by removing the remaining subsidies and cut food subsidies, as I believe they have said they will—there will be transferred to personal incomes an additional burden. That will make the difficulties of personal savings all the greater and the need to provide encouragement even to stay where we are all the greater.

We are left with the question which my hon. Friend rightly posed, namely, how we can achieve the really big permanent increase in personal savings—not just temporary savings because wages have gone roaring up and one wants to save for a bigger car or a better holiday—so that we can again with self-respect provide from the personal sector some cover for the Government's huge borrowings instead of having to rely on the begging bowl around the world and so that we can let the company sector keep more of its savings and generate more profits, thus enabling us to get back to a high investment rate.

That is the big switch that has to be pulled by the Government if this country is to turn aside from the collision course on which we are now firmly set. It is a major task, and I think that it needs imaginative and constructive ideas to put it into being. My hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) mentioned a number of points on the personal side as well as the major changes needed by the Government on the policy side.

I agree with the hon. Member for Battersea, South that the savings movement is essential. It was a psychological error to do away with the stamp. I recognise the strong arguments that were made by the Page Report about administrative costs, but it is essential that new schemes should be developed by the Government very quickly to reinvigorate and keep together the voluntary savings movements which has done a great service to the country. It is not good enough to say that in secondary and comprehensive schools the schools savings movement can rely on the banks. That may be so in some cases, but in infants and junior schools we need new schemes of a tangible kind to replace the tangibility provided by the stamp. The sooner we have these schemes to fill the gap left by the stamp, the better.

Mention was made of indexing, and the Government have put their toe into the water on this matter. I take the point made by my hon. Friend that if we were to go further much faster we should put a question mark over the whole market for Government securities and make great difficulties, but the Government have put their toe in the water and we have in the past wished them well on this matter.

If one is looking for further areas for indexing, the next areas are not on the savings side but on the tax threshold side where some of the thresholds are ridiculous. My hon. Friend mentioned the absurdity of starting the investment income surcharge at £1,000 or £1,500 for retired people. This is a classic example of an area in which the threshold could be adjusted in common fairness even if one agrees—which I do not—with having it at that level in the first place.

Finally, there is another need if we are to get a permanent larger increase in the proportion of national output saved, and that is for the Government machine to gear itself more effectively to the need for savings. One has the feeling that savings for investment as part of national policy are a bit of a Cinderella. I know that savings are the responsibility of the Treasury and that pronouncements are made from time to time by Treasury Ministers. Investment in industry is the responsibility of the Department of Trade, and from time to time announcements are made by that Department. I should like to know who sits down and takes a view about the level of national savings needed to finance the kind of investment that we need and what policies are thereby required to bring about that level of savings. I do not want to know about Ministers who sit down and say that they want this much more public spending and, therefore, they want that much more taxation. Presumably that process goes on although the gap between spending and revenue is very large, and appears to be getting larger. We know the predilection of Labour administrations for taxation as a form of forced savings rather than encouraging individual savings and thrift. I recognise that as a traditional part of the Socialist view of managing the State economy. Putting that aside, however, there is a real necessity for the Government to give more political and administrative weight to the mobilising of savings for industrial investment. Changes are needed there, and I should like to hear the Financial Secretary's thoughts on that.

When all is said and done, and when we have put forward constructive schemes and proposed new policies, the fact remains that as lone as there is a negative rate of interest it is irrational to save. As long as the net result of putting money aside, even with an apparently quite high rate of interest, is to end up with less purchasing power than when one started, it does not pay to save. Somehow we have to make it pay to save again. Only when we do that, only when saving really produces a real net return to the saver, can we honestly stand up and urge the nation to show the virtues of thrift which are required.

That will be done only when the rate of inflation is reduced from its present appalling and apparently still climbing level. The Government have given us very little idea of how they will do that. We seem to have reached a state of policy paralysis. The Chancellor is saying that he cannot reflate, and he is right, but we have an oncoming business recession in which unemployment will rise. Every other country will be able to take measures of reflation—Germany, Japan and the United States—and have the opportunity to reflate to offset or counteract to some extent the oncoming business recession. But we are paralysed. We are boxed in and we cannot move.

Indeed, it would be truly wrong to move now an inch in the direction of reflation, and it is of some help that the Chancellor appears to realise this. But all this creates an atmosphere of total paralysis which is reminiscent of the Labour Party's economic thinking in the late 1920s and early 1930s, when elders of the Labour Party were unable to apply their minds to or produce any new ideas for the surging economic crisis which then confronted Britain.

I get very much the same flavour now that the elder and senior members of the Socialist Party—left, centre and on the Front Bench—have run out of ideas. There is nothing more they can do except to stand paralysed while the recession moves towards this country and finds us more unprepared and in a worse situation to cope with it than any other country as a result of our appallingly high rate of inflation. This is the gloomy prospect for the future which we shall have to overcome and can overcome by our national energies and by a return to thrift by both the Government and the company sector where higher profits must be permitted. But before we get to that point we need new courage and strength in Government policy, and of that I see not the slightest sign.

12.58 p.m.

I should like to add my congratulations to the hon. Member for Romford (Mr. Neubert) both on his success in getting a debate today and on his choice of this extremely important subject. We have had a fairly wide-ranging debate, almost a general economic debate, about the effects of inflation and its causes.

I am sure the House will recognise that as a Treasury Minister, I speak under serious constraint at this stage in the parliamentary timetable because we are now under the shadow of my right hon. Friend's coming Budget. I merely say that quite a lot of prescriptions were pressed upon me today on how to deal with the problem, and they were not all compatible with each other. I should, however, like to assure the hon. Member for Romford that the Government are seized of the importance of preserving the integrity of personal savings and are concerned to continue to encourage them.

As my hon. Friend the Member for Battersea, South (Mr. Perry) said, we need to look at the genesis of the inflation which is one of the problems facing everybody who seeks to save today. As he said, it did not begin on election day in February 1974, or on election day in June 1970 when the Conservative Party took office, and any sensible man recognises that. The increase in the rate of inflation has been a worrying feature of our economy and society for many years.

This phenomenon has not been confined to this country. There have been times when elements of inflation have been wholly out of control of all Governments. The Conservative Government had to deal with a period of rising commodity prices. I recognised that when I was in Opposition. That was part of the problem over which they had no direct control. We disputed whether they might have mitigated the effect in ways that we thought appropriate, such as food subsidies, but they rejected those suggestions. I concede immediately that part of the rise of inflation during their term of office was due to causes outside their control.

However, there were other factors which were within their control. There was a high degree of monetary inflation under the Chancellorship of Lord Barber. The hon. Member for Bexleyheath (Mr. Townsend) has been good enough to acknowledge that my right hon. Friend has cut considerably the rate of growth of the money supply, which under the last Government was accelerating at a rate unprecedented in our history. It produced a great inflation in land and house prices, which in turn produced a great deal of misery for many people and, I think, played no small part in some of the election results of last year.

My hon. Friend the Member for Horn-church (Mr. Williams) called on us to tighten the social contract. He referred to some of the consequences for free societies and democratic societies when inflation is not kept under control. He mentioned South America, where counties have been unable to keep inflation under control in a democratic framework. We are all aware of the point he is making. It is only right that I should pay tribute to the extremely difficult job of responsible trade union leaders, who are faced with the responsibility of ensuring that the living standards of their membership and of the families of their membership do not deteriorate. Many trade union leaders have been travelling up and down the country deliberately telling their members to moderate their wage claims. I refer hon. Members especially to the speeches made by Mr. Jack Jones, of the Transport and General Workers' Union, in recent months.

The hon. Member for Bexleyheath, for reasons of quite understandable loyalty, talked about his neighbouring right hon. Friend the Member for Sidcup (Mr. Heath) and the right hon. Gentleman's talks with the trade unions. The hon. Gentleman said that, unfortunately, the Prime Minister had not followed the right hon. Gentleman's way of approaching the trade union movement. It is true to say that there is a distinct difference between the way in which the last Prime Minister approached the trade union movement and the way in which the present Prime Minister approaches it. All I say to the hon. Gentleman is that I should be surprised if he preferred his right hon. Friend's recipe, because it resulted in a three-day working week, which in turn resulted in enormous unemployment and suffering for many people. Moreover, it brought about the February General Election and the ultimate repudiation of his right hon. Friend by his Conservative colleagues recently.

At present there is no sensible alternative to our trying to get the social contract to work. It is an exceedingly difficult problem. I acknowledge at once the constructive remarks the hon. Member for Brentwood and Ongar (Mr. McCrindle) made in this respect.

I should like to address myself to some of the points made by the hon. Member for Romford. He was good enough to acknowledge that the Government had been the first to introduce index-linked savings certificates and an index-linked Save-As-You-Earn scheme, both of which will be coming into effect later this year. I am the first to accept that these are very modest proposals. I make no great claim for them, except that they establish a new principle. That is extremely important. I am glad to see that the hon. Gentleman acknowledges that. We shall have to see how we go. If the schemes prove to be successful, if the public find them helpful and valuable, if there is an enthusiastic uptake, and if inflation rates are not abated, we reserve a completely open mind about the possibility of extending their range and scope to different kinds of instruments and making them more widely available to the public. I give the House that assurance without reserve.

The hon Gentleman was distressed at the fall in share prices. I can assure him that the Government take no satisfaction in the fact that prices on the London Stock Exchange are considerably lower than their peak of two or three years ago. There has recently been a considerable resurgence in the value of shares traded on the Stock Exchange.

Yes. They now stand at less than 10 per cent. below their values when the Government took office, but that value in turn represented a fall of over 40 per cent. during the period that the Conservatives were in Government. I do not wish to make party points, but I think that it is worth making that observation in passing.

The hon. Gentleman rightly pointed out that the people who were most affected by the rise of inflation were those on fixed incomes, because they especially were affected by price increases. My right hon. Friend has introduced subsidies on the most basic foodstuffs which people have to buy, as distinct from assistance for discretionary expenditure. The hon. Gentleman will be aware of the wide range of food subsidies that have been introduced by the Government deliberately to try to hold down the cost of living of those on fixed incomes and those with the smallest incomes. I hope that I have the hon. Gentleman's support for those policies.

Last summer my right hon. Friend cut the standard rate of value added tax from 10 per cent. to 8 per cent. That was yet another contribution to cutting—not just holding down—the cost of living, and to cutting further increases, because value added tax, being an ad valorem tax, is what is known as a buoyant tax. As prices go up, so do the tax elements. Our cut in the standard rate of VAT meant that future price increases of goods liable to VAT would attract a smaller tax increase. My right hon. Friend also announced increases in the rent and rate rebates.

Even more important was the increase in pensions. The hon. Member for Rom-ford surprised me. He seemed so dismissive of the increases in pensions as almost to be hostile to them. I took down his words with care. He talked about increases in pensions reminding him of the relationship between the drug addict and the pusher, as though these pension increases were not welcome to the great majority of people. I have to tell him that pensioners in my constituency would resent very strenuously a metaphor of that sort. The fact that the Government kept their earlier election pledge to increase pensions by a record amount has been extremely welcome among those who depend on them as their sole source of income. I am sure that the hon. Gentleman, in his fair-minded way, would be the first to acknowledge that proposals for cutting the rate of tax and investment income surcharges, much as I appreciate the reasoning that lies behind his remarks, would be of no benefit whatever to those who rely solely on the national insurance pension or on social security benefits as their means of support.

To be fair to the case I made on that specific point, I related my comments to the other smaller inducements. Of course, one accepts that the basic pension is a right that people have and that it must be kept up to date with inflation to the best of the Government's ability. But I was talking about other small concessionary facilities and smaller inducements, and in that way trying to meet a need which people would prefer to meet themselves if the value of their savings could be maintained.

I take the hon's Gentleman's point, but I am sure that he would be the first to agree that the present Government's social security policy has marked a major social advance. He will also acknowledge that we are committed in future to increasing pensions not merely in line with increases in the cost of living but also in line with increases in the average national wage, so that pensioners, who have laid the foundation for prosperity for the country will, in the years of retirement, enjoy the fruits of their labours that have been invested arid worked on by the current work force.

Will the Minister concede that one of the main criticisms of the new pensions proposals, which we were discussing in the House only a few days ago, is that, while under the previous Conservative Government the second pension would have been funded or, in other words, saved, creating money for investment in industry, the present Government's proposals are on a "pay-as-you-go "basis which requires no savings or investment as we go along but relies on the assumption that when the working man of today retires the working man of tomorrow will be prepared to pay him his pension?

It would not be profitable for us to renew the debate now over the whole question of the funding of the new pension scheme. However, I am sure that the hon. Gentleman will welcome the fact that pensions in future will be better than inflation-proofed.

I recognise that both Governments have applied a rough and ready inflation proofing to pensions over the years. Pensions have been increased under both Governments, and then there has been a period when immediately after the increase has taken effect much of the benefit has been eroded by further increases in prices.

What we are proposing in future is to go one better than that and to ensure that future pension increases take account of increases in our national prosperity as a whole, over and above increases necessary to keep pace with the rising cost of living.

There is a further assistance that my right hon. Friend has announced which will be of direct benefit to those who are fortunate enough in their retirement not to be dependent solely upon the national insurance pension. As the hon. Gentleman will be aware, last November my right hon. Friend announced that for 1975–76 we would be doing away with the confusing marginal age exemption relief for those of pensionable age and would be introducing a new age allowance which would be set at £950 for a single person and £1,425 for a married couple. This scheme will be of considerable benefit to the vast majority of people with incomes up to £3,000 a year. The relief will be withdrawn only very gradually for those with incomes over that amount. These are precisely the sort of people the hon. Gentleman has in mind, and I am grateful for his acknowledgement of that. I am sure that they will welcome the Government's proposals when they are translated into legislation.

The hon. Member for Brentwood and Ongar made a most distinguished and thoughtful contribution to the debate. He recognised that I could not comment upon many of the specific suggestions about tax relief. However, his proposals will be studied. I assure him that his suggestion that we review the whole range of tax inducements for savings appeals to me very considerably. When, as a Treasury Minister, I have time to extricate myself from a never-ending series of Finance Bills, it is a suggestion I shall certainly look at closely. I am sure that the hon. Gentleman's suggestions for the building society movement will be noted in that quarter.

One of the points the hon. Gentleman raised was the problem about the return on productive assets being too low at a time of increasing inflation. This point was referred to by other hon. Members. The hon. Member for Guildford (Mr. Howell) said that for a great many savings vehicles there was at present a negative real return. In so far as return on productive assets is concerned, one of the problems is that, as part of the contribution to keeping down the cost of living, the Government have a stringent programme of price controls. If the return on productive assets is to be raised, one of the ways in which one would have to start would be by relaxing price controls. I am glad to see that the hon. Gentleman agrees. However, as soon as one does that, that has an effect on the cost of living, and as soon as the cost of living is affected, it is immediately reflected in the retail price index, and again it has a feedback into wage claims. Again the vicious circle is perpetuated. This is the eternal problem of Governments in this situation —how to break into this vicious circle and try to stop its perpetuation.

The hon. Member for Guildford spoke under some difficulties because he was continually acknowledging that the Government had done certain things of which he approved, but then he was always forced to say that we had not done enough and that he wished we had done more. He acknowledged that personal savings were currently running at a relatively satisfactory rate. We would always wish them to be higher, but they are running at a much better rate than that of a few month ago. The hon. Gentleman was reduced to asking whether they were temporary or permanent savings. Only time can answer such a question. It would be foolish of me to speculate. I am sure that the hon. Gentleman will welcome the fact that a considerable proportion of savings is channelling its way into building societies, which are not traditionally a form of short-term savings or traditionally where people put money just while saving to buy a television set or some other consumer durable.

The hon. Gentleman was good enough to acknowledge that the Chancellor of the Exchequer had made a contribution to improving company liquidity. My right hon. Friend has made it quite clear that he intends to continue that relief this year and to make it available to those companies which, for administrative reasons, were not eligible to receive it under his last set of proposals.

The Government are awaiting anxiously the report of the Sandilands Committee on inflation accounting, which will receive very close attention as soon as it is in our hands.

The hon. Gentleman called upon us to cut Government spending. He will be aware that we have cut the rate of increase here. But, beyond that, I should say that those who call on us to cut Government spending have a responsibility to say where they want Government spending cut and on precisely what items. It is so easy to make speeches saying that Government spending is wasteful and that this or that must be cut. As soon as there is a proposal to cut a hospital which it is proposed to build, or schools which it is proposed to build, or on roads or houses, the pressures that the public bring to bear not only on the Government but on members of the Tory Party, as on members of our party, are enormous. Treasury Ministers soon start receiving representations from people to the effect "By all means cut public expenditure, but not on our hospital and not on our schools ".

The hon. Gentleman has not been present for the whole of the debate. However, I will address myself to his informed comment. I will tell him what happens when food subsidies are cut. They may be cut, of course, but the offset is an immediate increase in the cost of living. That, as we have discussed in another context, leads immediately, quite properly, to wage claims from trade unions, which are responsible for maintaining the standard of living of their members and their families. It is not such a simple matter as the hon. Gentleman seems to think.

If the hon. Gentleman insists on casting a fly over our benches, he must not be surprised if the odd trout rises. Cannot he do anything to prevent the mass municipalisation that is going on and costing the public purse in Greater London £70 million.

It would be more suitable if we discussed such matters in a debate on the Greater London Council such as we had recently. There is a great need to improve the quality of the stock of London's housing. My hon, Friend the Member for Battersea, South will be the first to agree about that. These are costs which rightly and properly will fall on any Government and on a responsible council.

The hon. Member for Guildford also talked about the nationalised industry subsidies. My right hon. Friend has made it clear that he intends to reduce these. The hon. Member will welcome that. I certainly hope that if any of his hon. Friends follow him into that position we shall not get a series of outbursts at the immediate and inevitable consequence on gas and electricity prices. The effect of reducing these subsidies must be to increase the cost of living, and there will have to be compensating adjustments for those who will be affected by them.

One thing is fairly clear. Both inflation, which is the root concern of the hon. Member for Romford, and unemployment are global problems for the whole of the industrialised world. They are inextricably intertwined. They have been showing considerable increases all over the world in the last few months. They have been created in no small part by the multi-billion pound taxes that the oil-producing countries have been levying on the oil-consuming countries.

Britain is doing relatively less well than our trading partners on the inflation side. I do not think that there can be any argument about that. On the other hand, I am sure that hon. Members will be the first to agree that we are doing emphatically better that most of the rest of the industrialised world on the unemployment side. The unemployment figures in France, Germany and the United States are all much higher than ours. In the United States the rate is more than double ours.

If hon. Members were to contemplate, for example, an unemployment rate—I know that the figures are not totally comparable, but they are close enough—of, shall we say, 1·6 million or higher than that, which would be comparable here with what is being experienced in the United States, I think that they would concede that the Government are following a credible strategy.

So often the choice is put in very simplistic terms between inflation and unemployment. The monetarists, of whom there are a great many sitting on the Tory benches, say Let us accept some unemployment as the price, admittedly the painful price, of achieving a reduction in inflation."

Put that way, there are so many questions which are unanswered. How much unemployment? For how long should such a level of unemployment be accepted? To achieve what rate of reduction in inflation? Unless these matters are quantified the argument simply is not intellectually respectable.

The Financial Secretary says "Put that way, there are so many questions unanswered ". That is not surprising, because he has put the question to himself the wrong way. Does he not realise that it is inflation itself, particularly inflation at the levels we now have, which are diverging more and more from those of our competitors and are now more than three times the rate in West Germany, which will inevitably lead to far higher unemployment? Unless he and his colleagues understand that, they understand nothing.

Of course we understand that. I was just coming to that very point. This has been the theme of speeches by many of my right hon. Friends. I am glad that I have the acknowledgment of the hon. Member for Bexleyheath. This has been the theme in speeches weekend after weekend by my right hon. Friends the Prime Minister, the Chancellor of the Exchequer, the Secretary of State for the Home Department, and many others. Of course we recognise that.

I say again that it is intellectually disreputable to talk about a simple trade- off between inflation and unemployment without acknowledging what rate of unemployment would be acceptable, for how long, and to achieve what reduction in the rate of inflation. If all that had to be accepted was, say, an increase in unemployment of ¼ million to halve the rate of inflation, I do not think any hon. Member would quarrel with such a choice. On the other hand, if we had to get the unemployment figure up to 2½ million to 3 million and keep it there for 18 months in order to knock five or six points only off the rate of inflation, I do not think there would be many hon. Members, not even the most extreme monetarists amongst the Tories, who would accept that as a price worth paying, because of the social strains which would be involved.

This is far too complex a problem to lend itself to such easy sloganising. We recognise, of course, that unemployment and inflation cause waste and suffering. I assure the House that we are far from complacent about that. I hope that I have succeeded in persuading the House that we recognise the problem and that we have done a great deal to mitigate the effects of inflation, not only on savings but on the standard of living of the ordinary people. Hon. Members will not have to wait very long now for my right hon. Friend's proposals for yet a further attack on the sources of inflation.

Question put and agreed to.

Resolved,

That this House, recognising that the present accelerating rate of inflation represents the most serious threat to the welfare of the British people since the Second World War and observing that its harshest effects are felt by those on small and fixed incomes, particularly retired persons, who can see the benefits of a lifetime's work devalued daily by rising prices, falling dividends and sagging share values, calls upon Her Majesty's Government to ensure greater protection for the value of savings and to give every encouragement to the prime virtues of thrift and self-provision.

Imprisonment(Alternatives)

1.28 p.m.

I beg to move,

That this House, noting with concern the large numbers of citizens sent to prison who could more effectively and appropriately be treated in other environments, invites Her Majesty's Government to develop alternative forms of treatment for offenders and, in particular, urges a review of sentencing policy on women convicted of child stealing and on habitual drunken offenders.
I am grateful, Mr. Deputy Speaker, for the opportunity to introduce this debate. For reasons with which you will be familiar, I had come to the conclusion in the last two months that Friday was not my lucky day. I am, therefore, grateful that we have reached this debate so early in the afternoon. I hope that this winning trend will continue beyond 4 o'clock.

Since the war the prison population has risen threefold or fourfold. In the last two or three years it has shown a very encouraging modest reduction, but it nevertheless remains obviously true that there are far more people in our prisons than the prisons were built to accommodate.

The Home Office has recognised this fact in the past five years, and we have embarked upon a new building programme. In one sense, this is welcome. If we are to have prisons, and if we are to have people in them, it is in everybody's interest that the prisons should be reasonably modern and secure and should have modern amenities.

However, at the beginning of the debate it is right to strike a note of caution about a new prison building programme. First, we do not know what the response of the courts will be to this development. Might there not be a Parkinson's Law by which prisons will always have sent to them a sufficient number of prisoners to keep them permanently overcrowded, however large the capacity? Is there not a danger that courts might even award longer terms of imprisonment? Is there not a danger that in creating more large prisons, containing over 800, we might be breeding further problems of size?

Moreover, the constraint that we face in considering modern developments and better treatment of offenders within prisons is not so much building as the lack of adequate trained and dedicated staff. This is a problem which will be with us no matter how many prisons we provide. We are faced with a chronic situation which has been growing in the last 20 or 30 years and which cannot be resolved merely by providing adequate capacity in the prisons. That alone should surely make us question whether many prisoners really require to be there, and whether there is not a better, cheaper and more effective way of dealing with them. My hon. Friend the Financial Secretary to the Treasury in the last debate invited the House to suggest ways in which Government expenditure could be reduced, and there is no doubt that keeping offenders in prison is a preposterously expensive way of dealing with them. There are many other ways of dealing with them which are far cheaper and yet which, so far as we are aware, have just as low a rate of recidivism.

What is the function of a prison sentence? What is the purpose in maintaining such a large proportion of our community in prison? If anybody should choose to defend prison sentencing on grounds of retribution it would be difficult to argue with him, although even then I would invite hon. Members to have some regard to the appropriate tariff scale of punishment. May I illustrate what I mean by referring to women offenders. One-fifth of women who end up in prison are there on a shoplifting offence. The vast majority—something like 80 per cent. —of shoplifting offences involve amounts generally less than £5. Yet a proportion of these women offenders are in prison.

One is moved to ask—even if justice had anything to do with retribution—how just is it to imprison a woman even for a few months for such a trifling sum? Society would have to be very obsessional indeed to regard such a prison sentence as justified purely in terms of retribution, since the cost of keeping a woman in prison for only one week is almost certainly to be at least 10 times the sum involved in the charge. Even if a defence of the system is made on grounds of retribution one can observe the tariff scale and say that there is adequate ground for criticising many of the prison sentences which have been passed.

I do not imagine that many Members wish to defend the present institution of prison by reference to retribution. I would imagine that most of them would argue for a sentencing policy based on deterrence and on rehabilitation. But it is difficult to produce any conclusive evidence that prison has a deterrent or rehabilitative effect which is more effective than other available kinds of treatment. Prisons have just as high a recidivism rate as any other form of treatment in the community.

To start with first principles, it seems unlikely that we can turn an offender into a well-balanced and integrated member of the community by isolating him from it and putting him in a situation where there is useful employment, where there is no stabilising family contact, where there is no opportunity for community service and involvement and where he has the company of nobody else but offenders. I know that other hon. Members who hope to speak in this debate will wish to expand on these general arguments.

I wish to press on to the two specific cases mentioned in my motion—women child snatchers and habitual drunken offenders. Before referring to either of these two groups, I wish to say that, although the numbers of these two groups in prison are small, the points that one can make about them have a wider application than can be made merely about those offences. For example, what one might wish to say, about the treatment of the drunken offender can be said with equal validity about other cases where we are dealing not so much with crime as with social problems—drug addicts, charges brought against vagrants, with which I am particularly concerned as I represent an area with a number of lodging houses, and charges brought under the Street Offences Act. There is a recent report of a working party set up by the Home Office on these latter charges, but we have yet to see any movement by the Home Department. To question the way in which the law treats women guilty of child snatching is to call into question the way in which the law treats all women offenders. What can be said about prison can be said with greater force where a woman is the offender. To look no further than the fact that women are the linchpin, the key, to the home, when we imprison women we are taking them out of the family situation, and that often has a much more disastrous effect on the family than does the removal of the man. A study was carried out in 1965 of 500 women admitted to prison in Britain, and it was discovered that between them they had 1,000 dependent children. Of those 1,000 dependent children, about half had to be taken into the care of the local authority or into the care of relatives and friends of the offender.

Of course, society cannot ignore the offences of women. It cannot overlook the fact that a woman has committed an offence simply because she has a family role to play. But it is absurdly myopic to overlook the fact that we may well be contributing to a new generation of children being reared in broken homes in difficult circumstances, who themselves are likely to turn to crime and become involved in the sort of social problems with which we are attempting to deal.

I quote from a document produced by the Prison Department in 1970, about the treatment of women and girls in custody:
" It may well be said that as the end of the centure draws nearer, penological progress will result in even fewer or no women at all being given prison sentences. Other forms of penalty will be devised which will reduce the number of women necessarily taken from their homes, which so often ends in permanent disaster and breakdown in family life."
One cannot but ask: if the result of taking a woman out of family life is so disastrous and produces permanent family breakdown as well as problems for the next generation, why are we postponing the development of alternatives until the end of the century? Why are we building a new Holloway with an even greater capacity than the present one?

I want to consider one group which, whether the new Holloway is built or not, ought not to be inside it. I refer to women convicted for stealing young children. There have been a number of well-publicised cases of this offence in the last four years. Many of these cases have arounsed considerable public concern. The most notable was the case of Jacqueline Paddon, in 1971, who ran off with a baby for 15 minutes and was found at the end of that period at the place where the mother had been walking with the baby, and yet she was sentenced to prison for two years. That case, and others like it, aroused very strong feelings among the public, but we have still seen very little change in the sentencing policy.

Last autumn a woman was charged with such an offence, and her defence was that she was so lonely that she carried a doll for which she bought nappies and clothes. She, too, was sent to prison for two years. Two years ago we had the case of Paulette Whitfield, who was sent down for 21 months, a case which aroused much public concern and produced an Early-Day Motion which was signed by 93 Members. These are heavy sentences which would normally have been imposed only for offences of very great gravity. It puts the matter into perspective when I say that two years is the maximum sentence which can be imposed for "unlawfully treating a child in a manner which is likely to cause unnecessary suffering." Moreover, most of those convicted of this offence get less than the maximum sentence.

One is moved to ask, therefore, even if the House wished to defend such sentencing on grounds of retribution, how just it is that a disturbed woman who has taken a child for a few hours, or even, as in Paulette Whitfield's case, two days, should receive a sentence heavier than that imposed on a man who has followed a systematic course of child battery.

It is hard to imagine what purpose can be thought to be served by such sentences. Pretty well all the women charged and brought before the court for this offence are disturbed in one way or another. Dr. D'Orban, the medical adviser to Holloway Prison, has made a study of this matter. In 13 cases which he wrote up, he found in the vast majority evidence of considerable disturbance. Another significant feature is that there is a repeated history among the women charged with this offence of a recent miscarriage or phantom pregnancy, with the offence taking place during the period of emotional distress following that incident.

A prison sentence in no way assists these women to come to terms with their psychiatric or emotional problems. It in no way helps them to adjust to normal life in the community, which should be the proper concern of our society. On the contrary, a prison sentence may well retard that very development and retard the woman's adjustment to normal life. For instance, can it be said that we have assisted Paulette Whitfield or her husband to come to terms with life after the trauma which they have undergone in the past three months by separating them forcibly for two years?

It may be argued by some that it is possible in the prison environment to provide proper treatment for disturbance of this kind. Nevertheless we know that such treatment as has been provided has been rudimentary, to say the least. For example, in the case of Pauline Jones, who was inside some two years ago, we know that during her time in prison the only treatment she received was for defective hearing and defective eyesight, and there was little or no attempt to deal with her great emotional problems.

The suffering which such sentences impose upon the offender might be comprehensible and justified if it could he shown that they prevent suffering among innocent parents by deterring other possible offenders. That might be comprehensible, but there has, in fact, been no evidence to show that it is so. On the contrary, the criminal statistics show that offences of this kind have actually increased. In 1972 we had the well-publicised case of Jacqueline Paddon and similar publicity surrounding the case of Pauline Jones, but in 1973, the immediately subsequent year, there was the biggest ever increase in this type of offence. Moreover, this offence is now running at double the level of 1971.

One cannot but be struck by the though that, far from deterring further offences, the heavy prison sentences and the wide publicity accompanying them have encouraged the commission of offences of this nature.

Fortunately, all the points which I have made have been recognised by a number of judges. It would be wrong to suggest that every woman convicted on this charge is sent to prison for 18, 21 or 24 months. On the contrary, some are being dealt with in a far more enlightened fashion. Two months ago there was the case of Mrs. Clodagh Dean, very similar to the case of Paulette Whitfield. In both cases the woman thought she was pregnant, but it turned out that she was mistaken. In both cases the woman was unable to come to terms with that realisation. In both cases she carried through the deception of a real pregnancy, and in both cases, at the end of the supposed pregnancy, she produced a child by snatching it from elsewhere. Paulette Whitfield was sentenced to 21 months. Mrs. Clodagh Dean was put on probation.

One is immensely relieved at the way in which Mrs. Dean was treated. One is immensely relieved to know that the judge in her case had the good sense and insight not to impose a prison sentence. Nevertheless the fact that there is this wide discrepancy in sentencing policy only sharpens the injustice to those who are sent to prison.

I recognise that Home Office Ministers cannot compel a consistent or uniform sentencing policy on the judiciary, but I think I am right in saying that the Lord Chancellor has the power to issue guidelines on sentencing policy to the judiciary. I cannot help thinking that it is high time that some guidelines were issued in respect of this specific offence suggesting that custodial sentences are inappropriate and that, in the great majority of cases, probation would be a better way to treat the offender and a better way to help her to adjust to the emotional problems which produced the offence.

I suggest that with some confidence be cause I come from a country where we have not imprisoned any woman for this offence during the past five years. A number of women have been charged, but I understand that in every case they were dealt with by probation.

However, I do not wish to seem smug in defending Scotland's record in that respect because I have to turn now to the other type of offence to which I wish to refer, in respect of which, unhappily Scotland leads the world. I refer to the habitual drunken offender. If I say a few words here about the situation in Scotland, I hope that my hon. Friend the Minister will bear with me. I apreciate that he has no ministerial responsibility north of the Border, but I am sure that he will wish to draw what I say to the attention of his hon. Friends at the Scottish Office.

In Scotland in 1973, the last year for which we have figures, 16,000 charges were brought for the offence of being drunk and disorderly. That is a very large number compared with the total of 99,000 such charges in the whole of England and Wales. Moreover it has to be remembered that in Scotland many offences of drunkenness or offences primarily connected with drink are charged as offences of breach of the peace. Thus, if we accept some of the work which has been done in breaking down these figures, we come to the disturbing total of about 45,000 charges in Scotland in one year for offences primarily related to drunkenness, and that has to be compared with a total of 99,000 in England and Wales.

In short, the alarming picture is that Scotland's one-tenth of the population of England and Wales accounts for one-quarter of all the offences relating to drunkenness in the whole of the United Kingdom.

What is more, that startling and disturbing contrast does not take into account the major contribution by Scots to offences of drunkenness in England and Wales. Indeed, as my hon. Friend knows from the Report of the Home Office Working Party on Habitual Drunken Offenders—that is, relating to England and Wales—a clear majority of all the cases of drunkenness brought in Leeds, Manchester and London were connected with offences committed by Scotsmen or Irishmen.

I speak with some diffidence, therefore, on the English situation in this respect, partly because I am not familiar with it at first hand and partly because we have a much graver problem to deal with in Scotland. However, I think it fair to say—I am sure my hon. Friend will agree—that the report to which I have just referred, published in 1971, led to a liberalising of the attitude of the Home Office towards drunken offenders. For one thing, it conclusively established that anyone who has a history of repeated drunken offences is not a criminal, is not a mischievous person, but is sick and requires medical treatment. I quote one sentence from the report:
" Any notion that the man who is repeatedly appearing before the magistrates on a drunkenness charge is typically a casual ' roisterer ' who is mischievous rather than sick must be abandoned."
I understand that the Home Office accepted that conclusion, with the result that in the Criminal Justice Act 1972 it was provided that the Home Office should be able to order the cessation of any custodial sentence for a drunken offence once appropriate community facilities were available in the locality.

However, that conditional phrase has, I fear, turned out to be of some importance because three years later, long after the passing of that Act, only two detoxification centres have been established throughout England and Wales —one in Manchester and one in London, the latter, I believe, being only now in course of development.

The lack of alternative facilities, the lack of detoxification centres, the lack of dry hostels and the lack of facilities for treatment within the community has meant, in effect, that there has been no change in the practice of the courts since 1972.

The picture is even more grim in Scotland. We have as yet no counterpart to the report of the Working Party on Habitual Drunken Offenders. We have had no change in legislation. We have not yet had a circular on community facilities for the treatment of alcoholism, although such a circular was issued two years ago for England and Wales. Moreover, despite our grave alcoholism problem, we have at present only one detoxification centre, and that centre, only experimental, is currently coming to the end of its grant. Therefore, far from expanding the number of detoxification centres, we are about to close the only one we have.

Normally people charged with an offence of simple drunkenness will be fined. A custodial sentence will not be imposed on them. But many people go to prison for non-payment of the fine. I am fortunate that in my constituency there is an active urban aid programme the staff of which have spent much of their time working with people who have appeared before the burgh court. I am told by them that about one-tenth of all appearances before the burgh court end up with the offender being sent to prison for non-payment of a fine for simple drunkenness. Taking into account the fact that many people appear several times, the proportion of people sent to prison for non-payment of a fine may be much higher—perhaps one-quarter or one-fifth.

The matter is of acute concern to me because in my constituency I have one-third of all the lodging houses in Scotland. One thousand of my constituents live in lodging houses and they are faced with the awkward problem that if they appear before and are fined in the burgh court it is said that they have no fixed abode because they reside in lodging houses, and they are given no time to pay the fine. Therefore, they spend 30 or 40 days in prison.

In view of the insight of the 1971 report that many such people are not criminal and mischievious but are sick and require medical treatment, one is moved to ask what purpose is served by putting them in prison. What purpose is served by fining them £5 even if they can pay it? A constituent of mine has been charged 317 times in the burgh court with being drunk and disorderly. What purpose is served by bringing this woman, who is clearly alcoholic, before the court time and again on this charge when it is clear that it is having no effect and is not helping her to come to terms with her problems?

The legislation is perfectly adequate. What we require are facilities to provide alternative methods of treatment. We desperately require a major development of detoxification centres, dry hostels and community facilities, which were adequately outlined in the 1971 report. This calls for corporate action by the Government because, although such a development would save money in the Prison Department and would make savings in my hon. Friend's Department, it would place a growing burden on the Department of Health and Social Security which it could be expected to bear only if we were prepared, as we should be, to make available the necessary resources.

I conclude by reminding hon. Members that at the turn of the century the majority of people in prison were there because they were debtors. Now, only 70 years later, there is not one person in prison as a result of debt, and this reformation has been achieved with no perceptible increase in the amount of debt and bankruptcy. I suspect that, if anything, there are fewer bankrupts now than there were at the end of the last century. It seems to us preposterous that our grandfathers imprisoned people for being bankrupts and debtors. It is my hope—I am sure that time will prove me right—that 70 years from now our grandchildren will look back at our sentencing policy and the state of our prisons and regard it simply as preposterous and incomprehensible that we sent to prison people charged with certain types of offence.

1.55 p.m.

I congratulate most warmly the hon. Member for Edinburgh, Central (Mr. Cook) on raising this important subject and arguing his case with such persuasiveness and expertise. I do not have the expertise necessary to comment on all the subjects he raised, particularly on those of sentencing for child snatchers and alcoholism, but I endorse some of his criticisms about the arrangements for women prisoners in Holloway. One point which I am sure he knew but did not have time to mention is that well over half of the prisoners entering Holloway enter on remand only. Fewer than one in five of them receives a prison sentence. That is an extraordinary condemnation of the inflow of women prisoners to Holloway which must be urgently reviewed.

I agree with what the hon. Gentleman said about the wide discrepancy in sentences, particularly for child snatching. Lord Gardiner recently remarked that, whereas all members of the judiciary were extraordinarly well qualified in terms of their knowledge of the law, virtually none of them had done any courses in penology, criminology or psychology. In view of this rather large lacuna in their wisdom before they started passing sentences, I hope that the hon. Gentleman's suggestion that a firm directive and guideline on sentencing should be sent to the judiciary by the Lord Chancellor will be followed up.

I disagree with the hon. Gentleman on one point. I understand him to say that there was pretty well no deterrent effect in a prison sentence. I believe that the dramatic fall in the rate of muggings in London—they have more than halved in the last 12 months—is directly related to the stern sentences imposed by magistrates and judges for mugging. It is also indicative that the number of hank robberies in the South of England has more than halved, again I believe partly as a result of the stern sentences which have been imposed. Therefore, although part of the fall-off is due no doubt to extra zeal and success by the police in detecting the criminals and that is far more important than anything to do with prison sentencing—I believe that the hon. Gentleman was wrong to say that there is no deterrent effect in sentencing.

We can all agree on two basic principles as regards prison sentences. One is that the main aim of the law should be to limit the purpose of imprisonment to the minmum consistent with public safety and the interests of society. Secondly, much more thought should be given to constructive treatment within the community for the majority of offenders. We do not give nearly enough thought to alternative methods to prison sentences for dealing with offenders. We do not even know what the alternative methods are, and we have not looked hard enough at what other countries do.

I very much welcome the innovation of community service orders introduced by the Criminal Justice Act 1972. This experiment appears to be a considerable success in the areas in which it has been introduced, and I hope that it will be extended. We should not be afraid or ashamed of ensuring that community service orders, particularly when they have been imposed for the more serious types of offence, involve some fairly disagreeable tasks. Contributions to youth work, and so on, are very good for certain offenders, but perhaps more disagreeable tasks, such as assisting the troops in clearing Glasgow's refuse, could quite justifiably be included in community service order sentences. We need more experiments also like the Sheffield Day Training Centre, which has had some success in dealing with the more hardened criminals.

I should also like to see in borstal sentencing arrangements a mixture of a custodial sentence and community service towards the end of custodial sentences. I spent the summer myself in a borstal—I should quickly add, as an assistant to a housemaster—and during that period I led a party of the inmates to a community project which involved clearing up after a youth festival on the Isle of Wight. There was no doubt that the inmates, who were theoretically under my control, very much enjoyed leaving the borstal and did not mind tackling community work. After their return, they felt that a few weeks outside made it easier for them to adjust to a return eventually to civilian life. Perhaps more borstal sentences might consist of a mixture of custody and community service work.

Another innovation which could profitably be studied is weekend prison sentences. There have been weekend prisons for some time now in Germany and Belgium. It must be admitted that weekend prisons do not include much of a reformative or rehabilitation element, but the advantage is that a weekend prison avoids cutting a prisoner off from his work and his family and, therefore, disrupting family life. It avoids the expense of keeping a prisoner in prison full time, which I believe now costs over.£40 a week.

This would be the ideal kind of punishment for certain types of offenders. I have read closely the full text of Sir Robert Marks' much-publicised lecture earlier this week, which contained same valid comments on the vicious nature of a very small minority of political demonstrators who deliberately organise and create appalling acts of planned violence against the police. Since the police themselves in London now have to give up their weekend leave seven weekends out of eight, it would surely do no harm if these unpleasant types of violent demonstrator had to go into a weekend prison for a few weekends when convicted of crimes of violence against the police.

When considering alternatives to prison, we should spare a thought for the long-term prisoner. I was most interested to read in the Sunday Times Magazine of 16th February a remark by Lord Hunt, who has had as much experience as any one of prison service:
"After experience of the prison service for a number of years I became convinced that it is apt to be non-productive in the long term. Long sentences create serious social problems outside and may well lead to a return to criminal behaviour. Inmates need more opportunities to show they can change."
That is a telling comment. The characters of long-term prisoners do change dramatically during their long years in prison. When one reflects that well over half the people now serving life sentences are doing so because they killed, as a result of a family tragedy, someone they once loved, it is perhaps worth thinking about better and more flexible alternatives to the parole system to ensure that this kind of offender can have some hope of being released earlier than is sometimes the case.

Mr. Justice James, who could never be accused of being soft on criminals, since he was the prosecutor of the Great Train robbers, in last year's Ridell Lecture said that the recent proposals of the Home Office Advisory Council on the Treatment of Young Offenders, which made it possible to vary the conditions under which a sentence can be served by those between 17 and 21, should be applied to all age groups. That was a sensible suggestion which could be applied to people serving long sentences. But, above all, we need to give more hope to the long-term prisoner that his sentence will be reviewed if his circumstances and character change.

We could perhaps all agree that the criminal process must seek to avoid anyone serving a prison sentence having to remain in custody longer than is necessary in the balanced interests of society and the prisoner himself. That is not happening at the moment and this debate is a good opportunity to make some suggestions by which more flexible elements can be introduced into the system. I am grateful to the hon. Member for Edinburgh, Central for having initiated the debate.

2.5 p.m.

I owe my hon. Friend the Member for Edinburgh, Central (Mr. Cook) an apology for having been detained outside the Chamber until half way through his speech. If I repeat anything that he has said, I apologise to him and to the House. However, having had conversations with him about this debate earlier in the week, I understand that he intended to argue the motion chiefly in terms of specific cases. He was certainly doing so when I came in. I therefore hope that I shall not be repetitive if I support him in slightly more general terms.

The general issue raised by the motion is of the utmost importance. Society in its treatment of convicted criminals has only two important legitimate interests.

The first is the protection of society, which I put very much first. That is far and away the most important thing that society has to consider. The second is the rehabilitation of the criminal. Obviously, the two considerations are connected. If society fails to rehabilitate the criminal, when he emerges from whatever treatment society has seen fit to mete out to him he is likely to be criminal again, and society will have failed in its first aim of protecting itself.

Everyone will agree, I think, that violent individuals and sex offenders have to be segregated from society, at least for some period related to the nature of their offence and the success that society has in rehabilitating them. But it is far from obvious that many other kinds of criminal benefit from being segregated, or that society benefits from their segregation. I am not an expert in these matters, but I heard it argued seriously in a BBC radio programme only a short time ago that prisons are net producers of crime, not net reducers of crime: that trying to rehabilitate a man by locking him up in prison is like trying to rehabilitate an alcoholic by locking him up in a distillery; that by sending a criminal to prison we send him to a school for crime where he will learn new criminal practices and make new criminal contacts.

It was said by the hon. Member for Thanet, East (Mr. Aitken) that we have failed to keep up with advanced thought in these matters. That is true, or it has been true in the past. Our prison population of 30,000-odd is much larger than the prison populations of comparable countries on the Continent. But, fortunately, this subject is at last in the air, a great deal of thinking is being done about it, and a great deal of experience is being gathered in other countries. I am thinking particularly of Denmark and the other Scandinavian countries—where criminal and sentencing procedures are far in advance of ours—from which we have a great deal to learn.

Only yesterday, the Clarendon Press published a book dealing with these matters entitled "Progress in Penal Reform ", edited by Louis Blom Cooper, QC. In a review of this book in yesterday's Guardian, Baroness Wootton points out that every contributor to it dislikes our prison system as it now is. The volume therefore constitutes, she says, an anthology of informed and experienced criticism of the prison system. She concludes with the words:
"… this volume represents the most serious and well informed attack yet directed against our prison system, and should bring much nearer the day when that system will be universally regarded as an outdated version of a scene from Dickens."
If that is the view which is taken of our present system by a 77-year-old Member of the House of Lords, radically to criticise the system is scarcely to take an avant-garde attitude.

Many members of the public are too complacent in their acceptance of the assumption that to send a criminal to prison is the ónly proper thing which can be done. Many members of the public still take a crude, Old Testament, retributive view of how criminals should be treated. This is in the interests neither of society nor of the criminals in the long term.

When we send criminals to prison we are not only in danger of increasing their criminality and, therefore, the problems of society when they are released, we are also in danger of increasing short-term social problems outside prison, for in the main, prisoners are not isolated individuals. They have families. Many have wives and children whom they have had to abandon and who may be in financial straits. Often the children of such a person themselves get into trouble with the police because their father is away in prison.

Like other hon. Members, I have to become involved with the social problems of the family when one of its members goes to prison. So in counting the social cost of sending people to prison we have to think not only of the financial costs of running prisons, and the social costs of bearing the increased criminality of the people we treat: in addition, there are the social costs which have to be met outside prison.

I hope that hon. Members and the Government will pay more attention to the kind of informed thinking on this subject, published yesterday in the book to which I have referred, and to the more advanced experience on this subject of the Scandinavian countries. I hope that we shall soon catch up with these countries in our treatment of these matters.

2.13 p.m.

I follow the hon. member for Leyton (Mr. Magee) with similar apologies. I regret that I was unable to be present during most of the speech of the hon. Member for Edinburgh, Central (Mr. Cook). I was entertaining some Commonwealth delegates. I offer him my sincere congratulations on introducing this debate to the House. This is often a subject which receives little public sympathy and support. I was genuinely moved by the comments the hon. Member made in the latter part of his speech, which I was privileged to hear, on the problems of his constituents and the need for a radical and basic change in the philosophy behind our penal system.

There is a woeful lack of specialist means of dealing with offenders. The facilities recommended for dealing with alcoholics—the detoxification centres mentioned in the Home Office report and in pieces of legislation—have not materialised. The results are evident. The lack of facilities under the Children and Young Persons Act for children with acute behavioural problems and of facilities for women with acute psychiatric disorders are examples of the gaps in our penal system and a reflection of the fact that for too long successive Governments have not accorded this area of social responsibility the priority which it deserves.

I am desperately concerned that in this country there is a growing rate of absolute crime. What is more worrying is that there is a growing rate of recidivism in crime. This is the ultimate reflection of the complete inadequacy of institutional means of dealing with offenders. The proportion of people in prison for non-payment of fines is substantial. It is absurd that a large proportion of our prison population comprises people who have been sentenced for non-payment of fines, for having committed crimes of passion and for the sort of misdemeanours described by the hon. Member for Edinburgh, Central, such as drunkeness. Institutional means of dealing with offenders cannot cope with this. The quality and reformative element of those institutions is completely inadequate, and the empirical evidence is there to prove it.

I do not wish to spend too much time discussing the inadequacies of our system. They have been eloquently defined by other hon. Members. I want to look at some positive measures which can be taken to improve this deteriorating situation.

First and foremost, we must provide more money for this area. People and institutions cost money. Good facilities for reformative teaching cost money. I do not wish to make political points, but we are spending massive sums on indiscriminative food subsidies. If those sums were to be cut by £100 million or £200 million, that money could be spent on this area of tremendous need.

More recognition and financial assistance should be given to voluntary bodies. The National Association for the Care and Resettlement of Offenders, which provides rehabilitation facilities and helps ex-convicts adjust to society, could be accorded further legislative recognition and monetary assistance. That body represents a multitude of voluntary bodies working effectively on a small group basis throughout society, and further Government assistance to it would be one positive way in which we can help those with individual and behavioural problems.

Second, in terms of expenditure, we must accord more priority to the building of specialist homes for the sort of categories I have described. It is completely inadequate and a disgrace to this country that we still have system of lumping together people who have committed differing offences. Should we, then, be surprised that the penal sub-culture which exists is conducive to a recidivist and escalating rate of crime?

Third, although we have seen a welcome increase in the remuneration of the probation service, I feel that we should be aiming towards doubling or tripling the numbers. At every stage we should be trying to help offenders in the community, and not in an institutional environment. I recognise that in doing so we need a tremendous increase in the number and quality of those closely involved with such persons and that the burden in terms of the load placed on their time in that capacity should be substantially lower than it is.

I believe, too, that we should widen the options open to magistrates. Historically, magistrates have been able effectively to deal with offenders, particular young offenders who have been brought before them. With an increasingly defined legislative network, which has advantages, much of the initiative and imagination allowed them in dealing with offenders, especially young offenders, has been limited. I support the comments of my hon. Friend the Member for Thanet, East (Mr. Aitken), who said that as far as possible we should widen the possibilities of community reparations for offences.

For example, if a young boy throws a brick through a glasshouse he should pay for it and replace the plate himself. That may seem a simplistic example. While I recognise that there have been advances through the Criminal Justice Act with community service orders, I endorse the comments that these should be expanded and more discretion given to magistrates in dealing with these problems.

The magistrates' complaint is that they are not allowed to send children for custodial sentences, which is against the spirit of everything said in this debate. It is not that they want to use other means of dealing with them.

I disagree. The objections made by magistrates' associations and individual magistrates who have made representations to me reflect the duties placed on them by Acts of Parliament such as the Children and Young Persons Act 1963, their inability to follow the intentions and provisions of those Acts, and especially the difficulty of finding suitable community homes when dealing with young offenders. I do not believe that magistrates are against alternative and more imaginative means of dealing with offenders if they can be shown to work and are encouraged by the community. The complaints referred to by the Minister are a reflection of magistrates' frustration at being unable to apply certain pieces of legislation, especially when placing children in community homes.

I think that my comments go a little further than those of my colleagues. This is a subject on which I feel extremely strongly. I ask for a revolution in the attitude of Parliament to the problems of our penal system. The degree of civilisation which a country attains is measured by the humanity of its penal system. I believe that the priority and public sympathy accorded in the past to this subject have been grossly inadequate. We should not, therefore, be surprised to sec the figures for growth in recidivism and crime generally which arc currently being presented.

2.22 p.m.

I join in the approval of and congratulation to the hon. Member for Edinburgh, Central (Mr. Cook) who moved the motion.

The hon. Gentleman complained about the apparent tariff scale for women shoplifters and said that it was disproportionate to the gravity of the offence which they committed. I do not agree. The tariff for women shoplifters almost entirely avoids the custodial sentence. Women are sent to prison for shoplifting offences only when they have repeatedly failed to learn the lesson or to take advantage of the opportunities given to them during their earlier appearances before the courts. A woman shoplifter is very seldom sent to prison for shoplifting offences, for which there are frequently psychological explanations. The courts lean over backwards to avoid doing so. That has been my experience from my practice in the London criminal courts.

The hon. Gentleman said that there was no proof that prison was a deterrent. I disagree. There is no statistical proof that prison is a deterrent. It is very difficult to envisage a way in which such proof could be obtained. Perhaps a test might be made—I put this forward as a serious suggestion—for example where young persons who have been discharged from borstal or a detention centre could make statements describing their motivation following a period when they had stopped offending.

Hitherto no statistical method has been accepted as being capable of proving the deterrent effect of prison. That is not to say that proof does not exist. I have practised in the courts for 13 years. I am sure that a large number of lawyers share my experience that many offenders are frightened of going to prison and that they will do almost anything—usually demonstrated by pleading not guilty to offences which they have committed—to avoid it. Although deterrence cannot be proved by statistics, a large body of opinion of professional practitioners in the criminal courts would, I think, support the proposition that prison is a deterrent and causes fear to offenders.

I do not dissent from the suggestion that anyone faced with a prison sentence would wish to avoid it, or that those who have been through the mill will pay ample tribute to the unpleasantness of the experience. However, I invite the hon. Gentleman to address himself to the specific problem of woman child snatchers, where we have seen the onset of a modern trend towards heavy sentences and an increase in the rate of the offence. None of the women to whom I have referred would disagree with the hon. Gentleman. They would like to avoid prison sentences, which have imposed great suffering on them. However, on evidence, prison sentences do not appear to have deterred an increase in that type of offence in the past two years.

I do not think that follows. Because there have been one or two incidents recently of women child snatchers having been sent to prison, it does not necessarily follow that there has been an increasing tendency to commit such offences. I do not think that there is necessarily a cause and effect. We must look at the wider causes of stress and strain in our society. The hon. Gentleman will have great difficulty in proving a link between the sentences imposed and the incidence of the criminality which he rightly condemns.

The object of sending women child snatchers to prison is to deter them. Some people think that there is a deterrent value in sending such offenders to prison because that may deter those who are perhaps less psychologically disturbed but who might otherwise seek to take this way out of their problems. Perhaps this is a subject for the Home Office research facilities to investigate, to ascertain the motiviation and the incidence of the offence and the effect of the penalties imposed upon women child snatchers.

The hon. Gentleman made no reference to the need to protect the public. I find that disturbing because, whatever may have been the past justification for imprisonment and custodial sentences, the present dominant justification is that that is the only way in which society can be protected against the activities of repeated offenders, especially those who indulge in acts of violence.

The hon. Gentleman referred to the power of the judiciary. The Government have no powers to direct the judiciary to do anything. The nearest they come to it is that the Lord Chancellor is the supreme authority over lay magistrates. I assure the hon. Gentleman that the judiciary is aware of all the problems raised by sentencing. There are frequent conferences and seminars to consider sentencing policy. Lord Chancellors in successive Governments have called magistrates together. They have instituted training for magistrates to try to stabilise the system of sentencing by magistrates. The Lord Chief Justice has set up frequent conferences and seminars for all judges in the higher courts, so that a constant attempt might be made to look into and to discuss the results and the desirability of alternative forms of punishment.

Subject to those observations, some of which are critical of what the hon. Gentleman said, I must say that his motion is extremely good because it draws the attention of society to the fact that prison ought not to be regarded as the easy way out and that it may cause many more problems than it solves.

The motion is good, too, because it reminds the public that the prison system has a high failure rate and a high rate of recidivism. It also reminds the public of the cost of sending someone to prison. In answer to Questions of mine, the Under-Secretary of State said last month that the cost of maintaining an inmate in a borstal or young persons' centre in 1973–74 was £51 a week. In a detention centre the figure was £45. The estimated weekly cost of maintaining an adult male prisoner was £41. The average weekly cost of maintaining an inmate in a prison or borstal for women or girls was £53. I can assure the hon. Gentleman that those figures are double the estimated costs in 1970.

If the wage earner in a family is incarcerated and his wife and children then have to resort to social security, it is probable that the average cost of sending a man to prison and of supporting his family is well in excess of £100 a week. It is important that the public should realise, whatever their feelings and sentiments in relation to the prison system, that it is financially necessary to explore the alternatives to the fullest extent.

The motion is good also because it reassures the public that they are being protected and that their interests are prominently in the mind of Parliament.

The problem which the hon. Gentleman has raised is not a new one, however. For years Governments have considered ways in which they could cure the unsatisfactory nature of the penal system. I assume that the Minister of State will review the history.

One brave experiment was the introduction of suspended sentences in 1967 because it was considered that too many people were being sent to prison who might necessarily never have been sent —for first offences and matters of that kind. It was generally thought that if the sword of Damocles was suspended over their heads, that would be a sufficient deterrent for them and that in one stroke it would be possible to reduce the pressure on the prison service of having in its charge so many people who did not benefit from prison and who would not be deterred by prison. It was thought that that would release resources in the penal system for rehabilitation and allow more scope for the prison service to operate more effectively as a rehabilitative element.

The effect of that brave experiment was not entirely as had been hoped. It is doubtful whether it reduced the prison population. What happened was that people who received suspended sentences believed that they had been acquitted. In due course, when such a person came to be arrested and convicted again, the suspended sentence was put into effect and the overall sentence was longer than that which would have resulted if a prison sentence had been imposed in the first place. That has been reconsidered and the statute has been changed. I hope that the Minister will comment on the effectiveness of the change in the suspended prison sentence rules.

Then there was the experiment, which we are still undergoing, to try to encourage magistrates by statute to keep fewer people in custody who were awaiting trial. Again, I should be happy to hear what the degree of success is thought to be in granting more bail than was the case until recently.

Another brave experiment was the parole system and, linked to it, the early release scheme. That seems to have met with a measure of success. Perhaps the Minister can update the figures.

In recent years there have been determined attempts by all Governments to explore the alternatives to prison, especially by means of community service orders, which in so far as they are effective ought to be extended.

I hope that the Minister will comment on the working of the Children and Young Persons Act 1969. I am a member of the Select Committee of this House which currently is taking evidence and shortly will be drawing up its report. The concept by which that Act was introduced, to take young offenders outside the penal system and deal with them within the community on the assumption that custody was harmful to them, was highly desirable. However, the general conclusion of most hon. Members serving on that Select Committee and hearing evidence from body after body which has had to deal with the problems thrown up by the Act is, I think, that generally it is failing.

There do not seem to have been the money and resources available for the development of community centres and institutions laid down by the statute. There does not seem to have been enough prior thought given to the problems which would be caused by the implementation of the statute in an inhibitive way. There are criticisms of staffing, of social welfare workers who have not been trained in the specific tasks of looking after juvenile offenders and trying to stop them reverting to juvenile delinquency, of house mothers who are 16 or 17 years of age, with no experience or knowledge of life, let alone of how to handle small children.

There are criticisms of the community homes. When they were approved schools, headmasters were able to exert some degree of discipline over their charges. They could increase the length of time that they were in their charge. They could exercise some direct control over them, which was respected by the young residents. The situation now is that before a headmaster takes any decision he has to refer the matter to the social welfare services. By the time a young lady takes a decision about what the headmaster may or may not do, the respect—the link between the man and the boy—has gone. This is a cause of great concern to those involved with this very important unit in the overall concept of young people's rehabilitation as devised by the Children and Young Persons Act. Something should and must be done about that.

There has been criticism of borstals. It has been seen to be entirely wrong that they should have in their care children between the ages of 14 and 16. That is said to have interfered in a substantial way with the rehabilitative work which borstals have always been able to achieve with young persons from the age of 16 upwards. A strong case has been urged upon the Select Committee to take away from borstals the 14-to-16 age group and to devise some form of strengthened community homes as a way of caring for that age group.

In an intervention the Minister referred to the criticism which has been expressed by magistrates and police to the effect that the Children and Young Persons Act has no teeth. That criticism cannot be brushed aside. The police force is the unit that has to deal with the young offender. It has to decide whether to prefer charges and whether to bring young offenders before the courts in the first place. The feelings of the police are important and significant, as are the feelings of the magistrates. Something has to be done to give the Children and Young Persons Act rather more teeth than it has hitherto had.

I now suggest four general lines of approach for the Home Department in dealing with the problems raised by the motion. First, I agree with my hon. Friend the Member for Chichester (Mr. Nelson). It is vital that we should spend a greater degree of our national financial resources upon the penal system and upon alternatives to imprisonment. This is a difficult time to ask for more money to be spent. I am asking for a higher proportion of the national cake.

Secondly, I agree with my hon. Friend the Member for Chichester in calling for a considerable strengthening of the probation service. It has had to bear the brunt of many of the reforming changes that have taken place over the past 10 years. It now has a far wider duty concerning the after-care of prisoners. The service must have better pay. It must be made more attractive to potential applicants. There must be a more attractive promotion structure.

Thirdly, I ask for a more determined effort to improve the training of those officials who have to deal with the care of young offenders. That means specifically those who were so designated under the Children and Young Persons Act. It goes wider than that if we are to have an effective rehabiliative prison service. We must offer greater incentives to psychiatrists, doctors and general welfare workers who work within the prison system.

Fourthly, I ask for something that we do not appear ever to have had—namely, a thorough review of the workings of the penal system and the alternatives to imprisonment. We do not have enough facts about the vital questions that need to be answered. We do not know statistically of the deterrent effects of the various forms of sentence. There seems to be an appalling absence of data upon which responsible bodies are drawing conclusions and upon which action is being taken. When they are asked upon what data they have come to their conclusions, it is found that the data is often insubstantial.

Everyone knows what is wrong with the penal system, everyone can pinpoint where it is breaking down and where it is weak, but we are stumbling along in trying to cure the evils of the system. We have an upsurge of lawlessness in our society. Prison is, if anything, even more important than it was five or 10 years ago as one of the institutions that deals with criminality. The prison system has to be maintained and upheld. Equally it must be humane and enlightened. We have, however, a duty as a Parliament to encourage all steps to try to find realistic alternatives. I shall listen with great interest to what the Minister has to say.

2.47 p.m.

My hon. Friend the Member for Edinburgh, Central (Mr. Cook) opened this debate with a lucid and well-argued speech. He showed from his grasp of the subject how important it is to our consideration of the penal system. He may not have been aware how pertinent and relevant this discussion is to the problems that we now face.

My hon. Friend drew attention to the level of the prison population. He pointed out that it had doubled in the past 25 years but that it had now stabilised and showed signs of decreasing. That undoubtedly was true between the middle of 1973 and the end of 1974, but there have been signs in recent months that the prison population is increasing again. There are now 38,500 men in prison and there is every sign that if present trends continue the figure will exceed 40,000. That was the position between 1971 and 1972. Such a situation is deplorable on any grounds, not least because of the enormous congestion within the existing prisons.

For that reason I welcome what my hon. Friend said in such a constructive way about the alternatives to imprisonment. Within the Department we have given close attention to what we can do to minimise the effect of the present trends upon the prison system. That was the position even before my hon. Friend's motion came to our attention. My hon. Friend referred to two areas in particular —namely, child stealing and habitual drunkenness. I shall turn to those matters in a moment, but I begin in a rather wider perspective.

The number of people in prison at any one time is something which neither Government nor Parliament can effectively control. We define the limits of the criminal law and we prescribe the maximum penalties. The number of people in prison is a reflection of the level of crime in society itself, the number of offenders who are brought to trial and convicted and the use that the courts, whose independence from the executive I need not stress, make of their sentencing powers.

The hon. Member for Burton (Mr. Lawrence) drew attention to that factor in a speech that I thought was rather schizoid. He began by expressing the well-known attitudes which I share with him as as member of the same profession—namely, that imprisonment has certain desirable attributes which should be positively pursued.

The hon. Gentleman then went on, along with everybody else in the debate, to indicate the limitations of imprisonment and how we ought to seek alternatives to it. I feel that we both suffer from the attitudes in which we were trained in our profession in regarding imprisonment in this positive light. I think it must be accepted by all who look at the system that imprisonment is a negative way of dealing with the problems of criminality and that it is a punishment which is perhaps the least desirable of all the categories of punishment available to the courts.

My hon. Friend referred in a telling way to the limitation of imprisonment as a deterrent for child stealing. The hon. Member for Thanet, East (Mr. Aitken) suggested that he might be wrong because, for instance, of the experience in relation to mugging and bank robberies. As the hon. Member for Burton said, no one can be absolutely sure about this, but I should have thought that such evidence as we have indicates that the decline in bank robberies is more to do with the level of police activity and the fact that detection is so much more of a deterrent than almost anything else.

The deterrent effect of imprisonment in mugging cases is more arguable, but in a recent study which the Home Office did on mugging in the Midlands the results indicated that the pattern of falloff had more to do with increased police activity and very little to do with a particularly heavy sentence of 20 years which was passed upon a youth and which received enormous publicity at the time but did not seem to have any particular effect upon the incidence of mugging in the area immediately thereafter.

The indications—I put it no higher than that because no one can be sure—are that imprisonment as a deterrent is not as important as the hon. Member for Burton and, I suspect, most members of our profession, think it it is, and that there are ways in which one can reduce the potential of any particular individual to commit crime by alternative sentences which ought to be tried if at all possible.

I agree that we are all on unknown ground as to what creates a deterrent—police activity or sentencing. To some extent these factors may be related. If society feels that crimes such as mugging are serious, and if the courts reflect that feeling in heavy sentences, police activity intensifies precisely because the courts are taking seriously what society thinks. All these factors are interwoven, and sentencing is an essential thread in the interweaving.

If the key factor is increased police activity, that can be dictated by factors other than the high sentence of imprisonment that might be passed in any individual case, though I accept that the police, because they are human, are likely to be influenced by heavy sentences passed in individual cases.

What we have to discover is the effect of alternative forms of sentencing. The hon. Member for Burton said that there was no means whereby we could do this now. From time to time the Advisory Council on the Penal System has advised on a number of improvements in our sentencing procedure, and I hope that this is a subject which in due course it may feel disposed to take up. It is a difficult matter to deal with because of the problems of assembling research, but it is something which would be helpful to us all.

The other question which arises is the level of the prison population. The news about this is doleful. I hope that this is only a temporary upsurge, because so much depends upon the level of sentencing. I think it is right to say that the courts have not been bad, as some people have suggested. Over the last few years since 1965, imprisonment as a punishment has fallen from about 20 per cent. to 11·7 per cent. of sentences for all indictable crimes. If that pattern was pursued the prospects for the future would be good, if there was no substantial increase in criminal activity. However, in the past year there has been an increase of about 19 per cent. in the crime rate, and this has tended to cancel the effect of this improving pattern of sentencing.

The attitude of the courts to sentencing is still extremely relevant. Some hon. Members have referred to the scheme which has been introduced for training magistrates in their duties. I see considerable merit in a scheme for training the higher judiciary in the alternative punishments that are available and the effect that they have. Already many have some experience of that. As the hon. Member for Burton said, the Lord Chief Justice's sentencing conferences have helped to spread knowledge about the effect of sentencing, but it may be that we ought to move as soon as we can towards a more formal way of training members of the Bar who are appointed to the bench in their early days and perhaps continue with some kind of in-service training. There are signs from the judiciary that such a move would not be unwelcome, because many of its members feel a need to understand more about what happens to a person after he is sentenced.

At the same time, I ought to stress that we cannot and will not take lightly the need to deal as effectively as possible with offenders of all descriptions, and for some we cannot contemplate any course except that of imprisonment, nor would society permit us to do so. We must recognise the need for relevant alternative forms of sentence, which punish the offender without causing him to lose his self-respect and his place in society, so that when his sentence is completed he has every opportunity to continue to live a normal life without resorting to further crime. Where possible, we must look for a constructive element in the sentence.

Imprisonment has allegedly one merit, that of prevention. But it is prevention only by keeping a criminal out of circulation for a limited period of time. As the hon. Member for Chichester (Mr. Nelson) suggested, it may be that the upshot of a period of imprisonment is that the man is trained for even greater criminal activities by the time he gets out. That is another questionable aspect of imprisonment.

There is also the question of the cost of imprisonment. The hon. Member for Burton pointed out that the cost is now £41 a week for an adult who is kept in prison. But that is only part of the total cost.

As the hon. Gentleman knows, my right hon. Friend the Chancellor of the Exchequer is curtailing these matters at such a rate that it is probably cheaper now.

Another aspect is the cost to the State of looking after the prisoner's wife and children while he is in prison. My hon. Friend the Member for Edinburgh, Central indicated the continuing cost that will fall upon the State if those children are taken into care, not only because they have been taken into care but because they may thereby be deprived in later life and become criminals, causing additional expense to society.

From every point of view it is desirable that we should see whether there are ways in which we can keep people out of prison. We have been carrying out some fairly exhaustive studies on this matter. At a recent meeting I assembled all the officials I could concerned with this matter to review every criminal offence on the calendar to see whether any could have the penalty of imprisonment removed. I hesitate to use the dreadful word "depenalise ", but that is the technical term. We have already moved a considerable way in one area. Perhaps we have done more than has been noted by the public at large.

One of the most significant areas where people could be imprisoned, and where there could be questions about the moral justification for doing so, is that of road traffic offences. The Home Office insisted that in the last Road Traffic Act, which went through the House last summer, imprisonment as a method of punishment for all those convicted in magistrates' courts should be removed. It is interesting to note that when one tries to depenalise there is always somebody who stands up for the rights of the court to send people to prison. We succumbed to the pressure to the extent that three offences remained for which a prison sentence could be imposed by magistrates.

A substantial number of sentences of imprisonment used to be imposed for driving while uninsured, for instance. That is no longer an offence for which the magistrates can send people to prison.

That will have a marked impact on the prison population, because the incidence of imprisonment for such offences was far bigger than for drunkenness or child stealing. We have, therefore, made a considerable advance here.

I am anxious that we should make an advance in many other ways. In recent years we have de-criminalised attempted suicide, and to some extent abortion and homosexuality, and we are considering the question of official secrets. Drugs are a far more controversial issue, on which there are at least two well-justified and well-argued points of view.

We are considering the position concerning drunkenness offences. My hon. Friend was anxious that we should move faster. As he said, the power already exists under the Criminal Justice Act 1972 for us to get drunks out of prison by increasing the facilities for constables to take them to detoxification centres rather than to charge them. Unfortunately, only two centres are planned, in Manchester and Birmingham. The Government are concerned about the slow progress which has been made in this area.

In London the Department of Health and Social Security is seeking the help of voluntary organisations to establish a community-based centre run in co-operation with hospitals, the police and local authorities. However, during our recent discussions I have urged that we ought to go even further. The detoxification centres will be splendidly equipped pieces of medical help for people who are suffering from alcoholism. However, it may be that we are striving for too high a standard for the kind of people who need help, so I am hopeful that we can look for somewhat cheaper and perhaps more ad hoc facilities, in areas in which there are, for instance, hostels for vagrants, where people could easily get access to some kind of drying-out techniques. We are looking at this as a matter of urgency to see whether there is anything we can do in that direction.

From the figures that were produced for me, I am bound to tell my hon. Friend that out of the total population in prisons of 38,000, as at 30th June 1973, only 53 were in prison because of drunkenness. Therefore, the impact on the size of the prison population is limited. Of course, that does not indicate the number of people who are taken into prison for drunkenness with aggravation. About 482 were sentenced to short terms of imprisonment, and 89 had a suspended sentence passed upon them. However, in terms of the bulk of the prison population, this is a small area.

The other area with which my hon. Friend dealt was child stealing, and this is an even smaller area, as he indicated. My hon. Friend was talking only about women offenders, although child stealing is an offence which can be, and is, committed by men. Even in the peak year of 1973, the number of women who were sent to prison for this offence was very small—only three out of the 12 who were convicted. Therefore, if we were talking simply about reducing the prison population we would not be doing very much by abandoning imprisonment for this offence.

However, I take my hon. Friend's point very seriously, and I realise that this is not the basis of his concern, as it is not the basis of the concern of many who have been critical of these sentences throughout the country. Their concern is that these women should never have been sent to prison at all, even if only two or three of them were imprisoned. With that view I have very considerable sympathy indeed.

It is not for me, as a Minister of the Crown, to criticise any sentence passed by the judiciary. There is a clear demarcation between our functions. But I think that I am entitled as a Member of Parliament, and as a human being, to say that it does not seem to me to be appropriate that women should be sent to prison for this offence when it is quite clear that they were seeking no pecuniary advantage by taking the child but the taking was due simply to their disturbed attitude and disturbed relationships. After the uproar that broke out following the first such case some years ago, I am surprised that judges are still sending women to prison for this offence.

I am bound to say—this is the reason why I couch my words in rather general phraseology—that I cannot address myself to the particular case to which my hon. Friend referred because it is sub judice, and it may well be that the Court of Appeal will in this particular case reduce the sentence or give some other alternative sentence. It would be helpful if the judiciary had some kind of help from the Court of Appeal on the kind of sentences which ought to be handed down in such cases. If that does not prove possible, for myself—I speak only personally here—I would very much wish that we should look at the whole question whether offences under Section 56 of the 1861 Act are the kind of offences for which a person ought to be sent to prison. However, there are difficult questions which arise from that, and the Government are by no means committed to that point of view.

Will the Minister of State consider depenalising the offence of soliciting, for which a considerable number of women are at present serving sentences in Holloway? This has been the subject of criticism by a considerable number of legal figures, including Lord Justice James in the lecture to which I referred earlier.

On 30th June 1973 there were five women serving sentences in prison for offences in relation to prostitution. In the same year 181 women were sentenced for offences of prostitution and there were 202 suspended sentences. It appears that there are a number of short sentences which do not have a great effect on the prison population.

All sex offences are under review by the Criminal Law Revision Committee. The vagrancy aspects of these offences have been the subject of the recent report by the working party at the Home Department. My hon. Friend the Member for Edinburgh, Central said that we had not moved on this. A working party merely makes its report for consideration by the public generally. We are awaiting reactions from the public before we make our decisions about what should be done. I assure my hon. Friend that I am anxious to move on some of those recommendations fairly quickly. Some of the recommendations bear on the point to which the hon. Member for Thanet, East referred.

Does not the Minister agree that fettering the discretion of the judiciary is self-defeating if taken to extremes and is at any rate a very dangerous and slippery slope for any Government to embark upon? Secondly, is there not some advantage to be gained from maintaining prison sentences for certain offences? This retains the facility of a suspended prison sentence which can be held over the head of the person concerned. Is there not a deterrent aspect to the suspended prison sentence?

I agree with the hon. Member's first point. That is one reason why I should be reluctant to do anything about Section 56 of the 1861 Act. I do not suggest that this is imminent. However, if the present practice, which is at variance with what the public think is right and just, were to continue, this might be a matter that we will have to consider in due course. I am anxious and hopeful that this will not arise, because I think that the judiciary may well take cognisance of the strength of public feeling on this issue.

I agree with the hon. Gentleman that if we were to remove the sanction of imprisonment it might well be that the year after we did so a particularly bad case would occur for which the public felt that imprisonment was fully justified. In that sense it is undesirable to remove the power.

I think that I have covered most of the matters which were raised in the debate, with two possible exceptions. The hon. Member for Chichester raised the question of the number of people who go to prison in default of payment of fines. I am very concerned about this issue. If we can find a way of improving the machinery for enforcing payment of fines I should like to move towards it. We seem to have done almost all we can. We have attachment of earnings. There is, as the hon. Gentleman will know, a suggestion put forward by the Advisory Council on the Penal System about a day fine. The advisory council itself was sceptical about whether it could or should be used in the English system, although it is used in the Scandinavian system. It may be that the day fine would be more appropriate than our present system. Certainly it is one which we should like to consider again should the problem increase.

I can tell the hon. Gentleman that at the present moment fewer than 1 per cent. of the prison population are fine defaulters but they represent about 20 per cent. of the receptions. The difference between these figures is due to the fact that so frequently when a man has failed to pay a fine, imprisonment strengthens remarkably his desire to pay and he usually pays within the first 14 days of the prison sentence. There is, therefore, something to be said for keeping the sentence of imprisonment as a back-up for the payment of fines in those cases.

I was asked by my hon. Friend the Member for Edinburgh, Central about shoplifting in relation to women offenders. He suggested that the incidence of women going to prison for shoplifting was very great. In fact, in 1973 in the magistrates' courts in England and Wales 22,000 women were convicted of this offence, of whom only 181 received immediate sentences of imprisonment, and in the Crown Court 393 were found guilty, of whom only 45 received sentences of immediate imprisonment. The proportion, therefore, is extremely small.

Perhaps I did not make my meaning clear. The proportion to which I referred was not the proportion of women convicted of shoplifting but the proportion of all women going to prison. I said that a substantial number of women going to prison—about one-fifth —were convicted of shoplifting. We are talking of a significant proportion of women going to prison.

It must be obvious from those figures, as the hon. Member for Burton suggested, that the courts are reluctant to send them to prison and that they are probably sent to prison only after repeated offences. There is, indeed, the same difficulty in knowing what the alternative should be for a woman who was addicted to shoplifting. I will certainly look at the matter again to see whether there is anything that we can do about this matter.

The other worrying part of the recent rise in the prison population is that there has been a substantial increase in the number of those who have been remanded in custody. In the last year there has been an increase of about 12 per cent. The House will know that the Government are committed to introducing legislation at an early date to implement the recommendations of the report on bail procedures in magistrates' courts which came out last year. I am disappointed that we have not been able to introduce a Bill in the House before this, but I hope we shall be able to do it, if not in this Session, at least early in the next Session in order to implement those recommendations. Taken with the kind of code which will be built into the legislation, and also the other administrative procedures for getting information, I am very hopeful that we can cut down very quickly the number of people who are remanded in custody, because there is a good deal of injustice caused when people are remanded in custody for long periods and are then acquitted and apparently have served a prison sentence when the court has recorded that they committed no offence. It is desirable for that and for many other reasons that we ought to cut down the number of remands in custody.

Would the hon. Gentleman touch on the point which I raised about the contribution of voluntary associations and bodies? Does he agree that they provide an invaluable function in cutting the rate of recidivism, and will he not consider according them more assistance, either financially or in other ways?

I did not mention that matter because I did not have the appropriate figures with me, but my recollection—the hon. Gentleman must recognise that I am speaking only from recollection—is that our record here is extremely good. If he wishes to put down specific Questions on the subject, I shall be glad to answer them, but my recollection is that NACRO, for example, to which he referred, receives a substantial grant from the Home Office, and we are anxious to help its initiatives in any way we can. We recognise the value of voluntary bodies—not only that one but a great many others working in this field—and we give every assistance that we can to them.

The House will not wish to be wearied by a rehearsal of all the present alternatives to imprisonment which are available to the courts, but their number is substantial, and they have been enlarged considerably in recent years, both by the last Government and by their predeces- sor. The most hopeful alternative is the community service order. This was the outcome of a report commissioned by the Labour Government, and it was put into effect in an Act passed by the Conservative Government, so there is no party difference between us on this issue.

We have now reached a stage at which my right hon. Friend has been able to inform all magistrates' court areas in England and Wales that the community service order will begin to be available to them from this April. We are looking forward with great interest to see what will be the effect on the prison population and on sentences of imprisonment when courts have this alternative available to them. We believe that it will be extremely useful, giving, as it does, a sense to the public that something positive is visited upon the offender while at the same time giving to the offender a sense that he is not burdened by the rather negative atmosphere of prison but is putting his efforts to help some worthy and desirable cause.

The schemes already instituted under community service orders are many and varied. I do not think that they include cleaning up the rubbish in Glasgow, but they include both some unpleasant work and some very positive and stimulating work. The results so far have been extremely good. At least 70 per cent. of those convicted and sentenced to a community service order have completed the order without any difficulty whatever. It is too early yet to know what the level of recividism will be after community service orders, but we hope that this sentence will prove in future to be a useful way of finding an alternative to imprisonment.

I am very much obliged to my hon. Friend the Member for Edinburgh, Central for raising this important issue.

Question put and agreed to.

Resolved,

That this House, noting with concern the large numbers of citizens sent to prison who could more effectively and appropriately be treated in other environments, invites Her Majesty's Government to develop alternative forms of treatment for offenders and, in particular, urges a review of sentencing policy on women convicted of child stealing and on habitual drunken offenders.

National Heritage

3.23 p.m.

I beg to move,

That this House regrets the division of Ministerial responsibility by which the national heritage in private hands is threatened by the Chancellor of the Exchequer's capital transfer tax (despite the New Clause added to the Finance Bill), and that what remains in private hands, following the imposition of CTT, is threatened by the wealth tax which promises to remove the remaining resources of private persons preserving the national heritage for public benefit; further regrets that whilst the Secretary of State for the Environment through the Historic Buildings Councils endeavours with slender resources to prevent the decay and loss of historic buildings of outstanding importance, there is little liaison with the Parliamentary Secretary at the Department of Education and Science, who has responsibility for the Arts, which could be enjoyed by a far wider audience than at present if more use was made of existing historic buildings to house the arts in the form of music, drama, painting and sculpture where these things find a more sympathetic home than in the expensive clinical conditions of modern purpose-built buildings which Great Britain in her present state of economic stress can ill afford when faced with the pressing need to finance the National Theatre, now nearing completion, in a manner which will enable it to meet the expectations of the public who have waited for 117 years for the opening and the need to maintain all those other British artistic institutions whose present standards compare favourably with anywhere in the world; and calls upon Her Majesty's Government to give urgent consideration to the question of Ministerial responsibility with a view to making better use of existing resources to the benefit of the people whose interests this Government claims to serve.
By a happy chance, we find ourselves with enough time to look at a big subject in more leisurely fashion than I had hoped. Seeing the hon. Member for Putney (Mr. Jenkins) taking his place on the Government Front Bench, and having in mind the expanded form of motion which I put on the Order Paper for fear that I should never be allowed to make a speech on the subject this afternoon, I almost live in hope that I shall receive a reply by a Minister of State in charge of the arts and the national heritage, and I am tempted for a moment to think that I see that Minister in the presence of the hon. Gentleman.

However, having had some experience over a fairly long time in the House. I fear that I have not so quickly achieved my aim and I understand that, in fact, the Minister with responsibility for the arts is here this afternoon to look after the affairs of the Department of the Environment. I understand that Department's difficulties in sending a Minister to the House for an occasion which might not even materialise, and I can only hope that those at work in it are usefully employed elsewhere in looking after the national heritage.

We should not have half the problems to which I shall refer if there were a Minister whose influence and scope covered the subjects under discussion. I want to develop that theme at some length. However, before doing so I should ask the Minister about a vital matter which affects many people in the constituency of my hon. Friend the Member for Dorset, South (Mr. King), who has the added advantage of an hon. Friend in the House today who can ask the Minister a direct question about a pressing local problem which has national significance.

This is Architectural Heritage Year Europe, and yet we understand from this morning's Western Gazette that 35 masons, sawyers and labourers have been served with redundancy notices by the Portland stone firms. That is a pretty depressing picture in Architectural Heritage Year Europe, and I believe that the Under-Secretary of State, through his colleagues in the Department of the Environment, could do something about it at once.

There is a contract for the Crown offices at Cathays Park, Cardiff, for which the Property Services Agency of the Department of the Environment is responsible. I believe that the stonework for that project which will be needed in early 1976 could well be embarked upon now, thus keeping these valuable men in work. The Minister will know that if skilled men are lost from an industry of ancient skills it is possible that they will never return in better times.

That leads me to make another suggestion. Stonework has a habit of keeping for a very long time, and I should have thought that it would not be impossible for the Government to keep the stone firms and a number of other craft industries in work preparing stonework to be put into works of restoration or new construction perhaps some years ahead. Indeed, some restoration work of historic buildings is much better done with stonework which has been cut out of the quarry and worked and left to season. Some of the stark new work would not look so stark and new if it had been able to weather at Portland, where there is plenty of space for stone to weather. I hope that the Minister will give special attention to this matter. If he has not already thought about it, there is time for him to inquire of the Department of the Environment and give an answer today.

I began by saying that I believed there should be one Minister with responsibility for the arts and the national heritage. The Government invented the phrase "national heritage ", and I suppose that they know what it means. It is not a particularly attractive phrase, but no one has come up with a better phrase. It is the bringing together of a number of Government activities which have a profound effect on our lives. That. I believe, is the next sensible step. I have tried to raise debates with various Government Departments and Ministers over quite a long time. Now, a debate on a subject for which the Department of the Environment has considerable responsibility is being answered by the Minister responsible for the arts. That is perhaps a good beginning.

To bring the more civilised aspects of Government activity back into the mainstream of politics would be no bad thing. The public certainly require that they should be brought back into the mainstream. There is immense public interest in every aspect of parks and the national heritage.

But Government activity is not yet properly co-ordinated. Ministerial responsibility for the arts has been an up-and-down affair. Originally the matter came under the Treasury, which can be more civilised than some people might think. Then there was an Under-Secretary in the Department of Education who was raised to the rank of Minister of State. When the Conservative Party returned to office we had the Paymaster-General, but he was in the other place. Then for a brief period it was a Minister of State, again at the Department of Education.

I do not want to hurt the Under-Secretary of State's feelings when I say that he has been returned to the rank where all this began. I know that a Minister's influence to some degree de- pends on his personality and drive, but a Government are a somewhat hierarchical institution and a Minister of State would be able to achieve more than an Under-Secretary with less effort. Whereas an Under-Secretary has to fight hard to get things moving, a Minister of State has something of an advantage.

The Minister responsible for the arts has no authority in decisions which are vital to a wider field of enjoyment than the things which he seeks to promote. Museums, galleries and theatres house the arts and the Under-Secretary is to some extent responsible for them, but these are complementary to the original homes of the arts—the palaces and historic houses, where much that we term art was originally produced. They still play a great part, but they could play a far greater part.

The formation by my party of the Department of the Environment at last brought a lot of civilised activity under one head. It prevented the conservationists in the old Ministry of Public Building and Works from being defeated by the Ministry of Transport driving a road through what had been conserved. But that Department must be judged a vast affair in which some of the quieter subjects seem easily to get lost.

I believe that the relationships between the arts and their original homes, many of which are under the wing of the Department of the Environment, could produce a much more fruitful future with more ministerial cultivation. Historic buildings, representing as they do the finest craftsmanship that their owners could find, filled with the best works of art then obtainable and added to by succeeding generations, make them in effect into galleries and museums which existed long before most of our public collections were even thought of.

The Minister will recognise that the national collections for which he is responsible contain principally works of art which have been wrenched from the historic buildings for which they were created. Comparatively few works of art in our national collections were created with a public gallery in mind.

All this leads me to suggest that historic houses are far better places in which to see works of art than are the some- what antiseptic conditions of public galleries. There have been politicians—I will not say where I think they came from—who were very keen to drag away everything in private ownership and take it off to public collections, but now the public collections themselves say that they could not possibly cope with this situation, so I hope that the Government will think again. There are already encouraging signs in that direction.

Two other aspects of Government activity are involved—the regional arts associations, under the Under-Secretary, and the British Tourist Authority, with its various tourist boards, under another Department. There is no doubt that the activities of the regional associations could be based far more on existing historic buildings in public and principally in private ownership.

It would be far better to have a concert or exhibition at a stately home, where it could be enjoyed together with all the other things that such a place has to offer. I am not suggesting that it should be in conjunction with the zoo park associated with some stately homes. The majority of places do not have that sort of thing. That is where the regional arts should be directing their attention. They could achieve far more at much less cost than they would be able to do on the slender resources, a lot of them contributed reluctantly by local authorities with a separate empire of officialdom.

That shades off into regional tourist boards. There should be much more collaboration between tourist boards, the regions, regional arts associations and the owners of historic buildings. People come to Britain to see what? We are told that it is the theatre which comes first. We had a debate on that this week. The next attraction is the national heritage. How necessary it is to co-ordinate our efforts in that direction.

I could spend the rest of the afternoon happily talking about the problems of historic buildings. Perhaps we can have another debate on that subject later. We have had some helpful noises from the Government during the course of the Finance Act through this House, particularly during the debate on the capital transfer tax. The Select Committee considering the wealth tax is now wading through many problems, one of which is the national heritage.

If the Minister had been present at the public hearings of that Committee this week he would have heard the Inland Revenue agree that if there were a thousand major historic houses threatened by the wealth tax—that is not an exaggerated estimate—and if they all presented the same sort of problems as Hevening-ham, of which the Minister will have knowledge—Heveningham costs the Department of the Environment £30,000 a year and is an empty shell with some furniture in it—it would not be difficult to imagine that it would cost the nation £30 million a year to maintain those historic houses if private ownership was destroyed by the taxes the Government are determined to institute and if no exemptions were granted. Of course exemptions in conjunction with proper safeguards for increased public access are provided—although public access to the vast majority is not difficult now.

I am glad that the Minister responsible for the arts is taking an interest in this, because there is not much point in another part of his Department spending £30,000 a year on an increasing number of Heveninghams if it is not used to doing so. This is where the Minister comes in.

I suppose that there is no direct Government responsibility for great cathedrals, although there is a semiofficial interest in redundant churches. Historic buildings of all kinds are becoming more involved with government in one way or another. The Historic Buildings Council is tentatively moving towards a policy of helping buildings of an ecclesiastical nature. I wonder whether we make proper use of our churches—the ones still in use for worship, and long may they remain so—and the redundant ones. It ought to be possible to have a series of splendid concerts in our great cathedrals. They stand half empty for half of the time and completely empty for a lot of the time. They are splendid places for the performance of many great musical works such as Berlioz's "Te Deum" which, the Minister will have heard, has been completely recorded for the first time.

What a splendid event it would be if it could be performed in every one of our cathedrals in turn. Why not have a tour of cathedral concerts inspired by the Minister for the Arts? He might be able to find the necessary equipment which could travel around with the orchestra, because it would be pointless to have a special set of fittings made for every cathedral. The Minister may say that he is not responsible for that. However, as Minister responsible for the arts he must have an interest in all artistic activity wherever it takes place.

The Minister might direct his attention to the Musicians' Union. Sometimes the attitude of union members is self-defeating. Television provides a great opportunity for the arts. However, sometimes the unions make it almost impossible for concerts and opera to be broadcast because they demand fees which the television companies are not prepared to meet. The musicians should be persuaded that if they were prepared to see their work on television several times in exchange for more money, that would be of benefit both to the viewer and to the musician. However, at present there are too few opportunities of seeing such productions on television because of the musicians' restrictive attitude.

It is no good the Minister saying that it is all too difficult. It is not difficult if union members are given a financial inducement to perform. The Minister will be able to decide how that can be done, so that their work will reach millions of people by means of television when musicians can otherwise hope to reach only thousands during a lifetime.

The Minister is responsible for local museums. He informed me in reply to a Question that museums were primarily the responsibility of the local authorities. However, I am sure that he is still interested in museums. If he has any resources, I am sure he will help local authorities with their conservation services, since much lies mouldering in the basements of museums which never sees the light of day, and probably never will, because it will have mouldered away.

Can the Minister do more to foster the activities of local museums so that they can become a significant part of the communities in which they are situated? There are splendid examples of private enterprise museums in Dorset and in Kendal. Some municipal museums are good, while others are very bad. I hope that the Minister will lean upon local authorities and persuade them to make better use of their facilities.

Museums should provide centres for local amenity societies formed by happy bands of people, which have sprung up in almost every part of the United Kingdom. I wonder why there are so many amenity societies. I believe the reason is the failure of the planners and of officialdom to take people into their confidence. It is not surprising when we see the frustrations which the morass of planning law has produced. There is too much attention to petty detail and not enough vision.

The building regulations are applied in the most insensitive fashion by many local authorities. I wonder how many of them know that they can waive the building regulations in respect of any historic building. There is no need to put an aluminium picture window in the middle of a Tudor cottage. That process should he stopped, not encouraged. Sympathetic local materials can be used. That brings me back to the Portland stone argument. I do not refer to local stone ground up and pressed into uniform concrete blocks, because that is not a use of local materials in the true spirit of all the possibilities. Grants can be made to encourage the use of local materials.

Planners spend a good deal of time preventing new building. I wonder whether they pay attention to the removal of eyesores. All too often the atmosphere of a village is destroyed by a misplaced filling station or a building of that kind. I hope that the Minister will give a gentle nudge to the Department of the Environment to deal effectively with these matters. Financial incentives can be given to owners to clean and improve their properties. I do not refer to the mere dishing out of taxpayers' money, but perhaps one could say to them that if they provided something which was of community benefit from which they got a small return, they should not be taxed on that return. I hope that the Minister will look at that.

I want to leave the Minister time in which to make a brief reply. My last topic concerns the countryside as a whole. The landscape which we enjoy today was substantially man-made, except perhaps in the rugged North. Most of the landscape enjoyed by most people today was substantially man-made, but it was created to suit an agricultural economy, which has changed out of all recognition. The picturesque gives way to the practical.

I wonder how much the Forestry Commission is doing to plant for the future the hardwoods, possibly even the avenues, that we enjoy today. The avenues of the future should be planted today. I am prepared to bet that not one avenue of 100 yards was planted in Tree Year—" Plant a tree in '73 "—certainly not by a public authority. There may have been some private patrons who did. There is an avenue of monkey puzzles about 300 yards long in Scotland. I am not suggesting that we need another avenue of monkey puzzles. We have got one. But perhaps we should plant one now for the future.

Let us try to improve the landscape. What about the desecrations? Why do we not have all the hellish things in one place? Why not have the road, the line of pylons and the railway all in one place? All too often one hears of a splendid village having its views ruined by pylons. The planners say "It has not got the road or the railway. It must have the pylons." What nonsense that is.

I hope that the Minister will not forget about archaeology. These days, we destroy so much without knowing what was there before. Recently, a little booklet about New Palace Yard has been published by the Department of the Environment. I hope that a little money will be made available to help local authorities to record what they are wiping out.

I hope that some thought will be given to ways in which we can prevent people destroying that which they seek to enjoy. I am not suggesting restricted access to the countryside. That would be a most repressive measure. But we could do more with our modern aids to tell people who are setting off for the Lake District that 3 million people are already there that day and that perhaps they might choose another day on which to go.

That is quite a long catalogue. I hope that we shall now have a considered reply from the Minister. I remind him that there was an article in a newspaper recently entitled,
"Is Architectural Heritage Year a sham? '
I hope that it is not a sham. I intend to return to that subject in some detail. But I hope that I shall hear today that the Minister will at least give all these matters some thought.

3.48 p.m.

I have been asked to reply, and I am here today rather than visiting the Manchester area, and other places in the North-West, to establish what contribution is being made, for example, in its city museum to display the valuable objects which it has and which are part of the national heritage in that part of the world. Because the hon. Member for Bristol, West (Mr. Cooke) had today's Adjournment debate and because the matter which he intended to raise was of such current interest, it was felt that only the Minister responsible for the day-to-day handling of these matters should be here. Therefore, I postponed my visit to Manchester in order to be here for the Adjournment. However, I did not expect that the consequence of that action would be that I should be replying not only to the Adjournment debate but also to the immediately preceding debate.

I have often said that one of the advantages of this House is that it is like a theatre. It is an impromptu place with a changing and rather large cast. But, as a result of repeated performances by the hon. Gentleman and myself, people are beginning to feel that the cast is becoming rather small. They will think that even more by the time we reach the next debate, which will have the same two protagonists, albeit with a changed text.

If the Minister looks at the Order Paper he will see that the cast will be much larger for his Question Time soon after Easter.

Indeed, I am looking forward to that occasion with much interest. I hope that on that occasion we shall have a full cast. At any rate, this afternoon we have an audience. That is more than we had, if I remember rightly, at about 4 o'clock on Tuesday morning.

The motion is something of a curate's egg. If I may say so, it is a large curate's egg. It touches on a wide range of subjects. Because of that there are some points in it on which we find ourselves in agreement and there are other points in it with which the Government cannot possibly concur. I am sure the hon. Gentleman will understand that for that reason it will not be within my power to ask the House to accept the motion. I shall not be able to do that for reasons which I shall be making clear.

Before going any further I must refer to ministerial responsibility. As a back bencher I always felt that the division of ministerial responsibilities was wrong. I felt that if the lines were drawn in different places we could arrive at better solutions. Now that the time has come for me to occupy a seat upon the Government Front Bench I have not changed my mind. I find that most other Ministers seem to agree with me. Most Ministers nearly always feel that things would be rather better if they were responsible for just a little more. It is the universal ministerial process of imagining that if one can look after a bit more various matters will be dealt with a little better—goodness knows whether or not that would be the case.

I have a fairly full commitment in my present area of responsibility. I feel rather flattered that the hon. Gentleman is always seeking to add to my functions. I regard that as a form of flattery, but as the matter does not lie in my hands it is better that I try to get on with my present responsibilities as well as I can and not seek further responsibilities.

The fact that there is close liaison between Ministers with different responsibilities may be demonstrated by the fact that this afternoon my right hon. Friend the Minister for Planning and Local Government asked me to be present to reply to the debate as best I may. There may be some points which I shall have to refer to my right hon. Friend and not deal with personally. That is partly because I think there are matters peculiarly within his knowledge and responsibility and partly because there is not time to reply to all the points which have been raised in this wide-ranging debate.

One of the matters that I shall have to draw to my right hon. Friend's attention for a more extended answer is the question that has been raised about Portland stone. As I understand it, the project is a new Crown Office for the Welsh Office at Cardiff. Portland stone is being used, and it appears that the order for the stone is being passed through a sub-contractor rather than being directly ordered by the main contractor. That is a somewhat complex matter. Having covered the nature of the problem, I shall have to ask my right hon. Friend to consider it further. I feel that it is not a matter on which my right hon. Friend will be able to give the hon. Gentleman the kind of answer that he might wish to receive, because there is not a direct responsibility upon the Department of the Environment. The responsibility lies with the main contractor and with the sub-contractor who is ordering the stone. Nevertheless, I am sure that my right hon. Friend will wish to look into the matter personally, and if he feels that he can add suitably, encouragingly and effectively to what I have said in this brief reply I am sure that he will write to the hon. Gentleman or respond to a Question if he puts one down.

My hon. Friend the Member for Dorset, South (Mr. King) is anxious to know. He is down there this afternoon, and perhaps the Minister could inform him with all possible speed.

I am sure that when the hon. Member for Dorset, South (Mr. King) returns next week he will contact my right hon. Friend. I think we can leave it to my right hon. Friend.

The hon. Gentleman suggested that the phrase "national heritage" was an invention of the present Government. I do not know whether it is. I do not think it is a bad phrase, but I agree it is rather vague. What is "national heritage "? Is an object part of the national heritage if it is privately owned? If I walk into a private house and see a valuable object and say "This is part of the national heritage and I should like to have it, thank you very much ", I should speedily be told that it is not part of the national heritage but is private property.

The phrase is used rather vaguely in different circumstances. I do not think that the present Government introduced it though we have referred to it and used it in our Green Paper as a convenient description—and it is no more than that—of what most people would regard as part of our history, part of our valuable objects and worthy of being retained in the general interests of our people.

The Government's determination to secure the preservation and enhancement of the national heritage, whether in public or in private hands, has been amply proved in both word and deed. In the Green Paper on the wealth tax we said that we
" recognise the danger that the wealth tax could lead to the dispersal of the national heritage; they intend to ensure that this does not happen and that instead our heritage becomes more readily available to the public generally."
The Select Committee which is now sitting will no doubt consider how to give effect to those intentions, and it is understood that the Historic Buildings Council will be submitting evidence to the Committee on the problem of historic building in private ownership. Other bodies have submitted, and will be submitting, evidence to the Select Committee, and I have made it clear to them that they should feel free to do so. The Arts Council will be submitting evidence, as will the Review Committee on the Arts. The Department, too, will be submitting its evidence. It is possible that we may differ, but this seems to me to be a healthy thing. I do not think one should be afraid of the possibility that different views may be put forward by different organisations all of which are active in an area which may possibly be regarded as coming under the umbrella of my Department.

As proof that we do not merely pay lip-service to the need to preserve the architectural heritage, the Government have increased the allocation for repair grants for historic buildings. This is done on the advice of the Historic Buildings Council. Repair grants have been increased from £1½ million in 1974–75 to £2¼ million for 1975–76, and conservation grants from £1 million to £l¼ million.

The preservation and enhancement of the national heritage, however, is not something which can be—

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

Orders Of The Day

Divorce Law Reform(Scotland) Bill

Order for Second Reading read.

Hon. Members: Object.

Second Reading deferred till Friday 11 th April.

Wealth Tax

Ordered,

That Mrs. Millie Miller be discharged from the Select Committee on Wealth Tax and that Mr. R. B. Cant be added to the Committee.—[ Mr. Michael Cocks.]

Public Accounts

Ordered,

That, notwithstanding the Order of the House of 18th December relating to nomination of Members of the Public Accounts Committee, Mr. R. B. Cant be discharged from the Committee and Mr. Caerwyn Roderick be added to the Committee for the remainder of this Parliament:

Ordered,

That this Order be a Standing Order of the House.—[ Mr. Michael Cocks.]

Consolidation, Etc Bills(Joint Committee)

Ordered,

That Mr. Caerwyn Roderick be discharged from the Joint Committee on Consolidation, etc., Bills and that Mr. Alec Woodall be added to the Committee.—[ Mr. Michael Cocks.]

Adjournment

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Thomas Cox.]

Theatre Museum Andsomerset House

4.1 p.m.

I am glad to have the opportunity to present perhaps a rather more coherent case to the Minister on a subject for which he is directly responsible. In response to what the hon. Gentleman said in reply to my catalogue in the previous debate, I say only that we look forward to exploring his mind further in the future. Possibly we might even get the responsible Minister to the Dispatch Box.

The history of Somerset House and its partial release to the public covers a number of years. It was right back in November 1971 that I raised the subject in the House and my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) said that the Fine Rooms in Somerset House were no longer to be used for what he described as a "scandalous purpose ". I am sure that what the civil servants did in those rooms was entirely laudable, but it was scandalous that the rooms were being misused. We are all delighted that some years later we see these Fine Rooms restored, although we have not yet dealt with the question of the terrace. That was promised to the public in November 1971, as was the courtyard.

Somerset House might be described as London's very own stately home. It was released to the public as a result of a parliamentary campaign considerably aided by the Evening Standard, and that newspaper is not uninterested in what is happening now. The building was released to the public and then came the question of what to do with the Fine Rooms. I put a number of ideas forward to the then Minister. They would all have involved the furnishing of the Fine Rooms and their use for a variety of civilised purposes. It was with something like dismay that I learnt that the Conservative Government proposed to house the theatre museum at Somerset House, because there was not enough space there and the rooms were quite unsuitable for the display of the vast wealth of material, most of which was designed to be seen in artificial light and the world of make-believe of the theatre.

The prospect of the Fine Rooms being blacked out and their splendid interior decorations obscured in a vain attempt to create the atmosphere of the theatre filled me—if I may use a somewhat theatrical expression—with horror. I gather that such are the restrictions rightly placed upon the use of the Fine Rooms, together with the absence of any adequate storage space or rooms for research or administration, that those who were at first delighted at the thought of a per- manent home for the extensive and growing national collection now have grave misgivings about Somerset House. They have publicly stated their gratitude—and very grateful they are—but they have also publicly politely requested that consideration be given to a far more satisfactory alternative—indeed, I believe an ideal alternative. I hope that the Minister will make clear that nothing that any of us is doing in any way endangers the theatre museum trustees' hold on Somerset House, but it is the alternative that I ask him most forcefully to consider.

There has been intense public interest in all this matter, and the Greater London Council has produced imaginative proposals for much of the old Covent Garden Market area which adjoins the Royal Opera House and the Theatre Royal, Drury Lane. Last Monday we voted money for an extension to the Royal Opera House, for the site purchase. Not far from there stands the disused flower market. For the benefit of the uninitiated, that is not the large building standing in the middle of the square. It is another building in the corner of that area, on the very edge of Theatreland.

There are no firm proposals for the future use of the flower market, although I gather that the imaginative GLC is open to suggestion. The GLC kindly allowed me to see it last Tuesday. Above ground there is a great glazed hall, not unlike one of the plant houses at Kew. However, it is not the great glazed hall that is the principal attraction for those who want to see us have a fine theatre museum in the right place in London. The attraction is below ground, where there are 40,000 sq. ft. of unadorned fruit storage space, brick built and some 10 ft. high, with no constraints whatever save pillars widely spaced, and the whole area has infinite theatrical possibilities. It might almost have been designed as a whole series of theatre sets.

It is no secret, from published correspondence, that many concerned with the future of the theatre museum regard this flower market area, particularly the sub-ground area, as absolutely ideal. Of course there is space, not in the main great glazed hall area but adjoining it—it is an L-shaped area—where one could have administrative offices and research rooms above ground and where also one might see the Theatre Institute, which has had a letter published in The Times today, finding itself with a home. The whole thing could be a splendid theatre centre, right in Theatreland.

London is surely unique in the wealth of its theatre. How right it would be that we should have a theatre centre a theatre museum, where we would be able to recreate the past—and experiment for the future, because that is equally important.

Why is this matter urgent? It is urgent because there is to be an exhibition of the Royal Institute of British Architects in the flower market before very long. Obviously, certain works will be necessary in order to produce that exhibition. It would be quite possible for these works to be done in a way which would be complementary or sympathetic to the eventual setting up of the theatre museum in this building and particularly in the large storage area beneath it. Therefore it is important that an initiative should be taken.

Quite a lot of people in public circles are interested in this and are not unsympathetic. I hope that the Minister will be able to tell us today that he will at least consider the suggestions which I believe have been made to him. I know that the Department of the Environment has never been particularly happy about the prospect of the theatre museum being at Somerset House, simply because it was not likely to he an adequate site for it, and nor would the introduction of the theatrical material have added anything to the splendour of the Fine Rooms. Indeed, it might even have detracted from them.

Ministers have a habit of putting down proposals made by back benchers, or, indeed, by Front Bench Members, on the ground of cost. I wonder whether any real attempt has been made towards comparative costings. I put it to the Minister that a great deal of money has already been spent on Somerset House, which will never be wasted because the Fine Rooms have been restored, and so much else there besides them.

What about the cost in the flower market? That is up to the Minister to decide. Various figures have been bandied about. Unless a detailed study has been carried out by the Government Department or by the Greater London Council, the Minister should go into it with great care and at least tell us today that he is prepared to do it. There are a number of interested parties. He is the man to act as the chairman of the discussions.

I am sure that the Minister will not find the Greater London Council unsympathetic, because I believe that the council, has fairly fluid plans for the future of the whole Covent Garden area. If we could have the theatre museum and the other institutions that I have mentioned—the institute particularly—housed in the flower market area, we should have the finest theatre museum anywhere, certainly in Britain, and it could be the finest thing of its kind anywhere in the world.

I hope that the Minister will grasp the opportunity, which probably will not present itself again, because if the theatre museum is put into Somerset House it will never be a satisfactory affair there and Somerset House will not be enjoyed to the best possible advantage.

In conclusion I want to say a few words about Somerest House. There have been some very powerful letters in the Press from important people in the world of the arts suggesting that Somerset House should house a Turner exhibition. It is right that there should be a substantial amount of Turner's work on view at Somerset House if it is to be used as a picture gallery and, I hope, furnished.

After all, Turner exhibited when the Royal Academy was situated at Somerset House, but so did many other distinguished painters. It would perhaps be an idea, though I put it to the Minister for experts to decide, that Turner should be included substantially in an exhibition which could begin with those who started the Royal Academy and be representative of the whole period when the academy was at Somerset House.

The Victoria and Albert Museum, which is responsible for the theatre museum, also owns a splendid collection of furniture and other works of art which would look well if displayed at Somerset House. I have no wish to criticise that great institution, but I am sure it would agree with me that some of the furniture displayed in its series of faked-up period rooms at the Victoria and Albert looks awful in those conditions and could look quite splendid if given a proper setting.

It is important also to recognise that Somerset House is not really suitable for the sort of gallery that could become absolutely crammed with people, as we have seen recently at the great Turner exhibition. The floors would not stand it. The place is best suited for what I would describe as gentle use.

Crowds would come to Somerset House if the courtyard were cleared of cars in the evening. I see no reason for having any cars on the courtyard in the evening. Why not a concert in the evening this summer in European Architectural Heritage Year? Surely if the Minister gave the car owners due notice the cars could be cleared from the courtyard. A concert could be held or son et lumiere and that kind of thing.

What about the terrace? In 1971 the then Minister said that it was only a matter of time before the terrace was opened. Surely the public could be given access to the floodlit terrace and be allowed to walk through to look down to the river below.

I would not want to move all the occupants out of the rest of the building. There is a splendid historic reason why the Inland Revenue should be in the rooms which were created for it along the river front. It will be recalled that the Inland Revenue sent a man out to buy a clock. The clock he bought was made by Mr. Tomkin. That gives some indication of the Inland Revenue's antiquity. Though we may do battle with it from time to time, it is separate from the Treasury and we would not like it to be back in Whitehall. Its presence and the other things which are at Somerset House, including the Probate Registry, do not prevent the use by the public of the terrace.

What about the Minister's role in this? I believe that this is where his civilised and civilising Department should reside, in Somerset House, in modest offices but close enough to benefit from the Fine Rooms and in contact with the public whom he seeks to serve. Surely not for him for ever the remoteness of upstage Belgrave Square. He must feel uncomfortable there. Let him come closer to the people and let him see them from his window every day. Let him walk through the Fine Rooms full of fine things and see people enjoying them as he goes down to Parliament. Only then will he begin to understand what his job is all about.

4.16 p.m.

I am grateful to the hon. Member for Bristol, West (Mr. Cooke) for raising this subject. I wish that it could have come up on some other occasion, but I am particularly grateful to him for the manner in which he dealt with the subject. He said many things which I find worthy of close consideration, but I would remind him that

"Hearts just as pure and fair
May beat in Belgrave Square
As in the lowly air of Seven Dials"
—or anywhere else in London. I take the point that for my Ministry, with all its advantages, there is much to be said for Belgrave Square, although it is a little far out.

May I remind the hon. Gentleman that it was a haughty hereditary earl in "Iolanthe" who spoke those lines. The Minister is a man of the people.

Yes, but I am occupying Belgrave Square, and there is some significance in that perhaps.

The location of the theatre museum has been, as the hon. Gentleman said, a matter for continuous public comment since the Turner exhibition at the Royal Academy. But for that exhibition—and a very splendid one it was—it seems unlikely that there would have been any question of housing Turner in Somerset House. That the exhibiton coincided with the preparation of the Fine Rooms with a view to housing the theatre museum was a cha ice. However, the force of the gale is not reduced by the fact that the wind bloweth where it listeth. Its force is so great that almost all the artistic weather vanes including this morning a distinguished body of trustees, have swung round and now are wondering whether Some: et House is the right place for a theatre museum or whether it should not be put to the most popular of uses, housing a permanent Turner exhibition.

Since 1973 both the previous administration and the present Government have stated in Parliament on several occasions that it is their intention that the theatre museum should be installed in the Fine Rooms at Somerset House. The first statement to this effect was by the then Minister of State, Department of the Environment on 24th May 1973, and, as the hon. Gentleman has fairly pointed out, this was a statement not by the present administration but by the previous Government. The most recent was my own Answer to the hon. Gentleman on 4th March.

My noble friend Lord Strabolgi also explained once again in the other place on 10th March, and particularly in relation to the idea that a Turner museum might be established in Somerset House, the reasons for the Government's confirmation that Somerset House should house the theatre museum, not Turner or anyone else. This is not to say that I ever thought at any time that Somerset House was the ideal solution for a new theatre museum. The decision was taken in the knowledge that the Fine Rooms would impose certain limitations on the way exhibitions might be mounted and the extent of the collections which could be shown. But the theatre interests and the Victoria and Albert Museum welcomed the original decision, and work has proceeded on this basis with a view to opening by the autumn of 1976. At present, the project is at the design stage.

Pressure to move the theatre museum from Somerset House has rested on two main grounds. One is that it is not a suitable place for it; the other is that it would be a good place—instead of its contemplated use—to use for a permananent exhibition of the works of Turner. These arguments ignore the reality that there is, as I have already said, a previous commitment by Governments of both major parties—the hon. Gentleman's as well as mine—to Somerset House as the most practical venue for the theatre museum.

As regards a Turner museum, before he was swept away by the gale, the chairman of the trustees of the Tate Gallery, in his introductory remarks recently to the biennial report of the gallery, dealt with the facts. All sorts of allegations have been made about the intentions expressed in Turner's will. What is certain is that the will was disputed and that the subsequent settlement was endorsed by Parliament.

Turner's paintings and drawings are widely dispersed among private as well as public owners. Among the latter, the most important are the Tate Gallery, the National Gallery, the British Museum, the Victoria and Albert Museum and the National Gallery of Scotland.

There is no power to compel private owners to give up their paintings to a new Turner museum. New legislation would be needed if this were to be done, and the Government have never considered proceeding on such a course. In addition, the major building programme for which I am responsible has already, at a time of scarce capital resources, enabled extensions to be undertaken at both the National Gallery and the Tate Gallery. While these are not specifically to house the works of Turner, the extra space available to the two galleries will enable them to improve their conservation facilities, and, in the case of the Tate, show the Turners on a scale and in surroundings which it has not been possible to achieve before.

I am aware that a number of theatre people have, perhaps rather belatedly, realised that the Fine Rooms at Somerset House do not provide the ideal background for a theatre museum. Personally, I expressed the view long before I was appointed to my present position that what was needed was a combined theatre institute and museum in Covent Garden. I take the view that, important though a theatre museum is, it is even more important to provide an adequate infrastructure for the thriving British theatre. Many countries on the Continent of Europe have a far greater infrastructure of aid and of substance, with a much smaller theatrical achievement on the top of it, than we have, and I believe that, with our major theatrical achievement, it is high time that our theatre was provided with the sort of institutional background—including, for example, a library—which it deserves but which at present it sadly lacks. Incidentally, I said this when I was Chairman of the Theatres Advisory Council and when the market was still in Covent Garden.

However, when the museum interests were offered by the hon. Gentleman's Government the opportunity of going to Somerset House, they jumped at it, and those of us who were more interested in the service of the living theatre than in the commemoration of its past raised no objection. We hoped and said that perhaps this would make it easier for a theatre institute to be established in due course when the market vacated the Covent Garden area. That point, as the hon. Gentleman said, is made again this morning in a letter to The Times.

The various theatre interests might now believe that there is an opportunity to develop these ideas again. Whether this is feasible or not, however, is a matter not primarily for me in my present capacity, although, here again, this is an area in which Ministers in different Departments must co-operate and talk to one another and work together.

I am ready to consider whether any alternative is possible which can be accommodated within available resource s and which can better meet the needs of the theatre museum, both as to time and as to accommodation. I am in touch with my right hon. Friend the Secretary of State for the Environment and with the Greater London Council about the possibility of using the undercroft, as it is called, of the flower market at Covent Garden. Further work would be needed to establish whether this is a real possibility, and I cannot, therefore, go further than that at present, save to say that it is likely that such work may be undertaken.

There are those who take the view that permanent exhibitions of the work of a single artist, however major, tend to do him a disservice—and I think that I detected a note of that thought in what the hon. Gentleman said. It is felt by many people that after a time an attraction wanes and that the occasional assembly of the works as was done at the Royal. Academy lends an excitement to an occasion which a permanent exhibition can never enjoy.

If it proves possible to find alternative accommodation for the theatre museum or, better still, for a combined theatre centre, including an institute or a museum, responsibility for the use of the Fine Rooms at Somerset House would then return to my right hon. Friend the Secretary of State for the Environment, when it basically still is. In such circumstances, I should be glad to consider with my right hon. Friend, provided that resources are available—this is the key question, because the resources required for such a move would be much greater than are now required in respect of Somerset House—what contribution the national collections might make—the Tate has indicated its readiness to cooperate—both to showing the rooms to their best advantage and to future exhibition arrangements, of whatever nature might ultimately be decided.

That is as far as I can go today. I hope that the hon. Gentleman will agree that it is as far as the Government could reasonably be expected to go in present circumstances.

With leave of the House, perhaps I might thank the Minister for what he has said. He has shown that he has an open mind and is prepared to consider my suggestions, which have been made before by many powerful people outside. We look forward as soon as possible to a further statement from him when he has had a chance to do the work that he said he will do.

Question put and agreed to.

Adjourned accordingly at twenty-six minutes past Four o'clock.